State-owned electricity utility Eskom is preparing to roll out battery energy storage systems (BESS) across multiple sites as part of a replacement plan for the 100 MW Kiwano concentrated solar power (CSP) project initially approved as part of the $3.75-billion World Bank loan extended to the group in 2010.
Speaking at the SA Energy Storage 2018 conference in Gauteng on Monday, Cigre Southern Africa’s Prince Moyo, who is also an Eskom GM, confirmed that the scale of the BESS project is aligned with Kiwano’s assumed daily production rate of 1 440 MWh, or 525 GWh a year.
The replacement 360 MW/1 440 MWh BESS project is expected to involve the deployment of battery solutions ranging in size from 1 MW to 60 MW across 90 sites, with the average size of an installation to be 4 MW/16 MWh.
The Kiwano CSP project was approved together with the 100 MW Sere wind farm, under a renewable-energy component of the World Bank’s Eskom Investment Support Project, which has helped to fund the development of the Medupi and Kusile coal-fired power stations. The Sere wind farm entered into commercial operation in 2015.
However, Eskom subsequently decided against continuing with the Kiwano CSP project and the World Bank allowed for a restructuring of the project to enable an investigation of clean-energy alternatives.
Moyo reports that it was determined that a battery storage solution would be a suitable replacement, particularly in light of expectations of a far higher shares of variable renewable energy in South Africa’s electricity system by 2030. The draft Integrated Resource Plan 2018 (IRP 2018) has allocated 7 598 MW for solar photovoltaic and 11 442 MW for wind by 2030, representing a 350% increase against 2018 levels.
Eskom is busy conducting a due diligence exercise to identify suitable sites, as well as to define which applications will be targeted.
The use cases range from energy arbitrage and peak clipping, through to frequency and voltage support, the provision of instantaneous or spinning reserves and back-up, complementing variable wind generation, storing solar energy during the day for dispatch at peak, deferring other grid infrastructure upgrades and for deploying micro-grids.
“The arbitrage aspect makes a lot of sense for Eskom, because the electricity we serve during peak periods costs much more than off-peak electricity. If we can do arbitrage ourselves, we are saving money,” Moyo says.
Eskom is planning to deploy the BESS project in phases and Moyo stresses that the timeframe will depend heavily on the receipt of internal approvals, as well as those required from the World Bank.
However, it is currently anticipated that the bid documentation should be finalised in November and that the tender for the 200 MW/800 MWh first phase should be released to the market during the first quarter of 2019. Contracts should be awarded in the second quarter, with construction, testing and commissioning anticipated before the end of 2019.
South African Energy Storage Association policy and regulation committee chairperson Paul Vermeulen, who is also a City Power executive, argued that the business case for energy storage, particularly at the municipal level, has become increasingly attractive as the cost of storage has decreased.
However, he argued that even more value could be extracted if the storage capacity were to be deployed downstream of the Eskom network and on the medium voltage distribution networks operated by municipal distributors.
Besides the arbitrage opportunities, such systems could alleviate distribution network bottlenecks and overloads, improve security of supply to customers and help municipal distributors avoid Eskom notified maximum demand charge penalties.
Therefore, Vermeulen urged Eskom to consider installing storage assets on ailing municipal distribution by creating “virtual Eskom intake points" on the municipal network, which would still generate peak energy revenues for Eskom.
He also argued for the inclusion of battery storage in the final version of the IRP 2018, despite the fact that the draft version did not explicitly cater for the technology. “Storage is a direct proxy for gas and diesel peaking plant,” he argued.
Vermeulen added that energy storage systems could act as powerful demand-side management (DSM) tools, given that they could behave as both dispatched loads and as dispatched energy sources.
“Storage as a DSM tool will become ever more relevant as more and more self-dispatched renewable energy gets connected to municipal grids.”