Countries such as the US, China and Australia have made considerable advancements in energy storage. They are far from alone, as the benefits of energy storage have become an urgent focus for countries across the globe. Now, countries in the Middle East and North Africa (MENA) region are making thei Contact online >>
Countries such as the US, China and Australia have made considerable advancements in energy storage. They are far from alone, as the benefits of energy storage have become an urgent focus for countries across the globe. Now, countries in the Middle East and North Africa (MENA) region are making their own significant strides. By Rohit Kumar, associate director, and Gurleen Kaur, associate, Synergy Consulting.
Worldwide expansion of intermittent renewable energy sources, such as solar and wind power, has placed electricity storage systems on the verge of global expansion as energy storage systems (ESSs) can be utilised to optimally harness the power from the renewable energy sources.
Large-scale solutions such as pumped hydroelectric storage and stationary batteries are renowned for their ability to absorb power at one time for reconstitution later. Advanced battery storage options are increasingly being touted as the 24/7 answer to low-carbon energy solutions as they can balance the supply and demand for power almost instantaneously.
Though long regarded for their fossil fuel reserves, the countries of MENA are swiftly establishing themselves as global producers of clean, renewable energy. As the use of renewable energy continues to grow in scale in future, demand for energy storage as a method of stabilising wind and solar generation in the grid will increase.
Because of this burgeoning and lucrative – yet limited – technology, several entities are now exploring the vast benefits of energy storage to meet their power demands and improve the overall stability of their respective electrical grids.
* Managing intermittency in renewable supply – Perhaps, the most important driver of energy storage systems is the substantial growth in the amount of renewable energy being deployed around the world. In line with the rest of world, countries in the MENA region plan to have renewable energy as a major portion of their generation mix in the near future.
In Middle Eastern and North African countries, where sunlight and wind are in abundance, renewable generation is entirely dependent upon the shining sun and the blowing wind, which yield an inconsistent and unreliable energy supply. This intermittency has heightened the importance of energy storage throughout MENA.
Long-duration energy storage – solar-plus-storage – could potentially redirect power generated by these renewable systems during the day, allowing the plant to provide electricity at peak times using stored electrical energy.
The United Arab Emirates, Saudi Arabia, and Qatar, for example, have each benefited from the advancement in photovoltaic (PV) technology and have as a result developed utility-scale projects at competitive prices.
Throughout the region, the widespread integration of renewable energy in the overall energy mix will fuel the need for electricity storage solutions. Global information provider IHS Markit predicts a total deployment of 1.8GW of grid-connected energy storage by 2025.
In a 2017 speech at the World Economic Forum, Sami Khoreibi – CEO of transformative energy company Environmena – suggested that battery technology could potentially provide countries with self-sufficient, 24-hour electricity generation within the next decade. The implications of such a forecast are undeniable.
* Grid improvements – The electricity grid is a vast and intricate system, for which power supply and demand must be equal at any given moment. Balancing these components is essential for continuous power, and energy storage can play a critical role in this back-and-forth.
The starts and stops of conventional and renewable power plants result in an increase/decrease of output known as the ramp rate. This is one of the factors that result in substantial uncertainties in the grid''s overall reliability. Grid-connected battery-based storage solutions can be implemented to bridge this gap and smooth out fluctuations.
* Cost competitiveness – The price points for both renewable energy and applicable storage solutions have dropped steadily in recent years and should continue to do so. According to S&P Global, solar battery costs dropped by 40% between 2017 and 2018.
MENA stands ready to reap the benefits, thanks to the already low costs established throughout the region for PV-based power. This opens the door for nations such as the UAE – where the levellised cost of electricity (LCOE) is less than 3 cents per kWh (kilowatt hour) – to integrate energy storage while still offering power at a highly competitive price.
The Middle East''s largest solar-plus storage project, Philadelphia Solar, reached financial close on a 12MWh lithium-ion battery based energy storage project in Jordan in 2018. This became operational recently in February 2019.
MENA''s first-ever project-financed energy storage system was announced in Jordan; the Ministry of Energy & Mineral Resources (MEMR) pre-qualified 23 bidders for a 30MW/60MWh standalone energy storage project. Slated for completion in May 2020, the plant – located at a substation in the city of Ma''an – would be used for ramp-rate control of load and renewable power plants, shifting energy produced during off-peak hours to peak demand, leading to overall stability of the electrical grid.
MEMR received proposals from 10 firms in January 2019 to develop an electrical storage project under a BOO framework. The following are the key challenges/risks that may be applicable to this or other energy storage projects to be tendered on a competitive basis.
* Technology and bankability – Given the technology is new to the region, the lenders will require detailed technical due diligence to be able to provide support to the preferred bidder.
There will be bankability concerns with the lenders if there are any gaps identified between the performance guarantees required by the offtaker and the warranties OEMs were able to provide. This is so because the lenders will prefer obligations under the project documents to align/be back-to-back with the contracts with EPC/O&M contractors.
* Budgeting the cost – Depending on the type of usage, batteries may degrade faster or slower for the same amount of energy imported or exported. For developers agreeing to a fixed tariff for a 15-year tenor, it might have been challenging to budget the replacement cost/additional battery cost without knowing the way the batteries would be used.
Though Jordan''s approach to renewable energy infrastructure has – and continues – to serve as a template to multiple governments throughout MENA, the concept of energy storage has been emerging in the region for quite some time.
In 2018, on behalf of the Ministry of Energy & Water (MEW) Lebanon, the Lebanese Center for Energy Conservation (LCEC) has received expressions of interest (EOIs) from 75 consortia to develop three PV solar plants with battery energy storage.
These three solar farms will have a combined total capacity of 210MW–300MW and are expected to be on the grid by 2019. The minimum capacity of each plant will be 70MW, and the maximum 100MW. Regardless of the size of the proposed PV plant, the minimum battery energy storage will be 70MW.
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