Battery storage in Africa: Trends and challenges

Why are battery energy storage systems (BESS) important in Africa?

BESS projects are a solution to a number of inherent issues and challenges that many African jurisdictions face from a power supply perspective. Looking at jurisdictions like South Africa, for example, which is currently facing power challenges at present, you can see the case of BESS solutions (amongst other things) in addressing the power crisis.

There is a future for battery storage projects in Africa, which is being driven by a few things:

• Firstly, the uptake in renewable energy projects in a number of African jurisdictions (which will only continue to grow). Battery storage projects have always been intended to be the key means of addressing the challenges raised by the intermittency of renewable power generation. They achieve this by storing and releasing power at optimum times. So, we see a number of solar PV and onshore wind projects being developed with a battery storage element.
• Secondly, grid infrastructure challenges in a number of African jurisdictions. This can either be due to limited or non-existent infrastructure or a strained grid system. BESS projects can play a crucial role in enhancing the resilience and stability of electrical grids by: 
  
  1. responding quickly to fluctuations in demand and supply, 
  2. maintaining power continuity, and
  3. preventing service disruptions. 

What are the main challenges regarding the delivery of battery energy storage systems (BESS) projects in Africa?

Some of the issues facing most projects located in African jurisdictions are not necessarily specific to Africa, for example, the well documented supply chain issues driven by the increased demand for batteries globally and original equipment manufacturers (OEMs) struggling to keep up on the supply side. The scale of the supply chain challenges increases based on geography and in terms of how we have seen this play out in certain African jurisdictions:

• It has led to uncertainty regarding the ability to deliver these projects and/or incredibly long lead times with other more developed jurisdictions almost being “at the front of the queue” so to speak; and
• In relation to more sizeable standalone BESS projects which usually involve a competitive procurement process, there is limited engagement from suppliers or international contractors who are more focused on delivering projects in established jurisdictions where projects can be undertaken speedily. 

We also find that in respect of some jurisdictions – the absence of clear regulations or policies in connection with BESS projects creates uncertainty for developers seeking to deliver these projects, particularly where they are looking to raise debt funding to do so.

Regarding OEMs (original equipment manufacturers), do they experience any issues when it comes to supplying their products in Africa?

OEMs, as well as international contractors with the expertise to deliver these projects, do face various challenges in certain parts of Africa including, but not limited something as simple as the geographical location of some of the proposed projects.

From our experience, we have seen this translate to manufacturer warranties from OEMs being more limited in scope and duration than what you would otherwise see in projects in more developed jurisdictions closer to an OEMs production hub. With projects in more distant and possibly remote locations, OEMs need to weigh up the practical challenges they would face in repairing or replacing components under those warranties. They will also consider who would be operating the BESS system (for standalone assets this could be a state utility). 

It is also more difficult for EPC (engineering, procurement, construction) contractors to wrap all the risk in the delivery of these projects, in particular the assets performance, in certain jurisdictions where they otherwise would in more developed markets.