<\/p>\n
Eskom has quietly taken an important step in the rollout of its long-awaited virtual wheeling product, awarding a significant contract in the past few weeks to Johannesburg-based Enerweb to build a software platform that will automate and scale the utility\u2019s new wheeling model.<\/p>\n
The appointment represents the most tangible move yet towards operationalising the virtual wheeling initiative, viewed as central to unlocking wheeling of electricity from independent power producers (IPPs) to smaller and low-voltage customers connected either to the Eskom distribution network or embedded within the distribution networks of municipalities in good standing with Eskom.<\/p>\n
Read:
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While traditional wheeling, virtual wheeling and electricity trading are seen an important in accelerating the country\u2019s energy transition, they have simultaneously attracted industry controversy, sparked legal disputes, and exposed deep gaps in South Africa\u2019s still-emerging electricity trading regime.<\/p>\n
Read: Vodacom launches virtual wheeling platform<\/p>\n
Although Eskom successfully concluded a proof-of-concept project with Vodacom in 2023\/24, the utility has long acknowledged that a fully automated, industrial-scale system is necessary to accommodate the expected volumes of renewable energy, the hundreds of prospective buyers and generators, and the complex financial settlements that virtual wheeling entails.<\/p>\n
The Enerweb contract now sets the development of this automation process in motion.<\/p>\n
Pivotal platform for a changing electricity market<\/strong><\/p>\n Virtual wheeling is designed to allow IPPs to generate electricity anywhere on the national grid and allocate it virtually to customers \u2013 even those operating in municipal distribution areas \u2013 without requiring a physical electron flow from the generator to the off-taker.<\/p>\n It represents a fundamental shift from traditional wheeling, which has been limited mainly to one-to-one wheeling of energy from large IPP generators to a relatively small number of large industrial and mining off-takers connected to the Eskom grid and contracted through long-term power purchase agreements (PPAs).<\/p>\n Virtual wheeling is intended to radically lower the barriers to participation and open procurement pathways for many thousands of smaller commercial businesses, corporates and manufacturers connected either to Eskom or municipal networks under shorter-term PPAs.<\/p>\n Read: Eskom expects the Enerweb platform to consolidate generation, consumption and billing data into a unified digital environment; automatically calculate and apply wheeling refunds; integrate those refunds directly into Eskom\u2019s billing systems; maintain auditable records; and provide a modern user portal for customers, IPPs and electricity traders.<\/p>\n The platform is being designed to process interval-based metering data (including time-of-use data) from NRS-compliant meters for customers connected to the Eskom network, as well as those located within municipal distribution boundaries \u2013 an increasingly important feature in a fragmented distribution environment where municipal participation remains voluntary and, in many cases, administratively constrained.<\/p>\n While Eskom\u2019s existing virtual wheeling rules currently exclude the participation of electricity traders, Enerweb\u2019s architecture will accommodate them, thus enabling their involvement once the Eskom and regulatory landscape allows it.<\/p>\n<\/blockquote>\n This is significant, given that it is expected that a large portion of the anticipated wheeling market \u2013 and particularly smaller commercial businesses, corporates and manufacturers \u2013 will be contracted through traders rather than direct relationships between large IPPs and electricity customers.<\/p>\n Virtual wheeling: A product launched before the trading rules<\/strong><\/p>\n Despite the optimism surrounding virtual wheeling, Eskom\u2019s rollout has generated substantial controversy.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Virtual wheeling was launched as a commercially available product for low-voltage customers in the first quarter of 2025, and Vodacom became the first company to implement it at scale, using power from multiple renewable-energy IPPs to offset its national consumption footprint.<\/p>\n But traders and medium-voltage customers \u2013 who are expected to play a central role in South Africa\u2019s emerging market \u2013 have been explicitly excluded from the virtual wheeling scheme until the National Energy Regulator of South Africa (Nersa) finalises a comprehensive set of electricity trading rules.<\/p>\n The absence of these rules has been a flashpoint in the sector.<\/p>\n Eskom Distribution has argued that Nersa cannot lawfully issue electricity trading licences in the absence of a formal regulatory framework governing how traders operate, how risks are allocated, and how settlements are performed.<\/p>\n Read: Several trading licence awards by Nersa \u2013 among them Discovery Green, GreenCo Power Services, CBI Electric Apollo, NOA Group Trading and Green Electron Market \u2013 were subsequently challenged by Eskom in a court action, with the utility arguing that Nersa acted prematurely and unlawfully.<\/p>\n Read: The litigation has slowed momentum in one of the most dynamic parts of the private-power market, leaving several aspiring traders unable to participate meaningfully despite having received electricity trading licences from the regulator.<\/p>\n At the same time, Eskom has faced severe criticism for launching its legal action, effectively limiting participation in virtual wheeling to certain large corporates while excluding the broader market that competitive trading was supposed to unlock.<\/p>\n<\/blockquote>\n Some stakeholders have accused Eskom of abusing and entrenching its dominant market position rather than preparing the ground for the open, competitive trading environment envisioned in government policy and the country\u2019s electricity-market reform plans.<\/p>\n Nersa moves to close the regulatory gap<\/strong><\/p>\n After pressure from Electricity and Energy Minister Kgosientsho Ramokgopa, Nersa has expedited the preparation of electricity trading rules, which have now been published for public and stakeholder comment, marking a major step towards formalising the trading market.<\/p>\n Public hearings are scheduled for January 2026, with the final trading rules expected to be in place by the end of the first quarter of 2026.