Review of proposals for practical power sector restructuring and reforms in a dynamic electricity supply industry

Abstract

South Africa's electricity supply industry (ESI) remains a vertically-integrated monopoly despite global trends towards restructuring. The monopolistic nature of the ESI could hinder the development of distributed power systems as penetration of renewable electricity increases. The research aims to rationalise South Africa's ESI evolution; propose practical power sector restructuring in the short-to-medium term; and to determine their potential impact. The research methodology included a single case study instrument, with embedded sub-units of analysis. Primary research data was gathered using semi-structured interviews with industry experts in addition to which secondary data from government documents and archival records were used for triangulation. Research results conclude that South Africa's ESI grew due to techno-economic industrialisation factors, while Apartheid-era policies influenced the ESI in only some specific respects. The vertically-integrated status quo was sustained in the post-transformation period due to government's focus on social imperatives; lack of regulatory & policy certainty; and conflicts in political ideology. South Africa didn't experience the pre-conditions that triggered global power sector reforms in the late 20 th century but these pre-conditions are now becoming evident. Privatisation of Eskom Generation and introduction of wholesale and retail competition are not practical in the short-to-medium term, proving the infeasibility of the standard model of reform locally. The introduction of an Independent System and Market Operator (ISMO) using a single-buyer model is seen as the most favourable and practical option, with the ISMO owning transmission infrastructure. The research suggests that ESI changes will increase system efficiencies, economic performance and private sector involvement, but will not reduce electricity tariffs. The scenarios, challenges and proposals identified in this research are also applicable to other countries in Africa and other developing regions of the world, that have similar social and political backgrounds, ensuring sustainable supply of electricity.

Enablers towards establishing and growing South Africa’s waste to electricity industry

“…The logical option would be to have WTE economically competitive (while creating the options for co-combustion & co-generation) at a localised scale. While co-combustion and co-gasification in existing coal power plants would mean a range benefits (Psomopoulos and Themelis, 2015) the likelihood of such occurring in South Africa is limited because of the monopolistic nature of South Africa's grid infrastructure maintained by South Africa's single electricity utility, Eskom (Khan et al, 2016). This sentiment is corroborated by the feedback received from industry experts within this study.…”

Resilience Is Paramount for Managing Socio-Technological Systems During and Post-Covid-19

“…Case study STES. As reported in [35] and mentioned earlier, specialized linkages and networks were historically established between the sole shareholder, the energy utility, and the key industrial consumers during a previously exclusive political and socio-economic dispensation. It is arguable that over time, the legacy linkages and networks implanted a certain level of robustness within the STES, corresponding to the impartation of absorptive resilience toward certain kinds of change stressors.…”

Application of Systems Thinking in Reviewing Power- Infrastructure Capital Investment in South Africa

“…South Africa historically raised their capital borrowing from World Bank or International Monetary Fund (IMF) (Li, 2018). Eskom being the state-owned company raises its capital through the involvement of State as the Guarantor (Khan, Thopil & Lalk, 2016). Kumar, Stauvermann, Loganathan and Kumar (2015) stated that Eskom presents its long terms capital investment requirement to the cabinet for approval before financial borrowing.…”