A theoretical model for successful management of revenue for beneficiary communities of renewable energy companies in South Africa
- Authors: Amansure, Ricardo Julian
- Date: 2017
- Subjects: Strategic planning -- South Africa , Social responsibility of business -- South Africa , Renewable energy sources -- South Africa
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: http://hdl.handle.net/10948/7408 , vital:21351
- Description: The Renewable Energy (RE) sector is one of the fastest growing new industries in the Republic of South Africa (RSA). The Bloomberg New Energy Finance Climate Scope Report recently ranked RSA third globally, behind China and Brazil, and first among African countries for investment in clean energy (Glickman, 2014). However, one of the main benefits to be derived from the industry, that of socio-economic and enterprise development, is not being achieved owing to unsuccessful management of revenue for beneficiary communities in the renewable energy sector in RSA. Challenges relating to good governance and long-term planning are causing significant harm to communities that are already vulnerable, and are threatening to have a negative effect on the industry’s ability to fulfil its obligation to alleviate and, ultimately, eradicate poverty in some of the poorest communities in RSA.The primary objective of this study is to develop a model for the successful management of revenue for beneficiary communities in the renewable energy sector in South Africa. The model will provide guidance for enterprises, stakeholders, industry experts and community development practitioners within the renewable energy sector towards a pro-active, effective, and relevant decision-making process to achieve success in managing revenue for beneficiary communities. To address the primary objective, a number of secondary objectives were established by developing a conceptual model comprising variables identified in a comprehensive survey of the related literature. A path diagram, based on the formulation of appropriate hypotheses, was constructed between the independent variable and subsequent intervening and dependent variables. Primary data sourced from the identified national and international population of project management practitioners were collected by means of an electronic measuring instrument. The data were analysed and tested empirically by means of Structural Equation Modelling (SEM). The determinants that were identified through a review of the literature as influencing the success of managing revenue for beneficiary communities of renewable energy companies in South Africa included: the use of outside advice, strategic financial services, strategic planning, strategic partnerships, infrastructure development and project management. In order to achieve the objective, the following research questions were formulated: What is the influence of external factors such as outside advisers and support services on the perceived success of managing revenue for beneficiary communities of renewable energy companies in South Africa? The purpose of this research, therefore, was to evaluate and recommend new methodologies to the renewable energy sector by introducing a model of perceived success in managing revenue for beneficiary communities of renewable energy companies in South Africa. The study provided new insight into managing revenue for beneficiary communities in RSA. With the renewable energy sector being one of the fastest growing sectors in the RSA, and the RSA Government being determined to link the location of renewable energy facilities to economic development, this research has given new insight into managing revenue for SED and ED. The objectives of multi-sector participation, transformational change and sustainable initiatives for beneficiary communities could ensure greater consideration and care when managing beneficiary revenue. Thereby, the opportunity presented by the RE industry for beneficiary communities can change these communities dramatically for the better. The study makes a valuable contribution to the body of knowledge about managing revenue for beneficiary communities. The proposed model has led to a better understanding of the determinants that influence the success of managing revenue for beneficiary communities, namely: distinctive benefits (a combination of two variables: outside advice and support services), financial management, developmental benefits (a combination of two variables: infrastructure development and education), human development, project management and strategic planning. The study has also opened up new avenues of research into this subject.
