If your business is exploring wheeled energy in South Africa, one term you will encounter early — and repeatedly — is the Eskom wheeling framework. Understanding what this framework is, how it operates, and what it means commercially for your business is essential before you enter into any wheeled energy transaction.
This guide explains the Eskom wheeling framework in plain terms: what it covers, who regulates it, how costs are structured, and why the framework itself is one of the most important factors shaping the commercial case for wheeled energy in South Africa right now.
For context on how wheeled energy works from end to end, read our foundational guide on how energy wheeling works in South Africa.
What Is the Eskom Wheeling Framework?
The Eskom wheeling framework is the set of rules, tariff structures, technical requirements, and administrative processes that govern how privately generated electricity can be transmitted through Eskom’s national grid from an Independent Power Producer (IPP) to a commercial or industrial offtaker.
In simple terms: when an IPP wants to use Eskom’s transmission infrastructure to deliver electricity to your business, both parties must operate within this framework. It defines who pays what, how energy flows are tracked, and how credits are applied to the offtaker’s account.
The framework is not a single document. It is a combination of:
- NERSA-approved tariff determinations — which set the wheeling charges Eskom is permitted to levy
- Eskom’s Grid Connection Code — which governs the technical requirements for connecting to and injecting energy into the national grid
- The Wheeling Energy Purchase System (WEPS) — Eskom’s administrative platform for tracking, reconciling, and crediting wheeled energy transactions
- The Electricity Supply Agreement (ESA) — the existing supply agreement between the offtaker and their municipality or Eskom, which must be amended to accommodate wheeled energy credits
Together, these elements form the operational and commercial environment within which every wheeled energy transaction in South Africa takes place.
Who Regulates Wheeling in South Africa?
The National Energy Regulator of South Africa — NERSA — is the primary regulatory authority overseeing the wheeling framework. NERSA approves the tariff structures that determine what Eskom may charge generators and offtakers for use of its transmission infrastructure. It also sets the broader licensing and regulatory conditions that apply to IPPs wishing to participate in the wheeled energy market.
In recent years, NERSA has progressively updated the regulatory framework to accommodate the growing pipeline of private generation projects in South Africa. This has included revisions to wheeling tariff structures and the expansion of conditions under which private parties may use the national grid to transact electricity commercially.
The Department of Mineral Resources and Energy (DMRE) also plays a role in shaping the policy environment, particularly through the Integrated Resource Plan (IRP) — South Africa’s long-term electricity planning document — and through amendments to the Electricity Regulation Act that have opened the market to private generation above 100 MW without a generation licence.
How Does the Eskom WEPS System Work?
The Wheeling Energy Purchase System (WEPS) is the administrative engine at the heart of the Eskom wheeling framework. It is the platform through which all wheeled energy transactions are tracked, reconciled, and credited.
Here is how it operates in practice:
1. IPP Injection The IPP generates electricity and injects it into Eskom’s transmission grid at an agreed connection point. The volume injected is metered and recorded.
2. WEPS Credit Allocation Eskom’s WEPS system matches the injected volume to the offtaker’s account. A credit is applied to the offtaker’s monthly electricity bill — effectively reducing what they owe Eskom for grid-supplied electricity by the volume of wheeled renewable energy purchased.
3. Monthly Time of Use Reconciliation WEPS operates on a Monthly Time of Use (MTOU) basis. This means credits are applied across different time-of-use periods — peak, standard, and off-peak — rather than as a single flat credit. This has important implications for how the business case is structured, particularly for businesses with high peak-period electricity consumption.
4. Network Loss Accounting A small percentage of energy is lost in transmission as electricity travels through the grid. The WEPS system accounts for these network losses, meaning the volume credited to the offtaker is slightly less than the volume injected by the IPP. Loss factors are agreed upfront and incorporated into PPA pricing.
What Does Eskom Charge for Wheeling?
Under the current NERSA-approved framework, Eskom levies wheeling charges on both parties to the transaction:
- Generator (IPP): Approximately 3 cents per kWh for use of the transmission network
- Offtaker: Approximately 14 cents per kWh, reflected as a WEPS rebate adjustment on their monthly bill
These figures are subject to periodic revision through NERSA’s tariff determination process. It is important to note that in a well-structured wheeled energy business case, both sets of charges are incorporated into the overall model upfront — meaning the net tariff presented to the offtaker in their PPA already accounts for Eskom’s fees. There are no hidden charges applied after the fact.
This is one of the reasons working with a specialist energy broker matters. An experienced broker ensures that all wheeling costs are correctly modelled and transparently reflected in the commercial terms before you sign anything. Learn more about how Energy Brokers structures deals on our services page.
How Does the Framework Affect Your ESA?
One aspect of the Eskom wheeling framework that is often overlooked — particularly by businesses new to wheeled energy — is the impact on the Electricity Supply Agreement (ESA).
Your ESA is the existing agreement between your business and your electricity supplier — either Eskom directly or your local municipality. In most wheeled energy transactions, this agreement must be formally amended to allow for the WEPS credit mechanism to operate correctly.
The amendment process involves:
- Notifying your supply authority of your intention to participate in wheeled energy
- Agreeing on the technical and commercial conditions under which wheeling credits will be applied
- Ensuring metering infrastructure is in place to support WEPS reconciliation
This is not a process your business needs to navigate alone. Energy Brokers manages the ESA amendment process as part of the end-to-end transaction — alongside PPA negotiation, supplier vetting, and operational support post-signature.
Why the Framework Matters for Your Business Right Now
The Eskom wheeling framework is not static. It is an evolving regulatory environment — and the direction of travel matters for businesses considering wheeled energy.
Several dynamics are worth noting:
Grid capacity is constrained. South Africa’s transmission network requires substantial investment to support growing private generation capacity. Eskom’s Transmission Development Plan outlines the scale of infrastructure upgrades required — and funding for these upgrades only becomes substantial post-2030. Businesses that secure wheeled energy agreements now can access grid capacity and lock in favourable tariffs before constraints tighten further.
Regulatory evolution is ongoing. NERSA continues to refine the wheeling framework as the private generation market matures. Changes to tariff structures, loss factors, or connection requirements can affect the economics of a wheeling transaction. Well-drafted PPAs include change-in-law provisions that protect the offtaker if the regulatory environment shifts during the contract term.
Competition for IPP capacity is increasing. With over 20 GW of private offtake demand in the pipeline nationally, the supply of fully vetted, commercially ready projects at competitive tariffs is not unlimited. Businesses that move early secure better terms.
Frequently Asked Questions
What is the Eskom wheeling framework? The Eskom wheeling framework is the set of tariff structures, technical requirements, and administrative processes — governed by NERSA and administered by Eskom — that enables privately generated electricity to be transmitted through the national grid from an IPP to a commercial offtaker.
Does NERSA regulate wheeling charges? Yes. NERSA approves the tariff structures that determine what Eskom may charge generators and offtakers for wheeling services. These tariffs are subject to periodic revision through NERSA’s formal tariff determination process.
What is WEPS? The Wheeling Energy Purchase System (WEPS) is Eskom’s platform for tracking energy injected into the grid by IPPs, reconciling volumes on a Monthly Time of Use basis, and applying corresponding credits to offtaker electricity accounts.
Do I need to amend my electricity supply agreement to wheel energy? In most cases, yes. Your Electricity Supply Agreement with Eskom or your municipality will need to be formally amended to accommodate the WEPS credit mechanism. Energy Brokers manages this process as part of the transaction.
How do wheeling framework changes affect my PPA? Well-structured PPAs include change-in-law provisions that define how regulatory changes — such as tariff revisions — are handled commercially between the IPP and offtaker. This protects your business from unexpected cost increases during the contract term.
Get Expert Guidance on Wheeling in South Africa
Navigating the Eskom wheeling framework is one of the more complex aspects of renewable energy procurement — but it does not have to be a barrier. Energy Brokers has the regulatory knowledge, IPP relationships, and commercial experience to guide your business through every step of the process, from feasibility analysis through to contract signature and ongoing operational support.
With access to over 1,500 MW of fully vetted wind, solar, and BESS projects, and fees absorbed by IPPs at no cost to the offtaker, Energy Brokers makes wheeled energy procurement straightforward, competitive, and risk-managed. Explore the Energy Brokers Market Review for live grid capacity data and further technical insight.
Contact our team today to discuss your wheeled energy requirements →
