Other countries that have suffered power cuts offer South Africa lessons.
, a drought in 1992 caused the main source of electricity supply – which came from a hydroelectric plant – to literally dry up.power shortages for 15 yearsAll three countries followed a similar route, as have many others. They untangled their single electricity companies, focusing on keeping parts of it under state control and opening up the rest to a mix of state and private companies.First is generation — generating electricity at a power plant.
This part is best managed by a central body — in many countries a state-owned company. Because the transmission business can recover costs, it can use that income to increase transmission capacity,Actually a monopoly in generation is bad for all the same reasons that all monopolies are bad. They typically charge more and produce less.
Distribution is best left to a company as close to the end user as possible — in almost all countries, that is the municipality. In South Africa, it is a mix. This means that Eskom has to do everything: generate electricity, transmit it on large power lines to the cities and then distribute it to individual customers. It is a “vertical monopoly”.
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