Presentation by Bushveld Energy on the basics of energy storage, specifically large scale batteries at the 6th Annual Africa Power Roundtable, hosted by Webber Wentzel in Sandton, South Africa on 10 April 2018.

1. Bushveld Energy
Battery energy storage
systems (BESS) – an overview
of the basics
Webber Wentzel, Sandton, South Africa
10 April 2018

2. 22
Introduction and objectives
A little about me (Mikhail Nikomarov)…
• Co-founder and CEO of Bushveld Energy,
an energy storage solutions company -
part of Bushveld Minerals, which owns
and operates the Vametco vanadium
mining facility in Brits. We are working to
bring the vanadium energy storage value
chain to South Africa
• Chairperson of the recently established
South African Energy Storage Association
(SAESA)
• Chair of the Energy Storage Committee of
Vanitec, the global body of vanadium
producers
• Previously a consultant working in Russia
and across Africa, focusing on power
sector (strategy and plant operations) and
economic development
SOURCE: www.bushveldenergy.com
Objectives of presentation
• Provide an overview of
energy storage and battery
(BESS) technologies
• Note some key
characteristics of BESS
• Highlight the main
applications of BESS
• Review current dynamics in
the global energy storage
market
• Explain the main challenges
to BESS adoption in SA and
in general
• Share some free resources
on BESS

3. 33
Today our focus will be on stationary battery energy storage systems,
although there are other types
Source: IRENA (International Renewable Energy Agency)
Similar to how trans-
mission lines move
electricity from one
location to another,
energy storage moves
electricity from one time
to another
While oil and coal, are
examples of “stored
energy,” our focus is
reusable means to
store energy, such as
batteries (“electro-
chemical storage), but
also heat, mechanical
devices, etc.
Different types of
storage and storage
technologies are
relevant for different
applications, often
determined by the
amount of time stored
energy that is required
Types of power sector applications of energy storage
• BESS is not just about renewable energy, though it does help PV and wind
• This framework excludes the mobility applications of energy storage (e.g. EVs)
• Thus, the presentation will focus on “stationary” BESS

4. 44
One way to structure energy storage use cases is by the required storage
duration and whether power or energy is the priority
Source: IDC; Parsons Engineering
• Power is measuring in watts (kW, MW, GW)
• Energy is measured in watt-hours (kWh, MWh,
GWh)
• BESS design, configuration and technology
selection are all based on the combination of
power and energy requirements at a potential site

5. 55
Source: LAZARD
There are multiple energy storage technologies available
Overview of Selected Energy Storage Technologies
• Pumped hydro is by far the most deployed energy storage method, with over 2.5GW in SA alone
• Lithium ion is currently the most popular technology, though it is actually multiple technologies

6. 66
Multiple technologies are already commercially viable
Source: IDC; Parsons Engineering
Technological maturity and suitability for South African applications

7. 77
BESS consist of multiple components and on the outside can look like
containers or even buildings
DC block AC conversion
Major components of a BESS
Most of the technical differences are on DC
Examples of BESS installations
Source: IRENA; Sumitomo, Tesla, UET, http://www.greenbuildingadvisor.com

8. 88
Three types of applications that may be of relevance to you
A utility application, where distributed energy storage can add
over a dozen values
A behind the meter, electricity consumer, where the benefits are
driven by the tariff structure and grid power quality
Off-grid applications, where storage is part of a larger energy
solution
3
2
1

9. 99
1. The off-grid case is the most straight forward, involving displacement of
diesel or HFO to reduce energy costs and emissions
SOURCE: Bushveld Energy
SLD of a technical configuration
LoadAC
Generator
250 kVa
400 V
Battery, AC
500 kW /
2200 kWh
PVDC
750 kW
PVDC
750 kW
InverterAC
750kW
InverterAC
750kW
Transformer
400V 50HzTransformer
400V 50Hz
Site controller
(Modbus)
Relay
Existing infrastructure
• In off-grid, storage acts to
increase the amount of
energy that can come from
solar or wind, while
decreasing diesel/HFO
reliance (though not
eliminating it)
• Calculation of the benefit
involves combining the cost
of the PV, storage and
expected diesel usage to
create an energy tariff (very
similar to an IPP)
• Sizing the battery system
and the PV installation are
critical, especially optimising
for the amount of diesel
reliance
Context to off-grid example
Storage allows for larger PV sizing, of 5-7 times the
load and 2-3 times the battery in terms of power

10. 1010
2. Utility energy storage has over a dozen benefits that could be realised by
one system
Source: PGE IRP Draft (Nov 2016)
Other benefits include
• Technical loss reduction
• Time shifting of losses
• System resiliency
System reliability benefits are
well known and quantified;
utilities still analysing dispatch
and locational value streams
Utility scale energy storage use cases and their relevant time scales

11. 1111
• Value streams include
– Reduction of peak
demand charge
– Arbitrage / time shifting
– Back-up power and
uninterrupted power
– Improved power quality
– Higher utilisation of PV
(e.g. weekends)
• This analysis uses a 500kW
/ 2MWh BESS that was
added to a large industrial
customer load
• Sizing the battery system to
the application and
technology is essential (in
this case, we can get 1.5
daily cycles; adding PV
increases it to almost two)
3. In South Africa, we usually see up to five use cases for behind the meter
energy storage
Context to SA example
SOURCE: Bushveld Energy

