Transmission Podcast: "Africa's Battery Storage Opportunity – Energy Storage Africa"

Host: Ed Porter, Modo Energy
Guest: Michael Cupert, Energy Storage Africa
Release Date: March 31, 2026
Episode Theme: The emerging opportunities, challenges, and realities of battery energy storage in African power markets, focusing on investment, development, technical, and policy aspects with real experiences from on-the-ground project work in Malawi, Kenya, and beyond.

Episode Overview

This episode delves into the real prospects for battery energy storage (BESS) in Africa as the continent faces rapid electrification needs, surging demand, and abundant renewable resources—but also persistent challenges around financing, grid structure, and perception of risk. Ed and Michael unpack misconceptions, technical journeys, finance, grid design, and the parallels (and yawning gaps) between African and Western energy markets, all through the lens of current project experience.

Key Discussion Points & Insights

1. Misconceptions about Doing Business in Africa

• Perception of Difficulty and Risk:
  • Africa is often seen as a tough place to invest. In reality, with local knowledge, doing business isn’t substantially harder than in Western markets.

    “When you get kind of stuck in, roll up your sleeves, then it’s pretty much the same as doing business here…There’s no more red tape there than there is here. You’ve just got to know what it is.”
    — Michael, [01:23]

• Expected Returns:
  • The impression of ultra-high returns is inaccurate; most projects deliver mid-to-high teen IRRs, not outsized windfalls.

    “Financing is typically mid to high teen returns is all that we can get. Certainly nothing starting with a 2 unless we're willing to take an awful lot of risk.”
    — Michael, [01:57]

• Risk Wrapping and Guarantees:
  • Use of institutions like the World Bank and MIGA for credit and contract risk insurance is standard, costing around 1.5% of annual revenue.

    “They’ll put a risk guarantee around it...costs you about 1.5% of annual revenue to kind of insure against.”
    — Michael, [03:17]

2. Why Africa? Drivers of Battery Storage Growth

• Unmatched Renewable Resource:
  • Less than 8% of hydropower is tapped; vast solar and wind potential.
• Large, Unmet Demand:
  • Malawi: only 14% grid-connected. Demand is already present, not hypothetical.
• Industrialization Push:
  • Economic development, mining, and data centers demand reliable power.

    “We've got to win an argument around the fact that renewables and batteries offer a lower cost route … than simply extracting and burning fossil fuels.”
    — Michael, [05:30]

• Leapfrogging Infrastructure:
  • Africa can design new grids for renewables, not just retrofit old fossil-based ones.

    “Instead of running that two gig line...you could run that line in five different places to five different solar parks.”
    — Ed, [06:25]
    “It's on the money. In most Sub-Saharan African countries, the grids tend to be quite spindly and need a lot of work.”
    — Michael, [07:06]

3. African Power Market Structure & Revenue Models

• Contracting and Revenue Structure:
  • Most projects are fully contracted (15–20 year availability/capacity agreements), often with state-owned utilities, as opposed to Europe’s merchant markets.

    “So our contracts tend to be up to 20 years… just on a straight capacity and availability charge... The revenue stack is identical to what you would see in UK, Europe, but materializes through cost-savings to the utility, not direct payment to you.”
    — Michael, [14:02], [15:57]

• Counterparty & Risk Management:
  • Multilateral risk insurance wraps for contract and currency risk; development capital is scarce and patient investors are essential.
• Emerging Merchant Opportunity:
  • Southern African Power Pool is developing day-ahead/month-ahead trading, opening new merchant market potential for storage.

    “One of the sites we may well look at, how do we trade more of our asset into that because you still have these huge price swings between off-peak and peak times.”
    — Michael, [19:11]

4. Technical and Grid Realities

• System Design Differences:
  • Malawi: Small (550 MW) grid, bulk of energy from one hydro resource and solar; severe instability and limited solar expansion possible without more storage.

    “About 420 megawatts of that comes from run-of-river hydro...the balance comes from solar. It's got to the point where they can't add much more solar...because of frequency and voltage issues.”
    — Michael, [20:06]

  • Kenya: Larger, more diversified grid—hydro, geothermal, wind, growing solar; huge expansion plans to double capacity in 10 years for economic growth and mining.
• South Africa’s Unique Case:
  • Old, coal-centric grid model creating severe transmission congestion.
  • Recent battery tenders focused on strategically siting 4-hour 100 MW batteries along congested transmission lines to time-shift and stabilize output from renewables.

    “At five substations along...a 1,000km transmission line, they put 100MW four-hour batteries to just fill them up...and then release them back into the system in the evening...”
    — Michael, [09:08]

5. Finance & Investment Landscape

• Complex Development Paths:
  • Project development can take 7–8 years in challenging environments.
  • Requires small pool of patient equity, then DFI and commercial finance when contracts are in place.

