Eskom is exploring a “virtual wheeling” mechanism that should facilitate greater electricity generation investment by the private sector and municipalities in South Africa.

Wheeling is a transaction between a private generator selling energy to a buyer through a power purchase agreement where this energy needs to be exported over the Eskom grid to another location. For example, a data centre located in Johannesburg could draw on energy produced by a solar farm in the Northern Cape and “wheeled” over Eskom infrastructure.

In virtual wheeling, data from private energy generators is aggregated and a refund provided for the wheeled energy on a consolidated basis, according to senior advisor for electricity pricing at Eskom Onicah Rantwane.

In this scenario, a buyer of grid energy is an Eskom customer purchasing a mix of energy, some produced by the state-owned utility and some from the third-party generator. Traditional wheeling is typically done by measuring what a generator produces and then loading this export on the buyer’s Eskom bill.

According to Rantwane, there are several limitations associated with traditional wheeling:

An amendment to the supply agreement must be signed to account for the wheeled energy on the buyer’s bill.
The traditional model does not cater for connecting multiple generators to multiple buyers and is limited to medium-voltage and high-voltage supplies.
The traditional framework also does not cater for small buyers of energy or traders and aggregators and does not adequately deal with customers beyond municipal boundaries.
Wheeling to an “offtaker”, or buyer, within a municipality is limited to local councils that have wheeling frameworks in place.

Virtual wheeling

Virtual wheeling should address the limitations of traditional wheeling and will apply when one or more generators is wheeling to many small buyers and generators, Rantwana said at an Energy Exchange webinar hosted by energy expert Chris Yelland on Thursday.