Energy minister Kgosientsho Ramokgopa has announced a determination for 9.6GW of new capacity, made up entirely of battery storage and gas-fired power, with no new wind or solar, to tackle a daytime electricity surplus.
The determination provides for 4.6GW of battery storage and 5GW of gas-to-power. It is made under section 34 of the Electricity Regulation Act, which lets the minister decide, in consultation with the regulator, Nersa, what new generation capacity must be procured.
Ramokgopa told a briefing in Pretoria on Wednesday that it was the first determination under the 2025 Integrated Resource Plan (IRP), the government’s blueprint for new generation capacity. It brings forward battery storage that the IRP had planned to phase in up to 2035.
“We are sitting with the problem now, as I’m speaking to you. We are seeking to resolve an immediate problem,” he said.
That problem is curtailment: generators being told to switch off because the grid cannot absorb their power. Eskom’s generation recovery and the rapid growth of private generation have left the system with a surplus averaging more than 4GW, mostly during the day, according to the minister.
Independent power producers’ contracts are take-or-pay, meaning the buyer pays for electricity whether or not it takes it. As a result, the National Transmission Company South Africa (NTCSA), which administers the agreements, must still settle curtailment claims for power the producers are instructed not to deliver.
“We are sitting with surplus electricity on the system, and that itself represents a major risk to the system,” Ramokgopa said. “So essentially, we are losing electricity, and we are throwing electricity away, and that’s money.”
Risk of ‘market failure’
The intervention was needed to “avert the possibility of market failure”, he said, warning that curtailment would make future private generation projects more expensive to finance and more likely to fail.
Gav Hurford, acting GM of the NTCSA’s system operator, said curtailment “suddenly became quite a large problem to manage” around April.
“We had a particularly bad time during winter 2026, where we’ve seen curtailment of up to 3 000MW in a particular day. It is almost a daily routine at this stage,” Hurford said. “If we don’t act now, this beast that we are dealing with at the moment is going to become a significant problem.”
The batteries will charge from power that would otherwise be curtailed and discharge during the evening peak, at sites chosen by the system operator.
The battery allocation is almost nine times the 513MW procured in the first battery storage bid window, whose five projects attracted R15.4-billion in investment, Ramokgopa said. He put the likely investment in the new allocation at “upwards of R90-billion”.
Localisation requirements “will be more ambitious than the last round”, he said.
Citing the Independent Power Producer (IPP) Office, he said the first battery window had delivered 42.3% shareholding by black South Africans and 4.4% by local communities, but that “those numbers are not as ambitious as they could be”.
Gas and its risks
Gas is meant to supply dispatchable power – electricity that can be switched on when needed – when renewable output falls. Eskom’s latest system update recorded an increase of about 1GW in demand from the grid in the preceding week, as overcast weather reduced rooftop solar output.
The first gas-to-power bid window is still being evaluated. That round requires a minimum load factor of 50%, meaning plants must run at least half the time on average; the IPP Office will set the load factor for the new allocation.
Ramokgopa acknowledged the risks of imported gas, citing price spikes linked to the war in the Middle East and currency exposure. “The last thing we want is to have undesirable or unintended consequences of spiking the cost of electricity in our country,” he said. “A generating plant without dependable fuel cannot provide dependable electricity.”
A second determination will cover wind and solar, including hybrid projects with storage, plus pumped storage. A state-led power parks programme will follow in the next round. Under it, the state will prepare land, carry out grid studies and provide bulk services to cut upfront costs for emerging developers and place demand close to generation.
Eskom can build about 800km of transmission lines a year, against the 1 450km a year required, Ramokgopa said. He also wants stronger regional interconnectors to export surplus power.
Bitcoin miners
Asked about bitcoin mining as a source of grid flexibility, Ramokgopa said talks were under way.
“We are sold on the idea that mining provides a unique solution to our problem and a big opportunity going into the future. We’re looking at up to 1-3GW in the next two years,” he said.
“What is nice is that we can use existing infrastructure by repurposing existing power stations. I am confident that at the right time Eskom will make that announcement.”
That is far more than the interest cited in Nersa’s consultation on Eskom’s proposed pilot tariff for crypto miners, in which two mining companies indicated combined initial demand of about 10MW, potentially rising to 500MW. – © 2026 NewsCentral Media
