TRANSFORMING South Africa’s ENERGY FUTURE

Battery energy storage systems (BESS) are set to transform South Africa’s energy landscape over the next decade, offering solutions to critical challenges while creating economic opportunities for businesses and communities.

Alastair Muller, director at global management consultancy Partners in Performance, says BESS will be pivotal in the next five to 10 years, addressing the variability of solar and wind power, and turning intermittent resources into reliable baseload electricity.

“By storing excess generation and releasing it during peaks or dips, batteries help balance supply and demand, reduce blackouts and support higher renewable penetration. This is crucial as South Africa seeks to replace ageing coal plants while maintaining grid stability.”

Adoption is still in its early stages. Unlocking the full potential of storage will require clear market rules, innovative financing, local skills development and supply chains to reduce import dependence and ensure longterm sustainability.

Kalnisha Singh, development economist and founder of KD Strategies, says that as South Africa faces persistent load shedding, ageing coal plants and a pressing climate agenda, BESS has become more than a technical tool. “It is a strategic enabler, stabilising the grid, driving industrial renewal and paving the way for a more equitable energy future.”

From residential solar-plus-storage to rural minigrids and large utility-scale projects, BESS offers many opportunities. The key question, Singh asks, is whether South Africa can use this moment to store more than electrons to store opportunity, equity and resilience.

STABILISING THE RENEWABLE GRID

Consulting and advisory company Cresco conducts BESS analyses for its clients, focusing on the financial feasibility of both standalone storage systems and those coupled with existing solar and wind plants. The company also models future scenarios to assess the role of BESS in South Africa’s emerging ancillary services market.

Niel Claassens, an associate at Cresco, says storage will be essential to grid stability, absorbing excess renewable generation during the day and discharging during peak demand periods when the grid is most constrained.

“BESS can also serve as a ‘gearing’ tool, where a relatively small photovoltaic (PV) system or wind facility charges a large battery during the day, which then discharges into the evening and morning peaks. Ultimately, BESS is highly dynamic and will not be confined to a single role within the grid. For our clients, this means unlocking new revenue opportunities, improving project bankability and maximising the value of renewable generation assets,” says Claassens.

Freedom Won, Africa’s largest lithium battery manufacturer since 2012, designs and supplies scalable BESS solutions across residential, commercial, industrial and utility sectors. Its locally made products range from 5kWh home units to multi-megawatt containerised systems for large-scale projects, integrating seamlessly with solar PV and other renewables.

In 2024, the company moved to a 48 000m² facility in Johannesburg, boosting annual production capacity to more than 3.5GWh. According to Freedom Won, the investment positions the company to meet rising local and international demand while strengthening SA’s manufacturing base, and it has built a strong channel of distributors and EPC partners central to delivering its solutions nationwide.

From a grid perspective, the company says BESS provides vital relief by storing excess generation and dispatching it during peak periods, easing pressure on the grid, mitigating load shedding and enabling greater renewable penetration without compromising reliability.

Terra Firma, a sub-Saharan Africa-based turnkey energy engineering firm, says South African businesses are increasingly finding value in battery storage beyond backup power. With time-of-use tariffs, BESS enables energy arbitrage by charging when electricity is cheapest and discharging when it is most expensive.

Integrated with on-site solar, batteries store excess daytime generation for use during evening peaks, while overnight they can charge from off-peak grid power to offset costly morning tariffs. Even without solar, standalone systems reduce costs by shifting consumption away from peak pricing, says Matthew Turner, chief commercial officer at Terra Firma.

Despite the easing of scheduled load shedding, load reduction remains common and grid reliability concerns persist. BESS provides essential backup in weak grid areas, offering faster transition and lower running costs than diesel generators. Optimal configurations combine arbitrage with backup, meeting financial and continuity needs. While Terra Firma focuses on behind-the-meter solutions, Turner says utility-scale storage is critical to stabilising the grid as renewables CEO of Asoba, Shingai Samudzi, says Asoba is a technology company focused on strengthening energy resilience through intelligent grid management. “While we integrate BESS into our overall solution, our focus is less on specific modalities or energy sources and more on achieving complete grid balance.”

He says BESS plays a critical role in this process by working across the entire energy portfolio, helping to stabilise the variability of renewable energy and ensure reliable power delivery as South Africa’s grid becomes increasingly renewable-heavy.

According to global renewable energy technology leader, Sungrow Southern Africa, ageing coal and hydropower stations, limited new-build capacity and lengthy environmental approvals make renewables the fastest replacement option.

Sungrow managing director Eric Song says the surge in solar PV has created grid instability, while upgrades face even longer timelines. In response, large-scale BESS offers the most effective path to stabilising the renewable-heavy grid. To meet this need, Sungrow provides complete storage solutions and equipment to support solar-plus-storage projects nationwide.

