State-owned electricity utility Eskom has confirmed that it has awarded battery energy storage system (BESS) contracts to two suppliers for projects with a combined capacity of 199 MW/833 MWh.

CEO André de Ruyter confirmed on Wednesday that the BESS programme, which is being funded through a World Bank loan, will cost R11-billion. The entire programme is for 360 MW/1 440 MWh and is being delivered in two phases.

Speaking during a briefing hosted to explain another extension of rotational power cuts, De Ruyter said that Phase 1 contracts had been awarded to Pinggao, of China and Hyosung, of South Korea.

Eskom confirmed with Engineering News that Pinggao had been awarded contracts for the 80 MW Skaapvlei, 9.5 MW Paleisheuwel and 5 MW Graafwater projects, in the Western Cape, while Hyosung had been awarded the 40 MW Pongola and the 8 MW Elandskop projects, in KwaZulu-Natal, as well as the 20 MW Hex project, in the Western Cape.

Eskom has indicated previously that the BESS projects will perform various roles from peak shaving and demand management to the provision of ancillary services and local network support.

De Ruyter said the projects were currently the subject of a licensing adjudication by the National Energy Regulator of South Africa, which had already provided its concurrence to the projects.

Eskom is, thus, confident of receiving the licences by mid-September.

“We then intend to commence construction following the award of the licences and depending on the package,” De Ruyter said, indicating that some of the packages should begin later this year and be completed by the middle of 2023.

He noted that the World Bank had been intimately involved in supervising the project and ensuring proper governance.

“We were also very fortunate to secure pricing for the projects prior to significant price escalations that have arisen as a result of a commodity price spike caused by the war in Ukraine, as well as the fact that there is a significant demand now for additional battery storage systems around the world.”

Describing the contracts as large and innovative, De Ruyter said that the installation of the systems would help strengthen the transmission and distribution grids in a number of key areas, including the Northern Cape, the Western Cape and also in KwaZulu-Natal.

*This article and the headline have been updated to include new details about the size of the BESS programme, its phased development and the overall capital expenditure involved