According to the report, Scatec, a Norwegian renewable energy company, has unveiled the Kenhardt solar farm in the Northern Cape, boasting a capacity of 540 MW. This project, featuring 225 MW of battery storage and a total storage capacity of 1.1 GWh, ranks among the largest hybrid power initiatives worldwide. Spanning 879 hectares, or 10 kilometers from north to south, the site is adorned with one million solar panels and houses a battery facility comprising 456 units, each equivalent in size to a shipping container and weighing 30 tons.
In South Africa, there's a pressing need to hasten the deployment of utility-scale storage projects.
According to recent research, South Africa's energy market is sizable, with power demand reaching 211TWh in 2022, ranking 22nd globally, equivalent to 2.4% of China's power demand. Despite this significant demand, the power supply structure in South Africa remains centralized, with Eskom, the largest single power provider, responsible for approximately 95% of the country's power generation.
In line with the Integrated Resource Plan (IRP) of 2019, South Africa aims to achieve a renewable energy capacity of 46.3% by 2030, with wind and photovoltaic (PV) installations totaling 17.7GW and 8.3GW respectively. However, the reality falls short of these targets. TrendsForce analysts noted that the phase-out of coal units is encountering challenges, and the growth of PV installations has stalled.
South Africa's Installations and Future Plans (DMRAE)
As a result, South Africa's current energy mix diverges from the government's outlined plan, emphasizing the urgency to accelerate the deployment of utility-scale storage projects. These projects serve as the primary short-term solution to alleviate the country's energy challenges. Accelerating the deployment of utility-scale storage projects will not only stimulate demand for wind and solar power station projects but also realign the energy transformation trajectory as envisioned in the IRP-2019.
According to TrendForce, South Africa is poised to add 3.83GWh of installations in 2024, showcasing the country's vibrant energy storage market.
The surge in utility-scale storage development is anticipated to fuel this growth, with newly added capacity expected to hit 1.46GW/3.83GWh, marking a 35% increase from the previous year. This expansion is predominantly driven by the residential sector.
Projections for New Installations of Energy Storage in South Africa
In terms of residential storage, South Africa is projected to incorporate 1.5GWh of capacity in 2024. With frequent power outages and burgeoning residential storage installations incentivized by subsidy policies, there's a significant uptick in residential battery storage to ensure reliable power supply. This sector is expected to witness even more robust growth in 2024.
As for utility-scale energy storage, projects are primarily propelled by government tenders. However, the sluggish pace of construction for winning projects casts uncertainty on when the capacity will be operational.
Leading energy storage companies are setting their sights on South Africa.
With the country ramping up its residential solar installations, the demand for residential battery storage is also on the rise. While the market for residential battery storage is slowing in Europe, many manufacturers are eager to explore new opportunities in South Africa.
In late 2023, Sungrow secured a supply agreement with the French renewable energy group EDF Renewables to provide 264MWh liquid-cooled energy storage systems and MV transformers for the Umoyilanga project. This project marks South Africa's first wind-solar-storage integrated virtual power plant (VPP). EDF Renewables, along with the privately held investment company Perpetua Holdings (Pty) Ltd, clinched the Umoyilanga project bid in the South African Government's Risk Mitigation IPP Procurement Programme (RMI4P) in March 2021. Once connected to the grid, the project is poised to alleviate South Africa's power crisis, enhance energy supply stability, and serve as a testament to the advancement of renewable energy in the country.
On December 11, 2023, Kenhardt, backed by the world's leading renewable energy manufacturer and equipped with a comprehensive ESS system by BYD, commenced supplying power to South Africa's national grid. Today, it stands as the largest solar and battery storage facility in the country.
Designed to deliver 150 MW of dispatchable power round the clock, from 5 am to 9:30 pm, year-round, the plant effectively addresses the challenge of large-scale blackouts stemming from power shortages. Additionally, the power station contributes to expanding the transmission grid, enhancing power supply stability, and aiding South Africa's shift away from coal dependency in its energy mix.
With the South African government's push for renewable energy, the future looks promising for solar and battery storage. As the cost of energy storage continues to decline and the IRR of energy storage improves significantly, South Africa's energy storage market presents lucrative development opportunities, positioning it as a pivotal player in the global energy storage landscape.