Battery energy storage systems value chain analysis for the identification of opportunities for enterprise development

Abstract

South Africa is confronted by the triple threat of inequality, poverty, and unemployment and has the highest inequality and unemployment rate in the world. The energy transition to a low carbon economy offers significant opportunity for the country to stimulate economic growth and overcome some of the social challenges faced by pursuing investments to reindustrialise the economy. The country is expected to experience a significant investment in renewable energy as part of the energy transition. However, increased penetration of renewable energy demands other technologies to ensure that grid stability is maintained. Battery energy storage is seen as one such technology and according to the Integrated Resource Plan of 2019 and Eskom’s latest Transmission Development Plan it is expected that a capacity between 2GW and 6.6GW will be required to be installed by 2032. This indicates the potential investment that will need to be made for battery storage thus highlighting the potential opportunity for localisation and industrialisation of such value chains. Thus, this paper seeks to detail the activities, products and services required for lithium-ion and vanadium flow battery energy storage systems value chains with the inherent aim at unpacking potential enterprise development opportunities that exist. The paper will detail the upstream, midstream, and downstream activities within the value chains, key market competitors, barriers and possible solutions for reindustrialisation in the country.