1/24
Eskom Battery Storage Project (BESS) Tender.
Not very many people know this, but for the last 4 years #BMN has been implementing a long term strategy to position itself for the very tender that is currently in play at Eskom in S.A.
Eskom Battery Storage Project (BESS) Tender.
Not very many people know this, but for the last 4 years #BMN has been implementing a long term strategy to position itself for the very tender that is currently in play at Eskom in S.A.
2/24
That project is for a combined 1,440MWh of battery storage, split into 4 packages, with the first 80MW (320MWh) package tender out and due to close its bid window on 30th Sept.
For a company with VRFB ambitions, this project, right on the door step of BMN operating mines,
That project is for a combined 1,440MWh of battery storage, split into 4 packages, with the first 80MW (320MWh) package tender out and due to close its bid window on 30th Sept.
For a company with VRFB ambitions, this project, right on the door step of BMN operating mines,
3/24
is almost too good to be true.
However, from history we know that BMN have partnered with the S.A. government's investment arm, the IDC, with the 2 parties sharing ownership of the electrolyte plant, that is also currently being built in S.A and a VRFB tested at Eskom.
is almost too good to be true.
However, from history we know that BMN have partnered with the S.A. government's investment arm, the IDC, with the 2 parties sharing ownership of the electrolyte plant, that is also currently being built in S.A and a VRFB tested at Eskom.
4/24
It is the IDC that have effectively championed energy storage in S.A. and with it effectively delivered this ground breaking project opportunity.
See my 2018 blog here, which is the first in a series of 3 i produced on the subject.
thebushveldperspective.com/blog/public-ar…
It is the IDC that have effectively championed energy storage in S.A. and with it effectively delivered this ground breaking project opportunity.
See my 2018 blog here, which is the first in a series of 3 i produced on the subject.
thebushveldperspective.com/blog/public-ar…
5/24
Some of the outcomes have changed since then but the essence and key findings, remain valid.
The IDC champions the beneficiation of S.A. minerals, as a means to add value to S.A. and its mining.
The World Bank is fully financing the battery element of this project,
Some of the outcomes have changed since then but the essence and key findings, remain valid.
The IDC champions the beneficiation of S.A. minerals, as a means to add value to S.A. and its mining.
The World Bank is fully financing the battery element of this project,
6/24
at c. $468m for 360MW.
Meaning in theory the first 80MW tender, could deliver the winning team, c. $100m in new business.
For the likes of Invinity and Enerox, BMN's new VRFB investments and off-take partners, such a project would be company making. More on that later.
at c. $468m for 360MW.
Meaning in theory the first 80MW tender, could deliver the winning team, c. $100m in new business.
For the likes of Invinity and Enerox, BMN's new VRFB investments and off-take partners, such a project would be company making. More on that later.
7/24
Here's their take on why this project's so important for both S.A. and wider continent.
"vertical integration in the battery storage chain (mining, manufacturing, operation), feasible in South Africa."
VRFB's main competitor lithium, is not mined in S.A.
Here's their take on why this project's so important for both S.A. and wider continent.
"vertical integration in the battery storage chain (mining, manufacturing, operation), feasible in South Africa."
VRFB's main competitor lithium, is not mined in S.A.
7/24
What S.A. does have is the largest managenese deposits in the world and some nickel and cobalt production.
What it doesn't have is a visible intent by lithium-ion battery producers to drive local beneficiation, through these local deposits, although that could well change,
What S.A. does have is the largest managenese deposits in the world and some nickel and cobalt production.
What it doesn't have is a visible intent by lithium-ion battery producers to drive local beneficiation, through these local deposits, although that could well change,
8/24
now that Eskom is embarking on its large scale battery storage programme.
However, no other fully vertically integrated battery storage value chain company, is currently partnered with the IDC and in S.A. where its not what you know but who.
now that Eskom is embarking on its large scale battery storage programme.
However, no other fully vertically integrated battery storage value chain company, is currently partnered with the IDC and in S.A. where its not what you know but who.
