After the conclusion of a year-long electricity ‘wheeling’ pilot project, the City of Cape Town is opening its electricity grid to private electricity sales and trading.

During the pilot phase, 562 800 kWh of renewable electricity was successfully wheeled.

The pilot involved three traders (Enpower Trading, Etana Energy and Equites Fund Property), three generators (FairBridge Mall, Brackenfell; Constantia Shopping Mall; and Equites Property Fund Limited, Parow Industria) and three off-akers (Shoprite Head Office, Brackenfell; Growthpoint Properties, City Centre; and APF Portside, City Centre).

Mayor Geordin Hill-Lewis announced that the city would now enter the next phase, whereby it would promote the scaling up of power trading across the Cape Town electricity grid based on bilateral and multilateral trading agreements.

“This is an exciting leap forward to diversify our electricity supplier-base beyond Eskom to a future of decentralised electricity trading in South Africa,” Hill-Lewis said, describing the opening of the network to traders as the start of a changing role for municipalities in the energy space.

The development comes while Eskom Distribution legally contests the recent award of licences to several new electricity traders, despite the fact that several other traders are already operating nationally.

Eskom has objected to allowing more than one licensee to provide electricity in the same area, and argues that the National Energy Regulator of South Africa (Nersa) approved the most recent licences in the absence of fully developed trading rules.

Eskom has written to Nersa requesting its reason for decision before proceed with the review application and insists it remains committed to accelerating the reform of the rules to enable a competitive energy market.

"Eskom, like all other participants in the electricity industry, operates based on established rules and subscribes to a rule-based transition.

"However, this adherence to the rules has been misinterpreted as anticompetitive behaviour, which Eskom firmly denies," the State-owned company says.

It adds that it will collaborate with various stakeholders to ensure that a competitive market is developed through a consultative legal framework.