Electricity and Energy Minister Dr Kgosientsho Ramokgopa has described the wheeling framework approved by the regulator as highly “consequential” for the sector, as well as for meeting government’s ambitions to diversify generation to include more renewable energy and independent power producers.

The framework was approved by the National Energy Regulator of South Africa (Nersa) in March, but was officially unveiled by Ramokgopa at a briefing that included Nersa chairperson Thembani Bukula.

Bukula stressed that wheeling was not new, with over 100 such arrangements having already been implemented over the past 15 years.

However, he said the new framework provided a standardised set of rules for third-party wheeling across the entire network, including wheeling in and out of municipal supply areas.

It caters for non-discriminatory access, stipulates that charges be cost-reflective, and it also allows for generators licensed or registered with Nersa to participate in wheeling transactions at low-, medium- and high-voltage levels.

In addition, unbundled use-of-system charges could not discriminate between customers supplied by the network licensee and those supplied through bilateral or multilateral transactions, including ones facilitated by traders.

Eskom has indicated that it will launch a legal objection to Nersa’s most recent decision to license additional traders, but Bukula says the regulator is yet to receive information from Eskom regarding its case and that the licence approvals were made in line with legislation.

He added that the newly enforced Electricity Regulation Amendment Act also catered for the licensing of traders in anticipation of greater market competition in future.

The immediate constraint, however, related to insufficient grid infrastructure, which Bukula said Nersa was looking to unlock in the near-term through its recent approval on new curtailment rules.

These initial rules class curtailment as an ancillary service for a period of three years, during which the rules will be updated. Bukula estimated that up to 3 000 MW of grid capacity could be unlocked.

Besides clarifying the rules for system access, Ramokgopa argued that the framework also governed fees for accessing the network, which he likened to charges paid for use of toll roads.

He added that the framework would stimulate generator competition, spur investment and enable export-facing businesses to access the green electricity they needed to trade in jurisdictions where carbon border adjustment mechanisms were being introduced.

Describing the framework as the “most consequential intervention” undertaken in the electricity sector by the current administration, he argued that it would “help us remake the energy and electricity landscape”.

“It is also consistent with our objective of ensuring that we achieve energy security in the country and we are able to diversify generation sources so that we don’t only rely on Eskom.”