South Africa has taken another step towards expanding its renewable energy infrastructure with the commercial close of the Oasis 1 Mookodi battery energy storage systems (BESS) project.
The project, which is part of the country’s broader Energy Storage Independent Power Producers Procurement Programme (ESIPPPP), is a key milestone in South Africa’s efforts to enhance energy storage and grid stability.
The signing ceremony took place in Cape Town, attended by high-level dignitaries including Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa, alongside representatives from the National Transmission Company of South Africa (NTCSA), the Department of Mineral Resources and Energy (DMRE), and project sponsors.
The sponsors include global energy giant EDF and its local affiliate EDF Renewables (EDFR), co-sponsor Mulilo, and equity partners Pele Energy Group and Gibb-Crede. With the signing complete, financial close is expected to follow in November 2024, setting the stage for construction, which is expected to be completed in 24 months.
The Oasis 1 project is part of a larger portfolio of three energy storage projects led by the Oasis consortium, which was awarded three out of the five projects in the first bid window of the ESIPPPP, initiated in November 2023.
The Oasis consortium comprises EDF, EDFR, and local partners Mulilo, Pele Energy, and Gibb-Crede. The three projects—Mookodi, Aggeneis, and Nieuwehoop—will collectively deliver a total of 257 MW of capacity and 1,028 MWh of storage.
All of the projects are strategically located in the Northern Cape Supply Area, a region that plays a crucial role in South Africa’s renewable energy expansion due to its abundant solar resources.
The Oasis Mookodi project features a capacity of 77 MW with 308 MWh of energy storage, while Oasis Aggeneis has a matching 77 MW capacity and 308 MWh of storage. The Oasis Nieuwehoop project is the largest of the trio, offering 103 MW of capacity and 412 MWh of storage.
Together, the projects will significantly contribute to alleviating grid constraints in the Northern Cape, helping to manage the variability of renewable energy supply, particularly from solar and wind sources.
Minister Ramokgopa highlighted the significance of the project during the signing ceremony, stating, “The Oasis 1 project, alongside its sister projects, represents a critical investment in South Africa’s energy future. These battery energy storage systems are not only essential for stabilizing the grid but also for ensuring that we can maximise the potential of renewable energy sources. This is a pivotal moment in our journey toward a cleaner, more reliable energy grid.”
The ESIPPPP is part of the government’s broader strategy to address South Africa’s energy challenges, which include a lack of grid capacity and the need to integrate more renewable energy into the system.
The programme, launched in March 2023, is the first large-scale, private sector-driven energy storage initiative in the country. When announcing the preferred bidders in November 2023, then Minister of Mineral Resources and Energy, Gwede Mantashe, stressed the programme’s importance, describing it as a “critical measure” to increase grid capacity and support renewable energy integration.
The projects under the ESIPPPP have attracted over R10 billion in investments, a testament to the private sector’s confidence in South Africa’s energy market. The Oasis 1 projects alone have committed to spending over R3.2 billion on local content and R4.4 billion on preferential procurement from Broad-Based Black Economic Empowerment (BBBEE) enterprises, including black-owned small, medium, and micro-enterprises (SMMEs). Additionally, the Oasis 1 projects will contribute to job creation, with 992 job opportunities expected during both the construction and operational phases, measured in job years.
In line with the government’s emphasis on inclusive economic growth, each project in the Oasis portfolio will feature a 5% ownership stake for local communities through a Community Trust. This initiative ensures that the benefits of these projects extend beyond energy production and into local economic development, with dividends from the projects supporting community upliftment initiatives over the long term.
The Oasis 1 BESS projects will deliver more than just energy storage; they will provide critical services to the national grid, including grid constraint relief, energy arbitrage, and ancillary services. Grid constraint relief will help absorb excess power from renewable sources, particularly during periods of high solar output when the grid cannot evacuate all the energy produced.
The stored energy will then be released during peak demand periods, reducing the need for diesel-powered generation.
Energy arbitrage will allow for the shifting of cheaper electricity generated during off-peak hours to peak periods, optimising the use of renewable energy and helping to reduce energy costs.
Additionally, the projects will provide ancillary services, which are essential for maintaining the stability of the grid by balancing supply and demand in real-time.