- Full Text:
- Date Issued: 2017
- Authors: Amansure, Ricardo Julian
- Date: 2017
- Subjects: Strategic planning -- South Africa , Social responsibility of business -- South Africa , Renewable energy sources -- South Africa
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: http://hdl.handle.net/10948/7408 , vital:21351
- Description: The Renewable Energy (RE) sector is one of the fastest growing new industries in the Republic of South Africa (RSA). The Bloomberg New Energy Finance Climate Scope Report recently ranked RSA third globally, behind China and Brazil, and first among African countries for investment in clean energy (Glickman, 2014). However, one of the main benefits to be derived from the industry, that of socio-economic and enterprise development, is not being achieved owing to unsuccessful management of revenue for beneficiary communities in the renewable energy sector in RSA. Challenges relating to good governance and long-term planning are causing significant harm to communities that are already vulnerable, and are threatening to have a negative effect on the industry’s ability to fulfil its obligation to alleviate and, ultimately, eradicate poverty in some of the poorest communities in RSA.The primary objective of this study is to develop a model for the successful management of revenue for beneficiary communities in the renewable energy sector in South Africa. The model will provide guidance for enterprises, stakeholders, industry experts and community development practitioners within the renewable energy sector towards a pro-active, effective, and relevant decision-making process to achieve success in managing revenue for beneficiary communities. To address the primary objective, a number of secondary objectives were established by developing a conceptual model comprising variables identified in a comprehensive survey of the related literature. A path diagram, based on the formulation of appropriate hypotheses, was constructed between the independent variable and subsequent intervening and dependent variables. Primary data sourced from the identified national and international population of project management practitioners were collected by means of an electronic measuring instrument. The data were analysed and tested empirically by means of Structural Equation Modelling (SEM). The determinants that were identified through a review of the literature as influencing the success of managing revenue for beneficiary communities of renewable energy companies in South Africa included: the use of outside advice, strategic financial services, strategic planning, strategic partnerships, infrastructure development and project management. In order to achieve the objective, the following research questions were formulated: What is the influence of external factors such as outside advisers and support services on the perceived success of managing revenue for beneficiary communities of renewable energy companies in South Africa? The purpose of this research, therefore, was to evaluate and recommend new methodologies to the renewable energy sector by introducing a model of perceived success in managing revenue for beneficiary communities of renewable energy companies in South Africa. The study provided new insight into managing revenue for beneficiary communities in RSA. With the renewable energy sector being one of the fastest growing sectors in the RSA, and the RSA Government being determined to link the location of renewable energy facilities to economic development, this research has given new insight into managing revenue for SED and ED. The objectives of multi-sector participation, transformational change and sustainable initiatives for beneficiary communities could ensure greater consideration and care when managing beneficiary revenue. Thereby, the opportunity presented by the RE industry for beneficiary communities can change these communities dramatically for the better. The study makes a valuable contribution to the body of knowledge about managing revenue for beneficiary communities. The proposed model has led to a better understanding of the determinants that influence the success of managing revenue for beneficiary communities, namely: distinctive benefits (a combination of two variables: outside advice and support services), financial management, developmental benefits (a combination of two variables: infrastructure development and education), human development, project management and strategic planning. The study has also opened up new avenues of research into this subject.
- Full Text:
- Date Issued: 2017
Local content requirements and the impact on the South African renewable energy sector
- Authors: Ettmayr, Christopher
- Date: 2016
- Subjects: Renewable energy sources -- South Africa
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: http://hdl.handle.net/10948/6149 , vital:21043
- Description: Economies aim to expand over time, which always implies the need for increased energy availability in support of this growth. Governments can use their procurement of energy generation to further enhance the benefit to their economies via certain policy tools. One such tool is Local Content Requirements (LCR) where procurement of a good dictates that a certain value has to be sourced locally. The argument for this tool is that spend is localised and manufacturing, as well as job creation, can be stimulated due to industry establishing in the host economy. However, this practice is distortionary in effect and it does not create a fair playing field for global trade. Furthermore, if the local content definition is weak, or open to manipulation, the goals of such a policy may not be achieved at all. This study looked into the local content requirements of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and