9/24
Back to the World Bank.
Here's their restructuring paper for the Eskom support project, which transformed a failing CSP project into the BESS project, we see today.
documents1.worldbank.org/curated/en/929…
Page 8, item 29.
Back to the World Bank.
Here's their restructuring paper for the Eskom support project, which transformed a failing CSP project into the BESS project, we see today.
documents1.worldbank.org/curated/en/929…
Page 8, item 29.
10/24
The above wording lends itself once again, to a desire to support technology that isn't yet matured.
In my view, lithium-ion batteries from the likes of Tesla etc, do not fall into this bracket.
EV industry is far enough advanced/incentive driven, to counter such support
The above wording lends itself once again, to a desire to support technology that isn't yet matured.
In my view, lithium-ion batteries from the likes of Tesla etc, do not fall into this bracket.
EV industry is far enough advanced/incentive driven, to counter such support
11/24
The idea is to support alternatives technologies that do the job better but have yet to secure the sort of business that can enable things like manufacturing scale up and localised assembly, which in turn reduces costs and makes these product more competitive.
= VRFB
The idea is to support alternatives technologies that do the job better but have yet to secure the sort of business that can enable things like manufacturing scale up and localised assembly, which in turn reduces costs and makes these product more competitive.
= VRFB
12/24
VRFBs born in S.A from a company where clear vertical integration is under way, that's creating S.A jobs for it and is tied not only to the 2 biggest VRFB manufacturers in the world but also is sharing its winnings with the S.A. government, falls fully under that bracket.
VRFBs born in S.A from a company where clear vertical integration is under way, that's creating S.A jobs for it and is tied not only to the 2 biggest VRFB manufacturers in the world but also is sharing its winnings with the S.A. government, falls fully under that bracket.
13/20
So thus far we have a client and more importantly a financier that is looking for technologies that drive local beneficiation, drives local jobs, local supply, looking to support fledgling battery storage technologies, that need these sots of projects, in order to mature.
So thus far we have a client and more importantly a financier that is looking for technologies that drive local beneficiation, drives local jobs, local supply, looking to support fledgling battery storage technologies, that need these sots of projects, in order to mature.
14/20
In order to win this tender, a BMN (likely BE) led consortium, needs to have the requisite experience of building such projects.
This is why BMN will clearly partner on this project.
For me I don't see any reason to look beyond the 2 largest VRFB partners that BMN has.
In order to win this tender, a BMN (likely BE) led consortium, needs to have the requisite experience of building such projects.
This is why BMN will clearly partner on this project.
For me I don't see any reason to look beyond the 2 largest VRFB partners that BMN has.
15/20
Of those 2, for me, Enerox are the play here.
BMN RNS 3rd Aug ;
"Enerox has a global customer base with over 130 field installations over the past 10 years across five continents."
"multiple batteries installed in 2008 and 2009 continue to still be in operation"
Of those 2, for me, Enerox are the play here.
BMN RNS 3rd Aug ;
"Enerox has a global customer base with over 130 field installations over the past 10 years across five continents."
"multiple batteries installed in 2008 and 2009 continue to still be in operation"
16/20
That's over 10 years.
Why is that important? because the Eskom tender is looking for 20 years guaranteed performance. A feat lithium-ion battery suppliers claim but isn't proven.
c. 7-10 years is more likely. So again lithium has a problem on this tender.
That's over 10 years.
Why is that important? because the Eskom tender is looking for 20 years guaranteed performance. A feat lithium-ion battery suppliers claim but isn't proven.
c. 7-10 years is more likely. So again lithium has a problem on this tender.
17/20
Where as VRFBs are coveted by BMN as being able to run for more than 20 years, without any degradation to the vanadium, such that it can be taken out at the end and re-sold.
Lithium-ion can't do that.
Furthermore.
From the Enerox (formerly Cell Cube) website.
