Ramokgopa announces preferred bidders for third battery energy storage
616MW of battery storage will be added across five sites in the Free State, with operation expected by 2028.
The projects will store excess solar energy generated for use during the peak demand periods.
Four of the five winning bids went to SA company Mulilo, reflecting increased local capacity and competitiveness.
South Africa's push to stabilise its power grid through battery energy storage systems has advanced with the announcement of preferred bidders for the third bid window of the Battery Energy Storage Independent Power Procurement Programme.
Electricity and Energy Minister Kgosientsho Ramokgopa announced this during a press briefing on Friday, confirming that 616MW of new battery storage capacity would be added to the national grid.
This allocation is the final portion of government's 1 744MW target, as laid out in the Integrated Resource Plan (IRP). The latest bid window will see an investment of R9.5 billion, with project completion expected in January 2028.
Battery storage to support solar during peak demand
Ramokgopa explained that battery energy storage plays a critical role in improving grid flexibility by capturing excess electricity generated during the day, mostly from solar photovoltaic (PV) sources and discharging it during peak periods in the morning and evening. This approach aims to reduce reliance on costly diesel-powered open-cycle gas turbines during peak hours.
'During the day, our solar PV plants generate more electricity than we need.'
Instead of wasting that surplus, these batteries will allow us to store it and release it later in the evening, when demand is at its highest.
Kgosientsho Ramokgopa
Currently, peak electricity demand occurs between 6am and 8.30am and again between 5.30pm and 7.30pm, with the evening peak particularly severe. The battery systems are designed to provide four hours of storage capacity, enough to cover both peak periods daily, adding up to 730 charge-discharge cycles annually.
Five projects located in the Free State
The 616MW capacity will be installed across five sites in the Free State, identified by the National Transmission Company of SA as strategically suitable for new grid support infrastructure. Each site has one preferred bidder assigned:
Scatec was appointed for the Leander Substation site.
Mulilo Energy was selected for the remaining four sites, including Everest, Harvard and Merapi.
Ramokgopa noted the increasing competitiveness of domestic developers: 'We're seeing more South African companies winning bids in these programmes. Four out of five of the projects in this round have gone to a local developer, which is encouraging for the sector.'
The minister also noted the geographic spread of the three bid windows to date: the first was concentrated in the Northern Cape and parts of North West; the second was mainly in North West and the third was focused on the Free State.
Procurement process and technical considerations
The third bid window was launched in March last year, following an open and competitive process. According to Ramokgopa, the process considered several technical criteria beyond pricing, including:
Round-trip efficiency: The ability of batteries to return the same amount of electricity that was used to charge them.
Rapid voltage change factor: A metric based on the battery's proximity to substations, affecting technical losses and bid scores.
Government intends to improve fairness in future bid windows by pre-procuring land near substations to prevent distance-related disadvantages for bidders.
The power purchase agreements signed with the preferred bidders will span 15 years, which aligns with global industry norms for battery storage contracts.
Commercial close was targeted for January next year, with full commercial operation scheduled by January 2028. However, the minister encouraged developers to accelerate this timeline where possible.
Programme outlook and future plans
The 616MW announced on Wednesday concluded the initial 1 744MW target for battery energy storage outlined in the current IRP. This included:
513MW from bid window 1
615MW from bid window 2
616MW from bid window 3
The updated IRP, which will outline new targets and procurement rounds, is currently under review by the National Economic Development and Labour Council.
SA is considered a continental leader in deploying battery energy storage and government aims to maintain this position as part of its broader transition to cleaner energy.
However, Ramokgopa emphasised that coal remained the backbone of the country's energy generation capacity and plans involved a mix of energy sources rather than outright replacement.
'We are not pitting one energy source against another.'
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