The National Energy Regulator of South Africa (NERSA) has approved an application from the National Transmission Company South Africa (NTCSA) to classify congestion curtailment as a constrained generation ancillary service – a move that clears the way for new independent power producer (IPP) connections in transmission-constrained provinces such as the Eastern Cape and Western Cape.
The decision, effective April 1 this year to March 31, 2028, follows a public consultation process initiated in August last year when Eskom (prior to the NTCSA’s operational separation) sought permission to use curtailment to manage grid congestion and prioritise public IPP projects under Bid Window 7. Since then, Eskom’s transmission division has been unbundled into the NTCSA, which now holds operational responsibility and submitted the final application.
In its 2024 application, Eskom indicated that congestion curtailment would only be required once the 3 470 MW of generation capacity specified in the Generation Connection Capacity Assessment (GCCA) 2025 addendum had been connected to the grid – a process expected to take 18 to 24 months. The regulator’s decision enables the NTCSA to apply congestion curtailment from April this year, earlier than Eskom had initially projected.
The mechanism allows the NTCSA to restrict output from selected generators when the grid is constrained, enabling new capacity to connect in areas identified in the 2025 GCCA as critically oversubscribed.
The approval is subject to several conditions:
- Curtailment is limited to the approved Sixth Multi-Year Price Determination (MYPD6) allocation for ancillary services. Any excess costs may not be recovered from consumers.
- The mechanism applies only to the Eastern Cape and Western Cape unless further approved through submission of technical studies.
- Over-frequency curtailment and other grid interventions must continue under existing power purchase agreements and connection agreements.
- The NTCSA must submit six-monthly reports covering connected capacity, curtailment incidents, costs and system progress.
- Generators financially impacted by curtailment will be eligible for compensation, subject to the limits defined in the approved MYPD6 revenue determination.
“The conditions are designed to balance the interests of all stakeholders. They also aim to protect consumers from potential cost escalations associated with unmanaged curtailment while incentivising the NTCSA to accelerate the implementation of transmission infrastructure projects in the affected regions and promoting a supportive environment for investment in renewable energy projects,” NERSA says.