12. 1212
Stacking is the means to aggregate multiple storage value streams
For multi-value stream sites, value “stacking” is the approach to
quantify total value
SOURCE: LAZARD’S LEVELIZED COST OF STORAGE—VERSION 2.0
Although simple in theory,
actual stacking requires
significant analysis of
questions such as:
• How many of the
values can one system
perform?
• To what degree can
each value be captured
(e.g. 50%, 80%)?
• How will multiple
implications impact the
battery’s cost (e.g.
inverter, software) and
lifetime (e.g. cycles,
stage of charge)?
• How to value future
cost increases?

13. 1313
We have seen two methods to calculate the cost / benefit for specific sites
and compare costs across technologies
Years to cash
repayment
Levelised cost of
energy stored
1
2
SOURCE: LAZARD’S LEVELIZED COST OF STORAGE—VERSION 2.0; FreedomWon/Anthony English
Method description
▪ Calculates the annual financial
benefit from the system
▪ Estimates the number of years
it will take for the project to
recoup the investment /
becomes “cash positive”
Select pros & cons
+ Simple and can be done
without discounting
▪ Calculated on a “per kWh”
basis (similar to LCOE for
generation)
▪ Adds the total discounted costs
of installing and operating over
the lifetime of the project (years
and/or cycles);
▪ Divides costs by the aggregate
discounted energy stored
during the project lifetime
+ More accurate and holistic, if
assumptions are correct
+ Can be coupled with generation
and transmission levelised
costs
- Must be site specific
- Not as accurate when doing
fleet / portfolio or strategic
analyses
- End results often not driven by
technical assumptions but
financial (e.g. cost of capital)

14. 1414
Globally, energy storage is growing rapidly and expected to continue going
forward
Current and forecast annual stationary energy storage deployment, GWh total
SOURCE: Bloomberg New Energy Finance (BNEF)
• While aggressive, this growth is similar to solar PV the last 15 years
• According to BNEF, most of the growth will be behind the meter; other forecasts
call for 60-70% of installation in utility use cases
• Ultimately, stationary storage is still just 10-20% of EV energy storage demand

15. 1515
A major driver of the growth is the expected cost decreases and
performance improvement
Current and forecast annual stationary energy storage deployment, GWh total
SOURCE: IRENA

16. 1616
However, cost is just one obstacle to greater BESS deployment
Current barriers to BESS deployment in SA and Africa overall
1. Regulatory
– Uncertainty over how storage is classified and regulated (e.g. generation or not, role
in IRP, etc.);
– Inability to “monetise” all possible benefits (e.g. inability to calculate the value of a
benefit, no regulatory framework to charge for certain benefits);
– Absence of national policy on energy storage, especially for a “learning phase”;
2. Lack of awareness
– Move to PV + liquid fuel in off-grid rather than “leapfrog” to PV + BESS + liquid fuel
back up;
– Complexity due to terminology and diversity of technologies (e.g. kW vs kWh);
– Lack of skills or tools (or awareness of tools) to accurately model both costs and
benefits;
3. Cost
– Many possible applications are not “in the money,” either due to low electricity prices
(e.g. Megaflex) or high battery costs;
– High cost and low availability of financing for BESS. According to BNEF, 95% of
BESS installations to date have been balance sheet financed;
4. Other
– Perceived and actual technology risk (e.g. guarantees);
– Absence of standards on safety, integration, etc.
This is not an exhaustive
list and you and my panel
colleagues may have
more thoughts on this

17. 1717
If BESS is of interest, there are good resources available
▪ Cited external sources include:
– Parsons Engineering / IDC study on SA energy storage
www.idc.co.za/images/2017/eskom/USTDA_Public Version.pdf
– International Renewable Energy (IRENA) Electricity storage and
renewables: Costs and markets to 2030 -
http://www.irena.org/publications/2017/Oct/Electricity-storage-and-
renewables-costs-and-markets
– LAZARD Levelised Cost Analysis - www.lazard.com/perspective/levelized-
cost-of-storage-2017
– World Bank / IFC Energy Storage Trends and Opportunities in Emerging
Markets - https://www.ifc.org/wps/wcm/connect/ed6f9f7f-f197-4915-8ab6-
56b92d50865d/7151-IFC-EnergyStorage-report.pdf
– Bloomberg New Energy Finance (BNEF) - Global Storage Market to
Double Six Times by 2030 - https://about.bnef.com/blog/global-storage-
market-double-six-times-2030
▪ Other websites:
– Eskom and its battery testing facility at the Eskom Research, Testing and
Development (RT&D) centre in Rosherville
– Energy Storage Association (US) - http://energystorage.org
– US Department of Energy‘s Energy Storage Database -
www.energystorageexchange.org
▪ Reach our to South Africa Energy Storage Association (SAESA), via myself or
our Communications Officer, Jo Dean (jo@afklowcarbon.co.za)