The IDC is South Africa’s national development finance institution, wholly-owned by the South African government.
It aims to be the primary source of commercially sustainable industrial development and innovation to benefit both South Africa and the rest of Africa by promoting entrepreneurship through the building of competitive industries and enterprises based on sound business principles.
In 2015, the IDC approved R 11.5 billion (approximately USD 1 billion) in funding to companies across various sectors.
Under the terms of the Agreement, Bushveld Energy will partner with the IDC to determine the economic viability of vanadium redox flow batteries ("VRFB") for use and manufacture in South Africa. Accordingly, Bushveld Energy and the IDC will commission a Feasibility Study to determine the following:
1. Assess VRFB viability and costs in the South African market, including studies of the market potential for VRFB Systems in South Africa and Africa, and techno-economic studies for the local manufacturing of vanadium electrolyte and VRFB system manufacturing in South Africa;
2. Identify potential local and foreign partnerships in support of the roll-out and local manufacturing of VRFBs; and
3. Establish two VRFB verification sites of up to 1.0 MW each in size in South Africa to demonstrate performance of the technology and its use in commercial and utility applications.
While the development of global energy storage to date has largely focused on North America, Europe and Asia, Bushveld Energy believes Africa offers a unique and significant opportunity.
Grid penetration is below 50% in the majority of countries, leading to significant opportunities for power application in use cases such as off-grid, voltage support, transmission and distribution deferral. In addition, opportunities exist for VFRBs where diesel is currently the primary source of energy.
South Africa is rapidly adding renewable energy to its grid, with over 6,376MW already procured by the Department of Energy, mostly consisting of wind and solar photovoltaic generation.
Although renewables provide some direct opportunities for the implementation of VRFB energy storage systems, the use cases for VFRBs as a longer term energy source extend beyond them.
In addition, as a leading primary vanadium producer and exporter, South Africa serves as the logical base for VRFB manufacturing; furthermore, VRFB energy storage offers significant opportunity for mineral beneficiation.
Pursuant to the signing of the Agreement, Bushveld Energy and IDC have started preparing the scopes for the market and techno-economic studies. In addition, the two parties are assessing potential South African sites and further cooperation models for the two VRFB installations envisaged under the Agreement.
Bushveld Minerals CEO Fortune Mojapelo said: "Africa’s insufficient power infrastructure and rapidly growing electricity demand create a unique environment for immediate, mass-scale adoption of energy storage across a variety of use cases.
"The Agreement with IDC is an important step for Bushveld Energy, and we are very pleased to add a major local partner with significant resources and expertise in building successful, long term businesses in South Africa. It also demonstrates support for our vision of the potential for VRFB technology and underscores the opportunity for South Africa to beneficiate its mineral resources further through the development of new industrial opportunities.
"This is another example of Bushveld Energy’s efforts to promote the role of vanadium in the growing energy storage market through smart partnerships and innovative business models. As we have maintained in the past, partnerships are key to our business model. We look forward to working with the IDC."
New Industries Strategic Business Unit Head Christo Fourie said: "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.
"The IDC and Bushveld Energy share a common vision for the development of a new industry that will ultimately benefit all South Africans through increased local minerals beneficiation, the creation of jobs across the value chain, the increased availability of power and the overall stimulation of growth in the economy.
"We are excited about our partnership with Bushveld Energy and the contribution that this project will make towards the achievement of our industry development goals for the local Energy Storage industry."
