Opportunity Issue 108

POWER SOLUTIONS
Power wheeling: the solution
to grid instability and
achieving South Africa’s
decarbonisation goals
Vodacom Group Chief Technology Officer Dejan Kastelic explains how “virtual wheeling”
offers an exciting and innovative way forward for companies looking to move beyond loadshedding.
Climate change is arguably one of the biggest challenges
which the human race has ever faced. The effects of
climate change are visible throughout the world and it
is already disproportionally affecting poorer countries.
However, richer countries are not the only contributors to climate
change and are not solely responsible to solve it. With South
Africa’s grid emissions being some of the highest in the world
due to our dependence on fossil-fuel-based power generation,
it is clear that our current path to support our insatiable need for
energy is not sustainable. Furthermore, research has shown that
a stable and abundant supply of energy is the foundation of a
flourishing economy.
Yet South Africa is experiencing unprecedented levels of
loadshedding in already challenging post-Covid economic
environment conditions. In the past four years alone, Vodacom
South Africa spent R4.5-billion on backup power solutions and
R300-million on diesel for generators. This is a staggering 11%
of Vodacom’s total capital expenditure over the period. This
highlights just how large a burden has been placed on South
Dejan Kastelic: Vodacom Group Chief Technology Officer
Africans, especially for businesses in the SME sector, who need to
both maintain operations and remain competitive in their pricing.
This is over and above the issue of greenhouse gas emissions.
Despite accelerated digitisation in the post-Covid era, South
Africa has been regrettably slow in using the transformative power
of technology to address perhaps our largest hurdle – the power
crisis. For some time, electricity wheeling has been available in
South Africa; however, in its traditional form it excluded the
majority of the private sector from participating due to structural
and administrative limitations. Legacy limitations prevented
Eskom from opening wheeling to companies other than the typical
large industrial and mining customers. Access to this solution was
also limited to Eskom’s customers and those in specific areas, since
only a few select municipalities had wheeling frameworks in place.
Traditional electricity wheeling, with a few exceptions, typically
involves a single buyer (a private company), partnering with an
Independent Power Producer (IPP) to indirectly supply a single
site with power, usually generated from renewable sources. This
legacy approach requires the buyer to be indirectly connected
to the IPP’s location through existing electrical infrastructure (the
grid). This has several challenges, especially for businesses with
complex operating environments. In Vodacom’s case, our desire
to participate in wheeling has been hindered by the complexity
of our South African operating environment that includes over
15 000 distributed low-voltage sites located across the country
within 168 municipalities.
However, there may be a light at the end of the tunnel with
the introduction of a new technologically-enabled solution to
the market. By reimagining the problem, for just over a year, we
worked together to challenge the status quo, co-create, test and
iron out the finer details and mechanisms to deliver a solution
for which Vodacom finally entered into an official agreement with
Eskom, called “virtual wheeling”. The signing of this agreement
opens significant opportunities within the private sector, giving
all businesses a chance to save on costs and achieve their
decarbonisation goals. This solution enables the private sector
to actively participate in solving the energy crisis by indirectly
funding the development of renewable power, which is added
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