SAPVIA and NTCSA agree monthly bilaterals and a joint workplan on storage and daytime demand as R1.5 billion in outstanding claims is targeted for clearance by end-August
The South African Photovoltaic Industry Association (SAPVIA) has welcomed a fast-tracked payment mechanism that will see Independent Power Producers (IPPs) paid the full estimated value of their curtailment compensation claims upfront, easing a cash-flow squeeze that has fallen hardest on B-BBEE equity partners in South Africa’s renewable energy projects.
The mechanism was set out by the National Transmission Company South Africa (NTCSA) and its Central Purchasing Agency at a bilateral engagement with SAPVIA on 22 July 2026.
The meeting was convened after curtailment instructions to IPPs rose from roughly 100 a month earlier this year to more than 1 000 a month – a more than tenfold increase that has generated a substantial backlog of deemed energy claims and invoices, and stretched the administrative processes used to verify and settle them.
In a separate statement issued on 24 July, NTCSA said the value of curtailment claims under verification and settlement had been reduced from approximately R2 billion in mid-June to R1.5 billion, and that it is targeting completion of remaining assessments and payment of approved claims by the end of August 2026.
NTCSA administers Power Purchase Agreements (PPAs) covering 117 projects with a combined capacity of 10 083 MW, and processes payments of roughly R45 billion to IPPs annually. Approximately 300 claims have already been approved under the new mechanism.
“Delayed curtailment compensation has placed significant financial strain on IPPs, and B-BBEE equity partners have been disproportionately affected because they carry the least headroom to absorb a payment delay,” says Dr Rethabile Melamu, CEO of SAPVIA.
“Resolving these cash-flow bottlenecks is not an administrative detail. It is fundamental to protecting broad-based transformation in this sector and to maintaining investor confidence in South Africa’s energy transition.”
How the new process works
NTCSA has introduced a streamlined, two-step provisional payment process that operates entirely within existing PPAs, meaning no contractual amendments are required:
- Operational data is now drawn directly from the System Operator’s SCADA systems rather than from regional distribution teams, cutting verification delays significantly.
- NTCSA disburses 100% of the estimated claim value upfront, with full technical verification following after payment. Minimal or no financial adjustment – upward or downward – is expected in most cases.
NTCSA expects payment flows to normalise immediately as a result.
Why curtailment has risen
NTCSA attributes the increase to operational constraints on the System Operator during daylight hours. Because conventional coal-fired plants cannot be ramped up and down quickly, they must remain online through the day at minimum stable levels to guarantee capacity for the morning and evening peaks, when solar output is unavailable.
With flexible sources such as hydro and pumped storage already adjusted first, curtailment of self-dispatching renewable IPPs becomes the final balancing tool available to the System Operator.
SAPVIA has emphasised that curtailment is a standard global mechanism of power systems with high renewable penetration, and that the issue for the sector is not curtailment itself but the speed and predictability of the compensation that follows it.
“Faster payment addresses the symptom. The structural answer is to build a system that can absorb midday solar rather than waste it,” says Melamu.
“That means storage at scale, market signals that reward daytime consumption, and a grid that is planned around the generation mix we actually have. Those are the conversations we are now having with NTCSA on a standing basis.”
A joint workplan
SAPVIA and NTCSA have agreed to hold regular monthly bilateral meetings to monitor claims processing and operational grid dynamics. Beyond the immediate administrative fix, the two organisations are collaborating on longer-term systemic solutions to absorb excess renewable generation, including:
- Accelerating Battery Energy Storage Systems (BESS) by addressing the regulatory and implementation hurdles facing IPPs that want to integrate storage into existing facilities.
- Demand-side day shaping, including wholesale market mechanisms and price signals that stimulate daytime electricity demand.
- International knowledge exchange, drawing on the experience of global solar bodies including SolarPower Europe and the German Solar Association.
SAPVIA has commended NTCSA’s proactive engagement with industry and its commitment to transparent reporting on curtailment volumes, claims processing performance and delay reduction.
