South Africa will procure its entire IRP2025 battery storage allocation now, rather than spreading it to 2030, to stop excess renewable generation from destabilising the grid.
Minister of Electricity and Energy Dr Kgosientsho Ramokgopa made the case at a media briefing today [7 October] on the first ministerial determination under the IRP2025. The determination prioritises battery energy storage systems (BESS) and gas-to-power.
In his words, the country’s next electricity crisis will not come from too little power, but from too much of the wrong kind at the wrong time.
Curtailment is a now problem
The IRP anticipated roughly 2,200MW of battery storage by 2030. The Ministry is instead ramping that up to the full 4,600MW allocation in a single move.
“The problem is now. We are flexible, we are agile in the manner in which we respond, and that’s why we are taking all the 4,600 megawatts of [BESS] that is allocated in the current IRP2025,” Ramokgopa said.
The system operator can manage today’s curtailment, he explained; however, with new renewable capacity due to come on stream, the pressure will grow. Ramokgopa pointed to the official report into the Iberian blackout, which linked high penetration of non-dispatchable power to risks for system integrity.
“We are front-loading battery storage because the problem is now. We anticipate that it’s going to compound going into the future. So we don’t want to sit with a blackout as a result of overcapacity,” he said.
Gas to power plays the complementary role, giving the system operator comfort that dispatchable capacity will be available. The Ministry has also allocated a further 5GW to a second gas-to-power programme, while evaluations for the first bid window are near completion.
Of interest: Spain blackout and what the grid’s ‘black box’ revealed
Power parks shift risk to the state
The next major procurement window will introduce Power Parks, which Ramokgopa expects to announce before the end of the calendar year. The IPP Office aims to complete procurement before the end of the financial year.
Two features set the Power Parks model apart. First, the state takes on early-stage development risk.
“We’ll ensure that the land is properly permitted, the infrastructure is in place, so that we reduce the upfront costs that are associated with the project preparation. The state will carry that responsibility,” he said.
State-led land approvals, grid studies and bulk services should lower development costs and widen access for emerging developers. Second, the parks will co-locate generation with demand, so projects do not depend on new transmission infrastructure.
Renewable capacity within the parks will fall under a second determination and its own procurement arrangement.
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Raising the bar on localisation
Ramokgopa wants the next round to build on the first BESS bid window’s template for black shareholding, community ownership and subcontracting – but with more ambition. The IPP Office and the Department of Trade, Industry and Competition (the dtic) will set the new thresholds.
Localisation obligations must distinguish domestic manufacturing from imported equipment and local assembly, with measurable commitments and verified delivery. The aim is a sequenced pipeline that gives South African firms the confidence to invest in productive capacity.
He was frank about the current 90/10 evaluation split between price and socio-economic criteria. “Some of the bidders do focus on the price because it accounts for 90%, and then have, if you like, just compliance on the 10%,” he said.
Bitcoin mining as flexible load
Asked about using cryptocurrency mining to absorb surplus generation, Ramokgopa confirmed that the Ministry, Eskom and the National Energy Regulator of South Africa (Nersa) have engaged players in the space.
“We are sold on its technical claims. We can confirm that indeed it provides a unique solution for our situation,” he said.
Proponents say they could use between 1-3GW within two years, running on existing infrastructure in line with plans to repurpose power stations. Ramokgopa expects Eskom to make the formal announcement.
Excess power, unaffordable electricity
The Minister acknowledged the tension between surplus generation and rising tariffs. Nersa, not Eskom, sets tariffs, and the Ministry is revising the electricity pricing policy for the first time since 2008.
In the background, the iMnistry is modelling how daytime surplus could deliver relief to households and industry, subject to Nersa’s approval. For many households, the issue is not supply but the ability to buy units.
“Electricity can be available on the grid, but in many instances it’s not accessible. By that I mean people can’t afford the price of electricity,” he said. “Excess, but yet people don’t have electricity – and that’s an equation we want to resolve going forward.”
Ending load reductions in Gauteng and KwaZulu-Natal
Load reduction has ended in seven of the nine provinces, with Gauteng and KwaZulu-Natal outstanding. Ramokgopa attributed the remaining problem to local infrastructure overwhelmed by demand growth from illegal connections and informal settlements.
The long-term fix combines demand projections with municipalities, transformer investment, smart meter roll-out and a social compact with communities. He noted a link between ending load reduction and improved revenue collection.
On competition, he confirmed that Eskom Green, like any other generator, may bid in procurement arising from the determination. “No preferential treatment; all will be treated equally,” he said.
“We are addressing a now problem and also a future problem,” Ramokgopa concluded. “If we don’t address it [curtailment] now, we are likely going to revert back to a situation of crisis.”
