Question NW2836 to the Minister of Public Enterprises

Reply:

Wheeling refers to a regime where private generators are allowed to sell directly to eligible customers by signing a use of system agreement with the transmission and distribution network owners. For eligible customers connected to the Eskom network, the process for entering into a wheeling agreement requires an amendment to the customer’s existing supply agreement with Eskom, which will allow the customer’s electricity bill to be adjusted (to be credited) to take account of wheeled energy. This type of wheeling requires an amendment to the customer’s existing supply agreement is called traditional wheeling, and it is limited to connections on the high voltage and medium voltage networks.

Virtual wheeling, however, eliminates the need for amendments to supply agreements and expands wheeling to customers connected at low voltage networks. This enables entities like banks, hotels, corporate offices, and retailers to wheel energy from private generators.

Virtual wheeling is designed to work alongside traditional wheeling arrangements, not replace them. Additionally, Eskom will contract the buyer of energy directly, without the need to contract with off-takers (load customers), including municipalities. As a result, there will be no impact on municipal revenue, and this distinguishes virtual wheeling from the traditional wheeling approach.

Currently, the project will be executed on a pilot basis between Eskom and Vodacom to enable Eskom to test the systems and resource capabilities before the official country wide roll-out.

The smart meters and cables that will be required by buyers and offtakes of electricity are already supported by a local market.

(b)

There is no requirement for municipalities to invest in large-scale systems and cloud servers. Eskom will invest in a digital tool known as a virtual wheeling platform to facilitate the virtual wheeling and this will integrate with buyer platforms. This wheeling platform is required to support the aggregation, processing and provision of generation and consumption data to calculate the wheeled energy refund.

Virtual wheeling requires the measurement and reporting of energy generated and consumed on a time-of-use basis and this is allocated by buyers of electricity to their off-takers. All off- takers will need to be equipped with the necessary meters capable of supporting these functions. The investment will need to be made by the buyers and/or off-takers (load customers) and not municipalities.

Remarks: Approved / Not Approved

Jacky Molisane PJ Gordhan, MP

Acting Director-General Minister

Date: Date: