An ongoing study funded by the World Bank under the guiding leadership of mineral research organisation Mintek has found that there are considerable opportunities for South Africa in the battery storage value chain.
The country, however, needs to move quickly to capitalise on these opportunities to ensure that valuable resources and financial benefits do not leave the region, it was revealed during the World Bank’s Battery Storage Value Chain Creation in Southern Africa Online stakeholder engagement workshop, held on December 9.
Customised Energy Solutions (CES) Power Sector India senior analyst Harsh Thacker told attendees that some of the opportunities already emerging from the World Bank study are found in new energy vehicles, as well as lithium-ion battery (LIB) cell manufacture.
The automotive industry is South Africa's largest manufacturing sector, with about 60% of vehicles being exported, especially to Europe. The industry has a strategic imperative to survive and, therefore, it must pivot to electric vehicle (EV) production to align with global and local targets in this regard, he stated.
For the latter, there is currently no LIB cell production in the country. This is, therefore, a longer-term goal, but would most likely be required to meet local content ambition, the study indicates.
A scenario impact comparison finds that the establishment of an LIB cell manufacturing facility and the production of EV batteries for the local automotive industry will create an additional 890 direct full-time equivalent (FTE) jobs in manufacturing, and 17 192 indirect FTE jobs.
This is notable for a country such as South Africa with a high unemployment rate, particularly among the youth.
The study emphasises that investment in EVs is critical to create a local integrated battery value chain in the country. Over 70% of battery requirements in 2030 are likely to come from the mobility sector in the South Africa market, Thacker said.
The study also highlights that investment in infrastructure, especially electricity, is a must in order for South Africa to compete in mineral beneficiation and mid-stream chemical activities.
Mintek CEO Dr Molefi Motuku highlighted that battery minerals were important for the country.
He noted that Mintek has been piloting capabilities and key recycling initiatives to support the development of segments of the battery value chain.
South African Energy Storage Association (SAESA) chairperson Mikhail Nikomarov also welcomed the work undertaken thus far. He noted that a previous study by the Industrial Development Corporation (IDC) had created interest in this sector, which is now being further bolstered.
Nikomarov said the battery storage market is lagging somewhat behind other industries, such as the wind energy sector, for example, where there is enough information on its impact and jobs, besides others , with these providing valuable insights into directing policy decisions.
The work done by the IDC, along with the information in the current study, would provide the opportunity to eventually decide which levers can be used, given that resources are limited, he said.
Moreover, it will play a key role in ensuring that employment is increased and that the country follows a just transition path, he said.
Nikomarov highlghted that the country has the capabilities to leapfrog in this arena. For example, he posited that, compared with developed countries, South Africa would not need to use natural gas as a transition fuel, but could go directly from coal-based solutions to renewable energy and storages solutions.
He also pointed out that there is potential for more storage beyond the current dedicated allocation, with the actual upside for storage within the Integrated Resource Plan possibility being much higher, which also widens opportunities for the country.
Moreover, there are three sources of potentially even higher amounts of storage through co-location with solar photovoltaic, wind energy and embedded generation, he pointed out.
Nikomarov said the country’s energy storage system market had grown notably, with the utility energy storage market about to erupt.
For example, he mentioned that Eskom had, in April, tendered for 198 MW as part of a World Bank-funded Battery Energy Storage System programme; and that a further 152 MW is expected later in the year.
Nikomarov also encouraged industry players that feel that they are underrepresented in this arena to contact SAESA, which aims to ensure holistic representation. SAESA seeks to guide policy to allow for accessibly of storage projects and advance the energy storage industry in the country, he noted.