Understanding South Africa’s electricity sector: challenges and opportunities

IN RECENT weeks, we have examined South Africa's electricity industry and its deep links to political power and financial leverage.

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We have seen how various role players have sought to use political networks to influence outcomes since the adoption of the 1998 Energy White Paper. Some have pursued personal enrichment or institutional advantage.

Others have focused on enabling a transformation of the electricity sector toward a more democratic and inclusive system.

At present, however, the sector appears to be moving in many different directions.

An independent TSO with its own assets is essential to eliminate Eskom!s conflict of interest as both generator and grid owner. Yet management is seen by some as an obstacle to progress. Is this perception accurate?

It is convenient to blame Eskom’s leadership. But the reality is more complex. The right approach is to understand the multiple perspectives and dilemmas that each actor in the electricity governance framework is attempting to address.

The regulator, Nersa, recently intervened in the contested Interim Grid Capacity Allocation Rules (IGCAR) drafted by Eskom. Meanwhile, the Minister of Electricity and Energy has reportedly directed Eskom to refrain from challenging Nersa’s decision to award trading licences to independent traders in court.

Each institution is expected to operate within an intensely contested framework, which makes it difficult to meet expectations.