South Africa’s energy transition is entering an exciting new chapter. The key question is whether the market can successfully adopt and implement the new rules.
Regulatory reform has opened the electricity grid to private participation, marking a significant shift in how power can be generated and traded.
But for independent power producers (IPPs), access on paper does not automatically translate into real-world access. The ability to reach multiple buyers, transact efficiently and get paid accurately is fast becoming the next defining challenge.
IPPs are now firmly embedded in South Africa’s energy future, and selling power to a single off-taker works well for mining houses and large industrial customers. However, this one-to-one model is reaching saturation: around 80% of the 5.7GW currently under construction is already contracted, leaving the remaining 6.37GW of projects in development at least 24 to 36 months from delivery and increasingly constrained by grid capacity, with no remaining capacity in key provinces.
To expand market access and serve smaller-demand customers, IPPs will need to shift towards one-to-many trading models, overcoming the operational, commercial and settlement complexities that have so far limited broader participation.
Multilateral wheeling
This is where multilateral wheeling comes into play. By allowing a generator to sell electricity to many buyers through existing grid infrastructure, multilateral wheeling promises to expand market access and inject much-needed flexibility into electricity trading. The idea itself is not new. What is new is the urgency to make it function at scale and work reliably.
At its core, multilateral wheeling reshapes how electricity is traded. Instead of power flowing through rigid, one-to-one contracts, supply and demand can connect dynamically across the grid.
However, the viability of this model depends less on policy permission and more on execution. Without the right operational foundations, complexity quickly becomes a barrier rather than a driver of breakthroughs.
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Accuracy is one of the biggest fault lines. Effective wheeling depends on precise matching of generation and consumption, trusted metering data and transparent reconciliation across multiple parties. When these processes are inconsistent, manual or opaque, risk increases for producers, buyers and the system as a whole.
And risk erodes confidence.
Confidence is the invisible infrastructure of a functioning electricity market. Buyers need certainty that the power they contract will be delivered. Producers need assurance that the settlement will be accurate and timely. Without this shared confidence, participation stalls and scale remains elusive.
This is why standardisation matters. In a fragmented trading environment, inconsistent commercial terms and unclear settlement mechanisms slow decisions and increase friction. Standardised approaches create transparency, enable comparison and lower the threshold for engaging with multiple counterparties.
As corporates, industrial users and municipalities increasingly seek energy solutions that are not only alternative but also more affordable, IPPs need practical ways to diversify revenue and reduce dependence on single off-takers.
Multilateral wheeling offers that pathway, but only if it is underpinned by systems that support trust, reliability and repeatability.
Policy reform has laid the foundation by opening access to the grid. The next phase is about translating reform into real transactions. That requires an ecosystem built for accuracy, transparency and confidence at every stage of the trade.
When executed well, multilateral wheeling can unlock greater choice for both producers and buyers. It can support more competitive procurement, deepen market liquidity and accelerate the transition to a more resilient energy system.
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Ultimately, South Africa’s electricity future will be shaped not only by who can generate power, but by how confidently that power can be traded. Building that confidence is no longer optional; it is the difference between reform that looks good on paper and a market that actually works.
We must embrace multilateral wheeling underpinned by accurate, standardised trading processes to expand market access and build confidence in every transaction.
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