Abstract
South Africa is experiencing a major challenge of persistent load-shedding. As part of the Paris Agreement commitments, South Africa, like other nations, must reduce carbon emissions from coal power plants to combat climate change. Decentralization, decarbonization, and digitalization are taking place in the energy sector to keep up with the energy transformation.
The energy crisis and shortages have prompted municipal electricity utilities to reassess their business models to avoid revenue losses. The Business Model Canvas (BMC), a strategic planning tool used by management to develop and evaluate business models is used in this study. This study aims to examine the components of the business model canvas in municipal organizations, considering customers' social, economic, and environmental requirements to understand the associated risks.
A survey questionnaire was used as the data collection method, wherein the participants were experts from a case-study municipality and the electrical engineering stream, with working experience ranging between 5 and 35 years.
The analysis of expert responses indicated that modifications in the business model of electricity utilities are required to integrate alternative renewable energy sources. Factors affecting the business model of the utilities were successfully determined, which included both local and global factors and their negative impact on the business models’ societal, economic, environmental, and technological dimensions. The most influential local negative factor was the economic aspect, where electricity tariff hikes created economic instability. An ailing economy could jeopardize the business models of electricity utilities and result in underperforming municipalities.
The risks identified showed that there is still a need to adjust regulations to allow municipalities to enhance their performance and develop their business models to be in line with their organizational strategies.
The regulatory, policy, and legal frameworks governing electricity generation resources need to be adjusted to accommodate new renewable energy technologies. Reliance on NGTUC power purchases, though underperforming, requires regulations to be relaxed. This will allow municipalities to venture into new renewable energy business models to maintain their creation and delivery aspects.