The impact of independent power producers entering the South African electricity supply industry

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dc.contributor.authorMokhethi, Keketso Elijah
dc.date.accessioned2021-04-09T13:51:20Z
dc.date.available2021-04-09T13:51:20Z
dc.date.issued2020
dc.descriptionA thesis submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in fulfilment of the requirements for the degree of Doctor of Philosophy (PhD), 2020en_ZA
dc.description.abstractFor 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 regulationen_ZA
dc.description.librarianCK2021en_ZA
dc.facultyFaculty of Commerce, Law and Managementen_ZA
dc.identifier.urihttps://hdl.handle.net/10539/30846
dc.language.isoenen_ZA
dc.phd.titlePhDen_ZA
dc.rights.holderUniversity of the Witswatersrand, Johannesburg
dc.schoolWits Business Schoolen_ZA
dc.subjectIndependent Power Producers
dc.subjectElectricity supply industry
dc.subjectSouth African
dc.subjectElectricity
dc.subjectEskom
dc.subjectPower utility
dc.subjectRenewable Energy Independent Power Producer Programm
dc.subjectUCTD
dc.subject.otherSDG-7: Affordable and clean energy
dc.titleThe impact of independent power producers entering the South African electricity supply industryen_ZA
dc.typeThesisen_ZA
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