Tokenised Energy Settlement: Affordable Green Electricity for Municipal Customers, with Revenue Protection

Webinar Summary

Moderator: Ms. Lindy Taylor
CEO & Founder, 5th Discipline

• Opened the webinar and set the context for tokenised energy settlements (TES) as a practical way for municipalities to deliver affordable green electricity without complex reforms.
• Introduced the panel, thanked co-organisers (Future Cities Africa and Meridian Economics).

Mr. Johan Strydom
Technical Specialist, GreenCape

• Focused on municipal business models and how municipalities can stay relevant amid rapid change.
• Outlined key challenges: declining surpluses (from positive ~15% in 2010 to deficits now), rooftop solar defection, regulatory uncertainty, and infrastructure stress.
• Recommended "no-regret" actions: anticipate customer needs for cheaper/green power, enable private generation (especially via wheeling), maintain surplus neutrality, future-proof grids (smart metering), and create enabling frameworks.
• Explained wheeling mechanics, revenue impact (surplus can remain neutral via use-of-system charges or avoided-cost credits), reconciliation methods (NERSA-approved), and why wheeling protects revenue better than behind-the-meter solutions.
• Highlighted implementation challenges (billing systems, data burden, resource constraints) and emphasised equitable participation and trusted reconciliation.

Dr. Michael Boulle
Senior Specialist: Climate, Energy & Just Transitions, ICLEI Africa

• Presented insights from a UK PACT-funded project supporting six South African municipalities to develop solar PV projects (pre-feasibility stage, handed to DBSA).
• Covered technical (site/grid assessments), financial (modelling, tariff comparison), transactional (own-build vs IPP PPA), and socioeconomic aspects.
• Argued that the electricity sector is in rapid transition; past roles no longer predict the future and municipalities must diversify approaches.
• Stressed municipal readiness factors (Eskom debt, audit outcomes, revenue collection, political support, grid understanding) and unique value proposition (grid control, customer relationships, approvals, land).
• Advocated a pragmatic, phased approach: build foundations first (revenue collection, smart metering, cost-of-supply studies, SSEG frameworks), then explore multiple options in parallel (own generation, SSEG enabling, wheeling, trading/aggregation).
• Positioned wheeling as one of several viable pathways, not the only solution.

Mr. Matthew le Cordeur
Research Manager: Infrastructure and Just Energy Transition, Krutham

• Presented key findings from the South African Electricity Traders Association report: "10 actions to deliver green, accessible and secure electricity.";
• Described the shift from monopoly to competitive multi-market, high private investment (18 GW registered, mostly solar/wind), unbundling of Eskom, and the critical implementation phase.
• Highlighted blockages: transmission constraints, lack of reform roadmap/accountability, municipal distribution crisis, regulatory uncertainty.
• Summarised the 10 priority actions (publish reform roadmap, finalise pricing policy, strengthen DoE/NERSA, define Eskom end-state, accelerate grid build, enable bilateral trade, finalise trading rules, launch wholesale market, enable cross-border trade).
• Deep-dive on municipal EDI reform: financial instability, fragmented systems, governance/capacity gaps, ageing infrastructure, uneven readiness.
• Recommendations: ring-fence electricity business, move to cost-reflective tariffs, modernise with smart metering, standardise wheeling frameworks, build capacity, align with broader municipal reforms.
• Noted standardisation and automation of wheeling reconciliation/billing as critical.

Mr. Frank Spencer
TES Lead, Meridian Economics

• Introduced and explained Tokenised Energy Settlement (TES), previously called "token wheeling", as a novel, simpler financial alternative to conventional wheeling.
• Showed why traditional wheeling is complex and limited (new tariffs, metering, billing upgrades, contracts, mainly benefits large customers; fewer than 5 municipalities actively implementing).
• Described TES mechanics: private generator feeds grid, municipality gains avoided Eskom cost, issues tradable Electricity Credit Tokens (ECTs/digital vouchers), generator sells ECTs to customers, customers use ECTs plus cash to pay full municipal bill, municipality remains revenue neutral (full margin retained), customer relationship unchanged, no new supplier created.
• Demonstrated with numerical example (customer arbitrage, municipality surplus protection).
• Advantages: enables prepaid/low-voltage customers, avoids NERSA wheeling rules/trading licences/MFMA tenders (policy-based), supports green attribute traceability, reduces customer defection risk.
• Compared TES favourably to behind-the-meter, municipal procurement, and conventional wheeling.
• Current status: municipal playbook available, pilots late-stage (one council resolution passed), seeking more partners (6-12 month realistic timeline to live pilot).

Overall webinar takeaway

The speakers collectively painted a picture of municipalities under pressure but presented with multiple pathways - foundational improvements, enabling SSEG/wheeling, diversification, policy alignment, and innovative models like TES - to deliver affordable green electricity while protecting revenue and relevance.