3rd party electricity wheeling fast-tracked in the WC…

Western Cape municipalities are getting electricity wheeling toolkits to help fast-track the implementation of third-party electricity wheeling. It will allow private sector entities to transport power over the grid to other businesses, organisations, or facilities. In this interview with BizNews, the Provincial Minister of Infrastructure, Tertius Simmers, speaks about the benefits of third-party electricity wheeling. Those include: mitigating the impact of load shedding; a reduction in the bulk purchase cost of electricity for consumers; reducing consumer and municipal reliance on ESKOM: providing better electricity price certainty to businesses and commercial electricity consumers; enabling businesses to use renewable energy and reduce threats of export market carbon border adjustment mechanisms, as well as meet their climate change mitigation commitments and/or negate carbon tax obligations; and providing an incentive for investment, with the associated economic development and job creation benefits. – Chris Steyn

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Relevant timestamps from the interview

00:09 – Introductions
00:32 – Tertuis Simmers on what is in the electricity wheeling toolkit
02:11 – On what the benefits are
03:03 – What this means for consumers
04:00 – Will it be cheaper to buy privately owned electricity than Eskom produced power
04:42 – Could this not have an adverse effect on the finance system of municipalities
05:28 – Other initiative like Vodacom and Discovery
06:19 – Other developments at the moment relating to renewable energy in the province
07:49 – how soon will the residents in these municipalities be able to access the private power
08:55 – Conclusions

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Highlights from the interview

Western Cape municipalities are getting electricity wheeling toolkits to help fast-track the implementation of third-party electricity wheeling.

It will allow private sector entities to transport power over the grid to other businesses, organisations, or facilities.

That is expected to ramp up the rate at which provincial municipalities enable the connection of private electricity generators to private consumers.

In this interview with BizNews, Provincial Minister of Infrastructure Tertius Simmers, speaks about the benefits of third-party electricity wheeling.

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“…it reduces the bulk purchase cost of electricity for consumers and for municipalities. It also provides more electricity price certainty to businesses, as well as commercial electricity consumers. It also provides an incentive for investment with associated economic development and job creation benefits.”

Asked if this means that consumers can now access reliable privately-supplied energy instead of unreliable ESKOM-supplied power, Simmer says: “Well, that is the objective of introducing the wheeling toolkit to ensure that…”

As to whether it will it be cheaper for the consumer to buy privately-produced energy rather than ESKOM-generated energy, Simmers says:

“…in the medium to long term and what our pilots have shown in George, where real-time virtual wheeling assessments were done to cost comparison, in the medium- to long term, the cost benefits to the consumer indeed does have a massive impact implication.

“But I think above all, it also ensures that those who generate additional energy through their solar panels or which other form of alternative energy they do produce that there is a cost benefit to them as well for selling it into the grid or the municipal grid by having an agreement with a local municipality.

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“But it will also ensure there’s energy surety and security into the future for the Western Cape in this instance.”

On how soon the privately-produced power will be available, Simmers says: “… as soon as the toolkits are downloaded, and like I said, the system went live yesterday (Monday 23 October).

In other developments, the Western Cape Government also issued letters of award to HLT Advisors t/a Africa International Advisors for the bid relating to Exploring Options for Gas to Power for the Western Cape through conducting a detailed analysis and providing reasoned recommendations including a position paper for the period ending before 31 March 2024.

Additionally, Cresco Advisory has been appointed to provide transaction advisory services to Stellenbosch Municipality for their Independent Power Producer Procurement (MIPPP) Pioneering Project for 3 years.

The launch of the toolkits follows the establishment of the Western Cape Energy Council by Premier Alan Winde in 2022.