Wits Business School (ETDs)

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Coal and the Environment: Some implications for South Africa
(University of the Witwatersrand, Johannesburg, 2024) Makhombothi, Ntuthuko; Rangasamy, Logan
South Africa’s coal industry faces an existential threat from the need to transition to a low carbon economy. This study analyses the implications of the Just Energy Transition (JET) on the coal industry of South Africa using mixed methods approach and secondary data from industry reports, government reports and academic sources. The study demonstrates the significant economic contribution of coal to the GDP, employment and energy security, while evaluating the JET framework against international principles. Although the JET framework is largely aligned with international principles, there are some areas for improvement. The decommissioning of the Komati power station illustrates the shortcoming in the distributive, restorative and redistributive justice. The findings suggest a need for a balanced JET that ensures economic growth, energy security and environmental sustainability. Further research is required to develop transition pathways that mitigate against the negative socioeconomic consequences for coal dependent communities
The Relationship between Renewable Energy Products and Cost-Effective Electricity among Middle-class consumers in Gauteng
(University of the Witwatersrand, Johannesburg, 2024) Ludick, Sheldon; Venter, Robert
This executive summary presents a business venture proposal to address the need for stable electricity in South Africa, by offering renewable energy solutions to middle to upper-income households. The proposal focuses on charging customers per kilowatt basis, thereby eliminating the initial capital outlay typically required for setting up renewable energy systems in homes by providing renewable energy infrastructure at no upfront cost to the consumer. A pay-as-you-use model stands as the unique selling proposition of Renew Able Technologies, giving it a distinct competitive advantage. By partnering with residents in the target living standards measure LSM bracket, the business aims to provide long-term electricity supply through renewable energy technologies at a competitive per- unit or kilowatt cost, creating a monthly income stream, while creating a long-term partnership with consumers. Additionally, renewable energy is environmentally friendly, and contributes to a greener, cleaner, and sustainable future. As a consequence, this proposal is not purely based on the current supply issues of electricity in South Africa, but instead, it aims to create a profitable business, at once contributing to the planet's sustainability. The business venture proposal will calculate the average daily usage of kilowatt hours to determine the appropriate solution for each household. Implementation costs will vary based on individual household needs; correspondingly, larger households will incur higher charges based on their monthly usage. Estimates suggest that by 2030, there will be over 100 million homes globally equipped with solar energy or other renewable energy sources, a significant increase from 25 million homes in 2020. This proposal aims to support this growth, by enabling households with limited upfront resources to access renewable energy through a per-unit supply model. The proposal suggests offering an affordable monthly electricity bill to attract customers who desire to switch to renewable energy but are put off by the upfront expenses. This proposal presents a solution to the current lack of renewable energy accessibility for households. The pricing strategy will adopt a competition-oriented approach, ensuring that the shift to renewable energy minimizes household monthly spending for electricity while promoting long-term self- sufficiency. Our marketing efforts will be geared towards middle- to upper-income homeowners through promotions at various events, roadshows, and advertising agencies. We will ensure that product and pricing information is easily accessible to everyone through radio and television channels. By doing so, we aim to reach as many potential customers as possible and provide them with the best possible service. To finance the venture, we plan to seek equity and loan funding. Specifically, we are proposing a split of 60% equity and 40% loan. In summary, this business venture proposal aims to capitalise on the growing demand for renewable energy, by offering households an affordable alternative to traditional electricity. In eliminating the initial capital outlay, the proposal seeks to tap into a market segment that desires renewable energy solutions but is hindered by cost constraints
The Perceived Business Value of a Business Intelligence System in the South African Energy Sector
(University of the Witwatersrand, Johannesburg, 2024) Kgasago, Kgoramele Joseph; Oba, Pius
The use of the BI System is assumed to be beneficial to organisations based on several conceptual and empirical studies which were undertaken to establish the business value of this information system. The current era of the fourth industrial revolution is characterised by innovative solutions such as Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT) and Big Data Analytics (BD), which have furthermore elevated the significance of BI System. The adoption of these technologies creates voluminous amounts of data and information, which need BI System to integrate and manage these data and generate relevant insight to enhance decision-making. However, the literature about how the adoption and use of BI Systems add business value to organisations is still limited. Most studies on the impact of the adoption and use of BI Systems to establish its business value have adopted quantitative empirical studies. Furthermore, the extant literature on BI System is still very limited when it comes the impact and business value that the BI System has on the South African energy sector. This study adopted a modified version of the Balanced Scorecard (BSC) as a theoretical framework that underpinned its investigation on how the use of BI System adds value in the South African energy