The impact of private sector participation in the South African electricity supply industry

Abstract

The South African economy was hit hard by the electricity crisis of 2008 where increasing demand for electricity outstripped the available supply that led to load shedding. Many jobs were lost, industries could not keep up with international competition and as a result jobs were lost in the process affecting many households in the country. This is the context within the debate around the introduction of private sector participation in the electricity industry to assist Eskom to meet the demand and stimulate economic growth. This paper examines the introduction of the Independent Power Producers and its impact on the industry. The objective of this paper is to assess the impact of the Independed Power Producers can assist the country and Eskom to reduce the problem of electricity shortage in South Africa. It has been found that to level the playing field in the industry, the horizontal structure of the electricity industry will have to disaggregate.