South Africa’s renewable energy ambitions are increasingly running into a practical constraint: the grid cannot yet carry all the new electrons/energy power being planned and construct by developers. While developers are advancing major wind, solar and hybrid projects, limited transmission and distribution capacity means that new generation cannot always be connected where and when it is needed and/or moved across the grid.

This makes battery energy storage systems (BESS) more than a supporting and local technology. They are becoming central to how South Africa manages grid congestion, integrating renewable power and improves energy reliability for businesses. At the moment, South Africa has 72 GW of renewable energy projects at advanced stages of development, and a 220GW pipeline of renewable energy projects. But the national grid lacks the capacity to connect them to the businesses and homes that need them. 

Why BESS matters now

A battery energy storage system (BESS)is a large-scale asset, typically comprising lithium-ion batteries, that stores electricity generated from sources such as wind, and/or solar, power and releases it when needed. In simple terms, it allows electricity to be generated at one time and used at another, helping to balance supply and demand.

When used as part of a renewable energy project, either behind the meter or connected to the grid, BESS can help address the current technical challenges and several of the country’s most pressing electricity challenges:

• Reducing pressure on constrained networks by injecting or absorbing power where the grid is under strain.
• Storing excess generated energy during low-demand periods instead of wasting output through curtailment.
• Supporting grid stability by responding quickly to fluctuations in supply and demand.
• Helping manage peak demand by discharging stored energy during high-consumption periods, reducing reliance on costly peak power sources

South Africa’s battery storage market is moving quickly

Although BESS is still relatively new in South Africa, they are rapidly becoming an established part of the energy market. Eskom’s distributed battery energy storage programme involves the development of a 360 MW storage system, equivalent to 1,440 MWh with four hours of storage, at distribution sites across several provinces. The growing interest from financial institutions in funding storage alongside solar and wind projects is another sign that the technology is moving into the mainstream.

For developers, lenders and large energy users, the legal and commercial questions are not only whether BESS works, but how performance is measured, contracted and financed. Three technical  parameters are particularly important: capacity, availability and round-trip efficiency.

Capacity: how much energy can be stored and released?

Capacity relates to the total amount of energy stored and discharged by the system. It relates to the energy output that the system can distribute, and it poses a direct effect on revenue potential. The larger the system and its capacity, the greater the amount of usable energy it can store. This is the energy that a battery can release after it has been stored. The capacity is typically measured in watt-hours (Wh).

Availability: will the system be ready when required?

Availability plays a pivotal role in ensuring that the system delivers its contracted energy requirements during the span of its usage. It refers to the guaranteed period in time when the system is operational and ready to discharge and deliver its contracted energy. This measures the total time the system is capable of a full or partial dispatch, adjusted for planned and forced usage. Most utility-scale contracts require a yearly Energy Availability Factor of between 93% and 98%.

Round-trip efficiency: how much stored energy is recovered?

Round-trip efficiency (RTE) represents the percentage of energy taken from the grid that is fed back into the grid after storage. A higher RTE means there is less energy lost during the charge and discharge cycles of the system. A system that achieves a higher RTE rating is therefore preferable to one that would produce a lower result.

The shift from emerging technology to core infrastructure is now visible in South Africa’s energy landscape. BESS will not replace the need for urgent grid expansion, but it can help make renewable power more dispatchable, reduce wasted energy and improve grid reliability while longer-term transmission investment catches up. For project developers, lenders and corporate energy buyers, the key is to ensure that these systems are structured around clear performance measures, bankable contracts and a realistic understanding of how storage supports the broader energy system.

Written by Tsele Moloi, Director, and Aphiwe Qata, Candidate Attorney, Cliffe Dekker Hofmeyr