GiiResearch.com: Electricity Supply Liberalization Coupled with Soaring Demand Present Lucrative Opportunity for Private Power Producers in South Africa
Growing demand for electricity, liberalization of the electricity supply industry, as well as funding limitations and time constraints on public utility are driving increased private sector participation in the South African power industry.

FARMINGTON, CT, December 14, 2011 /24-7PressRelease/ -- Global Information, Inc. (GII) presents "Private Power Generation Opportunities in South Africa" by Frost & Sullivan.

Growing demand for electricity, liberalization of the electricity supply industry, as well as funding limitations and time constraints on public utility are driving increased private sector participation in the South African power industry. New analysis by Frost & Sullivan finds that the electricity generation industry is a R50 billion industry and offers a significant and lucrative opportunity for private sector participants.

"Market growth for private power producers in South Africa is being driven by a pressing need for new generation capacity and the associated cost of financing this new build," notes Frost & Sullivans Energy and Power Systems Research Analyst Gareth Blanckenberg. "Renewable energy generation is set to become the largest area of participation for private power producers in South Africa, with several projects already in the developmental phase."

At present, the demand/supply gap is extremely tight. Additional capacity needs have been forecast at 56.6 GW between now and 2030, while Eskom is facing significant time pressures and financial constraints in developing this additional capacity. This has created opportunities for private power generation.

Recent efforts to liberalize the electricity supply industry have been reflected in the Department of Energy (DoE)s mandate that independent power producers (IPPs) contribute 30.0 per cent of new generation capacity by 2030. Rising electricity prices and the implementation of schemes, such as RE-IPPPP, have created a strong incentive for private producers to enter the market.

Tariff increases represent another encouraging trend for private power producers. Eskoms new build program is the primary driver in hiking electricity tariffs.

These tariffs are on an upward path that will soon make it feasible for private producers to enter the market. Private participation is likely to increase supply, ease the borrowing requirements for Eskom and reduce the funding burden on the government.

Such trends are a far cry from earlier tendencies which saw an unattractive policy environment, as well as historically low electricity tariffs, serving as deterrents to investment by private power producers.

A key advantage for South Africa, in the future, will be its significant quantities of natural resources - both conventional and renewable  that are suitable for electricity generation. Political stability, coupled with an established legal and financial system, will also make it an attractive investment destination for international project developers.

For more details: http://www.giiresearch.com/report/fs221362-private-power-generation-o ... south.html

Find more information on the Power Generation Set Market: http://www.giiresearch.com/topics/EN05_en.shtml

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Yuko Ueki
Global Information, Inc.
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Farmington, CT
USA 06032
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