Inderscience Publishers

The reemergence of state-centred power sector reform: the case of South Africa

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Courtesy of Inderscience Publishers

The power sector in South Africa is dominated by the state-owned, vertically integrated utility, Eskom. An Energy Policy White Paper and subsequent Cabinet decisions laid out a path of managed liberalisation. However, government still experiences ambivalence and doubts around restructuring. The 'standard' model of power sector reform of the past decade – vertical and horizontal unbundling, wholesale and retail competition and privatisation – has, in effect, been abandoned by South Africa, and increasingly by many other developing countries. This does not mean that governments will accept inefficient utilities. There is a still a commitment to ensure improved performance by state-owned enterprises through appropriate governance and regulation. Capital constrained countries will also open up space for private investments – mostly within the framework of a 'hybrid market' where the state utility remains dominant. What remains to be seen is whether the investment mistakes of the past can be obviated and whether security of supply can be achieved at an acceptable price.

Keywords: power sector reform, electricity reform, developing countries, reform drivers, electrification, investment, commercialisation, corporatisation, restructuring, competition, regulation, state control, South Africa, liberalisation

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