We have reached a milestone in South Africa’s energy journey, reaching just over 230 days since the suspension of loadshedding.
Key drivers behind this milestone include energy sector reforms such as the amendments to the Energy Regulation Bill, which opened grid access to Independent Power Producers (IPPs), and the growing contribution of renewable energy sources like solar and wind to the energy mix. This includes the private power off-take rush, which has the effect of reducing the demand on Eskom. While these advancements have reduced reliance on fossil fuels and created new jobs, renewable energy still represents a small proportion of South Africa’s overall energy mix. This is where Battery Energy Storage Systems (BESS) come in, offering a critical solution to stabilise renewable power and support grid reliability.
BESS – The Solution for Renewable Reliability
As renewable energy projects continue to grow, challenges remain due to the intermittent nature of renewables. BESS technology provides a practical solution by storing surplus energy during periods of low demand and releasing it during peak times, which stabilises supply and supports consistent grid performance.
Eskom is currently implementing Africa’s largest rollout of BESS, a promising step toward stabilising grid capacity. However, this initiative faces significant hurdles, particularly global supply shortages that limit growth and effectiveness.
Supply Chain Disruptions – A Persistent Challenge
Global supply chains for BESS are increasingly disrupted by geopolitical tensions. For instance, the second Trump presidency could heighten trade frictions with China, the world’s largest BESS producer. Likewise, ongoing conflicts in Eurasia and the Middle East continue to affect supply chains, leading to price volatility and delays in the BESS supply chain.
The global construction industry, which has been experiencing similar supply chain disruptions and cost inflation, which has forced the construction industry to reprogramme and reprice certain activities to deal with these disruptions. Price volatility and logistical challenges have delayed projects and driven up costs, underscoring the need for supply chain diversification in the energy sector. For local IPPs, diversification is essential to manage these challenges, especially amid volatile exchange rates. Collaboration between BESS developers, IPPs, and governments will also be vital for building reliable, resilient supply chains adapted to today’s geopolitical complexities.
Additionally, establishing robust supply agreements and well-considered procurement strategies can help secure critical materials for BESS projects despite turbulent global markets.
Skills Development – Closing the Green Skills Gap
South Africa’s renewable energy sector not only addresses energy needs but also holds significant potential for job creation. Recent research by Boston Consulting Group indicates that the country could create up to 275,000 green jobs by 2030, predominantly within the solar sector. However, there remains a substantial gap in the specific skills needed for the green economy.
Currently, most BESS components and equipment are sourced from international original equipment manufacturers (OEMs) with the technical expertise required for complex installations. This reliance on imported skills highlights a local gap that could be filled with targeted training. By aligning education and skills programmes with industry needs, the sector can better meet the demand for skilled technicians and engineers, reducing the need for costly imported labour.
Government initiatives to reskill workers for a low-carbon economy are steps in the right direction. Training programmes should prioritise communities located near a dense concentration of renewable projects, focusing on an ecosystem approach to skills development that includes all aspects of the renewable energy value chain. Strategic partnerships with OEMs, industry players, and educational institutions will be crucial to fostering the talent South Africa needs for its green transition.
Public Health and Environmental Benefits
Beyond grid stability, BESS offers substantial environmental and public health benefits. By reducing dependence on fossil fuels, BESS systems help cut greenhouse gas emissions and improve air quality, which has positive effects on public health. Furthermore, by storing excess energy and reducing peak demand pressures, BESS contributes to grid stability and reduces the need for extensive infrastructure upgrades.
In an evolving energy landscape where coal remains dominant, and where the solar and wind industries have been firmly established in the South African market, BESS represents an overall excellent opportunity to off-takers, IPPs and investors.
A Balanced Approach for a Sustainable Future
The Just Energy Transition provides an unprecedented chance for South Africa to diversify its energy sources, build a thriving green economy, and create sustainable jobs. However, a balanced and inclusive approach is essential to maximise these benefits for all stakeholders. With strategic investments in BESS, diversified supply chains, and robust skills development, South Africa can strengthen its energy resilience, reduce emissions, and create a prosperous and sustainable future.