South Africa Opens Public Procurement for 4,600 MW Battery Storage, 5,000 MW Gas-to-Power

Electricity and Energy Minister, Dr. Kgosientsho Ramokgopa has signed a new Ministerial determination prioritising 4,600 MW of battery energy storage systems (BESS) and 5,000 MW of gas-to-power (GtP) projects, opening the way for new public-procurement bidding rounds.

The determination, published in line with the Electricity Regulation Act, will be implemented by the Independent Power Producer Office (IPPO) and is open to all market participants, including Eskom.

The State-owned utility has previously been excluded from bidding in public procurement rounds but has signalled GtP ambitions and is in the process of incorporating Eskom Green as a subsidiary to partner with private entities on new renewables and BESS projects.

Ramokgopa said the front-loading of BESS and GtP procurement was informed by priorities outlined by the System Operator, which identified a need for greater flexibility and dispatchable plants. It is also a response to a material increase in curtailment — implemented by the System Operator when available generation cannot be accommodated due to network constraints or operating conditions, including periods when supply exceeds demand.

The minister indicated that BESS was central to addressing curtailment and the associated rise in compensation payments by the National Transmission Company South Africa (NTCSA) to renewables independent power producers selected during previous public procurement rounds. Batteries can charge from electricity that would otherwise be curtailed and discharge during evening peaks or other periods of need.

South Africa already has a template for procuring BESS, with the IPPO having conducted three bidding rounds based on substation sites selected by the NTCSA. A total of 1,744 MW/6,976 MWh of BESS has been procured to date, and all five projects from the first bidding round — involving 513 MW/2,052 MWh and combined investments of more than R15-billion — have advanced to construction. The 4,600 MW outlined in the determination represents a significant scale-up.

The South African Energy Storage Association (SAESA) welcomed the minister’s recognition of BESS within the procurement programme. Chairperson Joanne Dean said BESS could strengthen grid stability and resilience, defer costly transmission and distribution upgrades, facilitate higher penetrations of renewable generation and create opportunities for manufacturing, localisation and skills development.

“Storage is increasingly becoming the infrastructure that connects generation, transmission, distribution and demand into a modern electricity system,” Dean said, arguing that energy storage should be recognised as a strategic sector in its own right, rather than as a supporting component of wind and solar projects.

Ramokgopa said the 5,000 MW GtP allocation would complement storage by providing dispatchable electricity when renewable output fell or demand rose. The procurement design will address startup times, ramping capability and minimum operating levels, as was the case during the first GtP bidding round, the evaluation process for which is yet to be concluded.

“Fuel availability, delivered gas prices, supporting port and pipeline infrastructure, grid connections and commissioning schedules will be assessed together,” the minister added.

The determination makes no provision for new wind or solar capacity, much of which is currently being procured by private companies through bilateral power purchase agreements. However, Ramokgopa said a subsequent determination would include new variable renewables capacity, as well as hybrid renewables-storage projects and pumped storage.

Both the BESS and GtP procurement programmes will be designed to support local manufacturing and construction, and incorporate measurable commitments aimed at broadening ownership of energy infrastructure by black South Africans.