Manufacturers’ Perspectives: Overcoming barriers and unlocking solutions for battery manufacturing in South Africa

Abstract

The global energy sector is transitioning towards sustainable sources. South Africa, a country heavily reliant on coal for its energy needs, faces myriad challenges compounded by persistent electricity shortages. These shortages have widespread negative economic impacts, prompting the exploration of technological solutions such as battery energy storage systems (BESS). Adoption of BESS is on the rise in South Africa. However, the country is still heavily reliant on imports for battery storage systems. This study sought to explore the barriers and solutions for the manufacture of BESS in South Africa, thus contribute to the rapid implementation of these systems in the energy sector. A qualitative approach was employed, including collecting insights from key energy sector role players, among them, representatives of global battery cell manufacturers and local battery assembly companies. Semi-structured interviews were conducted with five participants from global electro-chemical battery manufacturers, two from BESS assembly companies operating in South Africa, and seven key local stakeholders such as policymakers, and representatives of research institutes, and a financial institution. Thematic analysis of these interviews revealed that, first, battery energy storage systems present substantial opportunities for South Africa. Second, localising battery manufacturing could enhance grid stability, renewable energy integration, job creation, and economic growth. The study identified key barriers to local battery manufacturing. These include market, financial, technology, and policy barriers, and a lack of skills and international partnerships specific to South Africa. To address these barriers, the study suggests fostering strong partnerships between government and battery manufacturers, sound policy development and implementation, manufacturing incentives, tariff reforms, and regional demand validation. Key considerations for battery manufacturers entering new markets like South Africa include market entry challenges, cost competitiveness, intellectual property protection, infrastructure improvements, access to raw materials, and government support. The study revealed that government leadership is crucial for developing the ii battery manufacturing industry in South Africa. Stimulating domestic demand for electric vehicles, developing mineral refining capabilities, and fostering government-industry partnerships are recommended to capitalise on market potential and industry growth. These findings complement existing literature and highlight factors unique to the South African context, as perceived by stakeholders within the battery industry