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. 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; calculate and apply wheeling refunds automatically; integrate those refunds directly into Eskom’s billing systems; maintain auditable records; and provide a modern user portal for customers, IPPs and electricity traders.
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While Eskom’s existing virtual wheeling rules currently exclude the participation of electricity traders, Enerweb’s architecture will accommodate traders, thus enabling their participation once the Eskom and regulatory landscape allow 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. Despite the optimism surrounding virtual wheeling, Eskom’s roll-out 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.
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