Cleantech Market Intelligence
New Pathways for Advanced Batteries in the Southern Hemisphere
According to the Pike Research Energy Storage Tracker, there are over 6,000 megawatts (MW) of grid storage installed in the Southern Hemisphere, most of which is traditional pumped storage. Likely market suspects populate the list of installations – including Australia and South Africa – but the Tracker doesn’t tell the whole story of the role electricity storage can play in emerging markets like Chile, South Africa, and island nations across Southeast Asia. Nor does it highlight the budding business case for battery storage in these emerging markets. The debate around economic growth, utilization of domestic resources, and clean electricity generation presents an interesting opportunity for electricity storage, particularly advanced battery storage, in markets where grid conditions are unreliable, economic growth is unrelenting, and commitments to resource conservation are on the rise. The value proposition of advanced battery storage – which is, to be sure, unproven at this time – could give emerging markets in the Southern Hemisphere inroads to the broader utility market globally.
With growth rates over 3% in the last several years, both Chile and South Africa have navigated the global financial struggle relatively well. A handful of other countries display the same market conditions as Chile and South Africa. Each serves as a driver for economic growth in its respective region and is building industries that support global infrastructure and commerce. Meanwhile, utilities in both Chile and South Africa increasingly struggle to keep the lights on. Here is where the evolving debate around economic growth and resource utilization could lead strategies for expanding the power sector, the lifeblood of economic growth, to a pivot point.
Innovations in solar, wind, and transmission infrastructure have expanded the menu of power generation options from which emerging economies can choose. The economic development model, on the other hand, hasn’t changed significantly, leaving bulk energy generation, whether from fossil fuels or renewable sources, as the primary solution to accommodating rising electricity demand. But the forces of social change, new financing models, and global drivers for cleaner environments have the potential to drive forward new power sector paradigms. If the building blocks of the future grid in Chile and South Africa were distributed solar and advanced batteries instead of coal-fired power plants and long-distance transmission lines, the resulting power sector could exploit local, renewable resources and deliver them efficiently.
Distributed generation and advanced battery storage present a unique value proposition to both developed and developing countries in economic transition. Likewise, these new power sectors could be ripe for additional technological innovation in 21st century, while preserving local landscapes, natural resources, and indigenous ways of life.
Ultimately, countries like Chile and South Africa present ideal conditions for dispelling preconceived notions about the market barriers to advanced batteries in the utility industry – high CAPEX, lack of empirical operations data, and unclear value streams. But much of this potential hinges on the path the governments in Cape Town and Santiago take for power sector development.