Unlocking the potential of wheeling in the Western Cape

This industry brief by GreenCape examines the potential for electricity wheeling in the Western Cape, South Africa. It outlines the financial and technical mechanisms that allow independent power producers (IPPs) to transport energy across Eskom or municipal grids to end customers. The document identifies a significant market opportunity for new renewable energy investment in the province and discusses the regulatory, financial, and capacity-related barriers that currently limit the uptake of wheeling, while highlighting emerging solutions like virtual wheeling.

• The potential market for wheeling in the Western Cape is estimated at up to 1,600 MW of new renewable energy, which represents an investment opportunity of up to R25.6bn. This estimate assumes all Eskom and municipal customers can participate and accounts for market penetration, load factors, and renewable energy variability.
• Wheeling is categorized into three primary scenarios based on the location of the generator and customer: Eskom-connected generators wheeling to Eskom-connected medium voltage customers (a long-standing 1-to-1 arrangement), Eskom-connected generators wheeling to municipal-connected customers (currently rare due to municipal capacity and financial barriers), and municipal-connected generators wheeling to municipal-connected customers (the most common scenario for existing pilots).
• Virtual wheeling is an Eskom pilot program expected to launch in early 2025. It aims to simplify the process for municipal customers by using a virtual account to manage credits, allowing these customers to access energy from Eskom-connected IPPs without waiting for municipalities to be fully ready for wheeling. It will also enable wheeling for Eskom's low-voltage customers.
• Financial stability of municipalities is a critical factor for wheeling viability. Eskom only permits wheeling to customers and municipalities in good financial standing, meaning accounts must be up to date. While many Western Cape municipalities are financially stable, the lack of public data on municipal finances can create a perception that wheeling is not possible in most areas.
• Wheeling utilizes an avoided cost mechanism for rebates, currently based on the Eskom wholesale energy price (WEPS) excluding losses. This structure is designed to be surplus-neutral for municipalities, ensuring they neither incur revenue losses nor gains. To recover administrative and technical costs, municipalities may implement a monthly fee for participating customers.
• Several barriers limit wheeling uptake, including limited municipal capacity and lack of standardized frameworks, which NERSA is addressing through third-party wheeling rules. Other risks include long-term contracting uncertainty due to potential changes in the Eskom retail tariff plan from mid-2025 and the ongoing unbundling of Eskom (NTCSA) under the Electricity Regulation Amendment Act 38 of 2024.
• Four local municipalities in the Western Cape are currently engaging with wheeling: The City of Cape Town (Open), George (In operation), and Swartland (Pilot).

APA

GreenCape (n.d.). Unlocking the potential of wheeling in the Western Cape. https://greencape.co.za/wp-content/uploads/2025/04/Industry-brief-Unlocking-the-potential-of-wheeling-in-the-Western-Cape.pdf

Chicago

GreenCape. Unlocking the potential of wheeling in the Western Cape. n.d. https://greencape.co.za/wp-content/uploads/2025/04/Industry-brief-Unlocking-the-potential-of-wheeling-in-the-Western-Cape.pdf.

Wikipedia

{{cite report |author=GreenCape |title=Unlocking the potential of wheeling in the Western Cape |url=https://greencape.co.za/wp-content/uploads/2025/04/Industry-brief-Unlocking-the-potential-of-wheeling-in-the-Western-Cape.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greencapendunlocking, author = {{GreenCape}}, title = {{Unlocking the potential of wheeling in the Western Cape}}, institution = {GreenCape}, url = {https://greencape.co.za/wp-content/uploads/2025/04/Industry-brief-Unlocking-the-potential-of-wheeling-in-the-Western-Cape.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }