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Generation of Electricity in South Africa
BY Yasmin Mahomedy
South Africa
16 February 2021
R 14 400.00 (ZAR)  
estimated $ 989.44 (USD) *
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Generation of Electricity


State-owned utility Eskom, which dominates the generation of electricity in South Africa, continues to be plagued by financial instability, corruption, generating capacity shortages, and a debt burden which is threatening the country’s economy. Despite the ongoing construction of two massive coal-fired stations at Medupi and Kusile to increase capacity, Eskom produced less electricity from coal in the year to March 2020 than the previous year due to maintenance and unplanned breakdowns. Government’s Integrated Resource Plan 2019 includes increased generation capacity from renewable sources, but South Africa remains reliant on coal for the foreseeable future.


Independent Power Producers


Government confirmed in February 2021 that it would issue a request for proposals for 2,600MW imminently, followed by another bid window in August 2021. Four bidding rounds have been completed to date and 4,201MW of electricity generation capacity from 67 IPP projects had been connected to the national grid. Independent power production has provided opportunities for new players and SMEs in the form of advisory services, transport and provision of hardware.


Corruption, Fraud and Mismanagement


Eskom and its employees have been the subject of numerous allegations including Eskom officials having financial interests in entities trading with Eskom, irregular payments and kickbacks. By September 2020, 278 cases related to fraud, corruption and irregularities were active and 82 cases for criminal prosecution had been referred to the police. Eskom is also instituting civil litigation to recover over-payments to implicated contractors.


Report Coverage


This report focuses on the generation of electricity and includes information on the size and state of the sector, including coal, gas and renewables and developments at Eskom and in the independent power production programme. There are profiles of 13 companies including Eskom, the National Energy Regulator of South Africa, Dedisa Peaking Power, Hopefield Wind Farm Local Community Company and ACWA Power Solafrica Bokpoort.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 4
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 9
4. STATE OF THE INDUSTRY 11
4.1. Local 11
4.1.1. Trade 24
4.1.2. Corporate Actions 25
4.1.3. Regulations 26
4.1.4. Enterprise Development and Social Economic Development 28
4.2. Continental 29
4.3. International 32
5. INFLUENCING FACTORS 34
5.1. Coronavirus 34
5.2. Economic Environment 34
5.3. Rising Operating Costs 35
5.4. Supply and Quality of Coal 36
5.5. Corruption, Fraud and Mismanagement 36
5.6. Electricity and Equipment Theft 38
5.7. Technology, Research and Development (R&D) and Innovation 39
5.8. Environmental Concerns 40
5.9. Labour 42
6. COMPETITION 45
6.1. Barriers to Entry 46
7. SWOT ANALYSIS 47
8. OUTLOOK 47
9. INDUSTRY ASSOCIATIONS 48
10. REFERENCES 48
10.1. Publications 48
10.2. Websites 49
APPENDIX 1 50
Summary of Notable players 50
COMPANY PROFILES 52
ACWA POWER SOLAFRICA BOKPOORT CSP POWER PLANT (RF) (PTY) LTD 52
ASSOCIATED ENERGY SERVICES (PTY) LTD 54
AVON PEAKING POWER (RF) (PTY) LTD 57
CENNERGI (PTY) LTD 59
CORIA (PKF) INVESTMENTS 28 (RF) (PTY) LTD 62
DEDISA PEAKING POWER (RF) (PTY) LTD 64
ESKOM HOLDINGS SOC LTD 66
HOPEFIELD WIND FARM LOCAL COMMUNITY COMPANY NPC 70
KELVIN POWER (PTY) LTD 72
NATIONAL ENERGY REGULATOR OF SOUTH AFRICA 74
PHELAN ENERGY GROUP (PTY) LTD 77
ROSATOM CENTRAL AND SOUTHERN AFRICA (PTY) LTD 79
SEF (SOC) LTD 81