South Africa is considered to be one of the largest economies in Africa. The country has experienced significant economic growth ever since it got its independence a few decades ago. Even with such positive changes, the country continues to face significant hurdles when it comes to meeting its energy needs ( Eberhard, 2005 ). For a long time, South Africa has been experiencing periods of widespread blackouts due to reduced power supply and increased demand. The blackouts have destabilized the nation’s grid and made it difficult for individuals and companies to operate normally. The energy crisis in South Africa started to become evident in the year 2007 and has continued to affect the country to date ( Reena & Roberts , 2017 ). The government owned energy supplier, Eskom, has attributed the problem to reduced generation capacity in the country. With the demand for energy increasing, the nation ought to have developed new methods for increasing generation capacity. However, this has not been the case and it has significantly affected the manner in which the country meets the needs of the citizens. Other factors such as a low reserve merging, frequent need for repairs and maintenance, and failure of the power stations to operate at the optimal levels have also contributed to the energy crisis in the country. The crisis has a significant impact on almost all sectors of the economy. For instances, the mining sector loses millions of shillings due to insufficient power. The same apply to manufacturing companies that struggle to meet their production goals as a results of power shortage. It is against this background that there have been concerns about the energy crisis and ways of addressing it.
The subject of energy crisis has featured significantly in previous literature on South Africa. Being one of the most advanced nations in the continent of Africa, it is expected that South African would have enough power and energy to support intensive industries such a smelting, paper production, manufacturing, and mining (Oji, C. & Weber, O. 2017a). These are sectors that are significant to the growth and development of the national economy. Oji, C. and Weber (2017), however, stated that since 2007, the country has been experiencing serious energy crisis. In addition, the current supply of energy is not capable of supporting domestic and industrial requirements and uses. As a result, there are frequent cases of power cuts that adversely affect the economy. According to Oji and Weber (2017), at the start of 2007, the electricity capacity in South Africa was about 40,000 MW. This was way below the industrial and household power requirements in the country. The situation has worsened in the recent years as companies and industries strive to expand their operations (Oji, C. & Weber, O. 2017). In such a case, the power distributors are forced to adopt the load shedding method which entail systematic rationing of power depending on the region and energy demands. When such an approach is taken, the energy intensive organizations such as mining and smelting companies are forced to temporarily stop their operations until power is restored.
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There seems to be a consensus among researchers that Eskom may also be contributing to the current energy crisis in the country. The state-owned company operates as a monopoly in the power distribution sector. In addition, the organization handles more than 90 percent of the electricity that is used in South Africa through its affiliates and partners such as the coal fired plants. With the increasing demand for energy security and electricity, the government owned company has struggled to meet the needs of its clients. In the year 2010, the government came up with a plan that was meant to increase electricity generation to 50,000MW by the year 2030. It was anticipated that part of this capacity would come from the renewable sources of power. The government has also shown commitment in financing the efforts that are geared towards increasing the energy security in the county through the use of renewable sources. These initiatives are meant to help in addressing the current energy shortage in the country ((Oji, C. & Weber, O. 2017c). Furthermore, the programs are geared towards reducing the dependence on the non-renewable sources of power which are considered to be unfriendly to the environment (Grant, K. 2008). For instance, the core-powered plants are regarded as a major source of pollution. Therefore, there is an increasing call for the plants to be abolished and replaced by more sustainable and environmentally friendly sources. However, this is not something that can be done overnight considering the current energy crisis that South Africa is going through.
The current attempts to change the power sector in South Africa is an example of a case where the government adopts a standard model of working with a single institution that does not face any kind of competition in the country. The government appears to have focused on addressing the issue without thinking about competition and privatization. Initially, the government had thought about reforming the state utility company, Eskom while also commissioning the design of an electricity market that was characterized by fiscal hedges and bilateral contracts. The government believed that by selling part of Eskom, the private sector partners would come in to make new investments needed to increase the power generation capacity in the country (Lüdemann, C. 2012; Sweaney, S. 2017). However, none of these reforms has been adopted at the momement and the South African government has continued to support Eskom as the leading player in the generation and distribution of power in the country. With minimal competition and little involvement of the private sector, it implies that the power industry in South Africa is likely to stagnate. In addition, the failure of the administrations to address the governance relationships and commercial performance through contracts and corporatization has made it difficult for the country to deal with the menace of power shortage (Bilotta, N. & Colantoni, L. 2016). Eskom continues to be the dominant player in the energy industry and it accounts for a considerable volume of power that is used in the country. Furthermore, the company has not been able to increase the production capacity in the country in response to the increasing energy demands. If the situation continues, then South African are likely to experience the power blackouts for a long time. In the long run, companies will not be able to operate normally and meet the specific needs of the customers in a timely way.
