Stationary embedded storage can no longer be omitted from electricity system models in supply-constrained systems

Embedded storage capacity in South Africa has rapidly increased between 2022 and 2024 as residential consumers and telecommunication companies installed storage to mitigate the impact of frequent interruptions to the electricity supply. These interruptions, caused by unreliable generation capacity, peaked in 2023 but have abated at the time of writing. Current South African electricity system planning models do not account for embedded storage. It is hypothesised that this omission will distort model outcomes. In this paper, unit commitment modelling is used to investigate the impact of embedded storage on the South African electricity system, and how this impact may change over time. The study aims to assess the effects of including or omitting embedded storage when doing system modelling and planning. While most South African embedded storage systems are not directly incentivised to engage in arbitrage, embedded storage that is co-located with photovoltaic systems is used to increase self-consumption of renewable energy. This is found to impact system outcomes enough to make the inclusion of embedded storage in planning models necessary. It is also found that there is an incentive for future aggregation of embedded storage on a municipal level that is not well aligned with national system needs. By identifying the current underutilization of embedded storage and the misalignment present in incentive structures, this work highlights the urgent need for a discussion among embedded storage owners, policymakers, and grid operators on properly incentivising embedded storage utilization. The paper further contributes by demonstrating that planning models for supply-constrained electricity systems must account for the redeployment of security of supply storage when supply constraints are eased. • Estimates South African residential and commercial embedded storage capacity. • Shows that South African electricity system models must include embedded storage. • Identifies a misalignment between current tariffs and optimal storage utilization. • Shows potential benefits and pitfalls of redeploying security of supply storage.