Understand electricity wheeling in South Africa
Electricity generated in one place, sold to a buyer in another, delivered across the existing grid. Here is how it works.
A wheeling transaction
Energy exported by the generator is reconciled to the buyer's account, not physically traced.
What is third-party electricity wheeling?
The delivery and financial allocation of electricity from a generator to a buyer using a third-party transmission or distribution network.
A generator such as a solar plant, wind farm or embedded generator sells electricity to an off-taker under a Power Purchase Agreement and exports it into the Eskom or municipal grid. The buyer consumes electricity at another connection point. The network owner then applies the agreed wheeling methodology, metering data and tariff rules to reconcile the energy and adjust the buyer's account.
Wheeling is therefore both a technical network access arrangement and a commercial accounting arrangement. The generator must be properly connected and metered, the off-taker contractually linked to the transaction, and the network service provider able to calculate charges, energy credits and losses.
How a wheeling transaction works
Full step-by-step guide- 1
A generator produces electricity
An IPP, embedded generator or renewable project generates power and exports it into the grid, with a compliant connection, suitable metering and the necessary NERSA licence or registration.
- 2
A buyer signs a PPA
The off-taker enters a Power Purchase Agreement setting the price, term, volume, risk allocation, change-in-law clauses and payment terms.
- 3
The network delivers the transaction
Electricity flows into the interconnected network. The buyer stays connected to Eskom or a municipal distributor, which remains responsible for physical delivery.
- 4
Meter data is collected
Compliant metering at the generator and off-taker points, governed by the South African Distribution Metering Code, captures and verifies interval data.
- 5
Billing and reconciliation
The network owner reconciles export, consumption, losses, network charges and wheeling credits. Deficit energy is still supplied under the customer's normal arrangement.
- 6
Charges are settled
Use-of-system, network, administration charges, losses and levies may still apply. NERSA's rules require use-of-system charges regardless of how the energy is procured.
Most wheeling projects succeed or fail at the data layer
Accurate meter data, billing logic, reconciliation reports and exception management are what turn wheeling rules into a transparent, working process. Meerkat Energy supports utilities and project teams with metering data, reporting and reconciliation platforms that make this layer operational.
Talk about metering & reconciliation
Who participates in a wheeling transaction?
Five roles have to line up: commercially, technically and contractually.
Generator / IPP
Produces and exports electricity: a renewable project, embedded generator or utility-connected plant.
Off-taker / buyer
Buys electricity under a PPA. Usually large users: industry, commercial property, mines, data centres or multi-site businesses.
Network service provider
Owns or operates the network used for the transaction: Eskom, the NTCSA, a municipal distributor or another licensee.
Trader
Buys and sells electricity between generators and off-takers. Requires a NERSA-approved trading licence.
Metering & data provider
Ensures interval meter data is collected, validated, stored, reconciled and reported correctly. The operational backbone.
The legal & regulatory framework
Wheeling sits inside a defined set of national laws, regulatory rules and codes. These are the instruments that matter most.
Electricity Regulation Act, 2006
Establishes the national framework and makes NERSA the custodian and enforcer, regulating generation, transmission, distribution and trading.
Electricity Regulation Amendment Act, 2024
Provides for the Transmission System Operator and an open market platform for competitive trading. Commenced 1 January 2025.
NERSA Rules on Third-Party Wheeling, 2025
Central to the current framework: network access, use-of-system charges, licensing, tariff unbundling and compensation mechanisms.
SA Distribution Metering Code
Governs metering installation design, commissioning, testing, data collection, verification and storage.
Where do you fit in?
Wheeling looks different depending on where you sit. Start with the path built for you.
For municipalities
Confirm policy readiness, model the revenue impact and build a framework you can actually bill.
For businesses & off-takers
Understand your load profile, check eligibility and model the business case against your current tariff.
For IPPs & traders
Confirm your grid connection route, NERSA status, metering and the agreements you need to wheel.
Common questions, answered plainly
Does wheeling mean I get electricity directly from a solar farm?
Not physically. The grid is interconnected, so electrons are not traced from generator to buyer. Eskom's policy states that third-party wheeling does not deal with the flow of electrons, but with the accounting mechanism used to reconcile generated and consumed energy.
Does wheeling remove all Eskom or municipal charges?
No. Use-of-system charges, network charges, administration charges, losses and levies can still apply. NERSA's rules explicitly state that use-of-system charges shall not be avoided by a third-party wheeling transaction.
Does wheeling stop load shedding?
Not by itself. Wheeling is a commercial and accounting mechanism using the existing grid. It can help procure renewable or private electricity, but does not guarantee uninterrupted supply without storage, backup or firm supply arrangements.
Can low-voltage customers participate?
At national rule level NERSA allows generators at low, medium and high-voltage levels to participate, subject to the existing network. Specific municipal programmes may initially limit participation to medium and high voltage, as in Cape Town's first one-to-one programme.
Who sets the electricity price?
The energy price is agreed commercially between the generator, trader and buyer through a PPA. The network service provider does not usually set the PPA price, but applies approved network, wheeling and administration charges.
What is the biggest implementation challenge?
Often it is not the PPA. It is the operational layer: compliant metering, reliable data, correct billing logic, monthly reconciliation, exception handling and transparent reporting.
Laws, tools & templates in one place
View all resourcesNERSA Rules on Third-Party Wheeling
Principles, qualifying criteria, use-of-system and administration charges.
Eskom Wheeling
Generator connection requirements, charges and supply-agreement amendments.
City of Cape Town Wheeling
A working municipal example of one-to-one bilateral wheeling.
Western Cape Wheeling Toolkit
Implementation guidance, tariff tools and standardised agreement templates.
Find out whether your organisation is ready for wheeling
Many wheeling projects succeed or fail at the data layer: accurate meter data, billing logic and monthly reconciliation. Work through a structured readiness check, or talk to a team that builds the metering and reconciliation platforms behind real wheeling transactions.