Eskom has quietly taken an important step in the roll-out 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's new wheeling model.

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.

While traditional wheeling, virtual wheeling and electricity trading are seen as important in accelerating the country's energy transition, they have attracted industry controversy, sparked legal disputes and exposed deep gaps in South Africa's still-emerging electricity trading regime.

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. The Enerweb contract sets the development of this automation process in motion.

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A pivotal platform for a changing electricity market

Virtual wheeling is designed to allow IPPs to generate electricity anywhere on the national grid and allocate it virtually to customers - even those operating in municipal distribution areas - without requiring a physical electron flow from the generator to the off-taker.

It...