Wits Business School (ETDs)
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Item The socio-economic impact of Eskom’s Just Energy Transition on the town of eMalahleni, Mpumalanga Province(University of the Witwatersrand, Johannesburg, 2023) Mamoleki, MailaThe United Nations Framework Convention on Climate Change (UNFCCC) established the need to reduce global warming by lowering temperatures. This involves the reduction in fossil power plants which are a major source of global warming. South Africa (SA) relies heavily on fossil power plants and Eskom is now transitioning toward the reduction of fossil energy generation. However, the impact of this transition is not yet understood fully. This calls for research into the socio-economic impacts of the transition, specifically in the town of eMalahleni, which is the largest source of coal in SA. Understanding these impacts will therefore assist in designing a transition which minimises the negative impacts and maximises positive impacts. The study adopted a qualitative approach with a case study to understand the socio-economic impacts of the Just Energy Transition (JET) in eMalahleni. Descriptive and thematic analyses were utilised. The study found that this JET would result in a loss of income and jobs, increase social ills and the expansion of ‘ghost towns’ in SA. The results suggest that this impact could be mitigated by using the gradual approach, upskilling plant employees, providing financial support and ensuring fairness between those who will lose their income and jobs and those who will gain jobs and income thus the losers can be compensated. It was concluded that the negative socio-economic impacts of the JET in eMalahleni are inevitable. People of eMalahleni are going to face the negative consequences from the energy transition. It was also concluded that there are positive impacts on the people of eMalahleni from the energy transition such as the improvement in the environment and health of people due to less carbon emissions. However, there are ways to mitigate these impacts, which are far outweighed by the positive impacts the change in power generation would bring. From the research, it is clear that a slow transition would ensure fairness and justice for all employees involved.Item The impact of independent power producers entering the South African electricity supply industry(2020) Mokhethi, Keketso ElijahFor over a decade, South Africa has been experiencing electricity supply challenges which were mainly due to generation or distribution failures, as well as operational inefficiencies at Eskom; and this raised concerns about the power utility’s ability to guarantee security and quality of supply. In order to address these challenges, several attempts were made in the past to introduce competition in the electricity supply industry, without any material success. The latest attempt has been to accelerate the introduction of Independent Power Producers (IPPs) through the Renewable Energy Independent Power Producer Programme. This study investigated the impact of IPPs gaining access to the South African electricity supply industry which has been dominated by Eskom for a long time; and if the current market conditions are conducive for a competitive electricity market in the country. The study also identified some of the market barriers experienced by different IPPs. A qualitative methodology, premised on an interpretive paradigm, was employed for the collection of data. The study specifically focused on the South African context as a developing country. The sample included experienced individuals who are either currently working or have previously worked in the industry, thereby enhancing the richness of interviews conducted. The study found that the cost of electricity using renewable technologies such as wind and solar PV (generated by IPPs) has reduced significantly and is therefore cheaper than current prices paid by customers which is mainly based on power generated by Eskom using coal, which contributes significantly to the levels of pollution in the country. However, customers are not benefiting from the reduced costs since IPPs sell their power directly to Eskom which on-sells to customers using tariffs that continue to escalate at above-inflation rates. Furthermore, the introduction of IPPs did not result in improved operational efficiencies. The study also found that market entry barriers were low with a few minor challenges. Another finding of the study is that the current electricity market structure is not conducive for competition to prevail and therefore a restructure of the South African electricity market should be considered. The study was original and makes contributions to the theory of public choice and the theory of economic regulationItem Determinants of Eskom’s key financial ratios(2020) Ndlovu, Senzesihle PhilaniThis research estimates an empirical model to determine the key drivers of Eskom’s profitability measures. These measures are return on assets (ROA) and net profit margin (NPM). The explanatory variables used were the real GDP growth rate, relative coal price, relative electricity price, USDZAR exchange rate, SA government bond yield, and Eskom’s default risk premium. The paper applies Ordinary Least Squares (OLS) estimation to timeseries data collected from the period 2000 to 2018 using multivariate regression analysis. The study finds that the key drivers of Eskom’s ROA are the growth rate of real GDP and the growth rate of relative coal prices. The growth rate of real GDP has a significant and positive impact on ROA. The second part of the investigation focused on the drivers of Eskom’s NPM. Of the six independent variables tested, only one variable was found to be statistically significant, and that variable was real GDP growth. The growth rate of real GDP has a significant and positive impact on NPM.