By: Tord Johnsson - General Manager, Business Development East and South Africa Wärtsilä Energy

Every hour of loadshedding costs South Africa millions of rand in lost productivity, yet the solution isn’t just more power; it’s smarter, more flexible power.

South Africa’s energy landscape is defined by two forces: the immediate need to secure the grid and the long-term imperative to transition to a cleaner, more sustainable system. For too long, the narrative has been one of doom and gloom, dominated by loadshedding and the challenge of a retiring coal fleet, with 8.4 GW of coal capacity scheduled for retirement in 2029 and 2030.

However, a pivotal shift is underway. Flexibility, traditionally viewed as a mere technical cost, is rapidly becoming the most valuable and monetisable commodity in the South African electricity market.

The Unbundling of Opportunity

The core message of Wärtsilä’s recently released report, "Making money with flexibility," is that flexibility is not just a necessity for grid stability, but a commercial driver for Independent Power Producers (IPPs) and utilities. In South Africa, regulatory reform is actively creating the competitive, advanced market needed to realise this value.

The recently enacted Electricity Regulation Amendment Act (ERA) is the cornerstone of this transformation, moving the sector from a historic monopoly to a competitive, multi-market structure. 

Key legislative changes have been instrumental:

1. Market Liberalisation: The removal of the generation license threshold for IPPs, now requiring only registration with NERSA, has unlocked significant private investment and led to a rapid expansion of generation (including an estimated 6 GW of rooftop solar alone).

2. The New Marketplace: The transition to the South African Wholesale Electricity Market (SAWEM), which is set to launch around April 2026, will introduce competition and transparent price signals that reward flexibility. The question for the system operator is no longer just “How many megawatts?” but “How flexible and well-timed are they?”

This legislative framework is moving the country toward a future where power is bought and sold based on real-time need and value.

Local Examples of Flexibility Monetisation

As more intermittent renewable energy capacity, such as solar and wind, comes online through the REIPPPP and private wheeling projects, the volatility on the grid increases, driving up the need, and therefore the value, for fast-response assets.

This is where advanced flexibility technologies unlock specific, local revenue streams:

1. Energy Storage: The national outlook is ambitious. The Green Industrialisation scenario projects the need for 53 GW of battery storage and 23 GW of flexible gas turbines by 2050. Battery Energy Storage Systems (BESS) are perfectly suited to energy time-shifting, charging when solar production is high and prices are low, and discharging during peak evening demand or during load-shedding events. 

2. Real-Time Grid Support: With rising grid volatility, the Transmission System Operator (NTCSA) needs fast-response assets to maintain frequency and voltage. There are calls to establish an open ancillary services market, which would allow flexible assets to earn revenue by providing critical services such as reserves to the grid, ensuring stability within 10 seconds of a contingency.

3. Flexible Engine Power Plants: While renewables dominate the future, fast-starting, flexible gas engine power plants remain crucial to fill the looming firm capacity gap left by coal and to firm up high volumes of renewables. Wärtsilä’s track record comprises 79 GW of power plant capacity and over 130 energy storage systems in 180 countries around the world has a long history in Africa, with over 7.6 GW of installed engine capacity, including a 175 MW power plant in Sasolburg, demonstrating how this technology provides dispatchable, flexible power on demand.

The Path to a Flexible Future

The shift from a capacity-focused system to one that values rapid response and optimisation is key. The next generation of power projects in South Africa must be built on platforms that can manage complexity and aggregate value from multiple revenue streams simultaneously.

At Wärtsilä, our Quantum BESS and GEMS Digital Energy Management Platform are specifically designed to meet these needs, using intelligent software to autonomously control and optimise assets in real-time to maximise revenue in competitive markets.

For South Africa to truly end its energy shortage, it must continue to support policy that prioritises not just new capacity but flexible capacity. By embracing this commercial view of flexibility, IPPs and utilities can move beyond merely meeting a technical requirement and unlock a new era of reliable, profitable, and clean energy for all South Africans.

Want the full deep dive into the business case for flexibility? Explore Wärtsilä’s full report, Making money with flexibility, for detailed market insights and real-world case studies.