sector. A qualitative research methodology was assumed to explore this phenomenon about perceived business value of BI Systems in the energy sector. Six professionals working in the South African energy sector’s oil and gas segment were sampled thorough purposive sampling technique and interviewed collect qualitative data about the BI System is perceived to impact this sector. Thematic analysis strategy was used to analyse the data from the opinion, views, values, and perspectives of participants to identify themes, concepts, and ideas that adequately explains this phenomenon. The findings of the study revealed that, BI System impacts organisations indirectly by providing actionable insight that supports the decision-making process in key business areas. As such, the BI System impacts organisations' performance through financial control, customer relationship management, revenue and sale increase, Internal controls and governance management, business process and enhanced asset performance. Consequently, the adoption and use of the BI System is deemed as a strategic initiative which must be embraced to enable organisations to respond to global business dynamics promptly and sustainably
Outage management planning and performance within a South African energy service provider
(University of the Witwatersrand, Johannesburg, 2023) Choche, Segomotso; Gobind, Jenika
The study was motivated by our nation's present energy crisis; the electrical energy supply company has been fighting to keep the lights on since 2008, and the research is based on outage management planning. The organization’s core function is to ascertain that the power plants are dependable, that planned maintenance and outage work is properly planned and that completion dates are met to produce electricity continuously. This research report focuses on outage planning in the energy supply industry, including the planning process, procedures, and tools used to ensure that when a unit is taken out of service for a planned outage, it will be put back into service on schedule, within the budget that has been set, and to the specified quality standard. The unit is expected to operate in accordance with the defined performance standard up to its next scheduled outage to deliver a dependable service. The study focuses on outage planning difficulties, optimum planning performance techniques, and planning process gaps. This is a qualitative research study which employs the thematic analysis approach of semi-structured interviews with staff members of the outage department at five power stations in the Eskom Generation division to explore the difficulties, gaps, and performance status and gather descriptive data. The research findings demonstrated that from the themes developed the challenges faced by the outage planning team are, the late release of funding, funding shortage, the scope of work that’s undefined, procurement challenges and lack of expertise. The outage planning process is not the issue, rather, it is the lack of commitment to it that makes it difficult to achieve the established outage planning standards The recommendations reached on reducing the inefficiencies are divided into five disciplines including the main challenges; Engineering for undefined scope of work, Finance for the late release of funds, Procurement to deal with delayed orders, Human resource for the lack of expertise, and Process for outage planning process shortcomings.
Innovative Financing Models for Rural Electrification in the Eastern Cape, South Africa
(University of the Witwatersrand, Johannesburg, 2022) Maphosa, Thobile; Soumonni, Ogundiran
This research report is based on a case study that examines innovative financing models for rural electrification in the Eastern Cape, South Africa. This qualitative study examines innovative financing models deployed to extend electricity in rural areas and promote renewable energy technology innovation in the Eastern Cape, South Africa.
Solar electricity consumption, financial inclusion and welfare in sub-Saharan Africa
(University of the Witwatersrand, Johannesburg, 2023) Dube, Andile Precious; Horvey, Sylvester
Solar electricity has continuously contributed towards alleviating energy poverty in sub- Saharan Africa. Moreover, the development of off-grid solar electricity technologies and business models that integrate mobile money into solar electricity transactions has improved access to electricity in the region. As a result, the demand and adoption of mobile money have also increased. However, existing literature has not exposed this positive development trend and other economic development opportunities inherent in solar electricity consumption. Most studies have focused on analysing the potential of solar electricity consumption in alleviating energy poverty. Although the analysis of solar electricity consumption and poverty alleviation is critical, studies have failed to extend the analysis to other economic development indicators such as financial inclusion, and money demand. This analysis is important because access to financial services and the development of financial systems in sub-Saharan Africa is low, yet economic theory postulates that renewable electricity demand induces the development of and access to financial services and increases capital stock. Therefore, it is critical to examine the broader economic opportunities inherent in solar electricity consumption to provide additional insight into development of prudent renewable energy and economic growth policies. Additionally, the extant literature fails to expose the influence of the macro-economic environment, particularly human development indicators, on the demand for solar electricity. This is important because solar electricity consumption in sub-Saharan Africa is not consistent; it is characterised by rapid fluctuations and declines in some countries. Consumer welfare (education, health, and standard of living) may influence energy consumption patterns. Therefore, this thesis provides empirical evidence of additional economic indicators that influence the demand for solar electricity to contribute to the development of effective renewable electricity policies. The thesis