Energy procurement in the South African electricity supply industry – future scenarios for large power users

Abstract

Whilst the procurement of electricity within South Africa for large power users is currently done through the incumbent utility, Eskom, the future of electricity purchases within South Africa may be radically different. Structural changes to the South African electricity supply industry is likely in the next few years spearheaded by the unbundling of Eskom. In order to survive in this new world, procurement offices for large power users need to design strategies that are agile enough to adapt to these changes yet stable enough to ensure security of supply. This need may be facilitated by having a view of the possible futures and the factors responsible for driving it. This paper identifies the drivers of change for a future electricity supply industry through utilising scenario planning. The scenario planning framework is applied qualitatively through two subject matter expert focus groups. The results indicate there are seven drivers likely to influence the future electricity supply industry with two drivers, a desire to deregulate the electricity supply industry and an increased pressure to decarbonise the energy sector, having the biggest impact. Based on this, four alternative future narratives are derived to describe the plausible future of the electricity supply industry.