Renewable energy + industrial sustainability
As more South African municipalities start to roll out frameworks that support private energy wheeling, this once- niche mechanism is set to become a cornerstone of the country’s decentralised energy future. Due to constrained grid infrastructure, ageing coal plants and mounting pressure to transition to cleaner power, energy wheeling oers a practical, scalable way to connect independent generators with energy-hungry users. Wheeling is a critical enabler in SA’s electricity supply Wayne Cowie, CEO at EXSA
timelines of around 18 months and large-scale wind projects around 24 months. And there is a substantial pipeline of renewable energy projects waiting on financing to be built. This is where wheeling is playing a critical role. Facilitating private investment in the renewable energy market For independent power producers (IPPs), a key enabler for a project is whether there is a committed buyer for the power that will be produced. Wheeling provides another route to market for IPPs. Energy traders like Energy Exchange of Southern Africa (EXSA) typically enter into long-term agreements with multiple IPPs to bulk-buy power that they then onsell. Thus they assume certain risks on behalf of the end consumer and provide another route to market for generators. For energy users looking to access wind or solar power, contracting directly with an energy producer can be a complex contractual and administrative undertaking. Most large-scale solar or wind projects have long-term contracting requirements of 15 to 20 years, with substantial guarantees required to enable project financing, and this can be challenging for corporates. Such contracts may also involve complex metering, reconciliation and settlement processes, which are not typically a core competency of corporate energy users. Additionally, businesses may require several contracts with di erent IPPs to ensure the right energy mix of wind and solar to meet their needs. Wheeling enables large energy users to access wind and solar IPPs indirectly. It o ers a middle path, taking the onerous administration, contracting complexity and risk away from end consumers and unlocking financing for IPPs at the same time. As well as providing accessibility in the market, wheeling is attractive for other reasons too. First, wind and solar are currently the cheapest form of new energy generation globally. Wheeling can provide cost saving benefits for companies, taking advantage of the economies of scale inherent in utility-scale renewable energy projects. Second, companies can secure renewable energy certificates, certifying that their energy is procured from green sources. This is particularly important for companies with international footprints and will become an increasingly attractive benefit as sustainability targets and reporting
Wayne Cowie, EXSA.
E nergy wheeling, which entails using existing transmission and grid infrastructure to deliver energy from an independent energy generator to an end-user, o ers a technical solution that is gaining momentum as a market enabler. We need to look at how we can remove the remaining barriers to make it work at scale. The imperative for energy alternatives Although load shedding has abated for now, South Africa needs alternative energy sources to stimulate economic growth sustainably. Coal currently provides almost 75% of the nation’s power, but most Eskom coal plants have reached or exceeded the standard 30 to 40 years’ lifecycle. As Eskom continues its e orts to extend the design life of plants within its generation fleet to facilitate a phased decommissioning process, there will come a time when the ageing plants are no longer viable for upgrades. When these plants are shut down, a potentially significant energy gap will emerge if alternative supply is not well established. Coupled with this, mounting international calls for the transition to cleaner energy will increasingly put pressure on trade and industry to reduce fossil fuel usage, with the imposition of penalties, tari s and taxes. Timing is also a concern. Where traditional energy sources, such as nuclear and coal, can take upwards of 10 years to build, renewable energy sources can be up and running more quickly, with large-scale utility solar project construction
16 Electricity + Control MARCH 2026
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