The biggest benefit of the loadshedding crisis is that it has surely shattered a long-held belief in South Africa that the delivery of electricity would always be best achieved through a single supplier, the long-lauded “natural monopoly”.
Best reference point on the subject is the far-sighted 2013 book The End Of Power. In it author Moises Naim explains how technology has collapsed economic Walls of Jericho where sheer scale previously made incumbents impregnable. From politics to business, society to religion, he shows us how the world is transforming. Our thinking must adjust accordingly.
Naim writes: “One term that has vanished from the economics lexicon is ‘natural monopolies’. This used to designate businesses with economies of scale so intense that it made no sense to have more than one provider. Electric power, fixed-line telephones and water supply were prime examples.” Ergo Eskom, Telkom and regional water utilities.
Technology, Naim adds, has made these spaces highly contestable. Especially electricity where Moore’s Law keeps working its magic, dropping cost of production ever lower. That means overstaffed monopolies like Eskom are no longer fit for purpose. Nor are its giant and ludicrously complex power plants like Medupi and Kusile. If that penny has finally dropped in Pretoria, every minute of Level Six Loadshedding will have been worth it.