Where as VRFBs are coveted by BMN as being able to run for more than 20 years, without any degradation to the vanadium, such that it can be taken out at the end and re-sold.
Lithium-ion can't do that.
Furthermore.
From the Enerox (formerly Cell Cube) website.
18/20
Enerox are able to demonstrate to any potential customers, that their batteries can run for over 28 years.
Show me a lithium-ion company that can deliver that.
To the RNS once more ;
"a newly redesigned VRFB product. . . modular and stackable 40ft container base config"
Enerox are able to demonstrate to any potential customers, that their batteries can run for over 28 years.
Show me a lithium-ion company that can deliver that.
To the RNS once more ;
"a newly redesigned VRFB product. . . modular and stackable 40ft container base config"
19/20
"that increases standardisation to reduce costs of manufacturing, field installation and maintenance."
If a VRFB is going to win part of this project, then there really isn't much better experience or technology, than Enerox and right now, BMN owns a part of them and
"that increases standardisation to reduce costs of manufacturing, field installation and maintenance."
If a VRFB is going to win part of this project, then there really isn't much better experience or technology, than Enerox and right now, BMN owns a part of them and
20/24
has a first refusal off-take with them for vanadium supply to their batteries.
At 320MWh and 5.5mtV of vanadium per MWh, this first tender, if landed, would potentially call upon BMN, to supply c. 1,760mtV.
That's over 40% of their full 2020 guidance and a game changer.
has a first refusal off-take with them for vanadium supply to their batteries.
At 320MWh and 5.5mtV of vanadium per MWh, this first tender, if landed, would potentially call upon BMN, to supply c. 1,760mtV.
That's over 40% of their full 2020 guidance and a game changer.
21/24
Why?
Because such a contract, even if landed as just an off-take, would demonstrate clearly what this new vertically integrated vanadium business is truly all about and
spur on a key BMN 2020 objective.
"Investigate the business case for S.A. based VRFB assembly"
Why?
Because such a contract, even if landed as just an off-take, would demonstrate clearly what this new vertically integrated vanadium business is truly all about and
spur on a key BMN 2020 objective.
"Investigate the business case for S.A. based VRFB assembly"
22/24
Now anyone that knows BMN well, knows that this business case was set out many moons ago and is directly attached to a min number of projects being realised over an extended period.
CEO Mojapelo has stated the Eskom project alone wouldn't be enough but lets see about that.
Now anyone that knows BMN well, knows that this business case was set out many moons ago and is directly attached to a min number of projects being realised over an extended period.
CEO Mojapelo has stated the Eskom project alone wouldn't be enough but lets see about that.
23/24
Now off-take is the bare minimum that BMN shareholders could expect from this project.
But the actual approach could also include electrolyte from the BMN/IDC plant or a JV with BE sharing in the full value chain of the project, from vanadium supply through to developer.
Now off-take is the bare minimum that BMN shareholders could expect from this project.
But the actual approach could also include electrolyte from the BMN/IDC plant or a JV with BE sharing in the full value chain of the project, from vanadium supply through to developer.
24/24
There is far more to add, that these little pages cannot tolerate, so I will add additional points after I have posted.
I have been waiting a long time for this project to come around and the money end of things and its affects on BMN, is now finally coming to fruition
There is far more to add, that these little pages cannot tolerate, so I will add additional points after I have posted.
I have been waiting a long time for this project to come around and the money end of things and its affects on BMN, is now finally coming to fruition
24A
One important addition to the above insight on advantages that a #BMN led VRFB tender should have, is their vanadium rental product.
RNS 7th Sept ;
"We anticipate adding other rental agreements and VRFB companies to the partnership in growing the electrolyte rental model"
One important addition to the above insight on advantages that a #BMN led VRFB tender should have, is their vanadium rental product.
RNS 7th Sept ;
"We anticipate adding other rental agreements and VRFB companies to the partnership in growing the electrolyte rental model"
24B
The announcement was for a vanadium rental agreement with Invinity for their Oxford hub projct for Pivot Power. A fantastic achievement in itself because it introduces the model to the UK and a western audience.
