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

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.

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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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