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Report provides status and guidance on wheeling for municipalities

Home Engineering Electrical Report provides status and guidance on wheeling for municipalities

THE South African Local Government Association (SALGA) has published a report on “Wheeling in South African Municipalities” which forms part of the Municipal Embedded Generation Support Program and is a collaborative effort by SALGA, Sustainable Energy Africa (SEA), the Western Cape Government, GIZ, GreenCape, Eskom and the AMEU.

Downloadable from the SALGA website, the easy-to-follow 22-page report includes an overview of the steps municipalities must take to facilitate electricity wheeling in their jurisdictions and provides an overview of the progress municipalities have made in this regard.

“Wheeling is a relatively new development for most municipal distributors, and while a handful are implementing wheeling or have made important progress in this regard, most are still in the early stages of considering policies and processes to enable wheeling,” the report says.

The report says it aims to:

  • Provide an overview of wheeling in the electricity distribution industry.
  • Describe the wheeling scenarios applicable to municipal distributors.
  • Define the details of wheeling including the generator connection process, metering and billing, wheeling tariffs, and the impact of wheeling on municipal revenue.
  • Detail the steps municipal distributors should follow to implement wheeling.
  • Present the progress towards implementing wheeling in the leading municipal distributors.

Wheeling is the delivery of electrical energy from a power producer to an end-user through a distribution or transmission network. Wheeling allows independent power producers (IPPs) to sell electricity directly to customers, or offtakers, while paying for the use of the electricity grid owned by a third party (for example, a municipal distributor or Eskom) through use-of-system (UOS) charges.

The report says that wheeling is not a new concept and that Eskom has had wheeling contracts through municipal grids for years. When a municipality procures energy from an IPP this could entail wheeling across Eskom’s grid. In South Africa, the term “wheeling” has come to denote the set of transactions between IPPs, traders and offtakers that involve the use of public distribution grids.

The report outlines various wheeling scenarios and provides links to useful guidelines published by the Nelson Mandela Bay Metro, George Municipality, the City of Cape Town, and the City of Ekurhuleni.

The National Energy Regulator of South Africa (Nersa) has come under fire from the Association of South African Chambers (Asac) for not providing wheeling tariff guidelines. Without guidelines, the cost structure of IPPs distributing electricity to buyers is uncertain and dependent on municipal decision-makers.

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