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’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 an important in accelerating the country’s energy transition, they have simultaneously 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 now sets the development of this automation process in motion.
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 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).
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.
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’s billing systems; maintain auditable records; and provide a modern user portal for customers, IPPs and electricity traders.
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 – an increasingly important feature in a fragmented distribution environment where municipal participation remains voluntary and, in many cases, administratively constrained.
While Eskom’s existing virtual wheeling rules currently exclude the participation of electricity traders, Enerweb’s architecture will accommodate them, thus enabling their involvement once the Eskom and regulatory landscape allows it.
This is significant, given that it is expected that a large portion of the anticipated wheeling market – and particularly smaller commercial businesses, corporates and manufacturers – will be contracted through traders rather than direct relationships between large IPPs and electricity customers.
Virtual wheeling: A product launched before the trading rules
Despite the optimism surrounding virtual wheeling, Eskom’s rollout has generated substantial controversy.
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.
But traders and medium-voltage customers – who are expected to play a central role in South Africa’s emerging market – 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.
The absence of these rules has been a flashpoint in the sector.
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. – moneyweb.co.za
