The power to break the shackles on growth

Coal-fired power stations are likely to generate the bulk of South Africa's electricity for decades, but within 10 years renewable energy and the ability to store that energy will round out the generation and distribution of power to lift the constraints on economic growth.

While large business in South Africa may be assessing renewable energy and storage technology in readiness for when their price and efficiency meet targets for taking the business off the grid, it is unlikely that Eskom will put in place large-scale storage connected to the grid.

If anything, storage would be a way for Eskom to buy power from independent producers, just as it buys energy from successful bidders in the renewable programme.

Karen Surridge-Talbot, centre manager for renewable energy research and development at the South African National Energy Development Institute , said South Africa's energy mix was still driven by coal-fired base load, augmented by renewables. Whether Eskom bought power when weather and sunlight provided it or whether it came from storage was not the issue.

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Surridge-Talbot said that although coal-mining companies were unlikely to stop providing to the local petrochemical industry, such as Sasol, or to the new heavyweight coal power stations, there were numerous upsides to the renewables programme.

"The renewables bidding programme contains conditions that must be met, and one of those is localisation, which includes upskilling and employing local community members and sourcing components like steel from South African producers."

She said her institute was involved in a study - due to be completed in August - on how storage can most effectively be used in South Africa.

"We are looking at various storage technologies and where and how they can be best fitted in for economic advantage. This will inform the broader road map for storage in the country, and the overall driving factor is growing the economy."

Batteries may have a role to play here, but so will gas, liquid fuels and others mediums. The business case for batteries as a storage mechanism involves rising Eskom tariffs - with double-digit price hikes expected from next year - falling technology costs and improving efficiency.

Tesla's Powerwall and Powerpack scalable batteries for home and commercial use are examples of a proliferation of battery technologies being produced around the world.

One concern Surridge-Talbot raised was what happens, in five to eight years, when South Africa probably produces a surplus of electricity. "If you're storing electricity, the commodity may not be as valuable. What then?"

It is a question yet to be answered by a battery industry gearing up for high demand from customers ranging from homeowners to national power utilities.

block_quotes_start If the IRP was redone it would throw out nuclear completely. Perhaps that is why it has not been redone block_quotes_end

Greg Austin, MD of juwi Renewable, said utilities around the world were moving in the direction of integrating battery storage systems.

But he said it was a fair competition to see which combination of generator and storage technologies - which have different energy-in and energy-out cost factors - could produce at the cheapest cost and be most useful to the grid.

He said more and better storage positioned South Africa to increase its allocation to renewables, and that it had been shown that the average cost of energy from wind and solar was the cheapest now available.

In terms of battery technology, Austin said lithium ion technology dominated research and design, but that regulation around recycling and the lifespan of batteries needed to be developed in tandem with these disruptive technologies.

So what of the national grid and the legacy of centralised generation and distribution?

The grid of the future will probably feature upgraded and strengthened distribution infrastructure, but will also start seeing decentralisation as smaller-scale generators and developers create solutions for the residential and commercial market.

Kevin Nassiep, CEO of the South African National Energy Development Institute, said Eskom had done good work to flatten its demand profiles through demand-side management, somewhat negating its need for storage. The main beneficiaries may be municipalities, which pay differentiated tariffs for power, and may see cost efficiency by buying power from Eskom outside peak times and storing it.

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Frank Spencer, business development manager for renewables at Conco Energy Solutions, said a competition-driven, substantial reduction in battery prices would be a game-changer for the grid.

"I think the biggest threat to the grid is not solar on the roof but the storage revolution."

But, he said, storage was no silver bullet. "If centralised power stations and large-grid distribution are considered the optimal model, we'll overinvest in generation assets just as consumers start migrating to distributed generation. Our Integrated Resource Plan is five years old and horribly outdated.

"If the IRP was redone it would throw out nuclear completely. Perhaps that is why it has not been redone. Nuclear power plants will be inordinately expensive. If solar and wind are producing power so cheaply, the issue becomes building capacity to meet demand."

Spencer said the technologies best suited to demand change were gas turbines, which were cheap to build but expensive to run, and - when the cost was right - battery storage. "It's arguable that in a simplistic model, the optimal mix is renewables plus gas, and it will be cheaper than Medupi and Kusile. Then, in some decades, replacing gas."

peacockb@sundaytimes.co.za