Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-26T20:27:26.614Z Has data issue: false hasContentIssue false

3 - When the Quest for Electricity Reform and the Need for Investment Collide: South Africa, 1998–2004

from Part I - Mitigating Institutional Voids by Design

Published online by Cambridge University Press:  14 November 2019

By
Nchimunya Hamukoma  and
Brian Levy
Edited by
Nuno Gil ,
Anne Stafford  and
Innocent Musonda
Nuno Gil
Affiliation:
University of Manchester
Anne Stafford
Affiliation:
University of Manchester
Innocent Musonda
Affiliation:
University of Johannesburg
Get access

Summary

In 1998 South Africa signalled its intent to pursue a far-reaching agenda of electricity-sector reform. This chapter explores the political challenges of moving from vision to action – with a focus on decision-making vis-à-vis reforming  the market structure for electricity generation, and setting prices for purchases from electricity generation providers. Whilst on the surface the reforms were supported by government, beneath that surface were many unresolved conflicts amongst stakeholders. The result was six years of reform churning – at a time when forward progress with investment in new electricity generation capacity was required. The analysis offers a cautionary tale as to the unintended consequences of embracing far-reaching policy reform proposals without any clarity as to how they might be implemented.

Type
Chapter
Information
Duality by Design
The Global Race to Build Africa's Infrastructure
 , pp. 69 - 96
Publisher: Cambridge University Press
Print publication year: 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Andrews, M. (2013). The limits of institutional reform in development. New York: Cambridge University Press.Google Scholar
Andrews, M., Pritchett, L. and Woolcock, M. (2017). Building state capability: Evidence, analysis, action. Oxford, UK: Oxford University Press.Google Scholar
Bailey, S. (2000, 7 November). NER reduces Eskom’s tariff increase to 5.2%. The Star, p. 1.Google Scholar
Belinska, B. (2003). Overview of the current NER regulatory framework for independent power producers in the electricity supply industry. National Energy Regulator Quarterly Journal, 2: 2.Google Scholar
Bhorat, H., Buthelezi, M. Chipkin, I., Swilling, M. et al. (2017). Betrayal of the promise: How South Africa is being stolen. Johannesburg: State Capacity Research Project.Google Scholar
Carothers, T. and de Gramont, D. (2013). Development aid confronts politics: The almost revolution. Washington, DC: Carnegie Endowment for International Peace.Google Scholar
Chalmers, R. (1998, 28 December). Competition bid will give Eskom a boost. Business Day, p. 10.Google Scholar
Chalmers, R. (1999a, 9 June). NUM rejects gov’ts denials. Business Day, p. 3.Google Scholar
Chalmers, R. (1999b, 13 December). Compromise on electricity price hike. Business Day, p. 1.Google Scholar
Chalmers, R. (2000, 23 November). Power producer may be licensed next year. Business Day, p. 4.Google Scholar
Chalmers, R. (2001a, 3 April). Eskom’s generation division gets new look. Business Day, p. 17.Google Scholar
Chalmers, R. (2001b, 11 April). Global utilities are set to pounce in SA. Business Day, p. 15.Google Scholar
Chalmers, R. (2001c, 4 July). State puts Eskom privatisation on the back burner. Business Day, p. 1.Google Scholar
Chalmers, R. (2001d, 1 October). Eskom unveils its new plan to restructure. Business Day, p. 3.Google Scholar
Chalmers, R. (2001e, 13 December). SA may get National Power Pool. Business Day, p. 2.Google Scholar
Chalmers, R. (2002a, 7 January). Three steps to be taken in reshaping power arena. Business Day, p. 1.Google Scholar
Chalmers, R. (2002b, 12 March). Eskom powering ahead despite challenges. Business Day, p. 21.Google Scholar
Chalmers, R. (2002c, 1 July). Eskom to be converted into a tax-paying public company today. Business Day, p. 12.Google Scholar
