In the swirling landscape of Africa’s energy sector, Olivia Carballo stands at the forefront, pushing for transformative change as managing director in the emerging market alternative credit team at Ninety One. Over the past decade, the continent has witnessed a remarkable surge in renewable energy infrastructure, with hydroelectric dams, wind turbines, and solar panels sprouting up like wildflowers. Yet, despite this impressive growth, the fruits of these investments remain largely out of reach for many communities and businesses connected to national grids. The culprit? A glaring lack of battery storage systems.
Imagine a Nigerian developer struggling to power their laptop, a Ugandan taxi driver trying to charge their electric boda boda, or a Senegalese researcher desperate to keep vaccines refrigerated—all of them hampered by an unreliable power supply. The potential of renewables is immense, but without the right infrastructure, it’s like having a race car with no road to drive on. The key to unlocking this potential lies in financing utility-scale battery storage systems, a technology that remains in its infancy across the continent.
Fortunately, the winds of change are blowing. The cost of Battery Energy Storage Systems (BESS) has historically posed a significant barrier, but recent advancements are turning the tide. With lithium-ion battery prices plummeting to a record low of $139/kWh in 2023, and projections suggesting they could dip to $80/kWh by 2030, the door is wide open for rural West Africa to harness this technology. Pumped hydro storage also offers a glimmer of hope, particularly in regions like Central Africa, where countries like Cameroon could leverage their vast pumped-storage potential to balance renewable energy sources.
Moreover, the emergence of battery-as-a-service (BaaS) business models is set to revolutionize the landscape. By allowing residential, commercial, and industrial consumers to lease battery storage technology, these models can significantly reduce upfront costs, making it easier for electricity transmission and distribution companies to modernize aging infrastructure. This not only ensures that energy is distributed more evenly but also minimizes capital expenditure—a win-win for all involved.
But the implications of battery storage extend far beyond local energy needs; they have the potential to spur the growth of a new industrial sector in Africa. With the continent sitting atop a treasure trove of minerals critical for the energy transition, including lithium for electric vehicle batteries, Africa could position itself as a global leader in battery technology. By strengthening local supply chains, the continent can add value to its raw materials and tap into the burgeoning global market for battery components.
Recent initiatives like the BESS Consortium at COP28, which includes countries such as Egypt, Ghana, and Nigeria, signal a commitment to addressing storage capacity shortages. The goal to deploy 5GW of energy storage technology globally by 2027 is ambitious, but it’s clear that governments can’t do it alone. The private sector must step up, as evidenced by the $19 million investment from the Emerging Africa Infrastructure Fund in Mozambique, aimed at enhancing energy storage capacity in areas plagued by frequent outages.
Projects like the Golomoti Solar plant in Malawi, which features a pioneering 10MWh battery storage system, are game-changers. By stabilizing the grid and reducing reliance on costly diesel generators, these initiatives not only enhance energy resilience but also attract further investments in local renewable projects.
Yet, despite the progress, the battery storage sector in Africa remains underdeveloped. Investors, governments, and development partners must unite to ensure that Africa captures the full benefits of its renewable resources. The stakes are high: the continent stands on the brink of becoming a crucial player in the global energy transition. The potential is there, but it requires collective action to turn that potential into reality. The future of Africa’s energy landscape hinges on this collaboration, and the time to act is now.
