South Africa is searching for solutions to achieve economic growth and a sustainable future writes Tshwanelo Rakaibe, Senior Researcher: Energy Centre, Council for Scientific and Industrial Research, South Africa.

The global energy transition towards renewable energy sources presents a unique opportunity for the country to address its ‘triple challenge’ and potentially gain a competitive edge.

This transformation hinges on robust energy storage solutions, particularly lithium-ion and vanadium flow batteries, which are poised to play a pivotal role in ensuring grid stability and enabling the integration of more renewable energy into the power system.

Understanding the battery storage landscape

The increasing penetration of renewable energy sources like wind and solar power presents an exciting new chapter in South Africa’s energy story.

However, these sources have an inherent variability, meaning their output fluctuates depending on weather conditions. This presents a significant challenge for grid stability, as traditional power plants can no longer provide the necessary flexibility.

Battery storage systems offer a solution by storing surplus energy generated during peak production periods and releasing it when demand is high, ensuring a consistent and reliable power supply.

The South African government has acknowledged the potential of battery storage and has set ambitious targets for its deployment. The 2019 Integrated Resource Plan (IRP) and Eskom’s Transmission Development Plan (TDP) project a need for 2GW to 6.6GW of battery storage capacity to be installed by 2032.

This translates to a substantial investment opportunity, estimated at R24 billion by 2030, showcasing the potential economic benefits of developing a strong domestic battery storage industry.

The value chain: Unveiling potential opportunities

Battery storage systems are complex technological marvels, and their development involves a multifaceted value chain encompassing various stages, which include:

• Raw material extraction: This includes mining and extraction of critical minerals like lithium, graphite, manganese, vanadium and others.
• Processing: Refining the raw materials into high-purity precursors needed for battery production.
• Manufacturing: This stage involves the creation of battery cells, modules and pack assembly.
• End-of-life management: This entails responsible disposal and recycling of used batteries.

  The global battery storage market is witnessing exponential growth, and South Africa has the potential to carve a niche for itself within this dynamic landscape.

The country possesses several advantages:

• Abundant resources: As a major producer of several critical battery minerals, including manganese, vanadium and iron, the country can play a significant role in the upstream segment of the value chain.
• Strategic location: Being geographically closer to rapidly growing battery markets in Africa might offer logistical advantages compared to distant competitors.
• Government support: The government has shown commitment to developing the battery storage industry through initiatives like the Just Energy Transition Investment Plan and the draft Renewable Energy Masterplan. These plans highlight an intent to support localisation and domestic manufacturing and aim to create jobs and stimulate economic growth.

Challenges and considerations

Despite the promising outlook, significant challenges remain in fully realising South Africa’s potential in the battery storage market:

• Limited domestic processing capacity: While the country holds abundant mineral resources, the refining and processing infrastructure remains underdeveloped, necessitating reliance on imports for battery precursors.
• Skills gap: The advanced technologies involved in battery storage require specialised skills and expertise which are currently scarce in South Africa. Addressing this gap is crucial for the development of a sustainable and competitive domestic industry.
• Competition: The global battery storage industry is already dominated by established players, particularly in Asian countries. South Africa needs to develop a strong value proposition to attract investments and compete effectively.

Unlocking the potential: A strategic approach

To overcome these challenges and unlock the potential within the battery storage sector, South Africa needs a multi-pronged approach that must include: investment in refining and processing infrastructure; focusing on existing strengths; fostering collaboration; developing attractive investment incentives; and embracing innovation.

The energy transition presents a unique opportunity for South Africa to not only address its internal challenges, but also become a global player in the battery storage industry.

By leveraging its existing resources, strategically focus on key areas of development and address critical challenges, the country can unlock its potential in this rapidly growing market.

This transition has the potential to create significant economic growth for the country. ESI