measured the impact of this policy on the renewable energy sector in general. It was found that, in order to implement a policy such as local content, the host economy had to have certain pre-existing conditions in order to avoid any negative welfare effects. Due to SA not holding all supportive pre-conditions for supporting local content policy, the impact and effect of LCRs has not been optimal and it has not been found to be a sustainable mechanism to continue using into the future indefinitely. The pricing of renewable energy was also found to be higher due to local content and such pricing is passed on to the energy consumer. Therefore, the net welfare impact created for South Africa is diminished in exchange for the creation of jobs and manufacturing, but due to the unsustainability and potential manipulation of the system the country is not maximising the welfare potential from the REIPPPP as it should. It was found that SA renewable energy resources do exist and the logistics infrastructure is strong, providing good potential for investment into renewable energy projects. The demand created by the REIPPPP provided a good market, but there was uncertainty in the long term planning and stability. So, from a market perspective this could be further enhanced. Government had created a sufficient platform for investment, but areas of development such as clusters, R&D and skills training would create a better support environment for LCR policy and strict monitoring of this would also be required to prevent any manipulation. The use of LCRs increases project costs and risk, which is passed onto the energy consumers, but this could be reduced if local goods were more readily available at the right price and at the right quality and quantity. Focus on clusters would once again assist in this regard as independent power producers (IPPs) and engineering procurement and construction (EPC) entities would be able to source components and goods locally in a more cost-effective manner. As the LCRs currently stand in the REIPPPP, it would seem that South Africa is making renewable energy more expensive and although it is argued that this is done for the benefit of creating a new industry and jobs, these are not sustainable and so the current LCR policy will only create short term benefits.
- Full Text:
- Date Issued: 2016
- Authors: Ettmayr, Christopher
- Date: 2016
- Subjects: Renewable energy sources -- South Africa
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: http://hdl.handle.net/10948/6149 , vital:21043
- Description: Economies aim to expand over time, which always implies the need for increased energy availability in support of this growth. Governments can use their procurement of energy generation to further enhance the benefit to their economies via certain policy tools. One such tool is Local Content Requirements (LCR) where procurement of a good dictates that a certain value has to be sourced locally. The argument for this tool is that spend is localised and manufacturing, as well as job creation, can be stimulated due to industry establishing in the host economy. However, this practice is distortionary in effect and it does not create a fair playing field for global trade. Furthermore, if the local content definition is weak, or open to manipulation, the goals of such a policy may not be achieved at all. This study looked into the local content requirements of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and measured the impact of this policy on the renewable energy sector in general. It was found that, in order to implement a policy such as local content, the host economy had to have certain pre-existing conditions in order to avoid any negative welfare effects. Due to SA not holding all supportive pre-conditions for supporting local content policy, the impact and effect of LCRs has not been optimal and it has not been found to be a sustainable mechanism to continue using into the future indefinitely. The pricing of renewable energy was also found to be higher due to local content and such pricing is passed on to the energy consumer. Therefore, the net welfare impact created for South Africa is diminished in exchange for the creation of jobs and manufacturing, but due to the unsustainability and potential manipulation of the system the country is not maximising the welfare potential from the REIPPPP as it should. It was found that SA renewable energy resources do exist and the logistics infrastructure is strong, providing good potential for investment into renewable energy projects. The demand created by the REIPPPP provided a good market, but there was uncertainty in the long term planning and stability. So, from a market perspective this could be further enhanced. Government had created a sufficient platform for investment, but areas of development such as clusters, R&D and skills training would create a better support environment for LCR policy and strict monitoring of this would also be required to prevent any manipulation. The use of LCRs increases project costs and risk, which is passed onto the energy consumers, but this could be reduced if local goods were more readily available at the right price and at the right quality and quantity. Focus on clusters would once again assist in this regard as independent power producers (IPPs) and engineering procurement and construction (EPC) entities would be able to source components and goods locally in a more cost-effective manner. As the LCRs currently stand in the REIPPPP, it would seem that South Africa is making renewable energy more expensive and although it is argued that this is done for the benefit of creating a new industry and jobs, these are not sustainable and so the current LCR policy will only create short term benefits.
