The tipping point
The impact of rising electricity tariffs on large firms in South Africa
While much research has been done on the economic impacts of load-shedding in South Africa, fewer studies have focused on the effects of the rapidly rising electricity tariffs. The issue of tariff increases has now become even more critical, with technological developments making it easier and cheaper for consumers to reduce their demand for grid-based electricity.
There have been some South African studies that have attempted to estimate the price elasticity of electricity demand or to show vulnerable sectors, but all have struggled to demonstrate the potential impacts on the competitiveness of individual firms and their decisions to invest in their own generation, and the longer-run impacts on electricity demand.
This study examines the timing and type of own-generation investment decisions that are viable for 21 large companies, and the likely impact of this on South Africa’s electricity utility.