Rising fuel volatility and the definitive implementation of the European Union’s Carbon Border Adjustment Mechanism are forcing African heavy industries to pivot from diesel-led backup systems to integrated hybrid solar and storage solutions.
Energy is no longer just a cost line but a critical operational risk for the continent, industry leaders said.
Speaking at Solar & Storage Live Africa 2026 in Johannesburg on Wednesday, panellists highlighted that the shift is being driven by supply instability and global trade requirements.
Geopolitical tensions have made fuel prices and availability unpredictable across African markets, necessitating a shift toward efficiency and reduced emissions, according to Agnes Mbeya, CEO of Malawi-based Makko Brothers Credit Limited.
For ArcelorMittal South Africa (AMSA), the continent’s largest steel producer, the transition is increasingly tied to global trade requirements that affect African exporters.
While diesel generators traditionally handled instantaneous load fluctuations in manufacturing, they are now a primary cost driver and a carbon liability, said Jerry Dungu, head of market and product development at AMSA.
Carbon footprint is now a major factor in procurement, especially with CBAM entering its definitive phase in January 2026, according to Dungu. He noted that international buyers now weigh carbon intensity of products as a key consideration, making decarbonisation a commercial necessity for African producers seeking to maintain global market share.
Hybrid systems combining solar PV, battery storage, and energy management now manage the peaks and dips in power supply that diesel once covered.
The storage system quickly supplies power that ensures smooth operations while reducing overall diesel consumption, said Dungu.
From the perspective of Independent Power Producers, the move toward hybrid systems is driven by a need for cost predictability.
Energy is often an African business's second-highest cost after human capital, said Melusi Tshabalala, CEO of Mesama Energy.
You cannot really predict what utilities are going to charge; it is usually double-digit increases, explained Tshabalala. He noted that Power Purchase Agreements offer a 15-to-20-year window of predictable energy costs, protecting manufacturing margins against steep rate hikes.
Shabalala dismissed the idea that perceived improvements in national energy security make hybrid investment less relevant. He pointed to ageing infrastructure and localised outages as ongoing threats to production. A hybrid system often works out cheaper than utility tariffs without requiring upfront capital from the off-taker, he explained.
Despite the benefits, high upfront costs and legislative lags remain significant hurdles for large-scale adoption. While hybrid tech works in specific areas of a plant, the investment required to run an entire 24/7 industrial facility remains prohibitive without specialised funding, noted Dungu.
There is often a gap between legislation and what can actually be done on the ground to move projects swiftly, concluded Tshabalala.
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