Who has not read about, heard of, or discussed the conditions of the electricity sector in South Africa in recent years? Whether your profession is related to the sector or not, everyone and anyone has an explanation for the mismanagement of the national supplier and the role of the government in load-shedding, and an opinion on the appropriateness of the prevailing regulated pricing system for the economy. The stall in progress can be attributed to the complex nature of the sector’s challenges, conflicting stakeholder objectives, the interrelation of government policy-makers at national, regional and local levels, and the entities in the sector being state-owned.
It is ironic however that in a country with so many supposed experts loudly offering so many solutions in the last decades, the electricity sector still malfunctions (to put it mildly), and the South African economy bears the brunt.
In South Africa, the focus of the research has shifted between the pricing structures of electricity – the Eskom applications to the National Energy Regulator of South Africa (NERSA) for price increases are always most interesting for energy enthusiasts – and the most cost-effective supply mix for electricity – the Integrated Resource Plan (IRP) is always a document for debate. Meanwhile, Eskom’s “death spiral”, management issues (corruption), lack of profitability, and changes in board have been on the front covers of newspapers and in the media on a frequent basis – and let me remind you of the most commonly used term of the last decade: “load-shedding”.
As an economist by profession, I am particularly supportive of the motivation of this book, which is to go back to the idea that institutions are fundamental for the sustainability of every economy and specifically for the electricity sector in South Africa. This book works on the premise of the complex relationship between the national economy, the three tiers of government, and energy supply and demand, where each stakeholder is represented with diverse agendas and objectives. The approach it follows is founded on the idea that if we don’t understand these complex interlinkages historically and deeply, we won’t be able to disentangle them and thus propose sustainable solutions.
Indeed, the proposed resolution in the book is based on the stakeholders’ co-operation from a political-system perspective. And that is the biggest challenge in the South African reality – to get all of the energy sector’s players to leave their individual agendas behind and agree to co-operate for the sector’s and economy’s overall advantage. After all, and ultimately, a well-functioning system that is in balance ensures that all stakeholders benefit.
When I first met and spoke with Dr Theo Covary, I enjoyed that we were both energy enthusiasts and learners – neither of us pretended that we knew everything and that we had all the answers. It was obvious from our first discussions that he believed in the interrelation of the public and private sectors and that efficiency of policies can only be realised from working with communities on the ground and from understanding the fundamentals of the system. His PhD dissertation, which this book is based on, was one of the first comprehensive municipal historical overviews with regards to electricity and energy, pinpointing policy structures and changes. He also aligned the theoretical context with the South African reality and conditions. Dr Covary is therefore a person who has the practical experience and expertise combined with a piece of the theoretical and academic knowledge necessary to explore holistic solutions for the South African energy sector.
Enjoy this thought-provoking book that will ignite new debates among energy stakeholders in the country.
Roula Inglesi-Lotz
Professor, University of Pretoria
President, South African Association for Energy Economics (SAAEE)
