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Young Analyst Programme
Women of CIB
Battery energy storage systems
Posted 10/10/2023 2 mins
Battery energy storage systems (BESSs) on a standalone basis or those paired with renewable power sources play a significant role in mitigating load-shedding issues as it provides backup power when there are electricity shortages.
Technical improvements such as advancements in battery chemistries as well as increased energy density and efficiency have made it more affordable to store energy. Advancements in Cooling technologies have also improved BESS safety, with liquid coolants emerging as new technologies that can potentially play a significant role.
Creating attractive financing structures is crucial for encouraging investment and debt financing in BESS. These financing structures can include mechanisms such as power purchase agreements (PPAs), tax incentives, subsidies and innovative financing models to attract private investment and reduce the financial risks associated with energy storage projects. Currently, PPA structures dominate the market in Africa as clients prefer off-balance-sheet financing however we expect to see a shift in financial structures as the market matures.