Electricity wheeling
The Energy industry is changing rapidly, but the shift to renewable sources needs to happen faster to combat the effects of high carbon emissions and climate change. We are promoting the shift to renewable energy along with projects aimed at ensuring energy security for our customers that is cleaner at more affordable prices for a sustainable future for all Capetonians.
Electricity wheeling in Cape Town
What is electricity wheeling?
Wheeling refers to the financial transactions representing the transportation of third party electrical energy (kWh) over the municipal/Eskom distribution network. It allows a third party supplier to sell this electrical energy to a customer at their point of supply. The sale is governed by a bilateral power purchase agreement (PPA) which exists within a market environment, as opposed to a regulated environment, as the price of the energy is set between the parties and not by the City/Eskom or the National Energy Regulator of South Africa (NERSA).
The role of wheeling in Cape Town’s energy future
It is crucial that all parties, including the private sector plays a role in addressing the future electricity needs of the country. This will reduce the funding burden on Government and relieve the borrowing requirements of Eskom. It will therefore introduce generation technologies that Eskom may not consider part of its core function which may play a vital role in the future electricity supply options, in particular off-grid, decentralised generation, co-generation and small-scale renewable projects.
The introduction of electricity wheeling has multiple benefits as it allows our customers to procure electricity at unregulated prices from third parties, make use of existing infrastructure and reduce their carbon footprint. For the City, it presents an opportunity to become less reliant on Eskom and create a new service model through renting our ‘wires’ infrastructure.
Our programmes and projects
The City’s approach to electricity wheeling
Our
City of Cape Town Electricity Supply By-law, 2010 allows for the retail wheeling of electricity through our network by a licensed third party electricity supplier to customers within the City supply area. Wheeling will take place on 11kV and higher lines only.
We envision that a future licensed third party electricity supplier would be part of an electricity retail market, which would allow trading of electricity at prices set by either a competitive bidding process or by means of bilateral power purchase agreements (PPAs). Wheeling of electricity by traders using PPAs is a precursor to establishing such an electricity retail market. Until such time as a single electricity retail market supplier is formalised, each trader will be considered as and allowed wheeling rights associated with an independent electricity supplier.
We have developed a set of
wheeling rules to allow this market environment to function alongside the regulated environment.
Bi-lateral Wheeling
As of 1 March 2025, the City is introducing one-to-one wheeling across the City's electricity infrastructure at medium and high voltage levels. This involves the wheeling of electricity from one generator to one off-taker, via the City’s network, subject to the following criteria:
- Customers must be at a medium or high voltage connection level i.e. 11 kV to 132 kV
- Customers must be on a "Time of Use" electricity tariff structure
- Generators must be at a medium or high voltage connection level i.e. 11 kV to 132 kV
- Generators may be embedded or outside the City's network
- Customers to whom energy is wheeled must enter into suitable supplemental Electricity Wheeling and Use of System contractual arrangement with the City
- The Wheeling Customers must pay the applicable Wheeling use of System Charges as set out in the City's Electricity Tariff Policy, as amended annually
Wheeling pilot research project
Following the successful completion of Phase One of the wheeling pilot study, which introduced bilateral wheeling, the City is proceeding with Phase Two to test “pool” wheeling arrangements. This phase will assess one to many, many to one, and many to many wheeling configurations.
Phase Two will run for a further year with the current wheeling pilot participants. The City aims to conclude this phase by August 2026, after which the intention is to open pool wheeling to the broader market. Details on the outcomes of the pilot will be shared once they become available.
View the report to Council.
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