In 2019, 2020 and 2023, South Africa experienced the worst of its loadshedding crises on record.1 The country urgently needed new generation capacity, but Eskom and the state were only able to add it slowly while regulatory and planning regulations made it challenging for large private generators to participate outside tightly controlled public procurement programmes.
This push-me-pull-you paradox hamstrung the market. South Africa had an acute need for additional power, but the prevailing market structure made it difficult for private capital to deliver at scale. The breakthrough came through a mechanism that, at the time, wasn’t believed to have the capacity for widescale deployment – electricity wheeling. This structure allowed private generators to inject electricity into the grid at one point and have it credited against a buyer’s consumption at another. All that changed was the contractual flow of power and money.
For years, wheeling was perceived as too complex and risky, effectively unbankable and constrained by regulatory hurdles and financial risks. Fast forward to May 2026 and much of that early scepticism has gone. Wheeling has become a core pillar of corporate energy strategies. It is rapidly becoming a primary channel through which private capital flows into new generation projects, enabling large‑scale private investment in South African power at a pace that would have been unthinkable a few years ago.
The Great Acceleration
The pivotal moment came in 2020, when SOLA reached financial close on South Africa’s first private renewable wheeling project – a 12 MWp solar facility supplying Amazon. On paper, 12 MWp was a modest amount of capacity, but it was a deal that made the market rethink the potential of wheeling.
The Amazon deal proved that a privately developed renewable project could be financed, built, and wheeled across the grid to a corporate offtaker. And it demonstrated that this could be done within the existing regulatory framework, with bankable contracts, and at a price that worked for both sides.
In 2022, NERSA lifted its licensing requirements and changed the potential scale of wheeling projects. SOLA signed an agreement with Tronox to provide 256MWp, which was more than 20 times the size of the Amazon deal. It was a definitive step-change in wheeling capacity and potential, proving that the model could move into the private power market.
Today, wheeling is a viable option for almost any business. It offers a viable alternative to buying from Eskom’s fleet of coal-dominated generators. As of May 2026, NERSA registered over 19.3 GW of new generation facilities, with the vast majority specifically intended for wheeling to private buyers.
According to data collated by the Power Futures Lab at the University of Cape Town, 2026 has already seen six major projects totaling 1,788 MW reach financial close. If the current pipeline of some 30 large projects in the final stages of financing converts, South Africa’s booming independent power producer (IPP) industry is on track to bank more than 5,700 MW in 2026, which is nearly double the number of projects financed in 2025.
A Market Driven by IPPs, GenTraders, Traders and Local Capital
The new electricity market is also bringing its own language to the mix. Terms like IPP, GenTrader and Trader are mixed in with wheeling and wholesale electricity markets. The IPPs develop, own and operate generation projects like solar or wind farms. Traders are licensed entities that aggregate demand and supply from the power they purchase from the generators which they then sell on to their end customers. GenTraders sit at the intersection of these roles as they own their generation assets but they are also licensed to trade. Thus, they can combine their own power with the electricity purchased from elsewhere to serve a larger customer base. All these players create an ecosystem that ensures the private electricity market remains both accessible and competitive.
And, of course, their success is supported by a confident domestic capital market. South African commercial banks and DFIs are now funding utility-scale projects greater than 300 MW with BESS, without the need for foreign commercial debt. For example, the Naos-1 project in the Free State, the country’s first private solar PV and BESS wheeling project, secured its full debt stack from a consortium of local lenders, including Standard Bank, Absa, Nedbank, Investec, and RMB, with 100% local equity finance.
What This Means for Corporate South Africa
For the South African CEO or CFO, wheeling offers a crucial price sanctuary. This is not about escaping the grid or sidestepping system costs – wheeled power still uses Eskom’s wires and pays the associated charges – it is about reducing the uncertainty of being entirely exposed to regulated Eskom tariffs. With NERSA recently approving an 8.76% tariff hike for April 2026, the ability to secure predictable, lower-cost energy through a wheeling PPA allows for better downstream budget planning and risk reduction.
Wheeling, and the access to clean energy that it provides, is an increasingly relevant environmental investment. As South Africa’s key trading partners, particularly in the European Union, move toward stricter carbon-border adjustments, the ability for South African exporters to prove their products were made with clean energy is no longer a luxury, it is a competitive necessity. By decoupling the location of the generator from the user, wheeling allows a business in a space-constrained metro to benefit from the best wind and solar resources in the country.
Liberalisation and the Balanced Future
Wheeling underpins the transition toward the South African Wholesale Electricity Market (SAWEM), which is set to change how the country frames energy. Projects and the sector are moving away from a collective of infrastructure projects into a dynamic service where businesses can respond to market signals. This evolution is even reaching smaller corporate buyers and those within municipal networks through virtual wheeling, where businesses receive wheeled energy refunds from Eskom on their municipal bills.
Behind-the-meter (BTM) projects are still essential. Wheeling provides the scale and cost-security required for national transition, while BTM generation, and particularly on-site storage at very large scales, remain critical for businesses navigating the optimisation of their energy savings.
Six years ago, companies would not have recognised the energy infrastructure available today. Wheeling has efficiently solved several problems at once by opening up private capital at scale and providing enterprises with a credible route to procure clean and price-stable power. And it has moved South Africa closer to a competitive electricity market with a robust, private-led energy ecosystem that is creating a blueprint for a decarbonised, resilient and globally competitive economy.
By Katherine Persson, Managing Director: Assets at SOLA Group.