Recent events in South Africa’s energy sector have highlighted – as if there were any doubt – the need to make up for lost time on the country’s energy security.
As Africa’s largest pure-play renewable energy Independent Power Producer (IPP) , with over 1GW of wind power in operation across Egypt, Senegal and South Africa, and a pipeline of additional projects in development across the continent – we share the urgency that South Africans feel in making loadshedding a thing of the past.
The outlook is still difficult, with the prospect of Eskom increasing its loadshedding up to 16 stages in an effort to avert a complete collapse of the grid. While this seems a crushing prospect for businesses and householders, the consequences of a grid collapse would be dire and full restoration of power could take many weeks.
There are also some points of light in what can seem like unending darkness: the City of Cape Town has for example rolled out facilities for businesses and homes to sell power back to the grid. Compared to the scale of South Africa’s energy-crisis, this might seem like a drop in the ocean, but there are a number of examples of robust efforts to get beyond it.
First, the advances in battery storage: last year Eskom awarded contracts to two service providers for the rollout of its Battery Energy Storage System (BESS) project. The World Bank-funded project is designed to manage demand during peak periods and support grid stability. Its first phase comes onstream five months from now and the second by December 2024.
The project will use large-scale utility batteries with a daily capacity of 1440MWh, and 60MW of solar PV at Eskom sites in the Western, Northern and Eastern Cape and KwaZulu-Natal. The KwaZulu-Natal project alone will store and distribute enough electricity to power a small town for four hours. More recently, the Department of Mineral Resources and Energy issued a request for proposals (RFP) for 513MW of battery storage at five substations in the Northern Cape.
The second factor, linked directly to the first, is South Africa’s famed mineral wealth: Bushveld Energy is commissioning SA’s first vanadium electrolyte factory and aims to produce about a million litres of vanadium electrolyte this year. It will reach full capacity of 8m litres over the next four years, making it the biggest such facility outside of China.
This is timely considering the economies of scale in the battery market as South Africa is already the sixth largest residential storage market with an additional 1.3GW of utility-scale storage set to be contracted this year. These advances for battery-storage technology lay to rest the myth that renewables can’t provide baseload power.
The third contributor is the nearly R10bn in tax-breaks for households and businesses to install rooftop solar arrays which Finance Minister Enoch Godongwana announced in his recent annual Budget Speech. Whilst there have been some criticisms, the scheme is certainly a small step in the right generation.
Finally, we are sitting on a largely untapped potential in the form of renewable energy. From November 2013 to 31 December 2022, more than 6 gigawatts of wind, solar PV and concentrated solar power came online in South Africa, according to the CSIR.
Wind and solar power already generate twice as much power for the nation’s grid than nuclear power, without the downside of radioactive waste that requires safe disposal for a million years.
Eskom’s most recent Generation Connection Capacity Assessment shows that the Northern Cape’s grid is at full capacity, while the Western and Eastern Cape each have just 5GW available. These provinces have some of the world’s best, and cheapest, solar and wind resources – which we must capitalise on.
Consider that the average prices in bid window 5 had a weighted average price of 42.9c/kWh, while the wind came in at a weighted average price of 49.5c/kWh. There’s still 23GW of grid capacity available elsewhere, and renewables are well placed to address this. Mpumalanga – where Eskom has the bulk of its increasingly shaky coal-fired fleet – has 6.5GW available.
Right now, these measures may all seem like Band-Aids. And while South Africa’s energy-crisis has never been more serious, so the solutions at hand have perhaps never been more promising: the nexus of cheaper-than-ever renewable energy and the massive advances in battery-storage are a catalyst for green power to help drive us beyond energy-insecurity.
And beyond that, 600m Africans still live without electricity, needlessly so considering the continent’s access to talent and vast resources: mineral, solar and wind. Could South Africa’s energy travails hold lessons for energy transition on the continent? I believe so, but we need those in charge to maintain momentum and make the right decisions to help unleash change, and help achieve a just energy transition – for South Africa and beyond.
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