Four preferred bidders announced in South Africa’s Battery Energy Storage Independent Power Procurement Programme

  • The announcement of the four preferred bidders under the first bid window of the Battery Energy Storage Independent Power Procurement (BESIPPP) Programme marks a “significant development” in South Africa’s pursuit for energy security. 
  • This is according to Mineral Resources and Energy Minister Gwede Mantashe’s who announced the winning bidders yesterday at a press briefing.

The preferred bidders were selected following an independent evaluation of the bid submissions process held between August and October this year.

“This first grid-scale energy storage programme in South Africa marks yet another important step towards the development of adequate electricity generation capacity to meet the country’s demand as set out in the Integrated Resource Plan (2019). The site-specific BESIPPPP Programme Bid Window 1 is designed to facilitate the procurement of up to 513 megawatts (MW) from facilities that will provide Capacity, Energy and Ancillary Services to Eskom at 5 specified sites, therefore only one Preferred Bidder is appointed per site,” Mantashe said.

The four preferred bidders, chosen from a cohort of at least 17, are:

  • Oasis Aggeneis (Aggeneis substation)
  • Mogobe BESS (Ferrum substation)
  • Oasis Mookodi (Mookodi substation)
  • Oasis Nieuwehoop (Nieuwehoop substation)

Mantashe said based on the department’s benchmarking exercise, a fifth bidder is expected to be appointed. This process is provided for in the Request for Proposals (RFP) process. An additional Preferred Bidder will be announced as soon as the value for money negotiations have been concluded.

“The appointed preferred bidders have all made economic development commitments, notwithstanding the fact that such commitments were not mandatory for this BESIPPPP BW1 round. The preferred bidders have committed to creating a total of 992 job opportunities for South African citizens (measured in job years), during construction and operations. These projects will further spend over R3.2 billion on local content and over R4.4 billion on preferential procurement from BBBEE, black enterprises, QSEs and ESEs and on enterprise development initiatives over the life-time of the projects,” he said.

Risk mitigation procurement programme

The Minister announced that project agreements have been signed with an additional bidder under the Risk Mitigation IPP Procurement Programme (RMIPPPP).

“Together with Eskom, on behalf of government we will sign project agreements with Mulilo Total Hydra Storage Project appointed as a Preferred Bidder under the RMIPPPP. The project with a total capacity of 75MW located in De Aar, Northern Cape, offers a hybrid Solar PV and Battery Storage technology solution. The project anticipates reaching commercial close by mid-December 2023, and will start the 24-month construction phase in early 2024. The new generation capacity should therefore be online from early 2026. With the signing of this additional project, the total number of projects that have signed agreements under the RMIPPPP have now increased to 6 out of the eleven appointed Preferred bidders, which will add a total of 428MW of dispatchable capacity to the national grid,” he said.

Other IPP programmes

The Minister said that following the opening of several bid windows, at least 1384MW of new generating capacity – all at different stages of the process – have been secured.

“At least nine projects under Bid Window 5 of the Renewable Energy IPP Procurement Programme (REIPPPP) have now reached commercial close and are in construction. Three more projects are expected to reach commercial close in due course. In total, these projects will add a further 1 234 MW to the national grid from 2025 onwards.

“Moving to Bid Window 6, the 6 preferred bidders that were appointed in December 2022 are finalising all conditions precedent to reaching legal and commercial close. As previously communicated, the unavailability of grid capacity is a major constraint faced by all projects, resulting in delayed project closures.

“[The] department is in the process of finalising governance approvals for the release of the requests for the procurement of additional generation capacity under Bid Window 7 of the REIPPPP, Gas-to-Power, and Battery Storage.

“Further announcements in this regard will follow in the next two weeks,” the Minister concluded.

Author: Bryan Groenendaal

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