By: Anna Majavu
Manufacturing batteries for alternative energy systems and electric vehicles is a high-tech and very costly business to set up, but there are still opportunities for SMMEs to enter the battery energy storage system value chain, according to experts. Industrial Development Corporation senior industry specialist Kgashane Mohale said capital was flowing into the battery sector and local companies only had a short window of opportunity to establish themselves. “What we do know is that the global demand is there, it’s massive and it’s sustaining,” Mohale said.
He was speaking at a Trade and Industrial Policy Strategies (TIPS) seminar in Johannesburg on building a local battery industry, which heard from two local energy companies that SMMEs could find their place in the battery value chain. There is a massive and increasing global demand for batteries that are needed to store green energy and mini-electrical grids that recharge between bouts of load-shedding. However, most batteries are made with components imported from China – with imports of lithium-ion cells having shot up to over R1.6 billion per year.
“For a country that has strong capabilities in the value chain, this is concerning as it leads us to ask questions about the future of the industry,” said TIPS senior economist Lesego Moshikaro-Amani. She said South Africa was “well endowed” in many of the minerals needed for batteries, such as iron ore, manganese, cobalt, titanium, and nickel. And despite having the industrial capacity and know-how, the country did not make any of the cells needed for battery energy storage systems.
Moshikaro-Amani added that SMMEs could develop expertise in manufacturing certain components of battery energy storage systems. Her research found that SMMEs were already working in the lithium-ion battery industry, assembling batteries, and working in the development and design of plant components. Mikhail Nikomarov, CEO of Bushveld Energy, which manufactures mini-grids and battery energy storage systems, agreed that although the battery storage industry was capital intensive, SMMEs could take new and innovative ideas from the latest research into batteries and see if they could commercialise aspects of the new technology.
He recommended that they also look at becoming involved in battery-related project development and the exploration of minerals. “If you look at the entire value chain, there are areas that don’t require as much capital, and if I was an SMME I would look to play there because that’s where you can create value without needing to have as much capital,” Nikomarov told Vutivi News.
Ian de Vries, CEO of Cape Town-based Balancell, which makes electricity storage batteries for residential and business use, said four of his company’s 25-30 suppliers were SMMEs that did not exist before they began working with Balancell. There were many components of batteries that SMMEs could make and supply, such as plastic injection moulding, aluminum extrusions, and electronic circuit boards. “I think that is where the value is. If you get the industry going, the SMMEs are there to support it,” De Vries said.