South Africa prepares for a big battery switch-on

accreditation
0:00
play article
Subscribers can listen to this article
The transition to greener energy will involve greater reliance on efficient batteries. Photo: iStock
The transition to greener energy will involve greater reliance on efficient batteries. Photo: iStock

BUSINESS


As restrictions on electricity self-generation continue to ease and load shedding continues to escalate, it is becoming more apparent that utility-scale battery energy storage is set to play an important role in South Africa’s future.

Energy storage is an essential element in an integrated system, along with renewables and flexible thermal power.

The country’s ambitious renewable energy plans, coupled with its ageing and inflexible coal fleet, introduce grid instability and intermittency. Batteries provide the necessary flexibility to offset the escalating integration challenges of higher renewable penetration.

South Africa is also taking the first steps to introduce large-scale gas-fired power generation. Although both flexible gas power plants and batteries can be ramped up and down with relative ease, the two technologies are highly complementary.

While batteries are typically suited to short-duration applications for up to a few hours, gas generation is typically well suited to providing applications of longer duration, such as weekly, monthly and seasonal flexibility.

READ: The financial sector throws its weight behind green evolution

The energy storage market in South Africa will need to be driven by both Eskom and the private sector.

In August 2020, Eskom began this process by issuing a request for proposal for battery storage at Skaapvlei in the Western Cape.

This was subsequently re-tendered in March 2021, with additional requests for multiple sites released. This was also when the risk mitigation independent power producer programme, where seven of the 12 winning bidders have significant numbers of batteries included, was announced.

They are due to start construction by the end of January 2022. Furthermore, the integrated resource plan 2019, which maps the country’s energy mix for the next decade, provides 2 gigawatts of battery storage by 2030, with the minister having announced the first battery request for proposal of 512 megawatts to be released in November 2021.

On a smaller scale, a positive development is the amendment earlier this year to schedule 2 of the Electricity Regulation Act, which now allows private companies to install embedded generation of up to 100MW. Many will want to complement their renewable generation facilities with energy storage.

The localisation aspect of this procurement may be challenging, despite government’s intention to encourage local manufacture of batteries.

The dominant battery technology globally, due to its cost competitiveness, is lithium-ion (Li-ion), which is currently dominated by Asian suppliers. Li-ion batteries’ cost has been falling steadily, driven by the global roll-out of electric vehicles, which is an important advantage for this technology.

Today, however, due to the huge global demand for batteries (in both electric vehicles and stationary applications), the market is becoming dominated by those who can obtain battery allocations. These market dynamics may result in a temporary increase in battery prices soon.

This unique supplier-driven market situation could be an opportunity for South Africa in terms of launching their support for increased local content, which today would not realistically go beyond a 20% threshold.

However, the success of any localisation initiative would hinge on ensuring predictability and consistency in the development of the local storage market.

To establish confidence with investors considering energy storage localisation, it is imperative that clear and transparent energy policy reform that supports market growth is timeously executed by the relevant authorities. Efficient execution of energy policy is the key enabler in this regard.

READ: Just transition | SA's battle for green power

It is crucial in South Africa’s “just transition” from coal-fired power to greener energy that jobs in the coal sector be replaced. Batteries may not make substantial contribution to job creation, but they will help to move the grid to greener energy, which has significant job creation opportunities.

South Africa’s integrated resource plan 2019 sketches an ambitious renewables plan for 25GW or 33% of the country’s energy contribution to be derived from wind and photovoltaic energy by 2030.

Renewable energy, backed up with energy storage, will help the country meet its Paris Agreement targets and make South African exporters of manufactured goods more internationally competitive. Batteries are therefore an essential element of a renewables solution for a clean energy future.

Ball is the project development manager for Africa and Europe, and Buccini is in charge of business development for energy storage and optimisation, for Wärtsilä, a Finnish company that manufactures and services power sources and other equipment in the marine and energy markets.


facebook
twitter
linkedin
instagram

Delivering the 

news you need

+27 11 713 9001
news@citypress.co.za
www.citypress.co.za
69 Kingsway Rd, Auckland Park
We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24

E-Editions

Read the digital editions of City Press here.
Read now
Voting Booth
Tourism Minister Lindiwe Sisulu’s comments on the Constitution and the judiciary has been termed an “extraordinary attack” that is “dangerous and regressive”. What are your thoughts?
Please select an option Oops! Something went wrong, please try again later.
Results
She’s within her rights
9% - 25 votes
It’s all politics
26% - 69 votes
It was irresponsible
65% - 175 votes
Vote