    “There’s a very small pool of development capital and it’s tiny and shrinking...the next thing you need to have is an investor who’s very patient.”
    — Michael, [26:56]

• Risk Mitigation:
  • Pre-funded reserves for debt service, maintenance, and currency convertibility are required.
• DFIs Key Players:
  • Development finance institutions (e.g., AfDB, British International Investments) central to capital stack.
• Public-Private Partnerships (PPP):
  • Transmission lines increasingly financed via tolling agreements and PPP models.

6. Competition, Geopolitics, and Supply Chain

• China’s Declining Role:
  • Chinese EPCs and battery providers are active, but direct infrastructure investments have peaked and are now more strategic, focused on supply chain for manufacturing.

    “Chinese investment in infrastructure probably peaked five or six years ago and has really declined over the last four or five years...”
    — Michael, [31:50]

• Local Talent & O&M:
  • Existing technical and professional skills are strong, but battery projects often require deep training and on-the-job capacity building.

    “Talent is there. It just needs a lot of coaching. ...Optimization, O&M, and control systems are less mature than in Europe.”
    — Michael, [33:27]

  • South Africa emerging as a battery support hub; for other countries, long spares lists and strategic local inventory are crucial.

7. Vision for the Next Five Years

• Batteries Will Displace Diesel:
  • As Africa electrifies (with up to 100 GW new capacity needed continent-wide in 10 years), batteries are emerging as the logical replacement for expensive, aging diesel/ HFO peaking plants.

    “Historically, a lot of peak power has come from heavy fuel oils...and they’re all starting to come towards the end of their life. So we've got a really interesting five-year period...”
    — Michael, [37:05]

• Key Enablers for Success:
  • Investment in human capital (“people, capacity, capability”) is priority #1.

    “A lot needs to be invested into people and kind of human capacity and capability. … That needs to be expanded.”
    — Michael, [39:57]

  • Greater transmission investments and innovative financing models (e.g., PPPs).
  • More risk capital and development funding needed.

Notable Quotes & Memorable Moments

• On African Market Misconceptions:

  "Actually when you get kind of stuck in, you roll up your sleeves, then it's pretty much the same as doing business here...It's not a difficult place to do business. There's no more red tape there than there is here."
  — Michael, [01:23]

• On Grid Design Opportunity:

  "Instead of running that two gig line...you could build a system from the ground up with renewables that might be cheaper and effectively skip a step."
  — Ed, [06:12]

• On Battery Revenue and Value:

  “If in the case of Malawi we store a load of power from hydro run of river hydro plant overnight and then use it in the morning and then the evening peaks…that enables the system operator not to dispatch high speed diesels which are costing 52 cents a kilowatt hour...”
  — Michael, [15:57]

• On Training and Local Capacity:

  “Talent is there. It just needs a lot of coaching. …You have to spend a lot of time explaining the nuts and bolts actually right down to a fairly granular level.”
  — Michael, [33:27]

• On Chinese Investment’s Shift:

  “Chinese investment in infrastructure probably peaked about five or six years ago and has really declined over the last four or five years...”
  — Michael, [31:50]

• On the Critical Path for Success:

  “A lot needs to be invested into people and human capacity and capability...So for me the biggest thing is just continuing to invest as a lot of the kind of international institutions have done in kind of people capacity and capability.”
  — Michael, [39:57]

Key Timestamps for Major Segments

| Time | Topic/Segment | |-----------|----------------------------------------------------| | 01:23 | Misconceptions about African energy market risk | | 04:50 | Drivers for storage demand and renewables | | 07:06 | Grid structures in Africa – chance to leapfrog | | 09:08 | Microgrids, rooftop solar & South Africa battery use| | 11:49 | Project development in Malawi and Kenya | | 13:08 | ‘Unbundled’ African electricity market explanation | | 14:02 | Contracting and revenue structure for storage | | 19:11 | Merchant opportunities & risk stacking | | 20:06 | Malawi vs Kenya: grid generation mix | | 26:56 | Finance, development capital & DFI roles | | 31:50 | Chinese involvement trends | | 33:27 | Local engineering talent and capability | | 36:27 | O&M and supply chain logistics for BESS projects | | 37:05 | Five-year vision for batteries in Africa | | 39:57 | If in charge: priorities for African power sector |

Conclusion & Takeaways

This episode offers a ground-level, nuanced perspective on the realities of bringing battery storage to Africa—dispelling myths, spotlighting unique technical and financing challenges, and mapping a future where BESS is central to Africa's sustainable, cost-effective power expansion. Success will hinge not only on capital and hardware, but on investing in people, know-how, and smarter interconnected grid solutions.

The African BESS opportunity is as much about new business models, partnerships, and knowledge transfer as it is about technology—fertile ground for bold investors and builders with patience and vision.