Electricity Transmission
Wheeling is the process of transmitting electricity from one location to another through a transmission or distribution network owned by a different entity than the generator or the consumer. It involves the use of existing infrastructure to move electricity from one point to another, often over long distances.
The purpose of wheeling is to allow generators to access customers who are not located within their immediate vicinity, while also providing customers with access to electricity generated from renewable sources. This can help reduce the cost of electricity for consumers and promote the development of renewable energy projects.
Wheeling is regulated by government agencies, which specify the terms and conditions for third-party access, including the rates that can be charged, the technical requirements for connecting to the grid, and the responsibilities of different parties involved in the transmission and distribution process.
- When a customer generates electricity from a renewable energy source and wants to sell the excess electricity back to the grid.
- When a customer is connected to the grid and wants to receive electricity from a generator located elsewhere.
- When a generator wants to supply electricity to a customer located outside of its immediate vicinity.
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However, there are certain technical requirements that must be met before wheeling can take place. These include compliance with relevant grid codes, the provision of appropriate metering and monitoring equipment, and adherence to safety and quality standards. Additionally, the ERA requires that all parties involved in wheeling arrangements enter into a formal agreement that outlines the terms and conditions of the arrangement, including the rates that will be charged, the responsibilities of each party, and any technical requirements.
According to the Electricity Regulation Act and NERSA’s Transmission Grid Code and Distribution Network Code, all customers (transmission and distribution connected generators and loads) are provided non-discriminatory access to the grid to allow for energy to be delivered or exported. However, third party wheeling of energy is currently subject to the buyer being connected on a medium-voltage (MV) or higher-voltage networks and being on a time-of-use (TOU) tariff.
All generators (private and public) must be licensed/registered to generate and supply the network with electricity. To ensure accelerated access to the open grid, Government has raised the threshold for private self- or distributed generation power plants from 1MW to 100MW to only now having to be registered with NERSA, that is, not requiring a licence. The generator must apply to Eskom for grid connection and pay for a cost estimate letter to be issued, then if the project is to proceed to apply and pay for a budget quote and pay the connection charges quoted in the budget quote.
The customer whose account(s) the energy will be wheeled to, must sign an amendment agreement to their Electricity Supply Agreement to have the account adjusted for the wheeled energy based on the Gen-wheeling tariffs.
The generator must to make the budget quote effective to proceed with the connection, sign the “connection and use-of-system agreement” and nominate the buyer(s) of the wheeled electricity in this agreement.
The buyer(s) can be another Eskom customer, a municipality, or a customer within a municipal network. The buyer(s) will be required to sign an amendment agreement and pay/update security deposits.
If one of the parties buying the energy is located within municipal network, the municipality would be the party to sign the amendment agreement with Eskom (not the buyer) and must agree to allow the wheeling transaction.
Currently wheeling is not allowed for generators and load customers connected at low-voltage (<1 K, but this option is being investigated)
To understand how you can generate additional revenue from wheeling, please contact Carbon Zero Solar for information, and assistance.
