Talk on the need to electrify Africa and provide 600 million people without access to power usually centers on solar, wind, hydro, geothermal, or other energy-generating technologies.
Africa is making significant strides toward installing renewable energy capacity, particularly solar energy. However, an energy system needs a means of storing electricity in order to be able to operate consistently when it depends on naturally intermittent sources like solar and wind. This will enable power to be supplied even in the absence of wind or sunlight.
BESS, or battery electricity storage systems, are one of the primary alternatives. These work similarly to any other battery in that they store extra energy produced during the generation of electricity. Users can then use the electricity stored in the battery system when there is a shortfall in the system.
There are other ways to store electricity than batteries. Pumped hydropower, which releases water from reservoirs to produce electricity when needed, is still the most widely used kind of storage in the world. However, BESS systems can still be extremely important, especially considering how challenging and contentious it is to build additional hydropower capacity. Electricity produced throughout the day by solar power, for example, can be stored for several hours thanks to current BESS technologies.
Thus, according to Damola Omole, director of utility innovation at the nonprofit Global Energy Alliance for People and Planet (GEAPP), battery storage is a “critical enabler” for renewable energy in Africa.
In Africa, a few sizable battery storage systems have either been constructed or are presently being built. One notable instance is the Norwegian business Scatec’s Kenhardt project, which started sending power to South Africa’s national grid late last year. With 456 shipping container-sized battery storage units and a 225 MW overall storage capacity, the site currently ranks among the top 10 largest battery storage systems in the world.
But Kenhardt is an exception due of its scale. While several nations, like as Senegal and Mozambique, are implementing large-scale BESS projects, the continent is usually trailing behind in the competition to increase storage capacity.
Omole cautions that the amount of money being invested in battery storage is insufficient to support the solar projects that are already in the pipeline in Africa, let alone the far higher amounts of solar energy that will probably be used in the upcoming years. He states that “it’s clear that the BESS investment is far from where we need it to be” and goes on to explain that in order to guarantee that renewables investment in Africa covers the full value chain, a “deliberate, concerted effort” is required.
Risks and expenses
According to Holger Rothenbusch, managing director and head of infrastructure and climate at British International Investment, the UK’s development finance organization that provided debt funding for the Kenhardt project, the main cause of the lack of investment in battery storage in Africa is quite straightforward. “Investment in battery storage is trailing behind that in energy generation, primarily due to cost.”
According to him, “projects that do include a battery component either require a fairly high tariff for the power, or you require subsidies in order to keep the tariff affordable and the project economics viable.”
A report published earlier this year by the International Institute for Sustainable Development on BESS in South Africa found that there are still major concerns over battery costs in the country. The report’s authors, however, argued that energy system planners need to recognise the value of BESS as well as its costs. They noted that BESS brings many benefits for the entire energy system – such as reducing the need for other forms of electricity infrastructure – that are not captured by standard cost-benefit analyses.
However, the fact that there are still many unanswered questions regarding the technology itself is another reason why investors are reluctant to support battery storage. According to Rothenbusch, “technology risks are still playing out.” The construction of lithium-ion batteries is not the main focus. More important is the question of how they perform over time. Which patterns of degradation are expected to emerge? How large-scale batteries will deteriorate over the next ten to fifteen years is a mystery.
The good news is that the price of battery storage is progressively declining. In a recent research, the International Energy Agency stated that the cost of lithium-ion batteries, which are used in nearly all battery storage systems, has decreased by 90% since 2010 and is considered to be “one of the fastest cost declines of any energy technology ever.” By 2030, it anticipates an additional 40% in cost reductions on average.
According to Rothenbusch, “it’s unquestionably the technology of the future, and the cost curve is also sloping down with more investment and greater capacity being built.” “Battery costs should be competitive with thermal alternatives by 2030,” the author predicts.
Increasing investment
National electricity networks are not the sole use for installing battery storage. BESS is a “key component” of mini-grids or micro-grids, according to Martijn Proos, co-head of SA & Africa credit at Ninety One, the fund manager of the Emerging Africa Infrastructure Fund, a division of the donor-funded Private Infrastructure Development Group.
These operate much in the same manner as a traditional grid, but on a smaller size, and are frequently regarded as an effective means of supplying electricity to isolated locations devoid of transmission and distribution facilities. Mini-grids can function independently or in conjunction with the national grid.
More generally, Proos claims that in order to assist Africa in obtaining more funding for BESS, a “multifaceted approach” incorporating “innovative financing mechanisms” is required.
Investment is made possible by legislators that have supportive, uniform, and transparent legislative frameworks for energy storage, according to Proos. In order to increase investor trust, he continues, “tax breaks, subsidies, and streamlined permitting processes” are essential. Modernizing grids with storage components is also a priority.
Africa, according to Omole, may learn from nations like India and many southeast Asian nations who are “similarly oriented” and have already made significant strides toward installing battery storage.
Several African nations joined the BESS Consortium during COP28 last year. The consortium is an initiative of the Global Leadership Council, formed by GEAPP, which also comprises a number of international financial institutions and the energy giant Masdar, based in the UAE. The consortium’s ultimate goal is to assist member nations in project preparation and regulatory environment enhancement to promote investment.
According to Omole, the fact that several African nations joined the project demonstrates that there is “political will” to hasten the deployment of BESS.
In fact, he emphasizes how important BESS is to the success of renewable energy in Africa, which is critical to bridging the gap in energy availability. “The issue is not going away,” he cautions, pointing out that in addition to the 600 million people in Africa who lack connectivity at all, up to 300 million have intermittent access.
Even though Omole admits that increasing BESS investment is a “uphill task,” he ultimately thinks that when more projects are implemented, Africa will reach a “tipping point.” He thinks investors will jump at the chance to invest in battery storage as soon as the value proposition becomes evident, making ensuring that storage plays a key role in Africa’s renewable revolution.
