Power on demand: The rising importance of BESS

John Taylor

Batteries are a staple of the modern world, and they are becoming as crucial to our energy infrastructure. Battery Energy Storage Systems (BESS) are a foundation for sustainable and reliable energy, filling the gaps in baseload power by storing excess energy.

The local adoption of BESS reflects the maturity of the South African energy market, says John Taylor, head of M&A and large C&I at Yellow Door Energy South Africa.

"The growing significance of renewable energy is reshaping how communities generate and manage energy. Traditional methods to generate energy are wasteful when there is excess and expensive when demand outstrips supply. Battery energy storage systems are scalable enhancements that significantly reduce pressure on the national grid and energy economy."

Enhancing traditional energy

BESS complements and strengthens the established energy market. The South African Government supports BESS as a strategic part of its energy plans, managed through the Battery Energy Storage IPP Procurement Programme. Brazil, India, Egypt, Kenya, Nigeria, and Lithuania have all launched BESS systems or are in the process of doing so.

In 2023, Eskom opened the Hex BESS site at Worcester in the Western Cape. With a capacity of 100 MWh of energy, it has enough to power a town such as Mossel Bay or Howick for about five hours, according to the national utility.

There are several reasons why BESS enjoys this much momentum:

• Traditional energy generation, where a large station continuously generates energy for market consumption, lacks efficiency. There are innovative ways to store energy, such as pumped storage hydropower. However, traditional generation overwhelmingly relies on expensive peaking power stations to meet sudden demand or implement controlled power shortages such as load shedding. BESS sites store excess energy with relative ease, at lower costs, and with a flexible scale.

• Load spikes on grids can result in infrastructure damage. The stored energy at BESS sites can be discharged during high-demand periods to soften those spikes, referred to as "peak shaving". They also reduce costs - a significant benefit for large energy consumers that support major economic activities - as they can store energy generated during low-demand periods when prices are lower.

• BESS aligns naturally with renewable energy generation. A standard critique of wind and solar systems is that they only generate electricity during specific windows. But they often generate excess energy during their operations. BESS sites store that excess energy, supporting lower costs and peak demand availability, and increasing the economic appeal of renewable generation.

• Storing excess energy helps modernise established grid networks. BESS provides large utilities the headroom to upgrade their systems without disrupting energy delivery. It supports ancillary services such as frequency regulation, voltage support, and reactive power control, improving power quality and grid resilience. Investors favour grid systems that include BESS sites, using the combined advantages of lower battery costs, new financing models, and cost-sharing mechanisms to motivate investments in public utilities and private sector deployments.

• Often overlooked is how BESS democratises energy access. These systems can be deployed at different scales, from supporting large grid networks to small communities and even business sites. BESS enables communities and companies to store large amounts of energy for their needs and gain control over their energy consumption and costs.

• Energy arbitrage is one of the most powerful applications of BESS. By storing energy when demand - and therefore prices - are low, and discharging it during periods of peak demand when electricity is more expensive, businesses and utilities can significantly reduce costs while improving system efficiency.

When coupled with solar through a Power Purchase Agreement (PPA), the benefits become even greater: excess solar energy generated during the day can be stored in BESS and used later, ensuring a reliable, low-cost power supply even after the sun sets. This model not only protects customers from rising grid tariffs and volatility but also strengthens the economic case for renewable energy adoption, creating long-term stability, predictable pricing, and enhanced sustainability.

BESS does have some challenges, such as high upfront investment costs, supply chain risks, compliance complexity, and a shortage of trained technicians. This is where a robust and integrated energy market plays a crucial role, says Taylor.

"BESS is important and enormously beneficial. It enhances grid stability and reliability, reduces energy costs, provides backup power, and enables sustainable, flexible energy systems. Deploying, operating, and supporting BESS infrastructure is in the interest of all energy stakeholders, which is why companies like YDE work closely with parties on all sides - regulators, clients, suppliers, and training institutions. BESS is becoming a significant part of the energy foundation and an opportunity to develop a strong energy sector."