The World Bank will offer loans up to $1 billion and seek partners for an additional $4 billion to finance batteries in the developing world, it announced Wednesday at the United Nations General Assembly.
The bank aims to finance 17.5 gigawatt-hours of battery storage capacity by 2025, which is more than triple the 4.5 or so gigawatt-hours installed in all developing countries today. The U.S. has 0.867 gigawatt-hours of installed battery storage capacity on its electrical grid.
"Batteries are critical to decarbonizing the world's power systems. They allow us to store wind and solar energy and deploy it when it's needed most to provide people with clean, affordable, round-the-clock power," World Bank president Jim Yong Kim said in his address.
Batteries are a natural complement to several renewable energy sources, such as solar, wind and hydropower, because those sources vary so much over the course of a day and year. With battery storage, electricity users can be more independent of unreliable and slow-growing national electrical grids. Banks of batteries can enable communities to build so-called mini-grids, which offer small, remote communities some of the benefits national grids. The World Bank already helps finance mini-grids around the world.
Battery storage in developing countries can cost from $400 to $700 per kilowatt hour, according to the Financial Times. In lower middle income countries (data for low income countries is unavailable), households consume 2.1 kilowatts per capita per day, meaning that they might need to spend $200 to $350 for a battery to cover their overnight electricity needs.
But battery costs around the world are dropping: one report on storage in the U.S. notes that storage growth began booming in 2016 partly due to new rules in California. The same technology should help lower costs for rollout around the world.
Energy storage could grow by 40% a year in the decade from 2017 to 2027, according to a 2017 report by the International Finance Corporation, which is part of the World Bank Group.