Bushveld Energy - Your Time is Coming


4 November 2018

I have been looking at the historical developments that have guided Bushveld Energy (BE) and their associated stakeholders to this point in time

On 13th June 2016 BE announced its co-operation agreement with the Industrial Development Corporation (IDC) of SA

Christo Fourie, Head of the New Industries Strategic Business Unit for The IDC said at the time 

"The signing of the Agreement with Bushveld Energy marks an important milestone for the IDC's initiative towards the development of a sustainable Energy Storage Industry for South Africa"

Here is the 'South Africa Energy Storage Technology and Market Assessment' released by the US Trade and Development Agency (USTDA) in Aug 2017

"The objective of the South Africa Energy Storage Technology and Market Assessment was to provide advisory services to the IDC and Steering Committee that will help guide and promote the adoption of energy storage technologies in South Africa."

The Steering Committee is led by The IDC and includes the following organisations ;

  • the South African Photovoltaic Industry Association (SAPVIA), 
  • the South African Wind Energy Association (SAWEA),
  • the South African National Energy Development Institute (SANEDI), 
  • Council for Scientific and Industrial Research (CSIR), 
  • Eskom Research, Independent Power Producer (IPP) Office, 
  • Energy Intensive Users Group (EIUG), 
  • South Africa Department of Science and Technology (DSI), 
  • South Africa Department of Trade and Industry (dti) – 

The steering committee is also "working closely with the South African Department of Energy (SADOE), Eskom (South Africa’s national electricity utility), the National Energy Regulator of South Africa (NERSA), as well as other key stakeholders."

What that above list demonstrates is that the drive to create an "Energy Storage Industry in SA" is backed by a powerhouse of key SA stakeholders and is led by the IDC.

It is therefore most interesting that BE were able to sign an agreement with the IDC for exactly the same purpose some 14 months before this report was released. A feat no other battery technology developer has managed to achieve since.

It also brings far more weight to that co-operation agreement and the fact the IDC are not only still around but central to what BE is planning to achieve.

This presentation was subsequently produced to demonstrate the key findings of the USTDA, some of which may well be out of date, as the industry and it's objectives have developed rapidly since then. However, two key points highlighted on slide 37 have not changed ;

There are only 4 types of battery technology highlighted on that list as having any sort of "Future Potential for SA Utility Scale Storage"

  1. Advanced Lead Acid
  2. Lithium-ion
  3. Sodium Sulfur
  4. Vanadium Redox Flow

Of these only Lithium and Vanadium are deemed able to have 'Significant' potential and of those two only Vanadium is marked as being a "South African Resource".

In addition, from the above list, only Lithium and Vanadium are currently being tested by Eskom.

So as far back as March 2017 the USTDA ( who incidentally just awarded BE a $500,000 grant to develop their Eskom pilot battery) was telling the SA Energy Steering Committee led by the IDC, that the only utility scale storage battery technology that can be mined locally is the vanadium redox flow battery.

Further importance for me lies with the presenters of that presentation.

  • Bertie Styrdom (IDC Senior Project Development Manager)
  • Sumaya Nassiep (Acting General Manager – Eskom Research, Testing and Development)
  • Paul Vermeulen (Manager DSM and SSM) - City of Johannesburg

In June 2017, so 2 months before the USTDA report was released officially, Eskom announced the opening of a testing facility for as much as 2,000MW of energy storage on its networks, based at Eskom’s existing Research and Innovation Centre:

In the subsequent article dated 13th Oct 2017, Bertie Styrdom says ;

“energy storage could unlock local opportunities in mining and beneficiation, research and development, commercial exploitation and industry development, as well as opportunities in the global market.”

Not if the battery of choice is a lithium one it will not. The IDC incidentally have no known current co-operation agreement with any other battery manufacturers, despite lithium’s challenge.

The article goes on to state that ;

“State-owned power utility Eskom senior consultant Peter Langley agrees noting that the study highlights ample opportunities for energy storage by power utilities and municipalities.”

“Energy storage can fulfil several functions, enthuses City Power demand-side management and supply-side management manager Paul Vermeulen, who emphasises that, for local municipal electricity distributors such as Johannesburg’s City Power, energy storage can be a flexible, distributed grid- management tool.”

“Further, City Power could use utility-scale energy storage for tariff arbitrage, which Vermeulen considers as “probably one of the most realisable benefits” of a storage system for a municipality. Arbitrage means that the electricity distributor can, for example, buy cheaper, offpeak electricity to charge energy storage batteries and then release the stored energy during peak times, resulting in cost reductions through peak power shifting.”

But in order to do this the regulatory framework needed to be updated.

Bertie Styrdom goes on to say ;

“if the provision for energy storage is not stipulated in the IRP, Ministerial dispensation is required for the awarding of generation licences by Nersa”

“Energy storage has been listed in the draft IRP2010–2030, but only in terms of specific technologies, such as lithium-ion and compressed air.”

Remember that article was released in Oct 2017.

Jump forward to the BRR Media interview of 9th Oct 2018, when Mikhail discussed the revised IRP, which “now allows for storage to be part of that same service that gas would usually provide, which is peaking support”

Remember what Mr Vermuelen said about that “peak power shifting” being used as “tariff arbitrage” which is “probably one of the most realisable benefits” of energy storage.

Did a green light just turn on somewhere?

The engineering news article is full of illuminating quotes but Mr Vermeulen also says ;

“Most of the energy storage value – if we are to realise it – will be reaped within the municipal distribution systems, as the majority of the country’s ageing and stressed distribution assets fall in the municipal sphere.”

But Bertie Styrdom of the IDC really brings home the bacon though when he says ;

“The “most significant mileage” for the IDC, however, is in the backward integration of storage technologies into South Africa’s significant mineral value chain”

That quote is post USTDA results. So whatever the benefits, if it’s not South African sourced, it’s not got much of a chance.

Having digested all of this, it is extremely difficult to see past a locally beneficiated vanadium redox battery as the chosen battery technology source for both Eskom and the local municipals that it feeds, whatever the temporary issues with it’s electrolyte.

The IDC partnered with BE before the USTDA had even completed it’s study.

The IDC leads the SA energy steering committee of which every man and his dog including Eskom and City Power of the City of Johannesburg, are members. There is also a clear collaboration being demonstrated between The IDC, Eskom and the municipals, with all other key SA stakeholders along for the ride.

The IDC are working with BE to establish both electrolyte production and VRFB assembly in SA, a process that is already past the point of no return.

When the study was completed it stated very clearly that only vanadium redox batteries can deliver locally beneficiated minerals.

Jump forward 12 months and the USTDA is handing out a grant to BE for it’s pilot battery at Eskom, a very clear message of intent and conclusion.

Page 2 of the USTDA Report is very clear ;

“The U.S. Trade and Development Agency helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies. USTDA links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse trade missions while creating sustainable infrastructure and economic growth in partner countries”

I would suggest the USTDA knows exactly where this is all heading.

City Power with the IDC and Eskom have been spearheading the message that energy storage has multiple benefits ever since the report was released in August 2017, they just need the technology and the regulatory authority. The regulatory authority is now there.

Bushveld Energy is clear in it’s message. It expects to achieve large scale energy storage mandates and is so confident, it is already buying the land that will house the electrolyte production that will feed it. Given the evidence above, I do not blame them.

Every message points to a desire in SA to support and drive a vanadium redox battery industry through contract awards at Utility and Municipal level. Yes SA is going through the motions of providing a level playing field, but everything they are doing is pushing in the direction of VRFBs. No wonder BMN are so confident because it looks very much like it has been a done deal for a very long time. 

Finishing proving the technology and it is all systems go.

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