Chalmers, R. (2004, 24 October). Why the power is still with Eskom. Business Day, p. 13.Google Scholar
Chalmers, R. and Vermuelen, A. (1998, 18 December). Govt maps out energy deregulation. Business Day, p. 1.Google Scholar
COSATU. (2014). Tripartite alliance. COSATU. www.cosatu.org.za/show.php?ID=2051.Google Scholar
DOE (Department of Energy). (2014). About us. Department of Energy. www.energy.gov.za/files/au_frame.html.Google Scholar
DME (Department of Minerals and Energy). (1998). White paper on Energy Policy for Republic of South Africa. Pretoria: Department of Minerals and Energy.Google Scholar
DPE (Department of Public Enterprise). (2014). DPE overview. DPE. www.dpe.gov.za/about.Google Scholar
du Toit, E. E. (2003).The multi-market model for the introduction of independent power producers and private sector participation in the electricity supply industry in South Africa. National Energy Regulator Quarterly Journal, 2(1).Google Scholar
Eberhard, A. (2005). From state to market and back again – South Africa’s power sector reforms. Economic and Political Weekly, 40(50): 5309–5317.Google Scholar
Eberhard, A. and Gratwick, K. (2008). Demise of the standard model for power sector reform and the emergence of hybrid power markets. Energy Policy, 36: 3948–3960.Google Scholar
Eberhard, A., Kolker, J. and Leigland, J. (2014). South Africa’s renewable energy IPP program: Success factors and lessons. World Bank: Public Private Investment Advisory Facility.Google Scholar
EGI-SA (Electricity Governance Initiative of South Africa Working Group) (2010). The governance of power: Shedding light on the electricity sector in South Africa. Electricity Governance Initiative of South Africa. http://electricitygovernance.wri.org/files/egi/EGI-SA%20report%20-%20The%20Governance%20of%20Power%20(Feb. 2010)– cover.pdfGoogle Scholar
Ensor, L. (2000, 28 September). Parliament to process Eskom bill next year. Business Day, p. 4.Google Scholar
Ensor, L. (2004, 26 August). Eskom wants clarity on new power producers. Business Day, p. 2.Google Scholar
Eskom. (1998). Eskom annual report 1998. Johannesburg: Eskom.Google Scholar
Eskom. (1999). Eskom annual report 1999. Johannesburg: Eskom.Google Scholar
Eskom. (2012). Copy of historical average prices. Eskom. www.eskom.co.za/search/Pages/Results.aspx?k=copy%20of%20historical%20average%20%20prices%204%20july%202012. (Accessed 19 June 2014).Google Scholar
Fisher, N. and Downes, G. (2017). South Africa. www.iea.org/ciab/South_Africa_Role_Coal_Energy_Security.pdf . (Accessed 31 October 2017).Google Scholar
Gratwick, K. N. and Eberhard, A. (2008). Demise of the standard model for power sector reform and the emergence of hybrid power markets. Energy Policy, (36): 3948–3960. https://pesd.fsi.stanford.edu/sites/default/files/Demise_of_standard_model_Sept08.pdf. (Accessed 29 October 2017).Google Scholar
Green, D. (2016). How change happens. Oxford: Oxford University Press.Google Scholar
Hirsch, A. and Levy, B. (2017). Elaborate scaffolding, weak foundations: Business-government relations and economic reform in democratic South Africa. Graduate School of Developing Policy and Practice, Occasional Working Paper Number 8. University of Cape Town.Google Scholar
IC Publications. (2000). Eskom’s African expansion. http://www.thefreelibrary.com/ESKOM’S+AFRICAN+EXPANSION.-a0. (Accessed 20 January 2014).Google Scholar
International Energy Agency. (1998). World energy outlook. https://jancovici.com/wp-content/uploads/2016/04/World_energy_outlook_1998.pdf. (Accessed 29 October 2017).Google Scholar
Kessides, I. (2004). Reforming infrastructure: Privatization, regulation and competition. A World Bank Policy Research Report. Washington, DC: Oxford University Press and the World Bank.Google Scholar
Kindra, J. (2001, 15 November). Govt is breaking its promise, say unions. Mail and Guardian, p. 9.Google Scholar
Levy, B. (2014) Working with the grain: Integrating governance and growth in development strategies. New York: Oxford University Press.Google Scholar