entails three essays that focus on the relationship between solar electricity consumption, financial inclusion, money demand and welfare. It employs a sample of 15 countries in sub-Saharan Africa for the period from 2010 to 2019 for all three essays. The first essay examines the linear and non-linear relationship between solar electricity consumption, and financial inclusion. A Financial Inclusion Index is constructed using the Principal Component Analysis. The effect of solar electricity consumption on financial inclusion is analysed using the Two-Step System Generalised Moments Method. The results show that solar electricity consumption positively influences financial inclusion, implying that solar electricity consumption is a determinant of financial inclusion in sub-Saharan Africa. Furthermore, a threshold point in the relationship between solar electricity consumption and financial inclusion is detected using the Dynamic Panel Threshold Model, and the positive effect of solar electricity consumption declines after the threshold point. The second essay examines the short-run and long-run relationship between solar electricity consumption, mobile money, and money demand in sub-Saharan Africa. It employs the dynamic panel Autoregressive Distributed Lag with Dynamic Fixed Effects and Pooled Mean Group estimators and the Dynamic Ordinary Least Squares method to check the results' robustness. The empirical results reveal that solar electricity consumption has an insignificant effect on money demand (broad money balances) in the short and long run. However, if mobile money is introduced into the money demand function, solar electricity consumption positively impacts money demand. Subsequently, the interaction of solar electricity consumption and mobile money induces an upward effect on money demand. Therefore, the findings reveal that mobile money does not moderate the effects of solar electricity consumption on money demand; instead, it increases money demand leading to adverse effects on monetary policy. It is therefore recommended that monetary authorities should monitor solar electricity expenditure to control price fluctuation and maintain financial stability, particularly in countries where the dominant payment service is mobile money. The third essay investigates the effects of welfare on solar electricity demand using the following proxies: the Human Development Index, inequality in income, government expenditure on education, infant mortality rate, and access to information and communication technology (mobile phone subscriptions and internet users). The study applied the panelquantile regression technique with nonadditive fixed effects, and the results confirmed that welfare has significant effects on solar electricity demand. It reveals that the Human Development Index, education, and infant mortality have an inverse effect on solar electricity demand. However, income inequality has a negative effect in countries with low solar electricity consumption and a positive effect in countries with median-to-high solar electricity consumption. Mobile phone subscriptions positively influence solar electricity demand in countries with low-to-median solar electricity consumption. In contrast, internet users positively affect solar electricity demand in countries with median-to-high solar electricity consumption. The findings from the first essay endorse the proposition that solar electricity consumption induces the development of and access to financial products and services (energy-finance nexus). Whereas the findings from the second essay reveal the non-moderating effect of mobile money on the relationship between solar electricity consumption and money demand. Finally, the findings from the last essay reveal that human development factors drive solar electricity consumption. It is therefore recommended that policy makers should integrate renewable electricity goals and targets into economic development policies to enhance the transition to clean electricity sources and alleviate energy poverty in sub-Saharan Africa.
Prospects for artificial intelligence to manage load-shedding in South Africa
(University of the Witwatersrand, Johannesburg, 2022) Shakoane, Nomea Lerato; Lee, Gregory
Eskom, a state-owned utility in South Africa, is currently facing significant challenges and experiencing severe power shortages. While there is a growing expectation of adopting renewable energy in the future, a sudden and complete transition is unlikely. Legacy power systems, characterized by poor performance, breakdowns, and unpredictability, have received limited attention in AI research. This raises the question: What actions should be taken to quickly address maintenance issues in older power plants and increase generation capacity in the short term? The objective of this study is to explore AI solutions in the electrical sector and assess the feasibility and cost-effectiveness of integrating AI into Eskom's power system. The findings of this study will provide Eskom and the South African government with valuable insights to make informed decisions regarding the incorporation of artificial intelligence. These AI solutions can include detecting power and cable theft, optimizing energy usage and distribution, and implementing predictive analytics for demand planning and power production optimization. To gather data, a survey questionnaire was distributed to participants primarily located in South Africa, following a snowball selection process. The survey collected responses from a minimum of 50 participants and covered various aspects, such as load shedding at Eskom, artificial intelligence, data-AI enablers, and AI prospects. The study revealed that inadequate maintenance within the power generation division was responsible for load shedding. As a result, the implementation of AI solutions such as predictive maintenance, fault detection, and power demand monitoring systems emerged as crucial priorities for Eskom. However, it is important to note that implementing AI requires substantial capital investment. Considering Eskom's current financial situation and South Africa's mounting debt, it is challenging for Eskom to secure the necessary funds without seeking support vi from the South African government or major corporations like the IMF or World Bank
