ENERGY STORAGE AND MARKET IMPLICATION FOR POWERING AFRICAN COUNTRIES

Abstract

This study examines energy storage and market implication for powering 54 African countries. The study employed traditional pooled OLS methodology and levelized cost of energy model using secondary data from 1986 to 2018. Aggregating the results on a national level results in a levelized cost of electricity (LCOE) range of 80-200 USD/MWh (on a projected cost basis for the year 2020) in this very decentralized approach. As a continental average, 142 USD/MWh are found, this represents an upper limit for the electricity cost in a fully renewable energy storage. Results also suggests that battery technology has the potential to give countries their own self-sufficient, twenty-four-hour electricity generation systems. That in turn will have a huge impact on the price of energy and the region’s economy in a wider context. The specific implications are that energy storage has huge market potential for powering African countries, that access to energy by Africans is critical to the consumption of stored energy and opening up the energy storage market for investment, and that there exists untapped market for energy storage and could be exploited for powering African countries. The study equally found that the advancement of storage technologies, particularly in the context of use with solar, is going to lead to a huge transformation of the way we approach energy in the next few years ahead. The study concludes that there is money to be made from energy storage and the introduction of supportive policies could make the market much bigger and faster.