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A time to Change: Vodacom and Eskom Forge a Virtual Wheeling Agreement

Published September 21, 2023
9 months ago

At a monumental talk last year between Vodacom CEO Shameel Joosub, former Eskom CEO André de Ruyter, and Jan Oberholzer, former COO of Eskom—a game-changing proposition was born. The critical discussions shed light upon the crucial electricity issues at hand and the anticipated load-shedding problems that South Africa has been facing.

A novel solution, the Virtual Wheeling Agreement, was proposed, setting in motion a chain of events that could drastically alter the country’s electricity landscape. This arrangement links varying off-take sites, crossing municipal borders, to independent power producers (IPPs) through the Eskom and municipal grids. Practically speaking, a business can now purchase electricity from an IPP and deliver it via the Eskom grid, receiving a refund for the non-Eskom IPP electricity consumed.

Over the past year, Vodacom and Eskom have been diligently working behind the scenes to flesh out the details, designing a bespoke virtual wheeling platform to regulate these refunds. As at August 30, 2023, this has resulted in a formalized virtual wheeling agreement between the two corporations.

Joosub projects that the deal will promote green energy policies, inject new energy into the national energy grid, and potentially safeguard Vodacom billions if it can mitigate or eliminate the frequent load-shedding scenarios the nation experiences—especially as more establishments get onboard.

This move might mark a turning point for the beleaguered telecommunications industry currently spending an obscene amount on backup power solutions due to the frequent power outages, with Vodacom alone reportedly investing above R4 billion in the past four years.

In Joosub's view, this agreement is the first step of many to create a more resilient business environment and confront South Africa's ongoing energy crisis headlong, inspiring other large-scale firms to shift towards IPPs.

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