By Lehlohonolo Lehana.
Photo Credit: RWE.
Energy and Electricity minister Dr Kgosientsho Ramokgopa says the process to award the tender under the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) was transparent and complied fully with the requirements of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
In 2020, the Department of Mineral Resources and Energy (DRME) established a target to procure 28GW of new generation capacity through the IPPPP. To date, eight bid windows have been released, including the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), Renewable Energy IPP Procurement (REIPPPP) Bid Windows 5, 6, and 7, Battery Energy Storage IPP Procurement (BESIPPPP) Bid Windows 1, 2, and 3, and the Gas to Power Independent Power Procurement Programme (GASIPPPP) Bid Window 1.
Ramokgopa announced Mulilo and Scatec as the preferred bidders to develop 616 MW/2 464 MWh of new battery storage capacity at a cost of R9.5-billion across five substation sites in the Free State province.
In September 2023, Mulilo appointed Jan Oberholzer as its chairperson just two months after he left Eskom as its chief operating officer.
Mulilo had emerged as the preferred bidder across four of the sites, with the following projects:
- The 124 MW Bloemhoek BESS project at the Theseus substation, which had an evaluation price of R1 801.24/MWh;
- The 123 MW Erfdeel BESS project at the Everest substation, with an evaluation price of R2 157.29/MWh;
- The 123 MW Vanilla BESS project at the Harvard substation, with an evaluation price of R2 169.80/MWh; and
- The 123 MW Retreat BESS project at the Merapi substation, with an evaluation price of R2 477.86/MWh.
Meanwhile, Scatec, of Norway, which has a large South African presence, prevailed with its 123 MW Haru BESS project at the Leander substation, with a R2 037.10/MWh evaluation price.
All the projects would use lithium-ion battery technology, and the Minister indicated that the projects were expected to reach commercial close in the coming eight months and enter into commercial operation by January 2028.
The MK Party has written formally to the minister of electricity and energy, demanding full disclosure of the bid adjudication records within seven days.
In particular to a company headed up by Oberholzer.
In addressing the allegations put forward by the MK Party, Ramokgopa affirmed the department’s commitment to integrity.
“The process was subject to rigorous legal, technical, and financial due diligence, consistent with national legislation and the prescripts of the Constitution of the Republic of South Africa, including the objectives of ensuring that public procurement fosters inclusive growth for previously marginalised communities, including women and youth.”
“We remain committed to ensuring that all procurement conducted under the department’s auspices is beyond reproach and reflects the highest standards of probity and public trust,” he said.
He called on citizens with “concrete evidence of wrongdoing” to submit such information through the appropriate legal and institutional channels.
Ramakgopa added that he will formally write to the Chairperson of the Portfolio Committee on Electricity and Energy to request that the department and the IPPO be granted an opportunity to brief the committee on the appointment process and respond to any concerns that may be raised by Members of Parliament.