By Jason Deign
South Africa’s potential as a market for energy storage could be set to improve following a change in leadership last month.
The appointment of a new president, Cyril Ramaphosa, looks likely to unblock a stalled renewable energy programme and woo back foreign investment scared off by irregularities in the previous administration.
Ramaphosa this week reinstated Nhlanhla Nene, a highly regarded finance minister ousted in 2015 by former head of state Jacob Zuma.
The new leader, who took control of the country after Zuma succumbed to pressure to resign over corruption allegations, named another former finance minister, Pravin Gordhan, to run the Ministry of Public Enterprises.
The Ministry is key to the energy sector because it is in charge of signing off power-purchase agreements between the state electricity company Eskom and plants developed under the nation’s renewables procurement programme.
South Africa’s renewable energy programme
Developers selected under recent rounds of South Africa’s Renewable Energy Independent Power Producers Procurement Program (REIPPPP) had been trapped in a hiatus caused by a scandal involving Zuma and Eskom.
Zuma’s government had dragged its feet over signing the agreements while Zuma handed Eskom coal supply contracts to a family business tied up in the corruption allegations.
When Eskom came clean over faltering finances this year, Gordhan’s predecessor hastily approved outstanding REIPPPP power-purchase agreements in the days before Zuma was forced to resign.
Assuming Eskom can now limp back to financial health, which observers say is only a matter of time, the outlook for renewables in South Africa is once again bright.
One of the consequences of Eskom’s financial ill-health is that it has abandoned plans to build new nuclear plants, leaving renewables as one of the most viable options to increase generation capacity in future.
Too early to say when the market will take off
Such a move is likely to boost demand for energy storage, although it is too early to say how soon the market might take off.
In some respects, South Africa has much less potential for energy storage than many other parts of Africa.
Also, while South Africa has embarked on an ambitious renewable procurement programme in recent years, the delay in signing power-purchase agreements means the grid is not being unduly stressed by solar or wind.
Nevertheless, “there’s definitely applications where we’re seeing batteries being deployed in South Africa,” said Chris Ahlfeldt, energy specialist at Blue Horizon Energy.
Wanting to improve energy security
“Robben Island, for example, developed its own hybrid diesel-solar PV-battery concept to save on diesel fuel. That was an islanded situation. We’re seeing also some residential customers wanting to improve their energy security.”
Energy security is a big issue for South African electricity customers. In the past, blackouts have plagued the country, driving up demand for Tesla Powerwalls and other residential batteries among richer homeowners.
Commercial and industrial electricity users face a similar problem and may have an even greater economic case for investing in battery systems to ride through blackouts.
In 2015, South Africa had 100 days of load shedding, Ahlfeldt said. “We since haven’t had as many issues, but people still don’t fully trust the utility to not let that happen again, since it also happened back in 2008,” he said.
Beyond batteries, South Africa is also home to significant levels of molten salt storage, attached to concentrated solar power (CSP) plants developed under the REIPPPP.
The US National Renewable Energy Laboratory lists four megawatt-scale CSP plants currently active in South Africa, all with multiple hours of molten salt storage.
A world leader in molten salt
In capacity terms, these volumes make South Africa a world leader in molten salt storage.
How batteries and other storage technologies might complement this remains to be seen, but a study of US energy storage vendor opportunities in the South African market last year painted a rosy picture.
“South Africa’s existing electricity infrastructure is insufficient to meet demand,” it noted, “which has resulted at times in load shedding, excessive use of diesel to run peaking plants and billions of dollars in lost business.”
The report said: “It has been suggested that the adoption of energy storage technologies could provide a cost-effective way of improving South Africa’s electric grid.”
With the country looking to embark on wide-ranging improvements to its finances and governance too, now could be a good time to start.
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