Municipal Wheeling Revenue Impact Assessment

SEA's role in this project was to develop models to evaluate the impact of wheeling on municipal revenue as well as the wider socio-economic impacts of wheeling on local economies.

The Western Cape Government’s Municipal Energy Resilience Programme aims to improve energy resilience in municipalities across the Western Cape through facilitating and supporting the implementation of energy infrastructure development (public and private) for economic growth, energy affordability, and municipal financial sustainability. The initiative addresses the three key strategic dimensions: energy security, environmental sustainability and economic growth. A major focus towards achieving the three key strategic dimensions of the programme is private sector enablement, which includes mechanisms such as embedded generation (EG) or wheeling.

Wheeling is the delivery of energy from a generator to an end-user located in another area through an existing distribution or transmission network. It allows privately connected generators to sell generation capacity to utilities and/or private off-takers, with potential implications on municipal revenues.

The impact of wheeling on municipal revenues can be complex and depend on a variety of factors, including the specific wheeling arrangement and the regulatory environment, or loadshedding. As a result, this project conducted a comprehensive assessment of the impact of wheeling, through socio-economic and municipal revenue modelling in order to provide a comprehensive and robust framework for municipalities to evaluate the impact of wheeling on their revenues and local economy, and to make informed decisions about the best way to engage in wheeling activities.

Funder: Western Cape

Timeline: 1 Dec 2022 – 28 Feb 2023

Project Team: Mark Borchers, Julia Tatham, Zanie Cilliers, Joel Nana and Josh Dippenaar