Known as electricity wheeling, the City of Cape Town is leading the way in a South African first pilot project where 15 commercial electricity suppliers – representing 25 generators – will start selling electricity to 40 commercial consumers using the City’s grid.
The announcement came last week by Cape Town Mayor Geordin Hill-Lewis who gave the project the go-ahead after council approval later this month.
“Electricity wheeling, that allows people to buy electricity from each other, is one way to help address the country’s electricity shortages,” said Geordin Hill-Lewis.
According to Mayco member for energy Beverley van Reenen the pilot is scheduled to be completed towards the end of this year and will culminate in the full-scale implementation of wheeling in the city.
“At this stage, it will be commercial consumers with large electricity demand who are connected at medium voltage levels of 11kV and higher,” Van Reenen said to TygerBurger on Friday.
Van Reenen explained that wheeling does not avoid direct load-shedding for the clients.
“When the area that the client is situated in is shed, they will also be affected. However, because wheeling will encourage private sector investment into new generation, it is a vital part of the solutions required to resolve load-shedding,” she said.
Van Reenen said there may be an opportunity for household consumers to wheel in future as the supply industry evolves.
Electricity landscape
“The future is now, as Cape Town gears up for the first electron to be wheeled between our pilot project participants this July. This is the business end of our pilot, following the development of the billing engine and the completion of wheeling agreements. Cape Town’s electricity landscape is rapidly liberalising off the back of our end load shedding plans, with 700MW of independent power under procurement, innovative Cash for Power and Power Heroes programmes, and now the sale of electricity wheeled between market participants,” said Mayor Hill-Lewis.
Van Reenen continued to say that the complexity of wheeling requires new skills, regulatory changes as well as billing development and bilateral agreements.
“Our programme will allow electricity to be wheeled over both the municipal and Eskom distribution networks in Cape Town. Sales will be governed by bilateral power purchase agreements 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,” she said.
Moreover, Cape Town has already enabled the legislative framework for wheeling, with the City’s electricity supply by-law allowing for the retail wheeling of electricity through the network.
The 15 wheeling pilot participants who submitted valid applications to generate and sell power are Amazon Data Service South Africa, Brinmar Private Energy Trading, Distributed Power Africa, Energy Exchange of Southern Africa, Energy Partners Utilities, EnerJ Carbon Management, Enpower Trading, Floating Solar, Make a Difference Ventures GP LLC, Neura Trading, Phofu Solar Plant, Powerx Proprietary Limited, Redefine Properties Limited, Solar Africa Energy and Swish Property Seven.
