The Department of Mineral Resources and Energy (DMRE) held its Bidders’ Conference under the Battery Energy Storage Bid Window 3 (BESIPPPP BW3) IPPP Programme.

• The RFP was issued to market on 28 March 2024.
• The third Battery Energy Storage Bid Window calls for 616 MW (2464 MWh) battery energy storage capacity and ancillary services in line with the power system service requirements as set out by the System Operator.
• The procurement round will procure five (5) storage facilities that are located within the Free State Province.

Here are LnP’s take-aways from the bidders’ conference:

Legal Take-Aways:

• The PPA is for 15 years.
• Bid Submissions extended (by three months) to 31 October 2024.
• Bidders announced within 2 months of bid submissions.
• Commercial Close extended (by an additional two months) so Commercial Close must be done within 8 months from preferred bidder announcement.
• SCOD within 24 months from Commercial Close.
  • On 27 March 2024, the Minister of Forestry, Fisheries and the Environment implemented the norm for the exclusion of identified activities associated with the development and expansion of battery storage facilities in areas of low or medium environmental sensitivity and the norm for the exclusion of the development and expansion of solar photovoltaic facilities in areas of low or medium environmental sensitivity in terms of the National Environmental Management Act, 1998 (Act No.107 of 1998) (the “Exclusion Norm”). The exclusions allows for the development of battery storage and solar PV facilities in areas of confirmed low and medium environmental sensitivity without obtaining an environmental authorisation prior to commencement, while meeting the objectives of the Act.
  • A caution to the market- the Exclusion Norms still prescribe procedural requirements that must be adhered to.
  • A site sensitive verification inspection and report is required to identify the environmental sensitivity of the footprint and corridor.
  • This must be undertaken by a registered environmental assessment practitioner (EAP) or registered environmental scientist, a consultation process, and application to the DFFE for registration of the project.
  • The registration timeframes are reduced to 10 days from date of submission of all prescribed information. Once registered, interested parties are notified in 7 days.
  • Non-compliance with the Exclusion Norms may attract a fine of 10 Million ZAR or imprisonment not exceeding 10 years.
• For Bid Submissions, project registration with the DFFE is required together with a Legal Opinion is required (that meets the requirements of Part A of the RFP) that confirms the Projects fall into the exclusions covered under the Exclusion Norm.
• A briefing note from the IPP Office to the market will be issued covering this topic.

Technical Take-Aways:

• The distance between the construction of the BESS facility to the substation will impact on the Bidder’s Price – so this needs to be carefully considered.
  • The chemistry / technology of the storage is not specified. The Facility’s response is expected to be fully delivered within 400ms, therefore a high-resolution measurement device is required at each Project Site.
  • Stacked Services are key. Capacity, Net Energy and Ancillary Service for Instantaneous Demand is delivered within 400ms.
• For IGCAR compliance – measurement data is not required for BESS.

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