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Generation of Electricity Updated Report Available
BY Yasmin Mahomedy
South Africa
29 May 2015
R 2 040.00 (ZAR)  
estimated $ 145.51 (USD) *
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Current Conditions


State-owned utility Eskom, which supplies 95% of power in South Africa, has been forced to implement controlled blackouts to avoid a total collapse of the national grid due to its ageing, deteriorating and under-serviced power plants that are struggling to meet demand. This is costing the country between R8n and R20bn every month, depending on the frequency and severity of the “load shedding.”


Difficult Times


Eskom continues to face cost pressures and according to the National Treasury, is owed R9bn by municipalities throughout the country. The utility has had to spend R1bn a month on emergency diesel supplies to help keep the country’s lights on and this has already depleted the R8bn profit Eskom announced in its interim financials at the end of 2014. Delays in construction and rising labour costs have meant that the cost of two new power stations, Medupi and Kusile originally estimated at R69bn and R80bn respectively, has increased to at least R154bn for Medupi and R172bn for Kusile. These financial woes have resulted in Eskom applying to the National Energy Regulator (Nersa) for a 2015/16 increase of 25.3%, inclusive of the 12.69% already granted for the current 2014/15 financial year.


Renewable Energy


Hope is being pinned on the generation of energy through renewable sources with the government planning to bring online 17,800MW from renewable sources by 2030. Through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), a total of 79 projects with a capacity of 5,243MW have been approved to date, representing an investment of R168bn.


Report Coverage


This report describes the current situation in the country, government’s attempts to ensure the reliable generation of electricity and factors influencing the sector’s success. The report also profiles 20 industry players, ranging from state-owned enterprise Eskom to small enterprises, Solarzone (Pty) Ltd and Darling Wind Power (Pty) Ltd, which are both involved in the renewable energy sector and employ ten people.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Supply Chain 4
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 6
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Corporate Actions 16
4.1.2. Regulations & Government Programmes 16
4.1.3. Enterprise Development and Social Economic Development 18
4.2. Continental 20
4.3. International 21
5. INFLUENCING FACTORS 23
5.1. Economic Environment 23
5.2. Government Intervention and Policy 23
5.3. Labour 25
5.4. Rising Input Costs 28
5.5. Supply and Quality of Coal 29
5.6. Electricity Theft 30
5.7. Technology 30
5.8. Environmental Concerns 31
6. COMPETITION 31
6.1. Barriers to Entry 32
6.2. Research and Development (R&D) and Innovation 32
7. SWOT ANALYSIS 33
8. OUTLOOK 34
9. INDUSTRY ASSOCIATIONS 35
10. REFERENCES 35
10.1. Publications 35
10.2. Websites 36
ORGANOGRAM 37
COMPANY PROFILES 39
ALLIED ELECTRONICS CORPORATION LTD 39
ASSOCIATED ENERGY SERVICES (PTY) LTD 43
CEF (SOC) LTD 45
CENNERGI (PTY) LTD 48
CREST OPERATIONS (PTY) LTD 51
CURRENT AUTOMATION (PTY) LTD 53
DARLING WIND POWER (PTY) LTD 55
EDISON POWER ELECTRICAL (PTY) LTD 57
ESKOM ENTERPRISES SOC LTD 59
IPSA GROUP PLC 62
KELVIN POWER (PTY) LTD 64
KGE TECHNOLOGY TWO THOUSAND CC 66
KWIKOT (PTY) LTD 68
NATIONAL ENERGY REGULATOR OF SOUTH AFRICA 70
PLAN-MY-POWER (PTY) LTD 73
SELECTED ENERGY (PTY) LTD 75
SINETECH CC 77
SOLARZONE (PTY) LTD 79
SOLSQUARE SOLAR HEAT (PTY) LTD 81
SUNFLARE RENEWABLE SYSTEMS CC 84