Watts in Store Part 2

The report identifies significant barriers to grid battery deployment in South Africa, including an outdated electricity sector framework, insufficient understanding of battery capabilities, and economic challenges related to capital access and revenue stacking. It highlights the potential for local value chain development in lithium-ion and vanadium redox flow batteries, while warning of environmental risks in raw material extraction and the danger of technological lock-in. The authors propose a series of priority actions, including the alignment of national planning documents, the establishment of a market for ancillary services, and the implementation of pragmatic local content requirements in procurement.

• There is a significant discrepancy between national capacity expansion planning and grid expansion planning; for example, the battery capacity in the Integrated Resource Plans (2019 and draft 2023) is substantially lower than the requirements identified in Eskom’s 2022 Transmission Development Plan.
• Economic viability for grid batteries is hindered by the inability to 'revenue stack,' as there is currently no national system to compensate operators for providing ancillary services.
• South Africa has immediate opportunities to develop local value chains for both lithium-ion batteries (LIBs) and vanadium redox flow batteries (VRFBs), specifically through increased mineral beneficiation to battery grade and battery assembly.
• The current regulatory framework is outdated and fails to define energy storage, which leads to it being classified as an energy generator by default, ignoring its dual nature as both a consumer and generator of energy.
• High capital intensity and a lack of local project track records make it difficult for developers to secure affordable finance, with some hybrid projects requiring up to three times the initial capital of gas turbines.
• The procurement process for the Battery Energy Storage Independent Power Producer Procurement Programme (BESI4P) is criticized for being unrealistic for vanadium redox flow batteries and for having specifications that may force lithium-ion batteries into costly repowering processes after approximately 8 years.
• Environmental and human rights risks are associated with battery raw materials, particularly cobalt and nickel from the Democratic Republic of the Congo, and the toxic nature of vanadium, which requires improved hazard assessments.
• Lithium-ion battery recycling in South Africa is extremely low, with reports indicating that less than 1% of LIB waste is collected, with the majority ending up in landfills.
• The unpredictability of Eskom tariff increases, which are not aligned with inflation and only known one year in advance, creates significant uncertainty for battery developers estimating future running costs.

APA

Halsey, R., Bridle, R., Overy, N., & Vazi, B. (2024). Watts in Store Part 2. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-06/south-africa-watts-in-store-part-2.pdf

Chicago

Halsey, Richard, Richard Bridle, Neil Overy, and Bathandwa Vazi. Watts in Store Part 2. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-06/south-africa-watts-in-store-part-2.pdf.

Wikipedia

{{cite report |last1=Halsey |first1=Richard |last2=Bridle |first2=Richard |last3=Overy |first3=Neil |last4=Vazi |first4=Bathandwa |title=Watts in Store Part 2 |publisher=International Institute for Sustainable Development |date=June 2024 |url=https://www.iisd.org/system/files/2024-06/south-africa-watts-in-store-part-2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{halsey2024watts, author = {Halsey, Richard and Bridle, Richard and Overy, Neil and Vazi, Bathandwa}, title = {{Watts in Store Part 2}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = jun, url = {https://www.iisd.org/system/files/2024-06/south-africa-watts-in-store-part-2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }