A South African energy project finance specialist estimates that the country’s near-term battery energy storage project pipeline could grow to about R53-billion over the coming three years, potentially making the country one of the largest adopters of such systems globally.
The estimate includes assumptions not catered for in the country’s Integrated Resource Plan of 2019 (IRP 2019), however, and also assumes large growth in private battery storage investment.
Futuris Advisory founder Bertie Strydom, whose previous 20-year stint at the Industrial Development Corporation included a strong recent focus on the development of a domestic energy storage industry, calculates that the pipeline could grow to about 3 746 MW/14 648 MWh, once Eskom and private projects were aggregated.
“If we take a conservative estimate of saying that these solutions can be deployed at about $250/kWh, we are taking about an investment of R53-billion,” Strydom told participants to a webinar hosted by the South African Institute of Electrical Engineers on Wednesday.
The pipeline outlined by Strydom included:
- the 513 MW/2 052 MWh allocation for 2022 in the IRP 2019;
- Eskom’s tenders for 197.5 MW/827 MWh of battery energy storage across seven sites; and
- the five non-gas projects named as preferred bidders under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPPP), which will have combined battery storage of 640 MW/2 475 MWh.
However, he was also of the view that some battery storage could be added to the 1 000 MW of solar photovoltaic (PV) and 1 600 MW of wind currently being procured under the Renewable Energy Independent Power Producer Procurement Programme, at a RMIPPPP-type ratio of 82.5% storage to contracted capacity.
Should that be the case – a proposition not currently catered for in the IRP 2019 – another 2 145 MW/8 294 MWh could be added to the pipeline.
Likewise, should 10% of the 5 000 MW of new private embedded generation that could be added in the wake of the recent 100 MW reform involve storage a further 250 MW/1 000 MWh of additional batteries could be injected into the pipeline.
“What this tells us is that better storage presents the country with a huge opportunity.
“We have very limited local technology and capacity to deliver on these opportunities in the short- to medium term and unfortunately, therefore, the biggest portion will leave our shores and go to other economies,” Strydom said, while arguing that battery energy storage represented a significant localisation opportunity.
Speaking on the same platform, Bushveld Energy CEO Mikhail Nikomarov expressed optimism about the domestic market outlook, as well as the prospects for localising battery storage systems.
“Last year, the sixth largest battery market for residential batteries was South Africa and on the utility side, Eskom has got a large programme and, in the risk-mitigation round, everything that was not a [power] ship had a large battery tied to it and we will probably see a lot more in future,” Nikomarov highlighted, stressing that “batteries are already here” and the outlook is even more positive.
He also argued that South Africa could not only localise for its domestic needs but could also become an exporter of battery storage solutions in future.
“I know this because we are doing it ourselves with vanadium: yes, we’ve got the vanadium in the ground, but we can also make the electrolyte and we believe we can do the batteries here ourselves.
“And I think that opportunity is not limited to the vanadium version of battery storage, it is also possible with other technologies.”