- Full Text:
- Date Issued: 2016
An enabling environment for independent power producers in renewable electricity
- Authors: Palmer, Vivian Julian
- Date: 2015
- Subjects: Renewable energy sources -- South Africa , Independent power producers -- South Africa
- Language: English
- Type: Thesis , Doctoral , DBA
- Identifier: http://hdl.handle.net/10948/5868 , vital:21007
- Description: The increasing demand for electricity, the rising price of energy from conventional sources and limited electricity supply are a global concern. The demand on electricity generation could be alleviated by diversifying the sources from which electricity is obtained to achieve the goals of long-term electricity supply. Diversification implies finding alternative sources of energy such as renewable energy for the production of electricity. The South African electricity system is under increased pressure to provide and maintain electricity supply to its users. Electricity production may be regarded as a key contributor to the social and economic development of South Africa. The challenges are so serious that it will gradually become increasingly difficult to extract sufficient resources to satisfy increasing electricity demand. Growth in the electricity and industrial sectors signifies profound changes in the entire energy industry. The South African power utility Eskom, supplies 94% of South Africa’s electricity but the risk of inadequate supply because of increasing electricity demand is mitigated through the employment of Independent Power Producers (IPPs) which supply to the grid. However, although a limited number of IPP entrepreneurs sell electricity to the Eskom grid, there is no enabling entrepreneurial environment in which they can thrive. There is no positive movement to inaugurate policies and processes. This has created an opportunity for Smart Grid access as a viable option to accommodate IPP entrepreneurs into the grid. Investing in renewable electricity sources may provide feasible alternatives for the electricity industry, it would alleviate pressure on current supply whilst creating an enabling entrepreneurial environment for IPP entrepreneurs and increase entrepreneurial activity. This study investigates a proposed model for an enabling entrepreneurial environment for IPPs in the RE sector that can be utilised to ensure increased entrepreneurial activity within the electricity industry. Establishing such an enabling environment would contribute positively to the alleviation of the electricity demand crisis, result in lower carbon emissions and create a sustainable, more diverse electricity generation mix. This proposed IPP industry model for an enabling entrepreneurial environment is presented to address the problems experienced at the different levels of the electricity industry. The model can be utilised to increase entrepreneurial activity while eradicating major electricity challenges at different levels in the South African electricity industry. The results indicate that that RE, in the form of solar and wind, has the potential to expand the South African electricity industry significantly. Therefore, in order to reform the South African electricity industry, stakeholders need to embrace entrepreneurship as IPP entrepreneurs. This can be done effectively by the incorporation of IPP entrepreneurs into the electricity network. However, an enabling entrepreneurial environment in which to operate must be ensured. In this study, five important variables support the establishment of an enabling entrepreneurial environment for IPP entrepreneurs. These have been identified as; Smart Grids, Entrepreneurship, Renewable electricity environment, SA policy and Stakeholder theory. An important contribution has been made towards Stakeholder Theory. This has proven to be instrumental within the RE sector of the electricity industry in South Africa, as the mentioned role players have a reciprocal role to play. Three surveys were conducted at three levels of the electricity industry, namely, at organisational, legislative and entrepreneurial levels and included Eskom Management, National Energy Regulator (NERSA) Management and Approved and Non-approved IPPs. Both qualitative and quantitative research methods were utilised in this research study. The results indicate that SA Policy is instrumental in assisting stakeholders to facilitate the IPP process and feed the power from RE generation into the network. Most respondents were positive about the role of Smart Grids in future electricity generation and their contribution towards creating an enabling entrepreneurial environment for IPP entrepreneurs. Respondents indicated that by policy decisions, greater emphasis can be placed on the results of climate change and environmental challenges. Emphasis on the incorporation of stakeholders proved imperative to this group (IPPs). The results indicated that stakeholder management is a key factor contributing to the establishment of an enabling entrepreneurial environment. The major contribution of this study is a proposed entrepreneurial model that can improve future sustainability of the electricity supply.
