Eskom Distribution MD Monde Bala has signalled the utility’s willingness to consider the integration of an Electricity Credit Token (ECT) financial instrument to accelerate the implementation of a virtual wheeling model that allows multiple generators to transact with multiple customers in several locations.

Eskom and Vodacom have, over the past year, developed and piloted a virtual wheeling platform that Eskom is currently aiming to launch before the end of 2024.

However, Meridian Economics has made a proposal to modify the implementation of the scheme using ‘token wheeling’, whereby a liquid secondary market is created for ECTs generated when independent power producers inject power into the grid for sale to customers that have signed up to buy renewable power through a virtual wheeling platform.

The ECT, Meridian says, will be a “tradeable, standardised, contractually recognised claim to a credit on an electricity account”.

Meridian Economics MD Dr Grové Steyn has argued that ECTs could enhance IPP project viability by removing the credit risks associated with the current virtual wheeling platform approach, which is premised on securing an Eskom refund after payment of the account.

Instead of paying their full distributor or municipal bill in cash in the expectation of a later refund, customers would obtain a credit on their municipal accounts on presentation of ECTs and municipalities will do so in turn with the aggregated ECTs on their Eskom bulk accounts.

Bala described the ECT proposal, which could be implemented using a distributed ledger or blockchain system, as an innovative concept that could help unlock much-needed private investment into electricity generation by potentially derisking the virtual wheeling.

However, he also noted the complexity associated with the introduction of such a financial instrument and said further work and consultation were, thus, required to make it implementable.

He proposed that the token wheeling proposal be canvassed further with stakeholders participating in workstream nine of the National Energy Crisis Committee, which he chairs.