The National Energy Regulator of SA’s (Nersa) rejection of Eskom’s request to reserving grid capacity for certain renewable energy projects poses a potential risk for the wind energy sector, an industry body said on Monday.
The SA Wind Energy Association (Sawea) said it was “deeply concerned about the implications of this decision”, especially after the failure of bid window 6 of the government-backed Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
The association warned that without intervention by Eskom and Nersa, bid window 7 was likely to fail as well and, without viable solutions to grid challenges, public interest in the electricity market would eventually suffer.
Bid window 7, launched in December, seeks to procure 5,000MW of new generation capacity, which includes 1,800MW of solar and 3,200MW of onshore wind power.
Eskom’s 2025 Generation Connection Capacity Assessment (GCCA) indicated that parts of the transmission network in the most favourable areas for wind generation, such as the Eastern Cape and Western Cape, had no capacity as all the capacity was depleted from previous bid window rounds and private off-takers.
However, in an addendum to the 2025 GCCA Eskom outlined how introducing a 10% curtailment measure would allow for 3,470MW of new wind power projects to be connected to the grid.
“The failure to address grid allocation processes has resulted in significant delays and financial losses, devastating investor confidence and jeopardising the success of wind energy projects. With no solution in sight, the grid challenges will continue to undermine the open electricity market envisaged by the Electricity Regulation Amendment Bill,” Sawea said in a statement.
Business Day reported last week that Eskom failed in its bid to reserve grid capacity for renewable energy projects procured by the state after Nersa ruled that the state-owned power company’s application was unclear and vague.
In 2023 Eskom published new grid allocation rules that were based on the “first ready, first served” principle, giving preference to renewable energy projects, whether publicly or privately procured, which were ready to connect to the grid.
However, after the failure of bid window 6 of the REIPPPP — no bids were awarded for wind power projects due to a lack of grid access in some areas — and in anticipation of bid window 7, Eskom submitted an application to Nersa in May to reserve grid connection capacity in favour of independent power producers (IPPs) participating in the public procurement rounds.
Eskom argued in its application that the liberalisation of SA’s electricity sector had increased competition for limited grid capacity between private IPPs and IPPs participating in the government-backed REIPPPP. Private IPPs that did not have to go through “a moribund [government] energy procurement process” could move at a much faster pace to secure grid connection capacity and to bring new generation capacity online than public IPPs, it said.
“Ongoing failures evident in bid window 6 and expected again in bid window 7 need to be addressed to enable the successful integration of renewable energy into the grid through both public and private avenues,” said Sawea.
SA’s new government of national unity had to focus on addressing challenges that could slow down the rollout of new renewable energy projects such as expanding and upgrading the transmission grid infrastructure.
SA needs an estimated R390bn to fund Eskom’s current transmission development plan, which outlines the need to install more than 14,000km of new high-voltage power lines by 2032 to accommodate new renewable energy projects.
The treasury said last week that it would launch a pilot project that would enable private investment in electricity grid infrastructure in 2024.
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