OFID Symposium on Electricity Storage

27.03.2018 | Vienna, Austria

Welcoming remarks of OFID Director-General Suleiman J Al-Herbish at the OFID Symposium on Electricity Storage held at OFID Headquarters, Vienna, Austria, March 27, 2018.

Ladies and gentlemen,
Welcome to the OPEC Fund for International Development. It is my pleasure to host the OFID Symposium on Electricity Storage as part of our ongoing series of high-level events on specialized topics.

I am particularly honored to have Mr. Li Yong, Director-General of UNIDO, chairing this opening session. OFID and UNIDO share the common conviction that access to modern energy services is a vital precondition to achieving sustainable development, including the industrialization of developing countries.

Ladies and gentlemen,
The world is in the midst of an energy transition that is centered on two key developments: an unprecedented growth of the utilization of renewable sources of energy; and an accelerated electrification of energy systems. This second development manifests itself in digitization as well as in the electrification of the heat and transport sectors.

In such a vastly evolving energy ecosystem, the ability to store electricity in an efficient and cost-effective manner is a key requirement. Adequate storage is needed to make the electricity system more reliable when using renewables, and also an enabler for greater flexibility of the power market. Moreover, the growth in electric car sales, which is predicted to surpass the 50% mark by 2040, hinges critically on the development of a new battery system that would overcome the obstacles of high cost, limited power, and short driving range.

From OFID’s point of view, the vital role of electricity storage is its potential to supply the energy-poor in developing countries.

In fact, we started planning today’s meeting in 2017, which marked the 10th anniversary of the special mandate that we received from the 3rd OPEC Summit, in Riyadh, Saudi Arabia, in November 2007. The Summit emphasized that eradicating poverty should be the first and overriding global priority guiding local, regional and international efforts. The Riyadh Declaration called upon OFID to continue to align its programs with the objective of achieving sustainable development and the eradication of energy poverty in the developing countries. While our work in OFID encompasses operations in all development fields, since then energy poverty alleviation has been the central theme of our work.

Ladies and gentlemen,
It was OFID who framed energy as the “Missing Millennium Development Goal,” and together with other partners, we ensured that energy poverty is understood as a challenge and duly confronted. We worked diligently in international fora to include energy poverty alleviation in the post-2015 development agenda. These combined efforts culminated in elevating energy as Sustainable Development Goal 7 in the 2030 agenda.

As such, energy was, for the first time, universally accepted as a precondition to achieving sustainable development. Energy poverty is also recognized as an obstacle that hinders progress on the following fronts:

  • ending poverty and hunger,
  • improving health and education services,
  • securing safe drinking water, and
  • ensuring gender equality.

Further to our advocacy, OFID has transformed its words into action on the ground. Since 2008, we’ve committed over US$3.5 billion to energy projects. Through joining resources with our strategic partners, this amount leverages more than US$35 billion in support of more than 200 operations in 74 countries.

In terms of power generation projects, our approach is a pragmatic one; efforts to eradicate energy poverty must be technology-neutral, covering both conventional and renewable systems. As a priority, the aim is always to increase the electrification rate as well as the level and quality of electricity services in developing countries. Therefore, in addition to large grid extension projects and the establishment of mini-grid systems, OFID has also financed off-grid products.

Ladies and gentlemen,
A domain where we believe that renewables can play a significant role is rural electrification and distributed generation. Here, OFID has financed a number of projects in Sub-Saharan Africa and in developing Asia. One example of these is supporting the accelerated deployment, and promoting the productive use of hybrid mini-grids in Bangladesh, India, Mali and Mozambique by providing a de-risking mechanism for business ventures to stimulate replication and scaling up. Another example is in India and Tanzania, where the installation of 50-kW hybrid mini-grids systems will provide 24/7 power for households and businesses.

Our experience from these and other projects indicates that much work needs to be done in order to expand the spread of distributed solutions in poor developing countries. Though PV prices have significantly fallen, to make modern energy services even more affordable for these remote areas, major efforts are still needed to further reduce the costs.

In this area, while battery energy storage can improve the reliability of power supply from renewable and conventional sources and increase the overall distributed generation system efficiency, battery costs play a major role in the project costs. Therefore, it is critical for the lifetime of batteries to be maximized and their costs to be reduced in order to provide economic savings across the system life cycle.

Ladies and gentlemen,
Today’s OFID Symposium on Electricity Storage offers a platform to discuss these and related issues, and to explore the current status and the future prospects of electricity storage. We are honored to have distinguished speakers from world-renowned institutions, ministries, companies, and organizations with vast expertise on the subject matter. I am certain that their presentations will provide an excellent opportunity for the participants to interact and provide their own insights.

Once again, I welcome all of you to OFID’s headquarters and wish you a successful and fruitful day. Thank you.