There are very few energy suppliers in South Africa with a demonstrated track record of delivering large renewable energy projects to private buyers. Buyers who wish to procure renewable energy must ensure that they partner with reputable companies who have actually delivered projects in line with their promised timelines and tariffs. Buyers should also ensure that Eskom has guaranteed the grid connection capacity for the projects they are considering, as many companies offer projects that have no secured grid connection capacity. It is critical that buyers interrogate the project timelines and tariffs and ensure that these are realistic and reasonable.

Rolling PPAs offer a great way to decarbonise your energy supply while saving money. They reduce the risks associated with long-term agreements and provide the flexibility to choose alternative suppliers if the PPA is terminated . These terms reduce the likelihood of unforeseen changes to regulations and laws around energy supply and tariffs which may negatively impact your savings in the future. They are also less onerous in terms of the kinds of payment guarantees which buyers must provide under longer-term PPAs.

Wheeling is the transportation of energy from a generator (seller), over the transmission and distribution grid, to a customer (buyer). A wheeling transaction is the financial accounting treatment of the energy on the buyer’s electricity bill.

The benefits are that the buyer only has to enter into a wheeling transaction with a seller instead of having to design, build and commission their own renewable energy projects.

Why can you only wheel to Eskom sites?

Eskom has had a wheeling policy in place since 2009. Not all distributors (municipalities) have unbundled tariffs (time of use tariffs) or wheeling policies in place to allow wheeling and that can be used to determine wheeling charges.

Municipalities generally do not have the necessary wheeling and use-of-system tariffs in place, nor the necessary billing, metering and data processing systems to accommodate time-of-use wheeling transactions across both Eskom and municipal networks, to a customer supplied by the municipality.

Trading occurs when a company buys power from multiple generators and sells it to multiple buyers. There are two types of PPAs, one between the trader and the generator and the other between the trader and the buyer. Wheeling is a term for the use of the grid to deliver energy from one party to another party.

A kW is the amount of energy that a generator can supply, like the size of a water pipe. A kWh is the flow of energy during one hour, like the amount of water that flows through the pipe in one hour.