On South Africa’s grid, batteries would allow high-scale dispatchable green energy


Ministry of Mineral Resources and Energy in South Africa has invited proposals for 1,300 megawatts per hour (MWh) of green energy combined with battery storage to be added to the national grid. Independent power producers (IPPs) have sent their bids to claim the 20-year long power purchase agreements (PPAs). Through the Risk Mitigation Independent Power Producer Programme (RMIPPP), the successful bidders will deliver up to 2 gigawatts (GW) of energy to beat the power shortage experienced in South Africa. IPPs will supply power to the grid between 5 am and 9.30 pm as per ESKOM guidelines.

On March 18, 2021, Gwede Mantashe, the Mineral and Energy Resources Minister, announced the companies that won the bids. The winners are supposed to deliver energy resources by mid-next year. Mantashe reiterated that these energy projects are intended to reduce power limitations and reduce the use of peaking generators that burn diesel for long periods. Mantashe also launched the fifth bid window of the Renewables Energy IPP Procurement Programme (REIPPPP). This project seeks energy delivery from green energy companies in line with President Ramaphosa’s post-Covid-19 economy recovery plan. The program is eyeing up to 11,813 MW of green energy added to the grid through wind farms, solar projects, and energy storage.

Twenty-eight bids were received for the green energy tender amounting to approximately 5117MW, 1845MW of which are from eight Preferred Bid Status. Mantashe said the high number of bidders showed the private sector is interested in taking part in the South African energy landscape. “The RMIPPP succeeded in attracting project proposals featuring a variety of technology combinations. The quantity and quality of the bid responses and potential megawatt of contracted capacity allowed for a competitive price evaluation,” said Mantashe.

Among the big winners in the bid was liquefied natural gas (LNG). Renewable energy-plus-storage followed closely, expected to deliver around 428MW of power by next summer. Corentin Baschet, an analyst at energy consultancy Clean Horizon estimates that the green energy plus storage projects will procure 430MW of the 1,300MW to be delivered.

“South Africa is facing an urgent need for additional capacity to prevent load shedding,” Baschet noted. The hybrid project winners include Europe-based Electricite de France (EDF) Energy and Total Energy. Riyadh-based ACWA Power was also a top scorer and a local renewable energy giant, G7 Renewables.G7 won the preferred bid with its Oya Energy Hybrid Facility that combines wind, solar, and battery storage.

“The Oya project matches and exceeds governments expectations as it is extremely competitive while still complying with all strict requirements set by the IPP Office and its advisors, guaranteeing full compliance in terms of South African regulations,” said Dr. Killian Hagemann, G7 co-founder. The eight projects will yield about R45 billion in profits when implemented. These projects will also support local businesses by using at least sixty percent local content. Mantashe also estimated that these projects would create around 4,000 new jobs over the construction period and additional 13,500 jobs over the twenty-year maintenance period.

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