Eskom’s new curtailment addendum unlocks 3 470 MW of grid for wind in Western and Eastern Cape

27th January 2024 By: Terence Creamer - Creamer Media Editor

Eskom’s new curtailment addendum unlocks 3 470 MW of grid for wind in Western and Eastern Cape

Eskom has taken a major step in unlocking much-needed grid capacity for wind projects in the Western and Eastern Cape provinces by publishing the highly-anticipated curtailment addendum to its latest Generation Connection Capacity Assessment, or GCCA 2025.

The addendum, which has been published on Eskom’s website and has been approved by the National Energy Regulator of South Africa (Nersa), states that, by accepting a “reasonable share of no more than 10% of curtailment”, 3 470 MW of additional grid capacity to connect wind generation will be made available, including 2 680 MW in the Western Cape and 790 MW in the Eastern Cape.

Curtailment is defined in the document as the controlled reduction of the output of renewable energy plants as a system operator response to transmission capacity constraints.

“When the grid limit is reached, any further increase of generation in the supply area leads to grid congestion. In such cases, and in order to remove the congestion, generation has to be reduced.”

However, it argues that the generation connection capacity for constrained areas can be safely increased by accepting a reasonable share of curtailment, adding, too, that curtailment will maximise the use of the existing grid.

Prior to the addendum, the GCCA 2025 had stated that there was no remaining grid capacity in the Eastern, Northern and Western Cape provinces, while indicating there to be some 19 900 MW of capacity in the rest of the country.

The publication of the addendum could have major implications for the renewables bid window currently under way for the procurement of 5 000 MW, divided between 3 200 MW of wind and 1 800 MW of solar photovoltaic (PV). Although it has not yet been confirmed whether the new curtailment framework will now be applied during the round, with another bidding round due for release by the end of March.

Bid Window Seven is the first bidding round to be hosted following the partial failure of Bid Window Six, when only solar PV projects with a combined capacity of 1 000 MW advanced to a preferred-bidder stage after Eskom indicated there to be no remaining grid-connection capacity for those wind projects that had been vying for a 3 200 MW allocation.

This failure led to significant debate about why a mechanism such as curtailment, which is used by system operators globally to maximise the use of the grid, was not being employed given the urgency to close what is considered to be a supply shortfall of at least 6 000 MW and in light of intensifying loadshedding.

An assessment by Eskom and two leading European transmission system operators – 50Hertz of Germany and Elia of Belgium – was then undertaken last year. It showed that the capacity of the existing Western Cape grid to host variable renewable generators could be doubled under a scenario where no more than 10% curtailment was implemented.

Nevertheless, no such curtailment framework was included in the GCCA 2025, which was published in October. However, Eskom promised that an addendum would be published once it had received the necessary internal governance authorisations, as well as Nersa’s approval.

Ahead of the publication of the GCCA 2025 addendum, it was assumed that wind projects in particular would have to be bid in lower-yielding regions, unless they had existing grid connection budget quotes or could secure capacity that had expired in relation to projects that failed to reach financial close under the risk mitigation round and the fifth renewables bid window.

Independent Power Producer Office head Bernard Magoro indicated ahead of the addendum’s release that this was likely to result in a price premium, noting that in previous rounds, wind projects bid in Mpumalanga had carried tariffs that were 30% higher than those in the Cape provinces.

The GCCA addendum itself highlights ongoing demand for developments in the Eastern Cape and Western Cape, owing “to their abundant energy resources for renewable generation”.

“Unlocking capacity in these areas will require a significant amount of transmission network investment, which takes several years to develop and construct.

“The option of curtailment therefore provides developers with an alternative if they are still keen to connect in the constrained grid areas,” the documents states.