However, given the fact Enerox is now tied to the BMN stable,
The announcement was for a vanadium rental agreement with Invinity for their Oxford hub projct for Pivot Power. A fantastic achievement in itself because it introduces the model to the UK and a western audience.
However, given the fact Enerox is now tied to the BMN stable,
24C
it is inevitable that they will take up this model as well.
That was made abundantly clear, with the announcement that Enerox would work with @AusVanadium to ;
"assistance with arrangement of vanadium electrolyte leasing"
it is inevitable that they will take up this model as well.
That was made abundantly clear, with the announcement that Enerox would work with @AusVanadium to ;
"assistance with arrangement of vanadium electrolyte leasing"
24D
My view's that such leasing won't come from AV but more likely Enerox, because it is BMN that carved out this rental model and it took a great deal of time to achieve. So I see no reason to re-write the model, so long as AV and Australian legislation allows it.
My view's that such leasing won't come from AV but more likely Enerox, because it is BMN that carved out this rental model and it took a great deal of time to achieve. So I see no reason to re-write the model, so long as AV and Australian legislation allows it.
24E
What that confirms is that Enerox are in the vanadium rental game and if they are in it with AV, then they are going to be in it, with BMN.
When we couple Enerox tech with localised vanadium supply. Add to it potential locally produced electrolyte
What that confirms is that Enerox are in the vanadium rental game and if they are in it with AV, then they are going to be in it, with BMN.
When we couple Enerox tech with localised vanadium supply. Add to it potential locally produced electrolyte
24F
and then add in rental model for the vanadium , which drastically reduces the upfront costs for both Eskom and the World bank, then we have a very potent and intoxicating concoction, which will be very difficult to ignore.
Key point.
and then add in rental model for the vanadium , which drastically reduces the upfront costs for both Eskom and the World bank, then we have a very potent and intoxicating concoction, which will be very difficult to ignore.
Key point.
24G
VRFBs have a poor history of beating lithium-ion to large scale project wins.
However, they never had the owner of 2 of the world's 4 primary vanadium producers, in their corner before and a vanadium rental model with it.
VRFBs have a poor history of beating lithium-ion to large scale project wins.
However, they never had the owner of 2 of the world's 4 primary vanadium producers, in their corner before and a vanadium rental model with it.
24H
What the Eskom BESS project ignites, is not only the ability to win large projects and expand the likes of Enerox and BMN but also the ability to showcase a new way of procuring battery storage, in the form of VRFBs
and it could well be done with the biggest utility in
What the Eskom BESS project ignites, is not only the ability to win large projects and expand the likes of Enerox and BMN but also the ability to showcase a new way of procuring battery storage, in the form of VRFBs
and it could well be done with the biggest utility in
24I
Africa and the World Banka, an organisation embarking on a $5BN 17,500GWh battery storage programme, with this Eskom project as its starter for 10.
Africa and the World Banka, an organisation embarking on a $5BN 17,500GWh battery storage programme, with this Eskom project as its starter for 10.
24J
That's why long standing BMN shareholders are so excited about BMN's prospects because we aren't simply talking about a vanadium miner suffering lower prices here.
We are talking about a highly ambitious fully vertically integrated vanadium play, that saw this opportunity
That's why long standing BMN shareholders are so excited about BMN's prospects because we aren't simply talking about a vanadium miner suffering lower prices here.
We are talking about a highly ambitious fully vertically integrated vanadium play, that saw this opportunity
24K
long before the likes of Largo Resources even woke up to it.
So as slow as it all feels, they are in fact several years ahead of the pack and with their enormous vanadium deposits in S.A, are set to take full advantage of the opportunity, they themselves are driving.
long before the likes of Largo Resources even woke up to it.
So as slow as it all feels, they are in fact several years ahead of the pack and with their enormous vanadium deposits in S.A, are set to take full advantage of the opportunity, they themselves are driving.
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