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Unlocking the Potential: Urgent Call to Increase Funding for Energy Storage

Addressing the Storage Gap: Paving the Way for Renewable Energy Integration

In the fast-paced evolution of renewable energy technology, our ability to generate green power has surged ahead, almost tripling globally from 2011 to 2022. However, a critical challenge has emerged – our capacity to store this generated renewable energy has lagged behind. The disparity in this storage capability is becoming increasingly evident as renewable sources, which are inherently intermittent, require consistent and stored supply to manage their fluctuations. Energy storage solutions have become indispensable in mitigating these challenges and play a pivotal role in reducing energy costs while seamlessly integrating renewable power into grids.

The Global Imperative: Bridging the Storage Divide

The International Renewable Agency (IRENA) has highlighted the pressing need for 360 gigawatts (GW) of battery storage globally by 2030 to limit the rise in global temperatures and achieve nearly 70% renewable energy usage. To accomplish this, investments in various storage technologies such as pumped hydropower, decentralized mini-grids, and advanced electrochemical batteries are crucial. Exploring innovative solutions like green hydrogen, thermal storage with molten salts, and flywheel-based mechanical systems is also imperative to meet the growing demand.

Overcoming Funding Challenges for Storage Projects

While numerous initiatives in developing countries are driving regulatory frameworks, innovative business models, and infrastructure for energy storage, a significant challenge has been the lack of funding. Storage projects involve inherent risks, high costs, and uncertain returns, necessitating smart, large-scale, low-cost financing to mitigate risks and pave the way for a sustainable future.

The Role of Climate Investment Funds (CIF)

CIF, as the world’s largest multilateral fund supporting energy storage in developing countries, is actively working to address this funding gap. The fund has played a pivotal role in supporting mini-grid projects, a proven game-changer for isolated communities. In Mali, a rural electrification project supported by CIF replaced diesel generators with a hybrid (battery storage and diesel) mini-grid system, providing cleaner, cheaper, and more reliable electricity to half a million people.

CIF’s Impact: Case Studies

The Maldives, in partnership with CIF, embarked on an ambitious plan to achieve net zero by 2030, reducing electricity costs and dependence on diesel. Over four years, the cost of electricity dropped significantly, and subsequent initiatives are expected to mobilize substantial investments in battery storage, saving the country millions annually.

In South Africa, CIF’s concessional finance facilitated the introduction of 100 MW of new storage capacity, paving the way for private investors to back an additional 455 MW of battery storage with an investment of approximately $605 million.

Global Energy Storage Program (GESP)

Recognizing the urgency, CIF has launched the $400 million GESP, the largest climate funding vehicle dedicated solely to energy storage. Twelve projects across developing countries have already been approved, with plans to create 1.8 GW of new storage capacity and integrate an additional 16 GW in the next three years. Every dollar invested in GESP is anticipated to generate up to $16 in co-financing, making it a groundbreaking initiative to bridge the storage gap where it matters most.

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