This concept note is designed as a contribution to ongoing discussions around new wheeling models that are easy to implement, will significantly boost generation investment and, in the context of ongoing market reforms, pave the way toward a new competitive market structure.
The note offers an evaluation of the core challenges associated with the current “traditional” wheeling framework and highlights those associated with Eskom’s new and promising “Virtual Wheeling” model. It proposes the further evolution of the Virtual Wheeling concept by means of introducing an Electricity Credit Token (ECT) System. By reconfiguring payment flows, lowering barriers to entry, and increasing the ease of secondary trading, the ECT system is designed to address some of the sector’s current challenges, mitigate risks and thereby extend the reach of the system to unlock generation investment at scale. We hope to stimulate further investigation into and refinement of this and/or other potential Virtual Wheeling models to propel progress in this critical domain.