Original Research

The feasibility of competitive electricity transmission in South Africa

F Ahwireng-Obeng, M Thobela
South African Journal of Economic and Management Sciences | Vol 9, No 3 | a1094 | DOI: https://doi.org/10.4102/sajems.v9i3.1094 | © 2014 F Ahwireng-Obeng, M Thobela | This work is licensed under CC Attribution 4.0
Submitted: 05 June 2014 | Published: 05 June 2014

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F Ahwireng-Obeng, Wits Business School
M Thobela, Wits Business School

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Abstract

The paper investigates whether competitive transmission of electricity is realisable in South Africa by adapting the Delphi research process to survey the opinions of expert panellists drawn from the relevant disciplines. The research propositions revolve around the roles that customers, generators and technology suppliers, among others, could play in providing competitive transmission services. Given that competition in electricity generation is generally accepted, the paper examines the extent to which sunk costs, fixed costs and scale economies are sufficient to block entry into the transmission services sector. The experts were unambiguously convinced that economies of scale in transmission were significant enough to block entry into the industry. Consequently, neither the successful introduction of competition in generation nor Eskom’s successful experiment in power transmission and telecommunications joint ventures provides sufficient grounds to believe that it is feasible to implement a competitive electricity transmission industry in South Africa.

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