Opinion
- South Africa’s congestion curtailment framework unlocked 3,470 MW of grid capacity in Western and Eastern Cape but the feed in capacity constraints are now felt in other provinces, exposing tensions in allocation.
- Eskom’s effort to protect generation control and market share clashes with private sector developers seeking faster renewable energy connections for private off-taker clients.
- Grid access is becoming a critical commercial asset, shaping which projects proceed and which stall in South Africa’s energy transition.
South Africa’s energy transition is colliding with the hard realities of a constrained transmission network. The National Energy Regulator of South Africa approved a congestion curtailment framework in April 2025 that allows generators to operate under a 10% curtailment allowance. This move unlocked 3,470 MW of capacity, including 2,680 MW in the Western Cape and 790 MW in the Eastern Cape, while recognising curtailed energy as an ancillary service to protect revenue streams. By permitting temporary reductions during periods of peak generation, the framework offers a faster, more economically efficient path for private renewable projects to connect to the grid.
But the congestion has now extended to other provinces bringing underlying tensions between competing independent power producers into sharp relief. The High Court in Johannesburg is currently hearing Mulilo Renewable Energy v Eskom Holdings SOC Ltd and Others, a dispute over 240 MW of grid capacity initially reserved for Mulilo’s Nepal solar PV project in the Free State. Eskom and the National Transmission Company of South Africa sought to reallocate this capacity to publicly procured projects linked to Scatec, citing missed regulatory milestones. Mulilo obtained an interim interdict in December 2025, preventing reallocation until the main application is heard in April 2026. The case highlights how grid access is now one of the most contested resources in South Africa’s electricity market.
Transmission constraints are shaping the renewable energy landscape. While generation can be developed relatively quickly, connecting plants to the network is increasingly difficult. Key regions, particularly the Northern Cape and parts of the Free State, are approaching grid saturation. Developers face uncertainty over allocation processes, inconsistent enforcement of project milestones, and regulatory delays, while Eskom seeks to defend its generation control and market share. Legal disputes such as Mulilo’s may become the norm unless processes are clarified and capacity expanded.
The congestion curtailment framework offers a near-term solution to unlock capacity and improve utilisation of existing infrastructure, but it does not replace the need for long-term transmission investment which is happening at a snail’s pace.
According to the latest Transmission Development Plan covering 2025 to 2034, the grid will need between 14,000 km and 14,500 km of new high voltage transmission lines over the next decade. This build out is critical to integrate an estimated 56 GW of new generation capacity by 2034, much of it expected to come from renewable energy sources.
The scale of the rollout represents a significant acceleration compared to current construction levels. Annual build rates will need to increase from about 300 km to roughly 2,300 km per year, marking an almost eightfold expansion in delivery capacity.
In parallel, the plan calls for the installation of 105,865 MVA of transformer capacity to manage increased electricity flows across the network. Total investment required for transmission infrastructure alone is estimated at R440 billion, equivalent to about US$23.5 billion, underscoring the capital intensive nature of the transition.
A key priority is the reconfiguration of the grid to accommodate renewable energy generation concentrated in the Western Cape, Eastern Cape, and Northern Cape provinces. These regions, often referred to as renewable energy corridors, currently face severe transmission constraints, with available grid capacity largely exhausted. As a result, several gigawatts of wind and solar projects remain unable to connect to the system.
Despite a clear roadmap, multiple structural and financial challenges continue to hinder progress. Grid congestion remains a major bottleneck, particularly in high resource areas where projects are effectively stranded due to lack of connection capacity.
Funding constraints also persist. State utility Eskom faces ongoing financial pressure, including rising municipal debt, limiting its ability to finance large scale infrastructure projects independently.
Regulatory uncertainty adds another layer of complexity. The finalisation of the Market Code, now expected in April 2026, and the certification of the National Transmission Company South Africa as an independent system operator remain critical milestones that have yet to be fully achieved.
Execution risks are also emerging. Significant acceleration in project delivery is only anticipated from the 2027 financial year, creating a backloaded implementation profile. Additional constraints include delays in securing land access and servitudes, as well as a shortage of specialised technical skills required to design and build high voltage infrastructure at scale.
Investor confidence depends on transparent, consistent, and independent allocation decisions. How the courts resolve the Mulilo case will set a precedent for handling competing claims, determining whether South Africa can facilitate a more decentralised, private sector-driven electricity system or remain hampered by grid bottlenecks and state owned utility control.
Author: Bryan Groenendaal
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