Thread by @BigBiteNow

1/8
A potential spanner in the works for #BMN for the Eskom BESS Project tender, which has now been extended to 21st October.

In the bidders clarification doc from 10th Sept, one answer states ;

"The criterion requires each member of a JV to meet 25%"

https://twitter.com/BigBiteNow/status/1304362400007753729?s=20

2/8
"of the Average Annual Turnover of R3.5bn and failure to meet the requirement will result in disqualification of the Bidder i.e. the JV."

Ave. Rand/dollar exchange 2019 was 14.45, which equates to a turnover fig. of c. $60m.

In terms of BMN that's no problem but for

3/8
Enerox and Invinity it is, if its intended that they are to be part of a JV with BMN.

I am absolutely sure BMN will be part of a JV tendering for this first Eskom package but how they introduce VRFB technology, whilst achieving the above criteria will be interesting.

4/8
The only VRFB company I know, that could bring that sort of might to the table, is Rongke Power, the sister company of UET, whose test battery in partnership with BMN, was until late 2019, running at Eskom.

BMN RNS 2nd Sept ;

5/8
"an agreement was reached among Bushveld, IDC, UET and Range Power Integration Co. Ltd ("RPI"), UET's sister company in China, to supply a replacement system that would be manufactured and maintained by RPI."

I can find no information on RPI.

6/8
However, I find myself wondering why BMN pushed to have a sister company of UET, to supply a replacement system, if said system didn't have relevance.

Again, UET are a sister company of Rongke Power, who are China based and currently building the 800MWH Dalian VRFB.

7/8
Further reading available here.

uetechnologies.com/news/71-200mw-…

If UET is already connected to China based Rongke, then why do they have another China based sister company in RPI?

8/8
Eskom requirement's a problem and a company that's already building a massive 200MW battery, would certainly be a strong partner/ good solution, especially if they can achieve local vanadium/electrolyte supply and perhaps even a rental agreement to boot.

Food for thought.

8A
So my thanks to @BMNperspective for highlighting that Range Power is in fact Rongke Power, which makes complete sense once known about (be it #BMN should have updated this critical error).

If indeed the case, then with the current criteria on annual revenues,

8B
I am struggling to see past Rongke Power being part of the BMN JV team, be it BMN or Rongke led.

If so, then that introduces a proven big battery player and for me, further increases the chances of a VRFB being chosen for this first Eskom package.

8C
Important to remember that the IDC (S.A. government investment arm) is still the partner on the Eskom test battery (now being supplied by Rongke) and a 45% holder of the electrolyte plant taking shape in East London.

So we have BMN, Rongke and the IDC.

8D
That's a strong team all carrying the necessary annual revenue credentials, with significant influence in S.A. and an ability to offer considerable local content and ownership, beyond the current 20% called for in the tender.

In my view, BMN doesn't have to be the supplier

8E
of the batteries here or even lead.

Its about proving up the vertical integrated value chain and continuing to demonstrate that BMN vanadium has a new home, outside of steel, with the Eskom project as a very big first chance.

A key trigger point in the revaluation of BMN.

8F
@CruxInvestor interview 14th July.

38mins 30s CEO Mojapelo talks about ;

"All likelihood we will partner"

"to start with there's the VRFB manufacturers"

"then you got developers of projects that have a history of developing projects successfully"

8G
However, the more telling detail comes from the @CruxInvestor interview from 11th Nov 2019 ;

37mins 10s in.

"Lets take an example of a project like our mini grid. There we (Bushveld Energy) are the developer"

Can BE be the developer for the Eskom BESS? Possibly.

8H
BE claim "70 years of combined experience in clean energy and battery storage development and investment."

Also their Pat Frampton "consulted to Eskom Research, establishing and leading their Energy Storage Project."

A telling connection and influence.

8I
More importantly at 38mins 10s, he goes on to say ;

"Now i want to be honest, we are not going to develop every single vanadium battery project in the world, but if it is in Africa, then its extremely active."

cruxinvestor.com/videos/bushvel…

8J
So any notion that BMN/BE haven't found a solution to taking on an 80MW BESS tender, $60m turnover requirements or not, is for me highly inlikely.

This project is on their doorstep and in the very market they want to focus upon.

The more roles they can contribute to it,

8K
the more kudos and future tendering benefits they can demonstrate, be it as developer, VRFB supplier etc etc.

"Extremely active."

So right now, I believe we are back to the UET connection but with a substantial and exciting upgrade, in the form of Rongkw Power.