Eskom has awarded a contract to Johannesburg-based Enerweb to develop a software platform to support the rollout of its virtual wheeling product, marking the most concrete step to date in operationalising the new wheeling model, says Chris Yelland, MD of EE Business Intelligence.
The contract, awarded in recent weeks, is intended to enable the automation and scaling of virtual wheeling, which Eskom has positioned as a mechanism to allow electricity generated by independent power producers (IPPs) to be allocated virtually to customers across the national grid, including customers connected at low voltage and those located within municipal distribution networks.
Yelland says the Enerweb appointment represents “the first real step towards deploying virtual wheeling at industrial scale” following Eskom’s earlier proof-of-concept project with Vodacom during 2023 and 2024.
While virtual wheeling is widely viewed as a potential enabler of broader private-sector participation in electricity supply, its rollout has taken place against a backdrop of regulatory uncertainty and legal disputes linked to South Africa’s still developing electricity trading framework.
Automation to support virtual wheeling rollout
Eskom has previously acknowledged that virtual wheeling cannot be expanded using manual processes, given the expected volumes of generation, customer participation and financial settlements involved.
The Enerweb platform is expected to consolidate generation, consumption and billing data into a single digital environment, automate wheeling refund calculations and integrate those refunds into Eskom’s billing systems.
According to Yelland, the platform is being designed to process interval-based metering data, including time-of-use information, from NRS-compliant meters for customers connected directly to Eskom as well as those supplied through municipal distribution networks.
“This kind of system has to handle very large volumes of interval data and complex settlements if virtual wheeling is to scale,” Yelland says.
The system is also expected to maintain auditable settlement records and provide a user interface for customers, IPPs and, potentially, electricity traders.
Although the current Eskom virtual wheeling rules exclude electricity traders, Yelland notes that the Enerweb platform has been architected to accommodate traders once the regulatory framework allows for their participation.
“This is important because many smaller commercial and industrial customers are likely to access the market through traders rather than contracting directly with generators,” he says.
Eskom launched virtual wheeling as a commercial product for low-voltage customers in early 2025 with Vodacom as the first customer to implement the model at scale using electricity from multiple renewable energy IPPs to offset its national consumption footprint.
However, medium-voltage customers and licensed electricity traders have been excluded pending the finalisation of electricity trading rules by the National Energy Regulator of South Africa (NERSA).
Trading rules and regulatory constraints
The absence of approved trading rules has been a point of contention in the sector.
Eskom has argued that NERSA cannot lawfully issue electricity trading licences without a formal regulatory framework governing trading conduct, settlement processes and risk allocation.
Several trading licences issued by NERSA were challenged by Eskom in court – a move that has slowed participation by licensed traders in wheeling and virtual wheeling arrangements.
Following intervention by the Minister of Electricity and Energy, NERSA has since published draft electricity trading rules for public comment with public hearings scheduled this month and final rules expected by the end of the first quarter of 2026.
Once adopted, the rules are expected to define how traders participate in wheeling and virtual wheeling, including settlement mechanisms and data flows.
Yelland says Eskom’s earlier proof-of-concept demonstrated that virtual wheeling is technically feasible but also highlighted “the sheer administrative burden of trying to run these arrangements manually”.
He adds: “When you have multiple generators and thousands of meters, automation becomes a prerequisite – not a nice-to-have.”
The Enerweb system is expected to provide automated settlement and near real-time visibility of generation and allocation performance, addressing a key constraint in scaling wheeling arrangements.
Enerweb has previously developed settlement platforms for the Southern African Power Pool and the East African Power Pool and has supported electricity traders operating in the region.
Municipal participation and distribution interfaces
One of the defining features of virtual wheeling is its ability to operate across municipal supply areas without requiring direct municipal participation.
Under the current model, Eskom calculates wheeling refunds for municipal-supplied sites based on time-of-use data provided by customers.
While this approach has enabled early participation, it has also raised questions about longer-term municipal revenue models and governance in a more competitive electricity market.
“This model effectively works around uneven municipal readiness but it does not resolve the underlying distribution governance questions,” Yelland says.
The awarding of the Enerweb contract signals Eskom’s intention to position virtual wheeling as part of the transitional architecture leading to the future wholesale electricity market.
The first phase of the South African Wholesale Electricity Market is scheduled to go live in April, subject to regulatory readiness.
According to Yelland, virtual wheeling is expected to serve “as a near-term mechanism for enabling private procurement and as a building block for more formalised market trading arrangements” as regulatory frameworks are finalised.
