The Minister of Electricity and Energy, Dr Kgosientso Ramokgopa, announced the appointment of five preferred bidders under Battery Energy Storage Independent Power Producers Procurement Programme (BESIPPPP) Bid Window 3 on Friday, 30 May.
Two different energy developers picked up the five projects in the Free State between them. The five projects will be developed by Scatec (at Leander Substation) and Mulilo (at Theseus, Everest, Havard and Merapi Substations).
According to the Ministry, the Battery Energy Storage Independent Power Producers Procurement Programme is a critical initiative aimed at enhancing South Africa’s power system by providing essential ancillary services and increasing grid capacity through energy storage.
“What we are announcing today… is another ‘peaker’ that is going to help us during the peak, instead of relying more and more on the open cycle gas turbines and on burning diesel.
“We are going to use that excess generation capacity that we generated during the day when the sun was out; we store it, and at the time when we need it, we draw it.
“We are going to draw it from the batteries, and [it will] be discharged and give us the kind of capacity that we need. We are working on ensuring that we have additional generation capacity drawing from the technology that is out there in the world,” said the Minister.
Long-term commitment to strengthening the SA grid infrastructure through battery energy storage
Ramokgopa said the agreements will span 15 years, marking a long-term commitment to strengthening the country’s energy storage infrastructure.
BESIPPPP Bid Window 3 is a site-specific procurement round designed to facilitate the procurement of up to 616MW from facilities that will provide capacity, energy and ancillary services to the National Transmission Company of South Africa (NTCSA) as the buyer, at five specified sites in the Free State supply area.
“This is part of our quest to ensure that we achieve energy security and bring down the cost of electricity – because this solution has been shown to be the most cost competitive of the energy solutions that we can have.
“A combination of solar biological photovoltaics (BPV), wind and now storage capacity means that we are flattening the cost curve of electricity. We will make household lives more bearable – disposable income and more significantly for industry.
“Electricity is the backbone of the economy. If the lights are off, there is no economy,” Ramokgopa reminded.
Have you read?
Bids received for Bid Window 3 of battery storage programme
The Department received a total of 33 bid responses on 28 November 2024.
The BESIPPPP BW3 round was found to be highly competitive, with a marked increase in the number of bids relative to the previous bid windows, resulting in a 40% and 8% decrease in the average evaluation price, compared to Bid Window 1 and 2 prices, respectively.
An amount of R9.5 billion is set to be invested in South Africa’s economy by the preferred bidders.
The bidders have made the following commitments:
- Black Shareholding: will contract at a minimum of 40% in the IPP Project Companies; up to 30% Black shareholding by construction contractors; and up to 42% in operations contractors.
- Total Job Opportunities: 852 job opportunities for South African citizens (measured in job years), during construction and operations.
- Local Content Spend: Over R3.7 billion during construction and during the operation and maintenance phases.
- Preferential Procurement: Over R3 billion from Broad-Based Black Economic Empowerment (B-BBEE) companies, R1.3 billion from black-owned enterprises, R1.1 billion from Qualifying Small Enterprises (QSEs) and Exempted Micro Enterprises (EMEs), as well as R562 million from Black women companies.
- Supplier development, skills development, bursaries for Black students, skills development for Black disabled people, enterprise development and socio-economic development initiatives: R184 million over the lifetime of the projects.
Now Watch
Sign up for the ESI Africa newsletter
Subscribe to the newsletter for free and join over 50,000 readers using ESI Africa as their news source for marketing development on all things related to power and energy.
.
