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Unbundling Eskom – a silver or lead bullet?

The recent plan by the government of South Africa to unbundle the state electricity provider into three arms – Generation, Transmission and Distribution – has raised various questions. One of the more important question pertains to how the R400 billion debt will influence the unbundling. This article draws on international experiences as a way of preempting which outcomes (both negative and positive) the unbundling will result in, taking into account Eskom’s performance over time. While our analysis is not definitive, it does infer that in order to minimise the negative externalities, and maximise the positive gains from unbundling, there is need for government to have a well-considered action plan that balances the interests of the private and public sector.

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Electricity efficiency in South Africa and the dangers of nominal data

As a follow-up to an earlier blog that considered the energy efficiency performance of the South African economy from 2000 to 2012, this blog looks at the electricity intensity of the economy from 1995 to 2015. The data not only tells an interesting story, but also highlights the dangers when using nominal data to consider the relationship between variables.

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Warning to Eskom’s residential consumers: your electricity bill may need closer scrutiny

The blog aims to highlight inconsistencies in Eskom’s newly introduced bill estimation policy observed from the writer’s household bill. It highlights the non-transparent manner in which this policy was introduced and raises questions about Eskom’s underlying motives for doing so. Eskom’s residential customers are urged to carefully assess their energy usage and if necessary direct any questions to the utility.

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The descent into darkness: chronicles of a South African electricity consumer

It’s a Sunday evening and now 30 hours into a power outage. I would have been happy with load shedding. At least, those power cuts last for two hours and there is a defined start and end to it. But in my case, the problem is bigger. Along with millions of South Africans, I have learnt to accept that load shedding and power outages will become a feature of my life over the next few years. Barring the inconvenience, spoilt food and a rather unproductive weekend, I am not overly annoyed by this power outage. After all, it’s been a while since I last drafted a note by candlelight.

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South Africa’s energy efficiency performance since 2000

The National Energy Efficiency Strategy (NEES) released in 2005 set a national target for energy efficiency improvement of 12% by 2015 compared to a 2000 baseline. This monitoring system envisaged to accompany the roll-out of the NEES, however, is still under development and there has been no monitoring of the NEES to date. This makes it difficult to rigorously assess progress towards meeting this target. Consequently this blog provides a non-rigorous glance at what the available data can tell us about South Africa’s energy efficiency performance between 2000 and 2012.Over this period, energy intensity decreased by 13.2 percent and electricity intensity by a whopping 25.4 percent.

Over the same period, the contribution of the tertiary sector (which is typically less energy-intensive than the primary and secondary sectors) to GDP increased by 8 percent (to 69.6 percent), while the contribution of the primary sector fell by almost a third (to 7.9 percent). It is clear that the energy intensity picture in South Africa is changing over time. What is not clear yet, however, is whether this is predominantly due to increased energy efficiency and decoupling between economic growth and energy use, or whether this is being driven by structural changes to the South African economy.

A cost-benefit analysis is only as good as the assumptions that underlie it. If a rigorous assessment of the relative merits of exploiting Karoo Basin shale gas is to be undertaken, it is important that these two factors (amongst other critical assumptions – on both the cost and benefit side of the analysis) are considered in detail.

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Lights out!

(and previously published as part of their Geekonomics column in the Business Day)
Rolling blackouts and electricity rationing have had a widespread and serious impact. The media are not immune. As part of Business Days’s commitment to cut energy usage by 20 percent, one in every five columnists is to be cut. The Geeks, as major emitters of hot air, have voluntarily agreed to withdraw this column and this will be out last regular contribution to ‘The Exporter’ supplement. As the crisis eases and our own energy levels return, we hope to provide further occasional commentary. We are betting that there will be no shortage of good material.

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