Determinants of the use of Liquified Petroleum Gas for South African households
(University of the Witwatersrand, Johannesburg, 2023) Muanda, Bernard; Munkuli, Bongani
Introduction – South Africa is experiencing the worst energy crisis in decades, and this is causing untold pains for many users across South Africa. At the same time, alternative energy such as liquefied petroleum gas (LPG) usage is lower than similar emerging economies. The purpose of this research is to examine empirically the determinants of LPG usage for South African households. Design methodology – The author uses applies 118 responses to a survey to determine the drivers of LPG usage for South Africa households. To meet these objectives, the author combines the theory of planned behaviour model and partial least square structural equation modelling (PLS-SEM) to validate the hypothesis. Findings – The study found that behavioural control and intention to use LPG are the precursors to the eventual use of LPG. The relationship between behavioural control and LPG usage is stronger than the relationship between intention and the LPG usage. Attitude towards LPG, the perceived behavioural control and the norms, respectively in order of strength, have a positive relationship with the intention to use LPG. Finally,less educated respondents were likely to switch to LPG usage as opposed to the more educated counterparts. Research implications – The study contributes mainly to enhancing government policy with regards concerning the increase of LPG usage by providing key factors to target for marketing and education for the end user. Key policies will contribute to increasing LPG usage, hence positive contribution to the economy. The value of this study is the first to analyse the determinants of LPG usage for South African households using the theory of planned behaviour and structural equation modelling. Hence, it contributes to the debate surrounding the adoption and increase of LPG usage
Challenges facing small, medium and micro enterprises servicing operational wind farms in the Eastern cape, South Africa
(University of the Witwatersrand, Johannesburg, 2023) Maraba, Mahlatse; Young, Bruce
Climate change has resulted in a review of how electricity is generated with the focus now being on renewable energy sources. In South Africa, this focus is facilitated by the Renewable Independent Power Producer Program (REIPPPP) which seeks to introduce an energy mix of solar, wind, biomass, and hydro into the traditional coal-dependent systems. REIPPPP promised economic benefits and some of the intended beneficiaries are Small Medium and Micro Enterprises (SMMEs). The purpose of this study is therefore to understand the challenges facing SMMEs in wind farms that are in the operational phase to understand if they are benefitting from REIPPPP. A qualitative approach, using semi-structured interviews to obtain data from respondents offering various services to operational wind farms was employed. A sample size of 9 respondents was used to obtain this data. Applying thematic analysis to the collected data it was found that the challenges facing SMMEs are mainly due to lack of support, lack of finance, human capital, lack of policies and difficulty accessing the job market in the wind farms. All these challenges are as per Isenberg’s domains of entrepreneurship framework (Isenberg, 2010). Further themes that emerged are unfair competition SMMEs face and non-compliance issues by both the SMMEs and the wind farms. Given these challenges, SMMEs were negative towards REIPPPP. There is still a large potential for more renewable energy projects to be implemented in South Africa thus, these challenges must be well understood and addressed going forward for SMMEs to fully benefit. Some of the recommendations are for policies and regulations to be implemented by the government to ensure that SMMEs operate on a level playing field. It is foreseen that by addressing policies as a root cause, the remainder of the challenges can easily be addressed.
A renewable energy solution for small to large businesses in the Kingdom of Eswatin
(University of the Witwatersrand, Johannesburg, 2023) Manana, Cusilakhe; Mondi, Lumkile
The Kingdom of Eswatini’s electricity supply is not self-sufficient and relies on the import of electricity to meet its local demand. This has resulted in the country importing 73% of its electricity from foreign suppliers including South Africa, Mozambique, and the Southern African Power Pool (SAPP). This heavy reliance on imports means the country cannot guarantee future supply nor have full control of the tariffs charged to customers for electricity. Solar photovoltaic (PV) technology installations have seen a steady increase worldwide due to improved efficiency in technology performance and a decrease in the cost of the technology. These advancements have resulted in solar technology becoming cheaper than traditional sources of energy available to consumers. The business venture investigates the viability of using solar technology as a solution to the high electricity costs being paid by small to large businesses within Eswatini. The venture aims to install, own, operate, and maintain solar PV plants at the customer’s property and sell the generated power to the customer. The venture does not seek to replace the utility supply but aims to provide an alternative cheaper solution as an input into operations. The business venture proposal targeted small to large businesses from varying industries across the country as respondents for the study. In the study, the market perception towards solar technology as well as consumer behavior analyzed to assist in formulating a business model for the venture which would ensure uptake of the value offering. Furthermore, the business venture investigated the viability of the project by evaluating performance parameters which included the levelized cost of energy (LCOE) of the solar plants, cash flows, Internal Rate of Return (IRR), and the Net Present Value (NPV)

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