Sep 07, 2012
Greater collaboration urged as SA moves towards multiparticipant power marketBack
SECURITY|Africa|Security|Werksmans Attorneys|Africa|South Africa|Security|Electricity Sector|Energy|Internet Solutions Internetix Conference|Multiplayer Electricity Industry|Power Producers|Security|Greg Nott|Happy Masondo|James Surowiecki|Power|Security|Reinforcing|South East Asia
© Reuse this
The current transition to a multiplayer electricity industry, which can cause frustrations, also means that the South African industry can avoid the problems faced by independent power producers in South-East Asia during the 1990s, where a financial crisis and, in some instances, a lack of prudent technical assessments led to serious problems.
The risk of instability and market collapse can be tempered by careful development of an independent power production industry, which does take time, he says.
However, effective collaboration is an arduous task because it entails detailed debate and compromise, but leads to superior decisions, said newspaper New Yorker journalist and author James Surowiecki, who spoke at the Internet Solutions Internetix conference in August.
Using Bayesian probability mathematics, which gives the probability of an effective solution to a problem, given limited and unverified information, such as those encountered daily in business meetings where effective decisions must be taken using limited information, Surowiecki noted that diversity in groups and teams effectively countered the effects of incomplete information on decisions.
Diversity in teams means that a broader problem space is explored, compared with mutual reinforcing that occurs between like-minded people that can amplify incorrect assumptions and, hence, decisions, he explained.
“Working in diverse teams is not easy. We like to work with people whom we agree with and we must work hard as part of a diverse team. Working in diverse teams can also be uncomfortable and frustrating; the best decisions, however, do not arise from easy consensus, but rather from conflict, disagreement and compromise. An effective decision must balance the diverging views of a diverse team and effectively integrate different viewpoints in order to determine the best course of action.”
It falls to the industry to form a more coherent view with which to approach government and to support government in growing an independent power industry rather than advocating competing market views, which can make government policymaking uncertain, says Nott.
“If we analyse the prospects of an independent power producer in South Africa based on the existing legislation and policy environment, then the prospects are good. However, in light of the recent delay of financial closure for initial independent power production bidders and with no date given for financial closure of these bids, the implementation of policy by government remains in question, increasing risks and financial costs,” says Werksmans Attorneys director Happy Masondo.
“To ensure security of supply, South Africa needs independent power producers and alternative sources of energy,” she concludes.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other Regulation News
Article contains comments
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The board of UD Trucks Southern Africa (UDTSA) has announced the resignation of MD Jacques Carelse. Long-time UD employee, corporate planning and marketing GM, Rory Schulz, has been appointed as acting MD while the process started to appoint a new MD. The Japanese...
There is a need to start planning another pumped storage scheme in South Africa. Much work has already been done at a site in the Limpopo province and the project was very close to being put out to tender at one stage. In 2008/9 the National Energy Regulator of South...
The Coega Development Corporation (CDC) is preparing to leverage its strategic coastal position to develop the Eastern Cape economy through proposed aquaculture development zones (ADZs), with a proposed R2-billion project aiming to contribute $278-million to the...
Completion of the ongoing construction of the 102 km Zomba–Jali–Phalombe–Chitakale road, in southern Malawi, has been extended from June to December 15 because of persistent rains and difficulties in paying the contractor. The project is being undertaken by Kuwait's...
The Malawi government has awarded South African firm Fischer Consortium the contract to upgrade the Malawi Road Traffic Information System. The Directorate of Road Traffic and Safety Services at Malawi's Ministry of Transport and Public Works says Fischer...