By Charles Feinstein, the Director of the World Bank’s Energy and Extractives Global Practice. This post originally appeared on Ideas Lab.
Innovation in energy storage, smart grids and mini-grids hold the potential of improving access to power for billions of people around the world.
Breakthroughs in energy technology are happening all over the world, improving access to power for people and making a real difference in their quality of life. While technological innovation tends to come predominantly from developed economies, we see incredible entrepreneurialism in developing countries when it comes to adopting and adapting new technology for local markets and needs. The challenge for poorer countries is getting timely access to the best and cleanest technologies.
When I was approached by Ideas Lab to share my energy innovation predictions, I decided to crowdsource ideas from my team in the World Bank’s Energy Global Practice. These are people in regular — almost daily — contact with the government and private sector in the world’s key emerging markets and low-income countries
Their workdays are occupied by the challenge of improving energy services for millions of people in developing countries while also reaching the 1.2 billion people in the world still waiting for any electricity connection. And the challenge is to do this in ways that are sustainable for economies, people and the environment.
1. In terms of technology breakthroughs, at the top of everyone’s list: energy storage.
The expectation is that in less than five years, we will see a revolution in storage technology that will change the way the electricity business is done. If we can overcome the challenge of effectively storing variable renewable energy — such as solar and wind, which are not constant all day every day — and do so in a way that competes on cost with fossil fuel generation, we are talking major game-changer.
We are already seeing the development of longer-lasting liquid metals, which can make grid-scale batteries a reality (even comparable to the capabilities of pump storage). We’re also seeing many promising projects focused on converting surplus electricity (from wind, for example) to hydrogen, which can be stored and fed into natural gas grids for subsequent power or heat generation. Energy utilities can learn a lot from sectors like mobile telephony and car manufacturers, which are really leading the energy storage game.
2. Next on my team’s list: smart grids.
Just as mobile phones have dramatically changed in capacity and performance over the years, today’s power grids won’t be able to support the energy goals of the future. The integration of large amounts of variable renewable energy and distributed generation, improvements in the reliability of service, and aspirations for higher energy efficiency change the dynamics of the conventional power grid. The future calls for grids that are “smarter” and able to react faster.
For many of the countries the World Bank works with, upgrading and modernizing grids is a major challenge. Across the board, new technologies are increasing grid reliability and improving performance measurement through data analytics — from smart sensors to hardware and software. Innovations in how smart-grid information and communications technologies (ICT) are revolutionizing the way consumers react to information and markets, and will have a profound effect on how systems operate and resources are deployed. In this new environment, the value of variable renewable energy is maximized. Solar and wind are permanent parts of the energy mix.
3. For developing countries seeking to connect the unconnected, we see a lot of innovation ahead in the area of mini-grids.
Mini-grids, based on renewable or hybrid systems, will play a critical role in meeting the UN-led Sustainable Energy for All (SE4ALL) goal of universal energy access by 2030. While mini-grids have been around for a while, especially in Asia, they are now proliferating all over the world and becoming an important factor in the expansion of energy services in areas of low access, like Sub-Saharan Africa and parts of South Asia. While this expansion has been held back by gaps in policies and regulations, a lack of long-term financing and a lack of capacity or interest among power producers, the barriers are rapidly breaking down with new business models emerging. As renewable energy costs — particularly for solar panels — continue to come down, independent power producers will find innovative ways to bring electricity services to customers who’d otherwise be waiting years for grid connections. National utilities will have to quickly adapt in this new environment or find themselves outplayed by independent operators.
Our concern at the World Bank is to make sure that new energy technologies are rapidly transferred to where they are most needed. To do this, it’s critical to address all sorts of barriers to technology transfer and domestic innovation. For example, many low- and lower-middle-income countries apply import tariffs to renewable energy technologies like PV panels, wind turbines and biodiesel, making them more expensive before they even leave the port. Knowledge and the capacity to absorb new and sophisticated technology is another issue — the lack of enrollment in tertiary engineering and construction courses can be a major barrier. And having a strong legal, regulatory, planning and governance environment that encourages investment in new technologies is also key.
The good news is that trade between developing countries in renewable energy is expanding. The future is looking brighter and cleaner, but we have a lot of work to do to ensure all the breakthroughs benefit everyone, everywhere.