Scatec Renewable Energy Project Boon for South Africa
Scatec ASA, a Norwegian frontrunner in renewable energy, is moving forward with its Mogobe Battery Energy Storage System (BESS) project in South Africa.
Scatec is a renewable energy company that develops, builds, owns, operates and maintains power plants that generate clean electricity. Its business model includes development, construction and operations.
Scatec will not only be handling the engineering, procurement and construction (EPC) functions but will also oversee operations, maintenance (O&M) and asset management (AM) throughout the tenure of the project.
EPC companies deliver projects under a single contract, taking responsibility for design, materials and building works. The model transfers project risks from owners to contractors, while providing as much certainty around cost as is possible on large construction projects.
By leveraging its extensive experience, particularly from projects like the Kenhardt hybrid solar and battery storage project, Scatec aims to optimise the procurement and deployment of vital equipment and services.
The company has recently completed the financial arrangements necessary to begin construction of the 103MW/412MWh facility, a pivotal development under the country's Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP).
This project is a major stride in demonstrating Scatec’s capabilities, following the successful acquisition of a 15-year power purchase agreement (PPA).
With the PPA in place, Scatec ensures compensation for providing storage capacity to the National Transmission Company of South Africa (NTCSA), which will deploy the Mogobe BESS to enhance and stabilise the national grid.
The commitment to battery storage solutions is becoming increasingly significant as South Africa faces ongoing energy challenges and seeks to augment the integration of renewable power sources.
The estimated cost of the Mogobe BESS project stands at ZAR 3bn (US$170m), with the primary funding — about 90% — sourced from non-recourse project debt.
Terje Pilskog, CEO of Scatec, said: “This is a significant milestone not just for Scatec but also for the energy transition in South Africa.
"Mogobe BESS will set a new standard as one of the first and largest standalone dispatchable battery storage systems in Africa.
"We see plenty of opportunities for growth in this space and our strong local team is ready to deliver.”
Procurement key to South Africa’s energy future
Under the auspices of the Department of Mineral Resources and Energy (DMRE), South Africa is modernising its energy framework to combat the frequent blackouts that are curtailing its economic growth.
The programme underscores the critical role of dispatchable energy solutions, such as battery systems, which facilitate balancing of energy supply and demand and are integral for embedding more renewables into the national grid.
The ongoing second bid window of the programme aims further to expand storage capacity to 615MW/2,460MWh, with the submission deadline extended and a subsequent third bid window following soon.
Roar Haugland, Scatec’s EVP for Sub-Saharan Africa, commented on the importance of this procurement-driven project: “The Mogobe BESS will support grid infrastructure and unlock capacity for South Africa’s energy system.
"By doing so, we enable not only greater electricity access but also pave the way for future renewable energy connections.”
Standard Bank supports innovative financing
Standard Bank, as lead financial arranger for the Mogobe project, continues its partnership with Scatec following the success of earlier ventures like the Kenhardt hybrid project.
“We're proud to collaborate with Scatec on the Mogobe BESS project, which represents a major step forward for South Africa’s energy transition," adds Rentia van Tonder, Head of Power at Standard Bank.
"This project, like Kenhardt, demonstrates our commitment to financing innovative energy solutions that drive both economic growth and environmental sustainability.”
As South Africa advances its energy procurement and grid stabilisation strategies through these critical projects, the role of entities like Scatec and Standard Bank will be increasingly central in achieving the nation’s renewable energy ambitions.
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