By: Aishah Gire - Chief Operating Officer at EXSA

South Africa's renewable energy industry has seen significant traction within the last ten to fifteen years, with a notable ramp-up in the last six months, and is poised for significant growth as new regulations seek to open a competitive wholesale market as early as next year.

Energy wheeling (wheeling) – the process of using existing transmission and grid infrastructure to deliver energy from a private energy generator to an end-user – will play a key role in driving investment to bring more renewable energy projects to fruition. If we approach it correctly.

The road to bring wheeling into the mainstream has been a long one, and still has a way to go with the lessons learned thus far shaping the path to scale wheeling to its full potential in the country and on the continent.

Advocacy and collaboration bring wheeling into the fold

Although third-party wheeling was approved by Eskom more than a decade ago, several legacy factors remained, which complicated the process in practice. Critically, tariff structures remained bundled. In addition to this, the concept of wheeling – although officially opened – was not widely understood amongst all stakeholders. As a result, there was a lack of clarity surrounding wheeling tariffs as a subset of bundled tariffs. This complicated product development for companies – especially energy traders – wanting to wheel through the South African electricity network.  

In 2017, to spearhead wheeling-related advocacy across various industry forums, EXSA collaborated with several industry stakeholders in a push for the model to be opened, accessed, and accepted by all stakeholders. Significant work was done between the private sector, Eskom, municipalities, and independent advisors to understand the cost of supply components and how these are impacted in a wheeling scenario, as well as to drive knowledge sharing across municipalities. This allowed existing tariff structures to be unpacked and the future of “true” wheeling to be designed.

While tariffs largely remain bundled, this phase of advocacy, collaboration, and knowledge-building between private companies, utilities, and municipalities enabled the clear understanding of existing tariff structures. This could then be applied to the wheeling environment to bring the model to customers in a way that made commercial sense and laid the foundations for wheeling at scale.  

Electricity trading – decoding early licence requirements

The first electricity trading licence was granted by NERSA in 2009. Since then, the pace of licence issuance has been exponential, particularly in the last 12 months, with an estimated twenty-three domestic trading licences issued as of December 2025.

EXSA received its trading licence in November 2022. As one of the first energy traders to be licensed in South Africa, the application process was complex and slow to bear fruit. However, engagements with NERSA and Eskom during the period allowed for invaluable learning and understanding of the licensing requirements to support and spearhead the refinement of the Eskom license process for the industry and future applicants.

In the same vein, EXSA’s first pilot wheeling transaction, where excess power was wheeled to a customer in December 2022, allowed for testing and execution on Eskom-related wheeling and administrative processes and resulted in an understanding of how to execute in a complex and changing environment. These valuable lessons meant EXSA could start official “higher volume” trading to five customer sites six months later.

Time in the market, as well as practical experience such as these pilots, has enabled trading aggregators like EXSA to build robust relationships with stakeholders in the value chain.  Understanding the execution element at this level is paramount to the successful and accurate passing of energy credits to customers on a timely basis.

Regulatory reform is on our doorstep, but the path is not smooth

EXSA is currently looking to participate in the South African Wholesale Electricity Market (SAWEM), which is set to launch in 2026, and we are excited about the future it proposes for the energy trajectory of South Africa.

But, as the overarching theme of regulatory shifts shows that government is contemplating a future where customers can choose their energy supplier, this enablement of choice brings hurdles which the industry must overcome.

Firstly, for customers to be able to choose their own supplier, more clarity is needed on the necessary rules and guardrails for how this customer choice is enabled. 

Secondly, to create the competitive market envisioned, the bundled tariff structure must be addressed to allow for transparency of understanding.  

Lastly, supply and capacity are key issues. When South Africa’s aging coal plants are decommissioned, the energy gap will be large. While this is where renewable energy could provide a solution, grid capacity will need to be opened to facilitate the number of renewable projects that need to come online.  

Although the path toward a liberalised South African energy market will not be without its challenges, the strides made in knowledge building, regulatory reform, and private/public collaboration over the last decade are invaluable. These lessons and partnerships provide the foundations for a future of affordable and accessible electricity that will enable a brighter, more sustainable Southern Africa.