South Africa has continued to differentiate itself from other developing economies by focusing on creating a well-functioning public utility. Unlike other nations in African that have been facing serious cases of operational inefficiencies, Eskom has managed to contribute to the development of the country (SASOL, 2020). Furthermore, the company has been working to improving the energy capacity in the country. However, there is still room for improvement if the nation is to continue with the growth trajectory that it has experienced over the years. Some of the factors that will make it possible for the country to enhance its power generation capacity include microeconomic stability and the absence of heavy debt burden. In addition, there is a room for the nation to embrace privatization in the energy sector and promote competition. It is only through such revolutionary methods that the country will be able to realize equal access to electricity by different groups and populations ( Montmasson-Clair, G. & das Nair, R. 2017 ). While Eskom is considered to be a company that is being managed well, there is a need for further liberalization of the energy market to allow for the entry of other players who can contribute to the development of the sector. A review of previous literature show that researchers and experts believe that South Africa requires a comprehensive energy policy that will enhance the management of Eskom while also allowing the independent companies and private investors to join the sector (Niyibizi, A. 2015). These eternal partners will be able to exploit the available opportunities to produce energy need for domestic and commercial use. In the end, the policy will provide a basis for reforming the sector and ensuring that South Africans do not suffer from the constant power cuts that they have faced since the year 2007.
One of the main areas in which researchers have focused on when addressing the power crisis in South Africa is the utilization of renewable energy sources (Niyibizi, 2015). For a long time, South Africa, just like many countries around the world, has depended on the non-renewable sources of energy to meet its needs. The country has been relying on the coal powered plants that tend to cause adverse effects on the environment. The non-renewable sources have not allowed the country to meet the energy needs of its citizens and businesses that operate in the country. In response, there have been calls for Eskom to expand the generation capacity. Since Eskom works majorly with the coal power plants, it implies that such efforts are likely to lead to environmental pollution. In addition, the sustainability of the program remains an issue of concern as nations work towards the creation of a clean environment where people can be able to live a normal and healthy life. In response, researchers have identified renewable sources of energy as a potential solution to the current energy crisis in the country ( Montmasson-Clair, G. & das Nair, R. 2017 ). The renewable sources include solar voltaic sources, concentrated solar cells, biogas, landfill gas power and hydro plants. These sources can significantly improve the production capacity in the country even when done in small steps. The primary rational for developing the renewable sources of energy is to diversity the energy mix in the country. Furthermore, such interventions provide basis for reducing the greenhouse gas emissions and helping countries to work towards sustainable development. While the approach that the country takes to embrace such programs may be different, there is a consensus that the programs will go a long way in increasing energy generation capacity. Furthermore, they can help in meeting the electricity needs in the country.
The South African government has always been working towards improving the energy capacity in the country. In addition, the government has been looking for avenues through which it can address the current shortage of power ( Reena & Roberts , 2017). The initiatives are fueled by the realization that energy shortage can affect job growth, domestic industrialization, economic development, and community development. In addition, it can affect the ability of businesses to meet the specific needs of the customers. At the moment, the renewable energy programs have not been implemented widely in the country. Instead, South Africa continues to rely on its traditional sources of power. Available research evidence shows that the demand for electricity in South Africa has increased in the last two decades ( Reena & Roberts , 2017). The trend is likely to persist in the future as families and companies strive to get sufficient power for their everyday activities. In such an environment, there is a market for energy producers. Those that are involved in the generation of power can tap into the market to contribute to the efforts aimed at increasing the generation capacity in the country. While responding to the energy shortage, however, it is also imperative to consider the fact that nations such as South Africa have been working towards sustainable development. Moreover, the country is partnering with other governments around the world to reduce the release of greenhouse gases to the atmosphere. The use of renewable sources of energy remains a critical area that the government has directed its attention in the recent years. Therefore, the renewable energy market remains a promising sector for organizations and individuals who want to go into the south African energy sector.
References
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Reena, D. & Roberts. S, 2017. "Competition and Regulation Interface in Energy, Telecommunications and Transport in South Africa." Competition Law and Economic Regulation in Southern Africa: Addressing Market Power in Southern Africa , by Simon Roberts et al., Wits UP, 2017, pp. 120-48. JSTOR , www.jstor.org/stable/10.18772/22017070909.11. Accessed 8 Feb. 2021 .
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