COP21: Renewables-​​plus-​​storage can help developing world decarbonise, faces challenges

PV Tech Storage
November 25, 2015

By Andy Colthorpe

Renew­ables with energy stor­age can help build low car­bon energy net­works in the devel­op­ing world – but the twin tech­nolo­gies still face com­pe­ti­tion from nat­ural gas while they grad­u­ally mature, accord­ing to an elec­tric power sys­tems maker and integrator.

 

In terms of oppor­tu­nity, Africa may be richer in promise than many realise. A recent US$25 mil­lion fund­ing round for Off Grid Elec­tric, a another US-​​headquartered com­pany, which is devel­op­ing solar micro grids in Tan­za­nia and Rwanda, was led by a con­tri­bu­tion from DBL Partners.

Mag­i­cal formula’

Social impact’ invest­ment firm DBL’s founder, Nancy Pfund, along with her co-​​founder Ihra Ehren­preis was among early back­ers of SolarCity and Tesla among oth­ers. Pfund recently toldPV Tech Stor­age that the link with decar­bon­i­sa­tion and with lift­ing rural pop­u­la­tions out of poverty made it a win-​​win invest­ment choice for the VC fun­ders, which only invests in pro­grammes that have a pos­i­tive social effect as well as gen­er­at­ing healthy returns. These have included other recent invest­ments in energy stor­age and related areas, Pfund explained in an inter­view with PV Tech Stor­age.

Pfund empha­sised that the invest­ment in Off Grid Elec­tric and in Africa was not a hand­out or aid.

We are totally non-​​concessionary. We are a top tier finan­cial com­pany and that’s our brand, it’s our mis­sion, it’s in our DNA from Day One. So it’s a huge mar­ket and it has a lot of attrib­utes that are very, very fun­da­men­tal to the suc­cess of new entrants. So if we didn’t think we were going to make money on this we wouldn’t have made the investment.”

The num­bers stacked up eco­nom­i­cally as well as in terms of the mate­r­ial impact DBL’s money could have, Pfund said. Falling costs of solar, wider recog­ni­tion of battery-​​based energy stor­age tech­nolo­gies and inno­v­a­tive financ­ing mod­els anal­o­gous to the “no-​​money-​​down” rev­o­lu­tion enjoyed in US rooftop solar leas­ing had made it possible.

When you see that cost is com­ing in line with need and acces­si­bil­ity, that’s a very mag­i­cal for­mula,” Pfund said.

That hasn’t been totally pos­si­ble until recently when panel costs came down, stor­age, lithium ion is now acces­si­ble, and you also have a busi­ness model inno­va­tion with the leas­ing model being applied to this con­ti­nent. That was what broke open the solar mar­ket in the US – if you look at the growth num­bers, once peo­ple didn’t have to buy a sys­tem and pay upfront and instead pay less monthly than their elec­tric­ity bill, that’s when the mar­ket began to scale significantly.”

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