The power station sits between the Steenbras Upper Dam and a small lower reservoir on the mountainside below.

The City of Cape Town uses the power station for load balancing and to mitigate against loadshedding caused by the South African energy crisis.

The Steenbras Power Station and the scheme's lower reservoir are situated on the lower slopes of the mountain at an altitude of approximately 100 metres, close to the town of Gordon's Bay and 50 kilometres (30 mi) to the south-east of central Cape Town.

During peak hours, water from the upper reservoir is used to turn the turbines to generate clean energy.

[3] The output of the power station is generally constrained by the 3,560 megalitres (126×10^6 cu ft) capacity of the lower reservoir.