On 29 April 2025, the National Energy Regulator of South Africa (NERSA) granted approval to the National Transmission Company South Africa (NTCSA) to classify congestion curtailment as a constrained generation ancillary service. NERSA indicated that its 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 Eastern and Western Cape regions. NERSA’s decision is effective from 1 April 2025 to 31 March 2028.

Ancillary services are the services supplied to the NTCSA by generators, distributors, or end-use customers which are necessary for the reliable and secure transport of power from generators to distributors and other customers. A constrained generation ancillary service is the service provided by a power station in constraining its power output below or above the unconstrained schedule level.

The approval follows the NTCSA’s application submitted on 24 May 2024 which highlighted, the urgent need to unlock grid capacity in constrained corridors, particularly in the Northern Cape, Eastern Cape, and Western Cape. This urgency was emphasised in the Generation Connection Capacity Assessment (GCCA) published in October 2023 which revealed that there is no capacity on the transmission network to connect new-generation projects in the Cape regions. However, an addendum to the GCCA issued in January 2024 indicated that by allowing for a maximum of 10% congestion curtailment,3,470 MW of extra generation capacity could be connected to the grid imminently, with 2,680 MW in the Western Cape and 790 MW in the Eastern Cape.

By formally recognising congestion curtailment as a constrained generation ancillary service, NTCSA is now empowered to manage grid congestion proactively, enabling the connection of additional generation capacity without compromising system reliability. This approach serves as a short-term, transitional method to facilitate renewable energy integration and to unlock immediate capacity while long-term grid expansion projects, as outlined in the Transmission Development Plan, are implemented.

NERSA’s approval is valid from 1 April 2025 to 31 March 2028, and subject to several conditions designed to ensure transparency, cost containment and alignment with broader energy policy objectives:

  1. The maximum curtailment level to be implemented must remain within the revenue allocation approved under the Sixth Multi-Year Price Determination (a process by NERSA to determine Eskom’s revenue and electricity tariffs for a certain period).
  2. The use of congestion curtailment as an ancillary service is restricted to the Eastern and Western Cape regions.
  3. Additional grid connection capacity unlocked through congestion curtailment, along with support by appropriate studies, must be submitted to NERSA for approval before extending the ancillary service to other areas.
  4. The NTCSA must address other forms of curtailment in accordance with the existing grid unavailability provisions already outlined in power purchase agreements or connection agreements.
  5. The NTCSA must report to NERSA on the implementation of congestion curtailment every six months over the three-year period.

The approval of congestion curtailment as an ancillary service is a pragmatic and forward-looking regulatory intervention. It enables the immediate connection of renewable energy projects, supports South Africa’s decarbonisation objectives, and provides a transitional mechanism while grid expansion projects are completed. As South Africa continues to navigate the complexities of energy reform, this framework may serve as a model for integrating flexibility and innovation into the regulatory landscape.