Electricity intensities of the OECD and South Africa: A comparison

Abstract

This paper investigates the relationship between South Africa's total electricity intensity and that of the OECD members, a very important trade block. These results will assist in ascertaining possible scope for improvement, if such exists. This is necessary as electricity is an essential input for production, and hence it affects the competitiveness of the country.Calculating the electricity intensities, defined as the ratio of electricity consumption to total output, we found that South Africa's electricity intensity more than doubled between 1990 and 2007.All the OECD members' (excluding Iceland) weighted growth in electricity intensity was lower than that of South Africa by a considerable margin. The sectoral analysis showed that the majority of the South African sectors are more electricity intensive.To improve its industrial competitiveness and, as an additional benefit, contribute towards achieving its stated commitments to the reduction of greenhouse gas emissions, South Africa will have to improve its total and sectoral electricity efficiency levels, that not only were higher but also increasing at an alarming rate.

Sectoral electricity elasticities in South Africa: Before and after the supply crisis of 2008

“…In the Commercial sector, the price changes did not seem to affect the electricity usage in the first period and the sector exhibited the lowest price elasticity in absolute values for the second period. That finding can be explained by the fact that the Commercial sector is not among the electricity intensive sectors of the country with the cost of electricity being a small portion of overall cost, 1 and hence, tariff fluctuations are not a factor to their small electricity consumption.…”

“…Understanding such behavioural responses is of strategic and practical importance to policymakers and investors alike within the electricity sector when considering infrastructure development planning, the determination of future electricity tariffs, environmental policies, etc. Being able to determine the most likely behavioural responses to changes in prices in an industrial environment that is continuously becoming more electricity intensive 1 is the key to successful policy implementation.…”

South Africa’s performance on renewable energy and its relative position against the OECD countries and the rest of Africa

“…South Africa"s economy is considered to be two-tiered [23]. The first tier includes South Africa"s primary sectors (manufacturing, mining and agricultural) and financial sector which are sophisticated, well-developed and competitive with international markets.…”

“…However, Inglesi-Lotz and Blignaut [23] observed that South Africa's electricity intensity is higher than that of the OECD countries and, therefore, there is a need for a policy to promote electricity efficiency. To illustrate the South African reality with regards to renewable energy usage, Figure 1 shows the total renewable energy consumption in kilotonnes of oil equivalent (ktoe) and its share in the energy mix for the period 1990 to 2010.…”

An economy-wide evaluation of new power generation in South Africa: The case of Medupi and Kusile

“…Papers such as Alton et al (2013) Blignaut (2012, Blignaut et al (2015); Inglesi-Lotz & Blignaut (2011;2012a;2012b;; Inglesi & Pouris (2010);Joubert (2015); Spalding-Fecher & Khorommbi (2003);and Winkler (2007), amongst others, have made valuable contributions to the literature across a wide variety of electricity related topics. However, none of these papers used a comprehensive general equilibrium modelling framework to assess the economy-wide effects of Medupi and Kusile, specifically, whilst also measuring the cost of lost production due to inadequate supply in recent years, as we do in this paper.…”