[CAVIE/ACCI] Renewable energy resources such as wind, water or solar solutions hold great promise. They could provide energy while overcoming Africa’s infrastructural challenges. But this energy would need to be stored and lithium ion batteries might provide a solution.
Lithium ion, or Li-ion, batteries are a type of rechargeable battery. They are a popular choice because when well looked after, they can be drained and charged literally thousands of times, which makes them superior to commonly used lead acid batteries.
Like other batteries used to store energy, these act as a buffer between power generation and consumption. The batteries are charged when power is available and then provide power when it is not.
If Li-ion batteries could be manufactured in Africa on the appropriate scale, they would become cheaper and power users could rely more on renewable energy than they do now. This would open the path for clean, sustainable energy, mitigating the effects of climate change. It could also boost economies.
Africa already has part of the solution: photovoltaic (PV) panels are common and the energy they produce in SA is about 40% cheaper than that generated from fossil or nuclear-fuelled power stations.
The main drawback of PV power is that it can only really be generated between 10am and 5pm. That’s not when most people need to use it, so it has to be stored cheaply.
Li-ion batteries are used in many commercially available products, like power tools, toys, electric bikes, laptops and mobile phones.
Large Li-ion battery packs in home and grid-power applications are becoming more popular in many countries, including some in Africa.
There are only a few Li-ion battery factories in the US, Poland, South Korea, Japan and China. Most of the companies that run them work closely with electric vehicle manufacturers and consumer goods production sites. Some of the top 10 companies manufacturing the batteries include Panasonic, Toshiba, Samsung, LG and Tesla.
There are a few small companies in SA that assemble battery packs using imported cells. And there seems to be only one facility in Africa that has the capability to produce Li-ion battery cells at pilot scale: the University of the Western Cape’s Energy Storage Innovation Lab. The lab has been laying the groundwork for industrial Li-ion batteries assembly.
There is huge opportunity. SA has almost 80% of the world’s known reserves of manganese, an important component of the most popular battery. Because the companies that produce Li-on batteries have deep pockets, and because the price of manganese is relatively low, they have been able to import it from SA.
A growing market will eventually justify the creation of a local battery production plant. But to produce batteries at a competitive price, a large-scale facility with an investment of at least $1bn is required. Only in a facility that produces millions of excellent quality cells per day will the cost per cell be able to compete with cells produced on other continents. It will be challenging to raise the required capital in Africa.
To achieve commercialisation across the continent, the cost of a Li-ion battery system needs to be lower than any alternative energy storage system. Currently, Li-ion batteries cost between $500-$1,000/kWh, significantly more than lead acid batteries. But since they last longer than lead acid, they can offer a better deal.
The desired shift away from SA’s unsustainable fossil-fuel-based economy can be realised when the country produces Li-ion batteries that last many years and cost as little as $300/kWh. Economy of scale is crucial to achieve these costs.
The electrification gains could be huge. Renewable energy — such as wind or solar solutions — combined with an energy storage device that could deliver electricity at the same cost as from a power station would be a game changer.
And because Africa’s power distribution network is still underdeveloped, investors in the device could see returns sooner than in regions with a fully developed transmission network that is already paid for.
Bernard Jan Bladergroen