Developers Mulilo and Scatec were last week announced the winners of the third bid window of South Africa’s battery storage tender, the Battery Energy Storage Independent Power Producer Procurement Programme (BEIPPPP). They are combined to build 616 MW/2 464 MWh of new battery storage capacity at a cost of R9.5-billion in the Free State.
The announcement was made by SA’s Minister of Energy and Electricity, Dr Kgosientsho Ramokgopa last Friday. The minister revealed that the third round of the BEIPPPP attracted 33 bids before the submission deadline on 28 November 2024. The bidding window opened on 28 March 2024.
The projects were selected via 15-year power purchase agreements with the National Transmission Company of South Africa (NTCSA) which will utilise the capacity to balance the grid. The projects were evaluated mainly on price but with additional scoring for socioeconomic and transformation factors.
Ramokgopa also confirmed that the projects will utilize lithium-ion battery technology. They are expected to reach financial close within the next eight months and commence commercial operations by January 2028.
Awarded bids
Norwegian renewable energy independent power producer Scatec was awarded preferred bidder status for its 123 MW Haru BESS project at the Leander substation, with a R2 037.10/MWh evaluation price.
Scatec will own 50.01% of the equity in the project, with Stanlib’s Greenstreet and Redstreet Funds owning 44.99%, and a Community Trust holding 5%. Scatec will provide engineering, procurement, and construction (EPC), operations & maintenance (O&M), and asset management (AM) services to the project.
“We applaud the South African government’s commitment and dedication to the renewable energy procurement programmes. Battery energy storage will continue to play an important role in the energy transition, and we will continue to be at the forefront across our core markets,” says Scatec CEO Terje Pilskog.
South African renewable energy developer Mulilo was awarded the majority of the capacity in the tender. The company selected as the preferred bidder for four projects across multiple sites, including:
- The 124 MW Bloemhoek BESS project at the Theseus substation, with an evaluated price of R1,801.24/MWh;
- The 123 MW Erfdeel BESS project at the Everest substation, priced at R2,157.29/MWh;
- The 123 MW Vanilla BESS project at the Harvard substation, priced at R2,169.80/MWh; and
- The 123 MW Retreat BESS project at the Merapi substation, priced at R2,477.86/MWh.
“BESS is a vital solution for South Africa’s energy sector. It provides grid stability, enhances dispatchability of renewables, reduces load shedding, and optimizes costs. Being named Preferred Bidder in BESIPPPP Round 3 underscores our leadership in BESS and our commitment to building a low-carbon, resilient energy future the country,” said Jan Fourie, Mulilo’s CEO.
More confidence in SA’s battery storage tender
Interim IPP Office head Elsa Strydom noted a 40% decline in average evaluation prices during the third bid window compared to the first round in 2023. The initial round included five Northern Cape projects, four of which are now under construction, while the remaining one is targeting financial close by June.
Strydom also highlighted that the latest bid prices showed an 8% improvement over the second round, which had secured eight projects in the North West province just months earlier. Those projects are anticipated to reach financial close by March next year.
Furthermore, Strydom credited the cost reductions to advancing battery technology and growing confidence among South African financial institutions in funding storage projects.