Loxton, L. (2003, 10 April). Electricity tariff rises are inevitable this year, warns regulator. Star, p. 9.Google Scholar
Lunsche, S. (1999, 8 December). Eskom, jewel in the R150bn crown. Business Day, p. 4.Google Scholar
Marrs, D. (2001, 5 July). Plans for new Cape power plan on track. Business Day, p. 2.Google Scholar
Matyu, J. (2003, 12 March). Outrage over plan to hike Eskom tariff over inflation. The Herald (EP Herald), p. 7.Google Scholar
Messerschmidt, J. (2014a). A quarter of a century of electrification – Part One. EE Publishers. www.ee.co.za/article/messerschmidt-a-quarter-of-a-century-of-electrification-part-one.html. (Accessed 1 November 2017).Google Scholar
Messerschmidt, J. (2014b). A quarter of a century of electrification – Part Two. EE Publishers. www.ee.co.za/wp-content/uploads/2014/04/energize-april-14-p-22–24.pdf. (Accessed 1 November 2017).Google Scholar
Morgan, K. (2002). The current role of the NER in regulating South Africa’s electricity industry. National Energy Regulator Quarterly Journal, 1.Google Scholar
Nxumalo, F. (2003, 14 October). NER’s dim view of Eskom plan. Star, p. 5.Google Scholar
Phasiwe, K. (2003a, 16 July). Eskom warns of power shortage. Business Day, p. 2.Google Scholar
Phasiwe, K. (2003b, 15 September). Eskom in upgrade to avert blackouts. Business Day, p. 2.Google Scholar
Phasiwe, K. (2003c, 13 November). Billions needed to light up SA’s future. Business Day, p. 3.Google Scholar
Phasiwe, K. (2003d, 4 December). Eskom in appeal to minister over tariff. Business Day, p. 2.Google Scholar
Phasiwe, K. (2003e, 10 December). Regulator warns Eskom on tariff increase. Business Day, p. 2.Google Scholar
Phasiwe, K. (2004a, 20 May). Eskom still cheapest supplier of electricity in the world, but for how long? Business Day, p. 2.Google Scholar
Phasiwe, K. (2004b, 20 May). State peg’s utility’s tariff raise at 2.5%. Business Day, p. 2.Google Scholar
PARI (Public Affairs Research Institute). (2013). Why the lights went out: Reform in the South African energy sector. Written for the Graduate School of Development Policy and Practice. Johannesburg: PARI.Google Scholar
Public Protector. (2016). State of capture. Report No. 6 of 2016/17. Pretoria: Republic of South Africa.Google Scholar
SAPA. (2003, 10 April). Power to the people looks set to come at a higher price. Star, p. 6.Google Scholar
Singh, S. (2001, 30 November). Who will pay for the poor? Financial Mail, p. 50.Google Scholar
Singh, S. (2004, 23 January). Test still lies ahead. Financial Mail, p. 40.Google Scholar
Sonjica, B. (2008). Address by the Minister of Minerals and Energy, Ms Buyelwa Sonjica, MP: Joint Sitting of Parliament on electricity load shedding problem. http://oldgov.gcis.gov.za/speeches/2008/08013015151001.htm. (Accessed 31 October 2017).Google Scholar
South Africa, the Presidency. (2006). Electricity Regulation Act. Government Gazette 28992, Notice 660, 5 July 2006. Pretoria: Government Printer.Google Scholar
Steyn, G. (2006). Investment and uncertainty: Historical experience with power sector investment in South Africa and its implication for current challenges. Prepared for the Management Programme in Infrastructure Reform and Regulation (MIR) at the Graduate School of Business and the University of Cape Town. www.gsb.uct.ac.za/files/Eskom-InvestmentUncertainty.pdf. (Accessed 21 June 2013).Google Scholar
Stuart, B. (2002, 8 March). Cheap power planned. Citizen, p. 6.Google Scholar
Thompson, F. (2002, 30 April). Eskom revamp needs realism jolt. Business Day, p. 15.Google Scholar
Wa Sekano, P. (2003, 6 April). Free power switch-on boon for the poor. City Press, p. 4.Google Scholar
Wray, Q. (2003, 27 June). Watchdogs not reining in prices – Schussler. Star, p. 5.Google Scholar
Yanguas, P. (2018). Why we lie about aid. Chicago: University of Chicago Press.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×