- The Energy Regulator of South Africa, NERSA, has approved the National Transmission Company South Africa’s (NTCSA) application for congestion curtailment to be classified as a constrained generation ancillary service.
Congestion curtailment means that the amount of active power that a generating facility is permitted to generate is restricted by the System/Network Operator due to constraints/congestion on the grid.
This decision represents a significant step toward unlocking grid connection capacity and enhancing energy availability in areas with high renewable energy potential. The approval will enable the NTCSA to facilitate the connection of the electricity capacity identified in the country’s Eastern and Western Cape regions.
The approval, effective from 1 April 2025 to 31 March 2028, is subject to several conditions designed to balance the interests of all stakeholders involved. These conditions include the following:
- The maximum curtailment level to be implemented is restricted to the approved allowable revenue for the Sixth Multi-Year Price Determination (MYPD6) under the ancillary services and energy imbalance line item. Any costs incurred from exceeding this allocation will not be passed on to consumers.
- The use of congestion curtailment as an ancillary service is restricted to facilitating additional generation capacity in the Eastern Cape and Western Cape regions.
- Any additional grid connection capacity unlocked through congestion curtailment, along with support by appropriate studies, must be submitted to the Energy Regulator for approval before extending the ancillary service to other areas.
- The NTCSA must address other forms of curtailment in accordance with the existing grid unavailability provisions outlined in the power purchase agreements (PPAs) or connection agreements. Therefore, curtailment required for over-frequency control (resulting from low demand) will continue to be treated as it is treated currently.
- The NTCSA must report to the Energy Regulator on the implementation of congestion curtailment every six months over the three-year period. The report should cover, at a minimum, information on the capacity connected to the grid through this regime, curtailment level implemented, records of the curtailment incidents, costs, progress on systems and ancillary service projects.
The conditions are designed to balance the interests of all stakeholders, supporting the policy objective stated in section 2(g) of the Electricity Regulation Act of 2006 (as amended). The above conditions are also aimed at protecting 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.
The implementation of congestion curtailment will be conducted in a non-discriminatory manner. All generators experiencing financial losses due to congestion curtailment will be eligible for compensation, limited to the provisions of the approved MYPD6 revenue application. Through this decision, the Energy Regulator has taken a decisive step in facilitating investment in cleaner energy and supporting the integration of renewable energy into the national grid.
Author: Bryan Groenendaal
