With the exponential growth in installations for decentralised renewable energy systems by many businesses and homes, the demand for energy storage systems has also risen simultaneously. National renewable energy targets and decarbonisation plans have also driven more demand for energy storage at utility scale level.
South Africa’s Department of Energy Mineral Resources (DMRE) has announced plans to issue an RFP to procure around 530MW of energy storage in August 2021. South Africa in particular has been battling recurring power outages and many businesses are resorting to self-generation power solutions to ensure they remain productive during load shedding. This has driven the demand for renewable energy and battery storage systems, not only in the commercial and industrial sector, but in the residential sector as well.
A recent study by released by U. S market intelligence firm, Fortune Business Insights, forecasts that the global battery energy storage market size is expected to gain momentum by reaching USD 19.74 billion by 2027 while exhibiting a stellar CAGR of 20.4 % between 2020 to 2027. Africa will be a key participant in this growth with its energy sector promising a boom over the coming decade.
Our Senior Editorial Manager, Nigel Lungi (NL), chats to Kaloyan Dimov (KD), the CEO of Solar MD, a South African based manufacturer for Lithium-Ion battery storage systems for residential, commercial and utility scale applications.
NL: It’s exciting to chat to you about Solar MD’s energy storage solutions. It must have been quite an eventful journey from the early formative years of Solar MD since it started in Cape Town in 2014. How is the journey so far, seven years later?
KD: The past seven years have been incredibly eventful, incredibly difficult, intense, but rewarding. Starting a company with the simple idea of providing energy access to all people with accessible intelligent energy storage solutions, the ultimate goal has remained the same, but the journey towards creating a product that exceeds expectations has been the greatest learning curve.
NL: From your point of view, what could be the competitive advantages of manufacturing lithium energy storage systems in South Africa and how easy or difficult is it to source inputs?
KD: When I founded Solar MD, the goal was to manufacture accessible battery storage solutions in South Africa, creating an African solution for the continent’s energy challenges. Controlling the manufacturing of Solar MD batteries at our facilities in Cape Town means we are better able to control the quality, distribution and ultimately the cost. But, moving beyond the product, we’ve been able to transfer skills to our local workforce, we’ve developed a world-class battery monitoring system and invested heavily in ongoing research and development behind the software that powers the battery. Globalisation allows us to source any materials & essential components, anywhere in the world,
NL: Solar MD was an industry pioneer for wall mounted lithium battery energy storage systems and made sure to tailor systems suitable for African conditions. Can you tell us in more detail how your systems solved some of the flaws in battery storage systems in the market?
KD: Our battery management system is much more advanced than the current competitors, we are also the only one company in the world which can do updates over the air with our Logger V2 on the BMS as well as on third party devices.
NL: The COVID-19 pandemic negatively affected production capacity for many manufacturers due to restrictive lockdown regulations. How did Solar MD navigate that period and how did the pandemic affect your company’s ability to service the rising demand for storage systems?
KD: The devastating effects of the COVID-19 pandemic aside, many South Africans, individuals and businesses still have to contend with daily energy concerns resulting from the national energy utility. The accessibility to a reliable energy supply maintains the rising demand for our intelligent storage solutions.
NL: How has South Africa’s current power challenges influenced Solar MD’s order book?
KD: The current power challenges are not going away, anytime in the foreseeable future, our approach from the beginning has always been to not be reactive, Solar MD has focused on producing world-class, intelligent energy storage solutions, we have aimed to keep the bar high, focusing on quality solutions, with the assurance of 24/7 online service support via our sophisticated monitoring system and manufacture warranties on batteries, combined with short delivery times, this formula has maintained consistent orders.
NL: Solar MD’s lithium energy storage systems cater for all three sectors, C&I sector, residential & utility sectors. Which systems are currently servicing the most between the three?
KD: Currently around 60% of our solutions go into the residential sector. The C&I space started growing significantly mid last year in Southern Africa and currently covers 40% of our production. The utility scale sector will start getting bigger with the Eskom and Municipal projects and we have given quotes for several developers on the current tenders.
NL: South Africa’s government has announced plans to amend the Electricity Regulation Act. and lift the licensing exemption threshold for distributed generation systems from 1MW to 100MW. How do you feel about these proposed changes as a battery storage systems manufacturer?
KD: This has shown us that government policy and technological innovation can produce results…….. I think this would be great for higher consumption clients like mines and large manufacturers. The benefit for the overall installed capacity in the country will be significant. Hopefully we can also see this range of batteries.
NL: I understand that Solar MD has an annual manufacturing capacity of 250MWh for energy storage systems. This decade is being termed the Energy Transition decade. What role is Solar MD hoping to play and where do you see the company in the next 10 years?
KD: We are already updating our factory production to over 500MWh which we would be able to deliver from Q3/2021. And aiming to announce the first giga factory for Africa next year. Renewable energy & battery storage represents a great economic opportunity for many South Africans, we’re hoping to truly change the way people view & consume energy. We see intelligent energy storage, in every home, school, business. We see intelligent energy storage moving beyond a niche or futuristic ideal to being a working solution to bring energy to all South Africans.