South Africa - Eskom Distributed Battery Energy Storage Project - Project Appraisal Report
Eskom’s integrated report 2020 prioritizes strategic initiatives, called “seven pillars” that will enable the utility achieve sustainability in the current business environment and set up the Eskom of the future. Under Pillar 5- “Innovation and transformation to create new revenue sources”, Eskom’s strategy is to partner with players in battery storage technology to improve dispatchability of variable energy from the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) plants as well as provide alternative solutions of grid support to distribution-constrained networks. The distributed Battery Energy Storage Systems (BESS) project involves the development of 360 MW storage system (equivalent to 1440 MWh with four (4) hours storage) at various Eskom distribution sites in several provinces (Western Cape, Eastern Cape, Northern Cape and KwaZulu Natal). The project will be implemented in two (2) Phases targeting installation of 800 MWh and 640 MWh respectively. Phase I is expected to reduce energy curtailment by approximately 320 MWh and 140 MWh at the Skaapvlei and Melkhout sites1 . The World Bank and New Development Bank (NDB) have approved financing for Phase I amounting to USD 320 million and USD 90 million respectively. The AfDB’s proposed financing, targeting Phase I, is through the utilization of savings amounting to USD 57.67 million from the USD 100 million Clean Technology Fund (CTF) Loan, previously approved in 2011 under the Eskom Renewable Energy Project. The total financing package approved by the World Bank and NDB for Phase I and Phase 22 amounts to USD 320 million and USD 400 million respectively.