According to Dr Kgosientsho Ramokgopa, minister or electricity, new generation projects are already producing significant levels of electricity. But many of these projects are in areas where there is limited or misaligned transmission grid capacity.

He points out that more than 100 projects are currently clearing regulatory hurdles and will enter construction soon. In addition, 66GW of wind and solar projects are in development across the country.

“This demonstrates a pipeline of private sector investment in new generation capacity,” Dr Ramokgopa says. “And strengthening the transmission network will be key to enabling this.”

There is an appreciation of the value that virtual wheeling could offer, he adds.

Dr Ramokgopa is speaking at a discussion on virtual wheeling hosted by Vodacom and the National Business Initiative (NBI).

Virtual wheeling with enable multiple energy generators to combine their capacity, and multiple energy consumers to combine their consumption, into a single account within the Eskom environment.

Monde Bala, Eskom distribution group executive, says the new solution has been agreed upon, and will be operational on the Eskom transmission grid by the end of 2024.

The need for virtual wheeling is a result of last year’s lifting of the generation cap for private producers, Bala adds. “That sparked a revolution that had started in 2008, and meant that companies could self-generate.”

It also meant that generators had to agree with Eskom on what they would do with the energy they create. “Because the generator and uptaker might not be in the same physical location, this highlighted the need for a new wheeling framework.”

Eskom and Vodacom started discussions on virtual wheeling July 2022.

Sitholizwe Mdlalose, CEO of Vodacom SA, explains that Vodacom – like Eskom – has extremely distributed operations, including 15 000 base stations, data centres and more across the country.

In August 2023, the virtual wheeling agreement was signed, and forms the basis for similar agreements that other corporates can take up with the utility.

“We have now created a framework, and other organisations can do the same, using the same mechanism,” Mdlalose stresses.


How virtual wheeling works

With virtual wheeling, data from offtakers and generators is aggregated, and a refund provided for the wheeled energy on a consolidated basis.

The generator will export the wheeled energy. But, unlike traditional wheeling, the credit is not on the individual account but through a single refund to the buyer.

The basis for the refund is that the individual consumer will be paying their full bill, including for the wheeled energy. This means that Eskom effectively overcharges the individual accounts, so the buyer needs to be refunded.

The buyer will allocate the wheeled energy to the individual customers, so Eskom doesn’t process any refunds to individual bills.

Companies wishing to participate in virtual wheeling need to enter into a virtual wheeling contract with Eskom. They also need to have a data aggregation platform – and the platform developed by Vodacom is available to any buyer. Eskom would also require all of the seller’s information, a list of offtakers, and metering data.