South Africa’s DMRE launches third round of grid-supporting BESS procurement
South Africa: DMRE launches third round of BESS 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.
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.
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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.
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.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”