This report specifically focuses on battery energy storage in decentralized off-grid mini grids located in remote areas. It provides an overview of battery technologies used in mini grids globally, demand forecasts for various battery technologies, a comparison of characteristics of different batteries, an exploration of costs and trends in battery technologies, case studies, and recommendations.In the high-case scenario, it is projected that annual demand for mini grid batteries is projected to increase to over 3,600 MWh by 2030 from around 180 MWh in 2020. In a base-case scenario, annual demand exceeds 2,200 MWh, while in the low case annual demand is around 1,500 MWh.The selection of battery technology for mini-grid projects is a multi-faceted decision based on factors such as cycle life, depth of discharge, type of load connected to the grid, energy density, C-rating, thermal runaway, maintenance, after-sales service, hardware compatibility, maturity, cost, battery degradation, operating conditions, and environmental concerns.The levelized cost of storage (LCOS) is critical for optimal decision-making in mini grid development. Though upfront costs often dominate the technology selection process, the LCOS provides a more comprehensive perspective by considering the lifetime cost of storage technologies. The LCOS calculation incorporates the capital expenditure, operations and maintenance costs, residual value, and cost of charging the battery. While lead acid batteries cost less per nameplate capacity ($/kWh), the superior cycle life, efficiency, and permissible routine depth of discharge of lithium-ion batteries result in a lower LCOS.
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