Assessing Barriers and Solutions for Localised Battery Manufacturing in South Africa: Manufacturers’ Perspectives

• As energy storage technologies are poised to play a crucial role in the global energy transition endeavours, the manufacturing of these technologies becomes imperative. For South Africa, one of the leading economies in the African continent, the manufacturing of these cells locally becomes crucial in realising the country’s Just Energy Transition journey. However, several barriers are outlined in this study. The study also outlines opportunities for the country to ensure it establishes battery manufacturing hubs, thus enhancing the country’s industrialisation endeavours. As energy storage technologies are set to play a pivotal role in global efforts to transition to low-carbon yet intermittent renewable energy sources such as wind and solar, South Africa is moving forward to support this drive through the adoption of Battery Energy Storage Systems (BESS). This BESS adoption requires a balanced approach to battery demand and supply while creating new opportunities aligned with the country’s Just Energy Transition (JET) imperatives. However, despite views from various stakeholders in the energy sector calling for the urgent localisation of battery manufacturing to enhance employment prospects, the country has yet to establish mechanisms to meet this need, resulting in a continued heavy reliance on imported batteries. Given plans to increase BESS capacity in the country, the question of whether batteries could be manufactured locally is gaining prominence, as is the question of whether there are barriers to this proposed endeavour . To identify key barriers and opportunities for the local battery manufacturing industry, the study employs a participatory approach to gather insights from 14 experts and stakeholders, both domestically and internationally. The study’s findings highlight critical issues, such as policy uncertainty, unclear market demands, and skills shortage, as significant obstacles to the country’s participation in the entire BESS value chain. To overcome these challenges, participants suggest, among other solutions, developing a policy framework linked to industrial prospects to enable the country's participation in the battery value chain. The study recommends a comprehensive analysis of both cost-benefit and regional market demand to inform policy formulation aimed at driving the necessary localisation efforts the country requires.