Singh says South Africa’s early leadership, from residential uptake to Eskom’s rollout and IPP successes
shows the country has the capacity to lead not only nationally but across the continent. “If we are intentional, aligning industrial policy, financing, community benefit and mineral justice, BESS will do more than stabilise the grid. It will anchor new industries, enable green hydrogen and store something far more valuable than electrons – the possibility of a just and resilient future.”

Eskom is rolling out one of Africa’s largest BESS projects to support grid stability, integrate renewables and strengthen supply in areas with limited capacity. The batteries, linked directly to transmission and distribution networks, provide peak shaving, frequency regulation and backup during outages, and form part of Eskom’s Just Energy Transition.

The Distribution BESS project is being delivered in two phases. Phase 1 will total 199MW/833MWh, with 68MW/292MWh commissioned. A further 94.5MW/395MWh is under construction, due in 2026, while 36.5MW/146MWh is set for award and completion in 2027. Phase 2 (144MW/616MWh) remains subject to funding, says Eskom.

Eskom says there is a need for stronger front-end planning, better cost estimation amid immature markets and improved cultural understanding when working with international partners. “With global battery costs falling, we expect large-scale storage to play a growing role in grid stability, guided by the IRP, regulation and affordability.”

BENEFITS OF BATTERY ENERGY STORAGE SYSTEMS

Singh says BESS is fast becoming a catalyst for South Africa’s economic renewal. Projects such as Mogobe (103MW/412MWh), Red Sands (153MW/612MWh) and the Oasis portfolio (over 1GWh) have reached financial close, alongside Eskom’s 343MW/1 440 MWh programme, signalling delivery capacity and investor confidence.

Beyond construction jobs, South Africa’s reserves of manganese, vanadium and nickel could anchor a full battery value chain from mineral beneficiation to assembly, integration and recycling, thus creating industries, small business opportunities and skills development.

At community level, mini-grids with storage can stabilise supply for schools, clinics and water systems, while household batteries paired with rooftop solar improve resilience and support small enterprises. Utility-scale projects ensure renewable benefits are widely shared, provided they embed socio-economic development. Anchored in national strategy and critical to South Africa’s green hydrogen ambitions, BESS offers both reliability and a pathway to a just, inclusive transition, she says.

Turner says rising tariffs make BESS savings significant. A 1MWh mall battery can earn R3 300 daily in low season and R8 300 in high season, delivering internal rates of return of 15%-25%. Paired with solar, returns grow while increasing clean energy use. BESS also shields operations from grid instability and, at scale, strengthens system resilience.

Freedom Won says its BESS portfolio cuts electricity costs through time-of-use arbitrage, lowers peak charges and boosts reliability. Paired with solar, many clients recover investments in under three years.

The company says the energy storage’s growing role in national planning creates an opportunity for stronger government-private sector collaboration through clearer policy, better financing and localisation efforts that drive jobs and long-term resilience.

South Africa has two fully renewable BESS projects due by 2025 and 2026, cutting fossil reliance, costs and risks, says Song. On 21 August 2025, Sungrow launched PowerTitan 3.0 with liquid cooling, AI thermal management and stacked cells to boost efficiency, lower CaPex and maximise throughput. Built for African conditions, it enhances reliability and flexibility, supporting South Africa’s growing solar and wind integration through Sungrow’s extensive global grid-forming ESS experience.

CHALLENGES TO SCALING

Muller says the economic case for BESS has strengthened as battery costs fall and revenue streams expand. Key factors include capital outlay, operating expenses such as battery replacement and income from energy arbitrage, grid balancing and ancillary services. “While high interest rates raise financing costs, supportive policies and incentives are making large-scale investments increasingly feasible,” he says.

For Samudzi, the biggest barriers are financial, particularly at small scale. Monetising residential solar remains difficult, as wheeling at non-commercial levels is challenging. “Batteries add significant baseline CaPex, making dispatchable renewable energy unattainable for most households,” he says. At commercial level, financing is more accessible, but disparities in costs between technologies and geopolitical factors, such as tariffs and trade relationships, can still deter investment.

Claassens agrees finance is the greatest barrier, especially for grid-charged systems. While capital costs are falling, fixed grid charges drive high BESS tariffs. Predicting Eskom tariff increases is difficult, he says
with the recent Eskom/NERSA court ruling highlighting long-term uncertainty.

“If fixed charges continue to rise, forecasting viable tariffs for grid-charged projects will be harder. Greater regulatory clarity and cost-reflective charging structures are essential to unlock wider deployment,” says Claassens. Song adds that strict regulatory localisation rules burden EPCs, while larger-capacity battery cabinets create transport challenges, particularly for projects located in remote areas.

More than a technical fix, and challenges notwithstanding, battery energy storage systems are a catalyst for industrial renewal, energy equity and long-term resilience. With strategic alignment and bold investment, South Africa can harness BESS to power not just its grid, but also its future.