Current and Forthcoming Issues in the South African Electricity Sector
One of the contentious issues in electricity reform is whether there are significant gains from restructuring systems that are moderately well run. South Africa's electricity system is a case in point. The sector's state-owned utility, Es...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/04/7524355/current-forthcoming-issues-south-african-electricity-sector http://hdl.handle.net/10986/7026 |
| Summary: | One of the contentious issues in
electricity reform is whether there are significant gains
from restructuring systems that are moderately well run.
South Africa's electricity system is a case in point.
The sector's state-owned utility, Eskom, has been
generating some of the lowest-priced electricity in the
world, has largely achieved revenue adequacy, and has
financed the bulk of the government's ambitious
electrification program. Moreover, the key technical
performance indicators of Eskom's generation plants
have reached world-class levels. Yet the sector is
confronted today with serious challenges. South
Africa's electricity system is currently facing a tight
demand/supply balance, and the distribution segment of the
industry is in serious financial trouble. This paper
provides a careful diagnostic assessment of the industry and
identifies a range of policy and restructuring options to
improve its performance. It suggests removing distribution
from municipal control and privatizing it, calls for
vertical and horizontal unbundling, and argues that the
cost-benefit analysis of different structural options should
focus on investment incentives and not just current
operating efficiency. |
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