South Africa’s Department of Mineral Resources and Energy has announced five preferred bidders under the third bid window of the 616 MW/2464 MWh Battery Energy Storage Independent Power Producer Procurement Program.

Bids were submitted by November 28, 2024, with 33 responses received.

Five preferred bidders have been selected after a detailed evaluation conducted by an independent committee. These bidders represent a total capacity of 616 MW/2,464 MWh and a total investment of R9.5 billion (~$514.29 million).

Each project corresponds to one of the five specified substations in the Free State supply area.

The selected projects are Haru BESS by Scatec at the Leander substation (123 MW), Bloemhoek BESS by Mulilo at the Theseus substation (124 MW), Erfdeel BESS by Mulilo at the Everest substation (123 MW), Vanilla BESS by Mulilo at the Havard substation (123 MW), and Retreat BESS by Mulilo at the Merapi substation (123 MW).

The capital cost recovery charge rates for these projects range from R203.47 (~$11.02)/MW/h to R235.32 (~$12.74)/MW/h. The lowest evaluation price was from Bloemhoek BESS at R1,801.24 (~$97.53)/MWh, while Retreat BESS had the highest at R2,477.86 (~$134.14)/MWh.

The battery energy storage initiative supports South Africa’s efforts to enhance grid reliability by offering ancillary services, including instantaneous, regulating, ten-minute, and supplemental reserves.

The program requires all preferred bidders to meet certain transformation and development criteria.

The criteria include committing to a minimum of 40% black shareholding in independent power producer companies, up to 30% black shareholding among construction contractors, and up to 42% in operations contractors.

Local content expenditure is expected to exceed R3.7 billion (~$200.34 million) during both construction and operations.

Preferential procurement will include R3 billion (~$162.45 million) from Broad-Based Black Economic Empowerment entities, R1.3 billion (~$70.39 million) from black-owned enterprises, R1.1 billion (~$59.56 million) from Qualifying Small Enterprise and Exempted Micro Enterprises, and R562 million (~$30.43 million) from black women-owned entities.

Additionally, R184 million (~$9.96 million) will be invested over the project’s lifespan for supplier development, skills training, bursaries, and socio-economic development.

In December 2024, South Africa released the list of preferred bidders for solar and battery storage projects to be developed under its Renewable Energy Independent Power Producer Procurement Program and Battery Energy Storage Independent Power Producer Procurement Program.