<\/p>\n Once adopted, the rules will govern the conduct of electricity traders, define settlement processes, regulate the flow of financial and metering data, and determine how traders participate in Eskom\u2019s wheeling and virtual wheeling systems.<\/p>\n Read: This development is crucial, because virtual wheeling has been conceived not only as a bilateral procurement mechanism for large corporates like Vodacom, but also as a foundational component of the future competitive electricity market.<\/p>\n The platform Enerweb is now building for Eskom Distribution will need to interface with traders, aggregators and potentially the forthcoming wholesale market operator under the National Transmission Company South Africa\u2019s (NTCSA) Market Code.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Read:\u00a0Aggregators give IPPs access to new market \u2013 Mulilo CEO<\/p>\n The timing of Eskom\u2019s contract award suggests a recognition that systems development cannot afford to wait for regulatory finalisation, and that implementation must run in parallel with rule-making if the country is to meet its 2026-2030 market-reform milestones.<\/p>\n Why Eskom needs automation now<\/strong><\/p>\n The proof-of-concept with Vodacom demonstrated that virtual wheeling is technically feasible, but it also exposed the administrative burdens associated with manual processes.<\/p>\n Tracking allocations from multiple generators, matching them to time-of-use consumption across thousands of meters, validating interval data, running and reconciling refund calculations, and integrating results into billing systems require a level of automation typical of mature electricity trading markets, but historically absent in South Africa.<\/p>\n Read: Enerweb\u2019s system is expected to deliver near real-time visibility into generation and allocation performance, replacing the slow, largely manual and thus error-prone reconciliation processes that have long complicated wheeling arrangements.<\/p>\n Having developed settlement platforms for the Southern African Power Pool (SAPP) and the East African Power Pool (EAPP), and supported electricity traders across the region, Enerweb is one of the few South African firms with proven experience in designing and operating high-volume, multi-party energy-market systems.<\/p>\n Eskom hopes that automation will remove the bottlenecks that currently limit the number of participants who can be managed simultaneously.<\/p>\n<\/blockquote>\n Officials have previously suggested that the full version of virtual wheeling may eventually need to handle hundreds of generators and many thousands of customers, all submitting interval consumption data and expecting accurate monthly settlements.<\/p>\n Without a dedicated digital platform, such a system would be unmanageable.<\/p>\n Municipal boundaries: The unresolved challenge<\/strong><\/p>\n One of the most significant features of virtual wheeling is its ability to operate across municipal distribution areas without requiring municipalities to participate directly.<\/p>\n Under the model, buyers provide Eskom with time-of-use data for their municipal-supply sites. Eskom then performs the refund calculations and credits those refunds to the buyer, who distributes them to individual off-takers as necessary.<\/p>\n Read: This bypass mechanism has been welcomed by corporates frustrated by uneven municipal readiness for wheeling. However, it also raises questions about the sustainability of municipal revenue streams and the long-term governance of distribution.<\/p>\n While Eskom emphasises that virtual wheeling does not reduce municipal revenues because refunds are paid by Eskom rather than by municipalities, critics argue that the model postpones rather than resolves the structural issue of how municipalities will adapt to a future where customers procure energy competitively.<\/p>\n Some municipal distributors have indicated that they may develop their own versions of virtual wheeling or enhance traditional wheeling frameworks once metering and billing systems are upgraded.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/p><\/div>\n<\/div>\n<\/blockquote>\n The Enerweb platform will not directly manage municipal billing, but its design must anticipate the likelihood of multiple interacting wheeling regimes across the country.<\/p>\n Read: A transitional step toward a competitive electricity market<\/strong><\/p>\n The awarding of the Enerweb contract provides the clearest signal yet that Eskom intends for virtual wheeling to form part of the transitional architecture leading to the future wholesale market envisaged under the national electricity-market reform programme.<\/p>\n The transitional first phase of the South African Wholesale Electricity Market (Sawem) is planned to \u201cgo live\u201d on 1 April 2026, subject to completion of the Market Code and supporting regulations.<\/p>\n Read: Nersa makes big progress towards competitive electricity market<\/p>\n In that context, virtual wheeling serves both an immediate practical function \u2013 allowing customers to access private renewable generation despite grid and rooftop space constraints \u2013 and a longer-term institutional function as a stepping stone toward market-based dispatch and competitive procurement.<\/p>\n The Enerweb platform, therefore, is not merely a wheeling tool but an early building block in the country\u2019s emerging market infrastructure.<\/p>\n Looking ahead<\/strong><\/p>\n With Nersa\u2019s public hearings on trading rules scheduled for January 2026, and the final rules expected by the end of the first quarter of 2026, a clearer regulatory foundation for electricity trading is finally coming into view.<\/p>\n Read: Once those rules are in place, traders are expected to be allowed to join virtual wheeling, significantly enlarging the market and enabling sophisticated portfolio-based procurement that could eventually rival the traditional contractual structure of the public Renewable Energy IPP Procurement Programme (Reippp).<\/p>\n Eskom\u2019s appointment of Enerweb marks an important milestone on that path.<\/p>\n<\/blockquote>\n If successfully implemented, the virtual wheeling platform may become one of the most consequential enabling technologies in South Africa\u2019s electricity reform journey, bridging a messy present and an uncertain but potentially transformative competitive future.<\/p>\n Chris Yelland is managing director of EE Business Intelligence<\/em>.<\/p>\n \u00a9 Copyright 2025 \u2013 EE Business Intelligence (Pty) Ltd. All rights reserved. This article may not be published without the written permission of EE Business Intelligence.<\/em><\/p>\n Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n
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