SA’s new battery storage projects 40% cheaper than first bid window

New battery energy storage projects to be developed in the Free State are 40% cheaper than those announced in the first bid window of the public procurement programme launched in 2023.Electricity and Energy Minister Kgosientsho Ramokgopa on Friday announced the preferred bidders of the third public procurement round. South Africa-based energy companies Mulilo Scatec came out tops of 33 bidders that sought to develop 616MW of battery energy storage systems (BESS) across five sites in the Free State. Their projects are collectively valued at R9.5 billion.Mulilo will develop four projects: the Erfdeel BESS with a capacity of 123MW or 492MWh; the Retreat BESS with a capacity of 123MW or 492MWh; the Bloemhoek BESS with a capacity of 124MW or 496 MWh; and the Vanilla BESS with a capacity of 123MW or 492MWh. These are valued at around R7 billion.Mulilo was named a preferred bidder in the previous two bid windows as well. It's three bid window 1 projects, in partnership with EDF Development, are currently under construction.The lithium-ion battery systems will store excess energy generated by solar PV during the day and then this power will be deployed during peak demand times. This would be in the mornings between 06:00 and 08:30 and then again in the evenings between 17:30 and 19:30, Ramokgopa said."We're going to ensure that that excess generation capacity [from solar PV] gets to be stored somewhere," he said. Essentially, the battery energy storage systems will work like peaking plants - such as the open-cycle gas turbines (OCGT) that run on diesel - to meet demand during peak times. They would also be less expensive than using the OCGTs that run on diesel, Ramokgopa remarked."We are going to use that excess generation capacity that we generated during the day when the sun was out - cheap generation. We will store it and at the time when we need it, we are going to draw it from the batteries and... give us the capacity that we need."Ramokgopa added that the batteries will allow South Africa to take full advantage of renewables, and also aid the transition to clean energy technologies.In total, the three bid windows will see South Africa gain 1 744MW of battery capacity - as per the Integrated Resources Plan of 2019 - and it's attracted over R30 billion in investment.Notably, Ramokgopa highlighted the declining cost trends since the first bid window was launched in 2023. "As a result of the maturity of this process, we are beginning to see that the price point is coming down."Pricing has come down 40% since the first bid window. And between bid window 2 and 3 the costs have come down 8%, Elisa Strydom, acting head of the IPP Office, said. The IPP Office oversees public energy procurement processes. It was named preferred bidder for five of the seven projects in bid window 2. It will be developing the Rooikoppies BESS in the North West, the Mulilo Mercury and Hartbeesfontein BESS in the Free State, and the Leeuwpoort and Welverdiend BESS in Gauteng.Mulilo CEO Jan Fourie told News24 that the projects from bid window 2 are on track to reach financial close by the end of the year. This is dependent on receiving budget quotes from the National Transmission Company of South Africa, related to grid access. Fourie expects the projects for bid window 3 would likely be financed through an 80:20 split between debt and equity.-NEWS24

SA’s new battery storage projects 40% cheaper than first bid window

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Republikein 2025-06-06

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SA’s new battery storage projects 40% cheaper than first bid window

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