The Energy Storage Report 2024

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South Africa’s DMRE launches third round of grid-supporting BESS procurement

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Update 8 April 2024: After this article was published, independent power producer (IPP) Globeleq announced it was the company behind the successful bid for the fifth and final project from round one of the BESIPPPP procurement.

The Department of Mineral Resources and Energy (DMRE) of South Africa has opened the third bid window for its Battery Energy Storage IPP Procurement Programme (BESIPPPP), while also revealing the fifth and final winner from the first window.

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The request for proposals (RFP) has been released for the third BESIPPPP procurement, for five battery energy storage system (BESS) projects totalling 616MW/2,464MWh. They will be located at substations run by grid operator Eskom in the Free State province – Harvard, Leander, Theseus, Everest, and Merapi – and bids are due by 31 July 2024.

DMRE has also revealed that special purpose vehicle (SPV) AGV Projects is the fifth preferred bidder status winner from the first BESIPPPP bid window, following awards to Norway’s Scatec for one and a consortium of Copenhagen Infrastructure Partners (CIP), utility EDF and IPP Mulilo for the other three.

AGV Projects will build a 153MW BESS, Red Sands, at Eskom’s Garona substation for a total cost of ZAR6.43 billion (US$341 million), bringing the total round one projects to 513MW/2,052MWh.

After this article was published, IPP Globeleq revealed it is behind the winning bid for the fifth and final project. The Red Sands project was originally developed by Africa Green Ventures (AGV). Globeleq is owned 70:30 by UK and Norwegian state-owned finance institutions British International Investment and Norfund, respectively.

The BESIPPPP projects will provide Eskom with capacity, energy and frequency control via ancillary services Instantaneous Reserves, Regulating Reserves, Ten Reserves and Supplemental Reserves, under 15-year power purchase agreements (PPAs).

Eskom has in general struggled to prevent frequent and widespread load shedding and power outages and plans to use BESS to increase resiliency on the grid.

DMRE has also extended the bid submission deadline for the second bid window of BESIPPPP, from 30 April 2024 to 6 June 2024, and done the same for the seventh bid window of the separate Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). BESIPPPP round two will procure 615MW/2,460MWh.

The government of South Africa uses REIPPPP to procure large-scale solar and wind capacity, and has been covered extensively by our sister site PV Tech, and its latest bid submission deadline has been pushed to 30 May 2024.

It is also procuring BESS through another scheme, the Risk Mitigation IPP Procurement Program (RMIPPPP) for generation-plus-BESS projects, with winning parties including Scatec and Saudi-based ACWA Power.

The launch of BESIPPPP last year and its 70% round-trip efficiency (RTE) provoked some lively debate around whether flow batteries would be able to compete with lithium-ion for projects (Premium access), though winning projects so far appear to have utilised lithium-ion.

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