Wheeling

Wheeling is the transport of electric power from a generator to a buyer over transmission or distribution lines owned by a third party that is neither the producer nor the consumer. The line owner — usually a utility or grid operator — is compensated with a wheeling charge that covers use of the network plus the energy lost as heat during transmission. Wheeling is what allows a willing seller in one location to deliver power to a willing buyer in another, even when neither owns the wires between them.

Why it exists

In a vertically integrated system the local utility generates, transmits, and sells all the power in its territory. Wheeling, and the third-party (or open) access rules that enable it, break that bundle apart so an independent generator can sell directly to a distant customer. Retail wheeling extends this all the way to end users, letting them buy from a generator outside their own utility's footprint.

Relevance to mining

For a mining operation, wheeling can be the bridge between cheap, remote, or curtailed generation and a hosting site located elsewhere. If a miner contracts power under a power purchase agreement with a distant wind or hydro plant, wheeling tariffs determine the real delivered cost once transmission charges and losses are added. Those charges are set and regulated by the relevant authority, and they can materially change whether remote power is actually cheaper than power bought locally. In many cases the more economical answer is to site the mine at the generation itself and avoid wheeling entirely.

Wheeling complements grid interconnection and is one way to access stranded energy. Long-haul transmission fees often factor into a demand charge on the delivered bill.