- Full Text:
- Date Issued: 2015
- Authors: Palmer, Vivian Julian
- Date: 2015
- Subjects: Renewable energy sources -- South Africa , Independent power producers -- South Africa
- Language: English
- Type: Thesis , Doctoral , DBA
- Identifier: http://hdl.handle.net/10948/5868 , vital:21007
- Description: The increasing demand for electricity, the rising price of energy from conventional sources and limited electricity supply are a global concern. The demand on electricity generation could be alleviated by diversifying the sources from which electricity is obtained to achieve the goals of long-term electricity supply. Diversification implies finding alternative sources of energy such as renewable energy for the production of electricity. The South African electricity system is under increased pressure to provide and maintain electricity supply to its users. Electricity production may be regarded as a key contributor to the social and economic development of South Africa. The challenges are so serious that it will gradually become increasingly difficult to extract sufficient resources to satisfy increasing electricity demand. Growth in the electricity and industrial sectors signifies profound changes in the entire energy industry. The South African power utility Eskom, supplies 94% of South Africa’s electricity but the risk of inadequate supply because of increasing electricity demand is mitigated through the employment of Independent Power Producers (IPPs) which supply to the grid. However, although a limited number of IPP entrepreneurs sell electricity to the Eskom grid, there is no enabling entrepreneurial environment in which they can thrive. There is no positive movement to inaugurate policies and processes. This has created an opportunity for Smart Grid access as a viable option to accommodate IPP entrepreneurs into the grid. Investing in renewable electricity sources may provide feasible alternatives for the electricity industry, it would alleviate pressure on current supply whilst creating an enabling entrepreneurial environment for IPP entrepreneurs and increase entrepreneurial activity. This study investigates a proposed model for an enabling entrepreneurial environment for IPPs in the RE sector that can be utilised to ensure increased entrepreneurial activity within the electricity industry. Establishing such an enabling environment would contribute positively to the alleviation of the electricity demand crisis, result in lower carbon emissions and create a sustainable, more diverse electricity generation mix. This proposed IPP industry model for an enabling entrepreneurial environment is presented to address the problems experienced at the different levels of the electricity industry. The model can be utilised to increase entrepreneurial activity while eradicating major electricity challenges at different levels in the South African electricity industry. The results indicate that that RE, in the form of solar and wind, has the potential to expand the South African electricity industry significantly. Therefore, in order to reform the South African electricity industry, stakeholders need to embrace entrepreneurship as IPP entrepreneurs. This can be done effectively by the incorporation of IPP entrepreneurs into the electricity network. However, an enabling entrepreneurial environment in which to operate must be ensured. In this study, five important variables support the establishment of an enabling entrepreneurial environment for IPP entrepreneurs. These have been identified as; Smart Grids, Entrepreneurship, Renewable electricity environment, SA policy and Stakeholder theory. An important contribution has been made towards Stakeholder Theory. This has proven to be instrumental within the RE sector of the electricity industry in South Africa, as the mentioned role players have a reciprocal role to play. Three surveys were conducted at three levels of the electricity industry, namely, at organisational, legislative and entrepreneurial levels and included Eskom Management, National Energy Regulator (NERSA) Management and Approved and Non-approved IPPs. Both qualitative and quantitative research methods were utilised in this research study. The results indicate that SA Policy is instrumental in assisting stakeholders to facilitate the IPP process and feed the power from RE generation into the network. Most respondents were positive about the role of Smart Grids in future electricity generation and their contribution towards creating an enabling entrepreneurial environment for IPP entrepreneurs. Respondents indicated that by policy decisions, greater emphasis can be placed on the results of climate change and environmental challenges. Emphasis on the incorporation of stakeholders proved imperative to this group (IPPs). The results indicated that stakeholder management is a key factor contributing to the establishment of an enabling entrepreneurial environment. The major contribution of this study is a proposed entrepreneurial model that can improve future sustainability of the electricity supply.
- Full Text:
- Date Issued: 2015
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