What is Wheeling of Power?
One way of delivering renewable energy is through the deployment of a renewable energy system (PV plant) at the client location (on the roof-top or any available space within the premises). For this option, however, the availability of adequate land is a prerequisite for the installation of a system with sufficient capacity. An alternative to this is the off-site power generation option which enables a business to purchase and access power from an electricity generator that is not located at their premises, but elsewhere.
Here, electricity is transported from an energy generator (solar PV plant) to the client using the existing electricity network. This process is referred to as wheeling in the Power Industry. A wheeling agreement is typically signed between the owner of the energy generator (Solar PV plant) and the owner of the electricity network (ESKOM/ Municipality).
To understand the concept of wheeling better, take the example of a client, say, mining company in Northwest province, with a high electricity demand of more than 10 million kWh per annum. If the company does not have sufficient space on its premises to set up a solar plant capable of meeting all its electricity requirements, the wheeling mechanism would be an effective, alternative solution for it to source electricity. The company will sign a virtual PPA agreement with a solar developer company like Cosmic, which will then develop, finance and build a solar farm to meet the needs of the company in a region like Northern Cape (owing to the availability of solar in abundance) and sign a wheeling agreement with ESKOM/ Municipality in that region. The electricity produced from the solar farm will be delivered to the electricity network (managed by ESKOM/ Municipality), and the customer will subsequently receive credit to their existing electricity account (from ESKOM/ Municipality).
Wheeling enables developers like Cosmic to generate renewable energy where resources such as land and sunshine are found in abundance, and supply electricity to clients situated in diverse locations, allowing them direct access to clean, and reasonably priced energy. In doing so, it facilitates the diversification of electricity source for the client to choose its preferred electricity supplier.
