Building inverters and lithium batteries locally that are designed for South Africa’s specific needs is an incredibly promising prospect, according to ACTOM. In stimulating domestic production, industries can tackle the twin challenges of increasingly erratic grid access and spiralling energy costs.
Africa’s energy demands are surging, driven by rapid population growth and industrial expansion. Industries are now frantically seeking reliable and affordable power alternatives to run their operations but the current reliance on imported solar technology, from panels, to inverters and batteries, leaves the continent vulnerable, explains Mervyn Naidoo, CEO of ACTOM.
Repairs are delayed, components become scarce, and the whole system falters when global supply chains hit a snag. “It's a fragile setup, plain and simple, and one that Africa can't afford to rely on,” says Naidoo.
That’s where the prospect of building inverters and lithium batteries locally, suited to local needs, comes in. It is no longer just a golden opportunity, but rather a vital necessity if the continent is to meet its ever-expanding energy needs, according to ACTOM.
A compelling case for localisation
South Africa, a microcosm of the continent’s energy struggles, illustrates the point perfectly. The nation’s battle with load shedding, a direct consequence of Eskom’s inability to keep pace with demand, spurred a phenomenal uptick in solar adoption. Rooftop installations now account for an estimated six gigawatts alone, contributing to a total solar capacity of around nine gigawatts, including concentrated solar power.
This trend is not driven by load shedding alone, as municipal infrastructure delays, leading to extended outages dragging on for days, has heightened the need for independent power solutions. In the first 50 days of this year, some industrial areas endured as many as 20 to 30 days without electricity, highlighting the sheer scale of the crisis.
The global context adds a further layer of complexity. The world is pushing a renewable energy agenda, driven by the need to address climate change and decarbonisation. This, in turn, has created a giant surge in demand for components, from solar panels and batteries through to high-voltage transmission equipment. This surge in worldwide demand has saturated supply chains, causing extended lead times, with large transformer lead times in Europe exceeding three years.
Finding strategic advantage
Against this backdrop, localised manufacturing of inverters and lithium battery solutions becomes unavoidable. South Africa's rising electricity tariffs, increasing at an alarming rate, make off-grid solutions more commercially viable, explains Naidoo. The cost of a standalone solar and battery system is becoming competitive with municipal tariffs, which can create the demand and economies of scale necessary to localise production – and the benefits are not just restricted to costs.
“Localising component manufacturing can create jobs, expand the economically active population and generate tax revenue – all of which stimulates economic growth and reduces the state’s social burden,” says Naidoo. “This approach would align with national commitments to address unemployment and equality.”
Building Africa’s energy independence
Setting up a fully localised supply chain will require careful assessment. However, intercontinental trade within Africa remains low – below 20%. As such, the African Continental Free Trade Area (AfCFTA) can be instrumental in achieving the economies of scale necessary for large-scale manufacturing, explains Naidoo. By 2050, Africa’s population is expected to exceed 1.5 billion people, which presents a massive market. Drawing on the continent’s abundance of raw materials such as copper, lithium and iron ore, it is possible to establish regional industrial hubs for the purpose of localising production for the entire continent.
Local production capabilities will also enhance repair turnaround times and improve accessibility to critical components. Technology transfer will enable local manufacturers to support products throughout their lifecycle, which will reduce reliance on imported parts and ensure plant availability and reliability. The Transnet 1064 locomotive programme exemplifies the dangers of solely relying on imports; the lack of technology transfer resulted in idle locomotives and billions of rands wasted.
Taking steps toward a sustainable energy future
The economic and technological advantages of a domestic renewable energy industry are significant. Increased employment and tax revenue stimulate economic growth, while technology transfer strengthens local capabilities and enables innovation.
“Making a shift toward localised and decentralised energy solutions is one of the clearest ways to contribute to a more sustainable and energy-independent future for Africa, by reducing reliance on external sources to ensure long-term energy security,” says Naidoo.
In this light, the development of localised energy solutions is not an opportunity, but a necessity. Africa’s young population, with an average age of 20 years, is a vast potential workforce but putting this demographic to work requires industrialisation, which in turn depends on reliable and affordable energy. As such, the localisation of production, transfer of technology, and the creation of economies of scale are all essential steps towards achieving energy independence and establishing sustainable economic development.
