{
  "id": 2111955,
  "title": "NTCSA is paying more to buy nothing …",
  "url": "https://urgent.news/2026/08/20/ntcsa-is-paying-more-to-buy-nothing-2111955",
  "topic": "world",
  "section": "World",
  "published": "2026-08-20T09:41:59.000Z",
  "source": {
    "name": "The Citizen",
    "slug": "the-citizen",
    "url": "https://www.citizen.co.za/business/ntcsa-is-paying-more-to-buy-nothing/"
  },
  "original_language": "en",
  "account": "The National Transmission Company South Africa (NTCSA) is allocating more funds to compensate independent power producers (IPPs) for energy deemed unavailable due to curtailment instructions. This cash flow issue has strained the utility's finances, especially following a surge in curtailment orders in April and May. As a safeguard to maintain grid balance, curtailment occurs when the system operator directs generators, including renewable IPPs, to reduce output due to insufficient network capacity or temporary overproduction. This practice, recognized globally, is crucial for preserving system stability. Under its power purchase agreements with 117 renewable IPPs, the NTCSA must pay for energy that was available but not utilized due to curtailment orders. The tariffs remain unchanged, despite the IPPs receiving no tangible benefits. Currently, the NTCSA has 7,908MW of renewable generation connected to the grid, with an additional 9,219MW of rooftop solar available. However, rooftop solar's expansion has led to a significant reduction in demand during daylight hours, causing increased curtailment. To counteract this, Eskom is attempting to boost demand through special pricing agreements for large power users and reduced tariffs during peak hours. Yet, these measures have yet to be implemented. The NTCSA's recent Weekly System Status Report reveals a sharp increase in curtailment events and the volume of curtailed energy, more than tripling and nearly quadrupling, respectively, compared to the previous year. This rapid escalation caught the NTCSA off guard. While a rise in curtailment events is anticipated as the IPP count grows and more individuals install rooftop solar, the NTCSA was taken aback by the sudden intensity. The extent of the issue is not unique to South Africa but is observed in many international markets. Robert Futter, founder of energy intelligence service Florion, predicts a doubling or tripling of curtailments in the coming years. The critical question lies not in whether curtailment should occur but in its execution at the most cost-effective level, the proper accounting of compensation costs, and who ultimately bears these expenses – the NTCSA/Eskom, consumers through future regulated charges, or the government. NTCSA addressed Moneyweb's inquiry about the budget for curtailment compensation, stating that it is sufficient to cover payments to IPPs. However, this budget was based on the assumption that IPPs would be compensated for generated power. The NTCSA's treatment of deemed energy costs, which do not generate income and must be distinct and verifiable, raises concerns about potential financial repercussions.",
  "summary": "It pays about R45bn a year to IPPs for electricity - but with R2bn in curtailment claims generated in just a few months, consumers may feel it in the tariff.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}