Last week, Vodacom South Africa, Eskom, and the National Business Initiative (NBI) joined forces to shine a spotlight on the critical issue of power generation.

The event, which was held at Vodacom headquarters in Midrand late last week, and attended by government and independent power producers, was not about assigning blame for the power crisis that the country is currently grappling with, with 2023 being heavily dominated by near constant load shedding. Rather, it was heavily solutions focused, with a variety of speakers sharing their knowledge and insight on power generation in South Africa.

Understandably, it is easy for the strides and progress that is being made in some respects to be lost in the dark. However, strides towards a sustainable solution to our current power crisis are being made nonetheless.

As the cliché goes, every cloud has its silver lining, and for South Africa, that silver lining to the dark cloud of constant load shedding may just be an approach called virtual wheeling. In a nutshell, wheeling refers to the transportation of electric energy (megawatt-hours) from within an electrical grid to an electrical load beyond the boundaries of the grid itself.

The focus of Vodacom’s event included the announcement of the first, historic virtual wheeling agreement signed by Eskom and Vodacom South Africa.

The companies committed to sharing insights into their key learnings and understandings of virtual wheeling, expressing their hope that ‘’it would create a blueprint for other corporates looking to achieve their decarbonisation goals while positively contributing to the stability of South Africa’s electricity grid.’’

The broad concept of wheeling is not new, having first been approved in South Africa in 2008. Traditional wheeling typically involves a one-to-one relationship between the IPP and a buyer, using the national grid to convey their energy.

While traditional wheeling is fairly common globally, it has certain limitations for companies with complex operating environments. The virtual wheeling solution addresses these challenges primarily by incorporating smart metering, removing the need to amend the customer’s supply agreements, and extends wheeling to customers connected at low voltage. In addition, this mechanism supports the trade of renewable energy certificates that are utilised for decarbonisation efforts.

The partnership between one of the countries biggest telcom providers and the beleaguered power utility is also intended to set the tone for ‘new models of co-operation between business, governments, international organisations and civil society to deliver progress and scale towards sustainable economic growth. It was a fitting missive, as the event highlighted that the power generation crisis is too big for any one company to tackle completely on its own.

 “Having co-developed the virtual wheeling solution with Eskom and concluded our agreement, we estimate that we will move approximately 30% of Vodacom South Africa’s power demand onto renewable sources, a significant step towards our renewable energy ambitions,” commented Sitho Mdlalose, the CEO of Vodacom South Africa.

‘’We are really excited that we have the opportunity to contribute to the national grid, and truly hope that through sharing our understanding of virtual wheeling and engaging both government and private participants on this solution, similar actions can be taken by other businesses across the country,” he added.

"Virtual wheeling allows industrial and commercial customers connected to either Eskom or municipal networks to buy electricity directly from IPPs. This has a knock-on effect of increasing security of supply and reducing load shedding by unlocking investments in new generation capacity by IPPs at no cost to Eskom or the taxpayer,” explained Monde Bala, Eskom’s Distribution Group Executive.

Virtual wheeling does not require changes to existing Electricity Supply Agreements (ESAs) and is not limited by municipalities that do not have wheeling frameworks. However, Eskom will only process the refund of an off-taker or municipality whose Eskom account is in good standing," he elaborated.

One cannot talk about power generation in 2023 without also talking about sustainability, since efficient power is intricately tied up with environmental concerns and the very urgent need to address climate change.

To this end, the CEO of the National Business Initiative, Shameela Soobramoney, explained the importance of virtual wheeling for sustainable energy solutions, noting that virtual wheeling effectively enables the transmission of renewable energy across different parts of the grid in a practical and accessible way. This, he continued, makes it not only a business imperative, but a pivotal component of the Just Energy Transition. ‘’As business leaders, and from a strategic corporate standpoint, the significance of virtual wheeling cannot be overstated as an indispensable lever in South Africa's burgeoning renewable energy market,” he stressed.

While Vodacom and Eskom’s virtual wheeling is in its pilot phase at the moment, it is largely expected to come more fully into effect by the beginning of 2024, which now, is only three months away. Hopefully, 2024 will be characterized by this and other innovative solutions that prove the old optimistic adage that there is always light at the end of the tunnel, if for no other reason than South Africa’s 2023 has seen its fair share of darkness.