In a project that the World Bank hopes will be a catalyst for implementing its climate change strategy in low and middle-income countries, Eskom, South Africa’s 100% state-owned electricity utility, will launch a tender for a 1.4 gigawatt-hours battery energy storage system (“BESS”). The tender will likely be issued in the first or second quarter of 2020, pending final governmental approval. The completed BESS will have a daily capacity of 1.4 gigawatt-hours of energy output (which is sufficient energy to power 1.4 million homes for an hour). The project is the first of its kind on the African continent.
The BESS is a key component for meeting South Africa’s long-term renewable energy goals. It will be linked to solar and wind energy generation plants so that energy generated during periods of low generation costs and demand can be stored for distribution during periods of high costs and demand. This programme should improve the cost-effectiveness of renewable energy generation.
Funding for the project is part of the World Bank’s $1 billion battery storage investment programme. During the first phase of the project, the African Development Bank (AfDB) will work with the World Bank to provide a loan. During the second phase, European DFIs will supply more funding.
Eskom have already developed the BESS specifications, acquired sites, and secured environmental and regulatory approvals for the first phase of the project, which should achieve 200 MW of distributed battery storage by December 2020. The second phase will include 160 MW of distributed battery storage, together with an asset performance management system. Completion of phase 2 of the project is due one year later.
The tender covers the construction, operation, and management of the BESS, as well as the provision of security for the operational sites. Eskom expects the winning bidder to verify Eskom’s technical studies and provide detailed designs for the battery plant. In addition, Eskom expects the successful bidder to meet the ambitious construction deadlines, manage hazardous material generated by the project and provide product and performance guarantees for 20 years. Finally, the tender expects a minimum 20% of local content requirement in the first phase of procurement, including subcontracting to local suppliers and skill development programmes for local workers.