The National Transmission Company South Africa (NTCSA) has confirmed what it describes as a “temporary bottleneck” in curtailment payments to independent power producers (IPPs), with about R2-billion of such compensation claims currently undergoing “verification and settlement”.

This confirmation came only days after EE Business Intelligence MD and energy analyst Chris Yelland wrote that renewables IPPs had experienced a sharp increase in curtailment instructions from Eskom in 2026 and were growing increasingly concerned about a lack of transparency in the methodology being used, as well as delayed reimbursements.

Curtailment is a normal part of managing an electricity system, occurring when the system operator instructs generators to temporarily reduce output to maintain the safe and reliable operation of the national grid.

This is driven either by network constraints that limit power transmission, or during periods where total electricity supply exceeds demand.

Where renewables capacity has been procured through a public procurement process and Eskom is the single buyer, the power purchase agreements (PPAs) stipulate that Eskom must reimburse IPPs for the revenue lost when their output is curtailed.

The NTCSA currently administers PPAs covering 117 projects with a combined capacity of 10 083 MW, which currently translates to yearly payments of about R45-billion to IPPs.

Eskom secures the revenue for these payments through its regulated tariff.  

Yelland wrote that the volume of energy curtailed in the first six months of the year was roughly an order of magnitude higher than in the whole of 2025, and that the financial consequences were becoming material.

“Some IPPs report project revenues running about 9% below budget in 2026 – a shortfall they attribute both to the energy they were instructed not to generate and to the lengthening delays in being reimbursed by Eskom for it,” he indicated.

In its statement, the NTCSA said there had been a sharp rise in the volume and complexity of claims during April and May 2026, which had exceeded typical levels and created temporary bottlenecks.

“In response, the NTCSA has deployed additional resources and is implementing process improvements to accelerate the verification and settlement of these claims, while maintaining the necessary governance, contractual, and financial controls.”

However, Yelland wrote that a central concern being raised by IPPs was the opacity of the curtailment process itself.

“The methodology Eskom uses to set the merit order, level, frequency and targets for curtailment and reimbursements is, they say, far from transparent. IPPs cannot readily establish why particular projects are curtailed or face delayed reimbursements, in what sequence, or on what basis.”

In its statement, the NTCSA insisted it was managing evolving system dynamics in a way that ensured fair and equitable treatment of all market participants, while safeguarding security of supply and minimising costs to electricity consumers.

NTCSA CEO Monde Bala said that the organisation would continue to strengthen its operational processes while supporting investments that enabled a reliable, affordable and increasingly renewable-powered electricity system beyond 2030.

“As the System Operator, the NTCSA has a responsibility to balance affordability, security of supply and the fair treatment of all market participants, while maintaining the stability of the national grid,” Bala added.