Faculty of Commerce, Law and Management (ETDs)

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    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.
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    Non-Payment of Electricity by Border Post residents in Amahlathi Local Municipality, Eastern Cape
    (University of the Witwatersrand, Johannesburg, 2023) Makgoga, Amanda; Mosenogi, Marumo
    Eskom is a monopolistic electricity power supplier for South Africa as well as supplying neighbouring countries. Despite this advantage, the company is still beset by a heavy debt burden, increasing pressure from growing outstanding customer debt, and operational instability. Eskom, which is not different from other utilities globally, faces financial problems that halt the investment in capacity upgradation, Due to a lack of infrastructure investment, the country has experienced sporadic periods of loadshedding, undermining South Africa's efforts to re-ignite economic growth as the country recovers from the global COVID-19 pandemic. The non-payment of electricity was cited as one of the other reasons that negatively contributed to the financial crisis at the utility, which resulted in minimal investment in capacity upgradation. Furthermore, Eskom has indicated that there is an increase in non-payment of electricity and has continuously urged its consumers to refrain from this illegal act which results in billions of Rand of revenue loss. As a result, six factors were examined to better understand the extent and influence these factors have on non-payment of electricity, using Border Post Location as an area of study. This was accomplished by ranking the factors from most to least significant, whereby the order was as follows:poverty, high electricity prices, unemployment, poor law enforcement, poor quality of supply, and lastly, literacy. Also, the research reveals the ineffectiveness of free basic electricity that was designed to help those households in financial distress not to partake in non-payment of electricity.
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    Impact of weighted average cost of capital (wacc) on utility‐scale solar photovoltaics (pv) levelized cost of electricity
    (University of the Witwatersrand, Johannesburg, 2023) Shendile, Severus Twahafa; Odei-Mensah, Jones
    Namibia has one of the highest solar irradiation levels in the world, making it an ideal destination for renewable energy investments. The country receives an average of 300 days of sunshine per year. This means that there is an abundance of solar energy that can be harnessed for electricity generation using solar photovoltaic (PV) technology. The levelized cost of electricity (LCOE) is a key metric used to evaluate the financial viability of a solar PV project and is influenced by a range of factors that impact the cost of generating electricity from solar energy. The parameters that affect LCOE for solar PV systems include solar irradiation, O&M cost, financing cost, inverter efficiency, system design, system lifetime, regulatory environment, and the weighted average cost of capital. These parameters can interact with each other, and changes to one parameter can impact the LCOE in different ways. Several studies have considered the sun’s strength as the primary exogenous factor driving the cost of electricity and have treated other parameters such as the WACC, as largely endogenous and thus irrelevant to their analysis. This study has analyzed how the weighted average cost of capital from twenty- six projects in Namibia between 2014 -2022, impacts the levelized cost of electricity of utility-scale photovoltaic. This study has shown that while both solar irradiation and the WACC are essential factors that influence the LCOE of a solar PV project, WACC has a more significant impact on the LCOE for solar PV projects than solar irradiation because the cost of capital represents a substantial portion of the total cost of a solar PV project, while solar irradiation mainly affects the electricity generation potential of the project
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    An Essay on the Welfare and Growth Implication of the Energy Mix in the South African Economy
    (University of the Witwatersrand, Johannesburg, 2023) Sesele, Masedi; Kutela, Gelo
    This study investigated the welfare and growth implications of introducing renewable energy in South Africa’s energy mix. The investigation is divided into three chapters, providing a holistic analysis of climate change mitigation on developmental goals in South Africa. The first chapter determines the impact of the usage of non-renewable energy sources on selected sectors’ economic output in South Africa. The second chapter determines the pass-through effect and the response of consumer prices to renewable energy share increases in South Africa while using the exchange rate as a threshold. The third chapter determines through a natural experiment the impact of renewable energy policies such as the White Paper on the Energy Policy of the Republic of South Africa (1998), the White Paper on Renewable Energy Policy (2003) and the Integrated Resource Plan (2010) on South Africa’s economic growth by comparing the gross domestic product (GDP) growth path before and after the introduction of these policies. Results from the second chapter showed that coal was the least contributing factor to production for most sectors, showing that excessive coal usage may hinder economic output within the country. Petroleum has a positive and significant effect on the transport and agriculture sectors but has less of an effect on the other sectors. Electricity is a major contributing factor to production in some sectors, except for the industry sector, which may be adversely affected by the increasing electricity costs and constant load shedding in the country. Results from the third chapter showed that at an exchange rate threshold value of 7.7 R/$, the share of renewable energy pass-through to consumer prices is statistically significant below and above the threshold exchange rate value. When the exchange rate is above the threshold value, the pass- through effect is negative, indicating that an increase in the share of clean energy will decrease consumer prices. These results are largely attributed to the cost of renewable energy, which has been declining significantly in periods where the exchange rate was above the threshold value and, as a result, it had a negative pass-through effect on consumer prices. Results from the fourth chapter showed that each of the three green energy policies has a positive impact on the GDP, which shows that implementing renewable energy policies in South Africa has not only resulted in generating clean, renewable energy but also fosters economic growth within the country. Using a natural experiment, the study constructed a synthetic GDP growth path that vi would have been in place had there been no renewable energy intervention and compared it with the current GDP growth path post the intervention of renewable energy policy to identify the causal positive impact of green energy on economic growth. This thesis’ results encourage policymakers to further implement and improve renewable energy policies as the share of clean energy within South Africa’s energy mix not only mitigates climate change by decreasing greenhouse gas emissions but also positively affects economic growth by creating a clean ecosystem, job creation, increasing innovation and capital formation and overall improving total factor productivity in South Africa and the standard of living of ordinary South Africans
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    The impact of independent power producers entering the South African electricity supply industry
    (2020) Mokhethi, Keketso Elijah
    For 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 regulation