Energy Security in South Africa: the business case for energy storage

The document examines the South African energy storage market, highlighting the shift toward hybrid solar PV and battery systems to mitigate the economic impact of record load shedding. It identifies Lithium-ion (specifically Lithium Iron Phosphate) and Lead Acid as the dominant technologies, while noting that Vanadium Redox Flow and Hydrogen storage face barriers due to limited market penetration and the need for specific use-case analysis. The brief provides cost benchmarks for Li-ion systems and models a hybrid solar PV and storage scenario where the return on investment is estimated at 8-12 years, noting that this period could be reduced if business continuity benefits are factored in.

• South Africa experienced its worst year of load shedding in 2019, totaling 1,352 GWh and 530 hours, with Stage 6 implemented. This crisis is expected to persist for 3-5 years without decisive action.
• Lithium-ion and Lead Acid batteries are the leading technologies in the South African back-up power market. Within the Li-ion category, Lithium Iron Phosphate (LiFePO.4) is the most dominant due to its operational stability, defined performance ratings, and low manufacturing costs.
• There is a significant market opportunity for hybrid solar PV and storage; if 25% of new solar PV installations include storage, the potential annual market could reach approximately 200MWh, valued at roughly R2 billion.
• For a modelled 100kWp solar PV system, adding Li-ion energy storage doubles the capital cost and extends the payback period to 8-12 years, compared to 4-7 years for solar PV alone. However, this payback period may be significantly reduced when accounting for the avoidance of business operation losses.
• Certain technologies, specifically Hydrogen storage and Vanadium redox flow batteries, have failed to achieve significant market penetration because they require purpose-built systems and specific use-case feasibility analyses, typically for large capital utility-scale applications.

APA

Strydom, J. (2020). Energy Security in South Africa: the business case for energy storage. GreenCape. https://greencape.co.za/wp-content/uploads/2022/10/20200330_Industry-Brief_Energy-Storage-3.pdf

Chicago

Strydom, Johan. Energy Security in South Africa: the business case for energy storage. GreenCape, 2020. https://greencape.co.za/wp-content/uploads/2022/10/20200330_Industry-Brief_Energy-Storage-3.pdf.

Wikipedia

{{cite report |last1=Strydom |first1=Johan |title=Energy Security in South Africa: the business case for energy storage |publisher=GreenCape |date=2020 |url=https://greencape.co.za/wp-content/uploads/2022/10/20200330_Industry-Brief_Energy-Storage-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{strydom2020energy, author = {Strydom, Johan}, title = {{Energy Security in South Africa: the business case for energy storage}}, institution = {GreenCape}, year = {2020}, url = {https://greencape.co.za/wp-content/uploads/2022/10/20200330_Industry-Brief_Energy-Storage-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }