South Africa's Electricity Consumption: A Sectoral Decomposition Analysis

South Africa's electricity consumption has increased sharply since the early 1990s. Here we conduct a sectoral decomposition analysis of the electricity consumption for the period 1993 to 2006, to determine the main drivers of this increase. The results show that the increase was due mainly to output- or production-related factors, with structural changes playing a secondary role. While there is some evidence of efficiency improvements, indicated here as a slowdown in the rate of increase in electricity intensity, it was not nearly sufficient to onset the combined production and structural effects that propelled electricity consumption higher.

Electricity Intensities of the OECD and South Africa: A Comparison

Improving a country’s electricity efficiency is considered one of the important ways to reduce its greenhouse gas emissions and to meet its commitments concerning climate change mitigation. In this paper, we conduct a comparative analysis between South Africa and OECD members’ total and sectoral electricity intensities. This is done to establish a sense of South Africa’s relative performance in this regard, to ascertain the possible scope for improvement and, if such scope exists, to determine in which of the industrial sectors.

The impact of the student-to-supervisor ratio on research proficiency in postgraduate economics

Abstract: In 2007, the Higher Education Qualification Framework (HEQF) prescribed that all Bachelor degrees and Bachelor Honours degrees at National Qualification Level (NQF) level 8 include a research component worth 30 credits. The purpose of the research component is to prepare students to conduct independent and authentic field-specific research at an Honours-level with emphasis on discipline-specific research methodologies, data analysis and rigorous interpretation of results. Institutions have opted to present this research component in different ways depending on the discipline. In the discipline of Economics, the Honours research component is usually presented as a separate research module over one academic year and involves conducting and reporting research under supervision. The research module includes 10 two-hour research methodology lectures in the first semester so that students are provided with guidance on how to conduct independent research..

Aggregate electricity demand in South Africa : conditional forecasts to 2030

In 2008, South Africa experienced a severe electricity crisis. Domestic and industrial electricity users had to suffer from black outs all over the country. It is argued that partially the reason was the lack of research on energy, locally. However, Eskom argues that the lack of capacity can only be solved by building new power plants. The objective of this study is to specify the variables that explain the electricity demand in South Africa and to forecast electricity demand by creating a model using the Engle–Granger methodology for co-integration and Error Correction models. By producing reliable results, this study will make a significant contribution that will improve the status quo of energy research in South Africa. The findings indicate that there is a long run relationship between electricity consumption and price as well as economic growth/income. The last few years in South Africa, price elasticity was rarely taken into account because of the low and decreasing prices in the past. The short-run dynamics of the system are affected by population growth, too After the energy crisis, Eskom, the national electricity supplier, is in search for substantial funding in order to build new power plants that will help with the envisaged lack of capacity that the company experienced. By using two scenarios for the future of growth, this study shows that the electricity demand will drop substantially due to the price policies agreed – until now – by Eskom and the National Energy Regulator South Africa (NERSA) that will affect the demand for some years.http://www.elsevier.com/locate/apenergynf201

Energy research and R&D indicators : an LMDI decomposition analysis for the IEA Big 5 in energy research

The literature has always shown that there are two important factors in the improvement of a country's research output: Gross Domestic Product (GDP) and R&D Expenditures. Taking the discussion a step further, and in an effort to provide policy recommendations on what is needed to boost research capacity, this paper aims at decomposing the change in energy research papers of five countries (Australia, Canada, Germany, UK and US) into four factors: GDP, R&D intensity (ratio of total R&D to GDP), energy R&D rate of return or productivity (number of energy-related papers per unit of energy R&D expenditure), and energy R&D priority (share of energy R&D to total R&D expenditure). The findings show a general trend in the sign of the four effects on research for all five countries: energy R&D productivity, energy R&D priority, and GDP are mostly found to be positive contributors, while the R&D intensity a negative one. This pattern has exceptions that are more prominent during periods where economic growth is constrained, for example during 2008/09. The results have policy implications not only for these five countries but also for developing countries (low GDP) that aim at contributing more to the energy-related research output globally.http://www.elsevier.com/locate/enpol2020-10-01hj2019Economic

Social rate of return to R & D on various energy technologies : where should we invest more? A study of G7 countries

The importance of investment in Research and Development (R & D) in the energy sector is indisputable especially considering the benefits of new technologies to sustainability, security and environmental protection. However, the nature and potential of various energy technologies that are capable of improving the energy and environmental conditions globally is a challenging task for governments and policy makers that have to make decisions on the allocation of funds in R & D. To do so, the optimal resource allocation to R & D should be determined by estimating the social rate of return for R & D investments. This paper aims to estimate the social rate of return of R & D on various energy applications and technologies such as energy efficiency, fossil fuels, renewable energy sources, and nuclear for the G7 countries. The results show that primarily R & D investment on Energy Efficiency technologies and Nuclear are the ones that yield high social benefits for all G7 countries while exactly the opposite holds for Fossil fuels.The author would like to acknowledge the financial support received from Economic Research Southern Africa (ERSA) for publishing working paper 618.http://www.elsevier.com/locate/enpol2018-02-28hb2017Economic

The sensitivity of the South African industrial sector’s electricity consumption to electricity price fluctuations

Numerous studies assume that the price elasticity of electricity demand remains constant through the years. This, in turn, means that these studies assume that industrial consumers react in the same way to price fluctuations regardless of the actual price level. This paper proposes that the price elasticity of industrial electricity demand varies over time. The Kalman filter methodology is employed in an effort to provide policy-makers with more information on the behaviour of the industrial sector with regards to electricity price changes, focusing on the period 1970 to 2007. Other factors affecting electricity consumption, such as real output and employment, are also captured. The findings of this paper show that price sensitivity has changed since the 1970s. It has decreased in absolute values from -1 in 1980 to -0.953 in 1990 and then stabilised at approximately -0.95 which indicates that the industrial sector has experienced an inelastic demand. In other words, the behaviour of industrial consumers did not vary significantly during the 2000s. In the long run and as the prices increase, probably reaching the levels of the 1970s or even before, the industrial sector’s behaviour might change and the elasticity might end up at levels higher than one (elastic)

A sectoral benchmark-and-trade system to improve electricity efficiency in South Africa

The continuously increasing energy intensity internationally is recognised as one of the greatest dangers the human race is facing nowadays with regards to future climate change and its detrimental consequences. Improving the intensity of energy consumption is an important step towards decreasing greenhouse gas emissions originating from fossil fuel-based electricity generation and consumption. As a result of this, South Africa took the bold step in 2010 to commit itself to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) in taking all the necessary actions to decrease the country’s greenhouse gas emissions by 34% to below the “business-as-usual” scenario by 2020 (Republic of South Africa, 2010). In order to do so, the country has to substantially reduce its energy consumption. This should be done without affecting the economic output; however, major energy consumers might prefer to decrease their output in order to comply with the rules focusing on the reduction of energy use. In South Africa, harmful environmental effects are created mainly from the electricity consumption’s unprecedented rise. The bulk of the country’s greenhouse gas emissions (more than 60%) originate from the electricity generation sector which is heavily dependent on coal-fired power stations. The purpose of this study is to promote a benchmark-and-trade system to improve electricity efficiency in South Africa with the ultimate objective to improve the country’s greenhouse gas emissions. The uniqueness of this study is two-fold. On the one side, South African policy-makers have rarely discussed or proposed the implementation of a cap-and- trade system. On the other side, the same mechanism has never been proposed regarding electricity efficiency. In order to do so, it is first required to acquire an in-depth knowledge of the electricity consumption and efficiency of the South African economy in its entirety and on a sectoral level. The key findings of the empirical analysis are as follows: A decreasing effect of electricity prices to electricity consumption existed during the period 1980 to 2005, contrary to the increasing effect of total output to electricity consumption. Also, the results indicated that the higher the prices, the higher the price sensitivity of consumers to changes in prices (price elasticity) and vice versa. The relationship between electricity consumption and electricity prices differ among various sectors. The findings of the exercise point towards ambiguous results and even lack of behavioural response towards price changes in all but the industrial sector, where electricity consumption increased with price decreases. On the other side, economic output affected the electricity consumption of two sectors (industrial and commercial) presenting high and statistically significant coefficients. Based on a decomposition exercise, the change in production was the main factor that increased electricity consumption, while efficiency improvement was a driver in the decrease of electricity consumption. In the sectoral analysis, increases in production were part of the rising electricity usage for all the sectors with ‘iron and steel’, ‘transport’ and ‘non-ferrous metals’ being the main contributors to the effect. On the decreasing side of consumption, only five out of fourteen sectors were influenced by efficiency improvements. The country’s electricity intensity more than doubled from 1990 to 2007 and the country’s weighted growth of intensity was higher than the majority of the OECD countries by a considerable margin. Also, nine of the thirteen South African sectors were substantially more intensive than their OECD counterparts. Although the picture presented is rather dismal, there is scope for improvement. This study proposes a sectoral benchmark-and-trade system. This system aspires to steadily improve the participants’ efficiency performance by awarding the successful participants with monetary incentives through trading with the less successful ones. The benchmark is chosen to be subject to the average of OECD members for each sector. Depending on the sectors’ performance compared with the standard chosen, they will be awarded credits or allowances to sell if they do better than the benchmark. If they are worse-off, they will have to buy credits in the market created. The price per credit will be determined by the interaction of demand and supply in the market. The findings of a comparison with a carbon tax system show that the proposed system benefits the majority of the sectors and gives them better incentives to change their behaviour and production methods to more efficient ones. The system also fulfils the desired characteristics of a benchmark-and-trade system: certainty of environmental performance; business certainty; flexibility; administrative ease and transparency.Thesis (PhD)--University of Pretoria, 2011.Economicsunrestricte

Load shedding in South Africa : another nail in income inequality?

SIGNIFICANCE : South African households have been affected by load shedding for over a decade. Low-income households are the most heavily impacted by unreliable electricity supply, rising electricity prices and lack of financial means to absorb such shocks, subject to their living conditions. Marginalised communities struggle to access the advantages of urban areas, deepening the country’s income inequalities. Policymaking needs to address the uneven distribution of the impact with policies and programmes that will improve access to finance and technologies for sustainable future solutions. However, there is a catch in the implementation of such policies, as, potentially, measures such as subsidies may exacerbate inequalities and create more problems in the system. Innovative financial programmes are essential to support low-income households and ensure fairness in dealing with load shedding effects while promoting socio-economic development and improving living standards.http://www.sajs.co.zahj2023Economic