Aerial view of Eskom's Hex battery energy storage facility
Independent Power Producer (IPP) Office head Bernard Magoro reports that work is under way to identify substation sites for the upcoming third Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) round while progressing with the second bid window (BW2) for 615 MW/2 460 MWh across eight substation sites.
Speaking during a virtual bidders’ conference, Magoro acknowledged questions posed by several prospective bidders about the prospects of securing the necessary environmental authorisations in time for the sites selected for BW2, which were identified only on December 14 when the request for proposals (RFP) was published.
He reported that an effort was being made to ensure that the next set of sites were identified well ahead of the launch of BESIPPPP BW3, the RFP for which could be issued before the end of March.
For BESIPPPP BW2, meanwhile, Eskom had selected eight transmission substations sites in the North West province for the programme, namely Mercury, Carmel, Hermes, Ngwedi, Midas, Marang, Bighorn and Ararat.
Eskom chief engineer for transmission grid planning Caswell Ndlhovu reported that the sites were selected by a multidisciplinary team within the utility using a selection criteria governed by six principles.
These included: sites where there was capacity available at all times for discharging and recharging and the provision of ancillary services; sites where losses could be minimised; areas with high system strength; areas with low existing storage concentration; and sites that could help decongest the main corridor into Gauteng for renewable electricity.
Eskom also gave a higher weighting to areas where the renewables generation would arise from solar photovoltaic, owing to the outcome of a study showing that battery storage paired less well with onshore wind from a curtailment perspective.
Using this criteria, the North West province emerged as the frontrunner location and the eight sites were subsequently selected for BESIPPPP BW2.
Under the round, the IPP Office is seeking 77 MW battery energy storage systems at each substation with four hours storage.
A minimum availability of 95% over 8 760 hours per contracted year is also stipulated and the facilities will be expected to provide instantaneous, regulating and supplementary reserves.
The bidding process is being governed by rules similar to those used during the inaugural BESIPPPP round, besides a stipulation for a minimum South African ownership of 49%, as well as the selection of reserve bidders, which could step in should the preferred bidder fail to achieve financial close within the stipulated timeframe.
A 90/10 evaluation criteria is being used, with 90 points for price and 10 points for the various economic development components, which are not qualifying criteria.
Following the first bidding round in 2023, four preferred bidders were named in late November, with negotiations under way with a fifth.
The four installations are all earmarked for development in the Northern Cape and will have a combined capacity of 360 MW/ 1 440 MWh, as well as a combined investment value of R10-billion.
The closing date for bid submissions under BW2 is April 30, and Magoro urged prospective bidders to meet the January 31 deadline for the application for grid-connection cost estimate letters from Eskom, which required 90 days to process.