South Africa’s energy is wheeling towards a brighter future

Aishah Gire is the chief operating officer at EXSA. Image supplied.

Energy wheeling – the process of using existing transmission and grid infrastructure to deliver energy from a private energy generator to an end-user – will play a key role in driving investment to bring more renewable energy projects to fruition.

If we approach it correctly.

The road to bring wheeling into the mainstream has been a long one, and still has a way to go with the lessons learned thus far shaping the path to scale wheeling to its full potential in the country and on the continent.

Adding wheeling to SA’s energy mix

Although third-party wheeling was approved by Eskom more than a decade ago, several legacy factors remained, which complicated the process in practice.

Critically, tariff structures remained bundled.

In addition, the concept of wheeling – although officially opened – was not widely understood amongst all stakeholders.

As a result, there was a lack of clarity surrounding wheeling tariffs as a subset of bundled tariffs.

This complicated product development for companies – especially energy traders – wanting to wheel through the South African electricity network.

In 2017, to spearhead wheeling-related advocacy across various industry forums, several industry stakeholders collaborated in a push for the model to be opened, accessed, and accepted by all stakeholders.

Significant work was done between the private sector, Eskom, municipalities, and independent advisors to understand the cost of supply components and how these are impacted in a wheeling scenario, as well as to drive knowledge sharing across municipalities.

This allowed existing tariff structures to be unpacked and the future of “true” wheeling to be designed.

While tariffs largely remain bundled, this phase of advocacy, collaboration, and knowledge-building between private companies, utilities, and municipalities enabled the clear understanding of existing tariff structures.

This could then be applied to the wheeling environment to bring the model to customers in a way that made commercial sense and laid the foundations for wheeling at scale.

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Licence to power

The first electricity trading licence was granted by the National Energy Regulator of South Africa (Nersa) in 2009.

Since then, the pace of licence issuance has been exponential, particularly in the last 12 months, with an estimated 23 domestic trading licences issued as of December 2025.

As one of the first energy traders to be licensed in South Africa, the application process was complex and slow to bear fruit.

Time in the market, as well as practical experience, has enabled trading aggregators to build robust relationships with stakeholders in the value chain.

Understanding the execution element at this level is paramount to the successful and accurate passing of energy credits to customers on a timely basis.

Competitive energy market

The South African Wholesale Electricity Market (SAWEM) is set to launch in 2026, bringing excitement about the future of South Africa’s energy trajectory.

But, as the overarching theme of regulatory shifts shows that government is contemplating a future where customers can choose their energy supplier, this enablement of choice brings hurdles which the industry must overcome.

Firstly, for customers to be able to choose their own supplier, more clarity is needed on the necessary rules and guardrails for how this customer choice is enabled.

Secondly, to create the competitive market envisioned, the bundled tariff structure must be addressed to allow for transparency of understanding.

Lastly, supply and capacity are key issues.

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When South Africa’s ageing coal plants are decommissioned, the energy gap will be large.

While this is where renewable energy could provide a solution, grid capacity will need to be opened to facilitate the number of renewable projects that need to come online.

Although the path toward a liberalised South African energy market will not be without its challenges, the strides made in knowledge building, regulatory reform, and private-public collaboration over the last decade are invaluable.

These lessons and partnerships provide the foundations for a future of affordable and accessible electricity that will enable a brighter, more sustainable Southern Africa.