By Johnathan Paoli
Electricity and Energy Minister Kgosientsho Ramokgopa has welcomed his department’s announcement of preferred storage procurement bidders as a significant milestone in the country’s ongoing efforts to stabilise its electricity grid, accelerate the integration of renewable energy and unlock economic growth through infrastructure investment.
Minister Ramakgopa announced the preferred bidders for the third bid window of the Battery Energy Storage Independent Power Procurement Programme (BESIPPPP) at a media briefing held in Pretoria.
“These systems allow us to store excess solar energy generated during the day and release it when it is most needed, in the mornings and evenings, helping to reduce load-shedding and cut reliance on expensive, high-emission peaker plants,” he said.
Ramokgopa confirmed that Mulilo and Scatec would develop 616 MW/2 464 MWh of battery storage capacity across five sites in the Free State, backed by an estimated R9.5 billion in private investment.
This landmark development will bring the total battery storage secured through the programme to 1744 MW across three bid windows, further stabilising South Africa’s power grid, accelerating the integration of renewables and unlocking infrastructure-led economic growth.
Mulilo, a South African independent power producer (IPP), has emerged as a dominant player in the latest round, winning four out of the five awarded battery energy storage sites (BESS).
They are Bloemhoek BESS (124 MW), Theseus substation at R1 801.24/MWh, Erfdeel BESS (123 MW), Everest substation at R2 157.29/MWh, Vanilla BESS (123 MW), Harvard substation at R2 169.80/MWh and Retreat BESS (123 MW) Merapi substation at R2 477.86/MWh.
The fifth project, Haru BESS (123 MW) at the Leander substation, was awarded to Scatec, a Norwegian renewable energy company with a strong South African presence, at R2 037.10/MWh.
All systems will use lithium-ion battery technology and are scheduled to reach commercial close by January next year, with full operations expected by January 2028.
According to Elsa Strydom, interim head of the IPP Office, the third bid window saw a 40% drop in average evaluation prices compared to the inaugural round in 2023, and 8% lower than the second round.
She attributed the decline to improved investor confidence, technology learning curves and growing comfort among South African financial institutions with battery storage investments.
Ramokgopa stressed the strategic role of battery storage in balancing South Africa’s energy mix.
The five substation sites were selected by the National Transmission Company South Africa, reflecting national planning priorities.
The projects will also offer grid ancillary services, improve voltage stability and support overall grid reliability.
A cornerstone of the BESIPPPP is economic transformation.
Each project must have a minimum 40% black ownership, while construction contractors must include at least 30% black shareholders.
Collectively, the awarded projects will channel R3 billion in preferential procurement from broad-based black economic empowerment firms, R3.7 billion in local content spend and R184 million toward skills training, supplier development and socio-economic upliftment over the project lifespans.
While not labour-intensive, the projects are expected to create 852 jobs during the construction and operations phases.
“This is about more than electricity. It’s about building local capacity, creating new industrial opportunities, and ensuring that all South Africans—especially youth and women—benefit from the energy transition,” Ramokgopa said.
The minister confirmed that the next phase of energy procurement would align with the upcoming 2025 revision of the Integrated Resource Plan (IRP).
The updated IRP is currently under review by the National Economic, Development and Labour Council \and is expected to reach Cabinet by July.
This revised framework is anticipated to open doors for further battery storage, solar, wind, and gas-to-power investments.
While celebrating the success of Mulilo, Ramokgopa raised concerns about over-concentration and called for greater diversity among bidders.
“We want to see fully-fledged black-owned IPPs emerge as lead developers in future rounds,” he said.
To address land access barriers for new entrants, the government may consider pre-acquiring land near substations to level the playing field.
With 1744 MW of battery storage capacity now in the pipeline, South Africa is establishing itself as a continental leader in large-scale energy storage deployment.
These systems will serve as a crucial bridge between renewable generation and consumption, making the grid more flexible, cleaner and more efficient.
“This is not just a procurement success, but a signal of what’s possible when we combine innovation, inclusion and investment,” Ramokgopa concluded.
With strong public-private collaboration, deepening local ownership, and falling technology costs, Ramakgopa said the country was powering toward a greener and more equitable energy future.
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