Mulilo emerges as battery-storage force, participating in 65% of projects awarded

South African independent power producer (IPP) Mulilo has emerged as a leading battery storage project sponsor following three public procurement bidding rounds. It is participating in 12 of the 18 projects awarded, which together have a capacity of 1 134 MWh/4 536 MWh, representing a market share of 65%.

The Cape Town-based IPP has taken the lead in nine of the projects in the North West, Free State and Gauteng provinces, and is partnering with EDF in three Northern Cape projects that are currently under construction and have a capacity of 257 MW/1 028 MWh.

Chief development officer Stuart MacWilliam tells Engineering News that Mulilo’s immediate focus is on completing construction of the projects already under way while advancing the nine other projects to financial close.

The nine projects being led by Mulilo were awarded during the second and third bid windows of government’s Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) and have a combined investment value of more than R14.6-billion.

The latest four projects, awarded on May 30, will all be built at pre-selected substations in the Free State, and include:

The 123 MW/492 MWh Erfdeel BESS, which will be built at a cost of R 1.75-billion; The 123 MW/492 MWh Retreat BESS, which has an investment value of R2.02-billion; The 124 MW/ 496 MWh Bloemhoek BESS, which will cost R1.79-billion; and The 123 MW/492 MWh Vanilla BESS, with an investment value of R1.79-billion. MacWilliam confirms that all of the projects are using lithium-ion batteries, which will likely be sourced from China, but will have combined local content of R1.3-billion during construction and R1.46-billion during operations.

The Mulilo projects awarded during the second bid window, meanwhile, have a combined investment value of R7.68-billion and are also advancing to commercial close, having been named as preferred bids in December.

These five projects are to be located near substation sites in Gauteng, the Free State and the North West provinces and have a combined capacity of 384 MW/ 1 536 MWh.

The projects awarded across all three bidding rounds have 15-year power purchase agreements (PPAs).

MacWilliam says the engineering, procurement and construction, as well as the operations and maintenance contractors, will be finalised through a competitive closed bidding process to be conducted in the coming months.

Mulilo itself is also scaling up as its asset footprint expands: “We have grown from 43 staff at the time of the transaction to 163 now and we’re still growing.”

The company attributes its recent success in the public procurement round largely to the financial firepower that has been introduced through the shareholding of Copenhagen Infrastructure Partners, which is the source of the IPP’s direct equity contributions, as well as a provider of “deep international expertise”.

Therefore, despite its rapid growth, Mulilo is content with its current capital structure and is not currently considering a listing on the JSE.

“In the immediate to short term, the focus is to successfully complete construction for the projects awarded under Bid Window 1 of BESIPPPP and progress towards financial close for projects awarded under rounds 2 and 3.

“These efforts are in line with Mulilo’s ambition to deliver 5 GW of generation by 2028,” MacWilliam says.

Mulilo currently operates 420 MW of wind and solar projects, with 764 MW under construction and more than 1 500 MW targeted for financial close by December.

In response to some negative political party commentary following the award of the latest battery storage projects, MacWilliam asserts that Mulilo has always been committed to local ownership generally and black ownership specifically as required both for government and private PPAs.

“We are proud of our South African heritage and are grateful to have shareholders that are supportive of our growth agenda and ambitions to power the future of South Africa.

“Our projects will always have a shareholding structure that supports local and black ownership whether directly through Mulilo or through our partners or community trusts as applicable.”