The head of Discovery Green, the renewable-energy trading unit of JSE-listed Discovery, is forecasting that trader‑led wheeling will become the dominant commercial model in the South African electricity market in 2026.

In a wide-ranging statement, Discovery Green CEO Andre Nepgen highlights that the wheeling framework has matured and that the market is, thus, poised to move beyond one‑to‑one bilateral agreements and toward more aggregated solutions.

“While the proposed South African Wholesale Electricity Market remains in development, the most immediate impact for large energy users is coming from the maturing wheeling framework, with clarified participation rules, standardised processes across utilities, and the rise of trader‑led, portfolio‑based models that simplify contracting and balance risk.”

These developments, he says, are expanding access to supply and enabling companies to act ahead of any finality on future market structures.

“For our clients, and other large energy users, the wheeling rules, not future market constructs, are what matter right now.

“As trader-led models scale, businesses can secure renewable power with greater flexibility and less complexity, aligning supply to their operational needs while managing risk through aggregation.”

He argues that such models are redefining how electricity is priced, traded and integrated into energy strategies, while also enabling renewable energy to function as a scalable market rather than a collection of independent, bespoke transactions.

“Aggregation is what turns renewable energy from a risk into a predictable system that works for business.

“This evolution marks a critical step in the sector’s maturation, enabling flexibility, resilience and scale that were previously difficult to achieve,” he argues.

SOLAR COST PRESSURES

Besides wheeling, Discovery Green anticipates that the electricity market will continue to be affected by South Africa’s well-documented grid constraints. However, the company is also anticipating a new risk in the form of increased solar input costs, amid an impending change to Chinese export policies and rising silver prices.

The decision by China to remove a 9% value-added-tax export rebate on solar modules and wafers from April has already resulted in the inclusion of ‘policy adjustment clauses’ to automatically hike prices the moment the rebate disappears, Nepgen says.

In addition, the price of silver, a critical component on the solar cell that collects electricity, has hit record high prices, nearly doubling in two years.

“This, combined with the movement to high-efficiency N-type panels which require significantly more silver exacerbates the issue.

“Despite the recent strength of the rand, even this is no longer enough to offset dollar-denominated logistics and hardware increases.

“With solar panels, inverters, and batteries all priced in US dollars, the 10% to 15% hike in global factory-gate prices is overwhelming any marginal gains in the rand’s exchange rate,” he warns.