Kessides, Ioannis N.Bogetic, ZeljkoMaurer, Luiz2012-06-042012-06-042007-04https://hdl.handle.net/10986/7026One of the contentious issues in electricity reform is whether there are significant gains from restructuring systems that are moderately well run. South Africa's electricity system is a case in point. The sector's state-owned utility, Eskom, has been generating some of the lowest-priced electricity in the world, has largely achieved revenue adequacy, and has financed the bulk of the government's ambitious electrification program. Moreover, the key technical performance indicators of Eskom's generation plants have reached world-class levels. Yet the sector is confronted today with serious challenges. South Africa's electricity system is currently facing a tight demand/supply balance, and the distribution segment of the industry is in serious financial trouble. This paper provides a careful diagnostic assessment of the industry and identifies a range of policy and restructuring options to improve its performance. It suggests removing distribution from municipal control and privatizing it, calls for vertical and horizontal unbundling, and argues that the cost-benefit analysis of different structural options should focus on investment incentives and not just current operating efficiency.CC BY 3.0 IGOASSET MANAGEMENTAVAILABILITYAVERAGE TARIFFBALANCECAPACITY EXPANSIONCAPITAL INVESTMENTCAPITAL INVESTMENT COSTSCATASTROPHIC FAILURECOALCOAL GASCOAL PRODUCERCOAL RESERVESCOMMERCIAL CUSTOMERSCOMPETITIVE BIDDINGCONSUMER OF COALCONSUMER PRICE INDEXCOST RECOVERYDISTRIBUTION ASSETSDISTRIBUTION BUSINESSESDISTRIBUTION COMPANIESDISTRIBUTION FACILITIESDISTRIBUTION NETWORKDISTRIBUTION SYSTEMECONOMIC COSTSECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GROWTHECONOMIES OF SCALEELECTRIC POWERELECTRIC POWER DISTRIBUTIONELECTRIC UTILITIESELECTRICAL ENERGYELECTRICAL GENERATIONELECTRICAL GRIDELECTRICAL POWERELECTRICITYELECTRICITY CONSUMPTIONELECTRICITY DISTRIBUTIONELECTRICITY DISTRIBUTION NETWORKSELECTRICITY EXCHANGEELECTRICITY GENERATIONELECTRICITY INDUSTRYELECTRICITY MARKETELECTRICITY MARKETSELECTRICITY NETWORKSELECTRICITY PRICESELECTRICITY REFORMSELECTRICITY REGULATIONELECTRICITY REGULATORELECTRICITY RESTRUCTURINGELECTRICITY REVENUEELECTRICITY SALESELECTRICITY SECTORELECTRICITY SERVICESELECTRICITY SUPPLYELECTRICITY SYSTEMELECTRICITY SYSTEMSELECTRICITY TARIFFSELECTRICITY UTILITIESELECTRIFICATIONENERGY GENERATIONENERGY LOSSESENERGY POLICIESENERGY POLICYENERGY RESEARCHENERGY SOURCESENERGY SUPPLYENVIRONMENTAL CHALLENGESENVIRONMENTAL IMPLICATIONSENVIRONMENTAL PERFORMANCEEXCESS POWERFINAL CUSTOMERSFINANCIAL VIABILITYFOREIGN CURRENCY DEBTFOREIGN INVESTORSGAS FIELDSGAS TURBINEGAS TURBINESGENERATING CAPACITYGENERATING UNITSGENERATIONGENERATION OF ELECTRICITYGOVERNMENT GUARANTEESGROWTH IN DEMANDHYDROELECTRIC STATIONSHYDROPOWERINCOMEINFRASTRUCTURE PERFORMANCEINTERNATIONAL CAPITAL MARKETSINTERNATIONAL COMPETITIVENESSINTERNATIONAL ENERGYINTERNATIONAL ENERGY AGENCYINVESTMENT INCENTIVESINVESTMENT PROGRAMKEROSENENATURAL GASNETWORK PLANNINGNUCLEAR POWERNUCLEAR POWER STATIONOILPEAK DEMANDPEAK POWERPEAK POWER GENERATIONPERFORMANCE INDICATORSPLANT PERFORMANCEPLANT RELIABILITYPOWERPOWER DISTRIBUTIONPOWER PLANTPOWER PLANT CONSTRUCTIONPOWER SECTORPOWER SECTOR REFORMPOWER SHORTAGESPOWER STATIONPOWER STATIONSPOWER SYSTEMPRICE INCREASESPRICE OF ELECTRICITYPRIMARY ENERGYPRIMARY FUELPRIVATE SECTOR PARTICIPATIONPUBLIC UTILITYRECOVERABLE COALRENEWABLE ENERGYRENEWABLE ENERGY RESOURCESRESIDENTIAL CUSTOMERSRETAIL ELECTRICITYRURAL ELECTRIFICATIONSUPPLY INTERRUPTIONSSUPPLY OF ELECTRICITYSURPLUS CAPACITYSYNTHETIC FUELSTARIFF ADJUSTMENTSTAX RATETRANSMISSION ASSETSTRANSMISSION CAPACITYTURBINE GENERATORTURBINE GENERATORSVOLTAGEWORLD ENERGYWORLD OILWorld Bank10.1596/1813-9450-4197