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Wheeling is coming. And it will change everything

By Larry Claasen

I know it’s hard to believe now but South Africa could very well be in a better position when it comes to energy security and even electricity pricing in a few years time.

Before you question my sanity, hear me out.

You might not have noticed, but the South African electricity market is preparing itself for deregulation.

This essentially means municipalities are figuring out the engineering, regulatory and financial models regarding wheeling, which is the practice that will allow Independent Power Producers (IPPs) to transmit electricity over their grids.

The hard lessons are being learned now, but once they figure it out, it not only means they have increased energy security in no longer being dependent on the unreliable Eskom for electricity.

It also means the IPPs will be able to sell electricity directly to end users, at a discounted rate.

And it won’t just be large scale IPPs selling into the grid. Warehouse operators will look at their expansive roofs and see an opportunity to generate revenue from selling electricity derived from the solar cells they plan to put on it.

They won’t be alone. Business parks will soon put solar panels on their roofs and try to entice tenants by including energy security and cheap electricity as part of the rental package.

Not everyone is learning

This bright future, however, depends on how serious a municipality takes wheeling.

If they treat it as a curiosity, and don’t make the necessary investments now, the chances are strong they will regret it in a few years time, when fed up businesses decide to shut down their operations, and move to municipalities that offer a secure supply at a discounted rate.

The future is being built now, and any municipality or metro that do not take wheeling seriously, will soon wonder why their neighbours are able to attract investment, while they are struggling to hold onto their businesses.

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