South African Residential Electricity Price Increase Between 2013 and 2020: An Online Desktop Study

21 Pages Posted: 30 Aug 2021

Date Written: July 30, 2021

Abstract

Eskom Limited Holdings (EHL), South Africa’s primary electricity supplier, is mandated to provide electricity to the country and its citizens. After South Africa moved into an era of Democracy, the demand for electricity exponentially increased. To keep up with the increased demand for electricity, EHL embarked on various projects to expand and maintain infrastructure. Unfortunately, the demand for electricity outgrew the supply thereof. This led to the establishment of the National Energy Regulator (NERSA); a body responsible for, inter alia, considering applications of Independent Power Producers (IPPs) and regulating prices and tariffs of electricity. Due to socio-economic reasons, IPPs could not provide additional electricity supplies, resulting in EHL implementing load shedding. In addition, EHL, over the years, accumulated an astronomical debt that has not significantly decreased over the past decade. To sustain itself, and fund its relevant projects, it has successfully applied at NERSA to increase electricity prices on numerous occasions. Considering that EHL charges among the highest prices for electricity in the world, this study placed emphasis on theoretically investigating these electricity price increases, from a residential perspective. This study was non-empirical, exploratory and entailed qualitative research in the form of online desktop research. Stemming from the research conducted, it becomes apparent that further residential electricity price increases enforced by EHL will have dire consequences for the South African economy.

Keywords: Eskom Holdings Limited, electricity, residential electricity prices, South Africa

JEL Classification: E00, H1, H5, H7, H8,

Suggested Citation

Bruwer, JP, South African Residential Electricity Price Increase Between 2013 and 2020: An Online Desktop Study (July 30, 2021). Available at SSRN: https://ssrn.com/abstract=3896552 or http://dx.doi.org/10.2139/ssrn.3896552

JP Bruwer (Contact Author)

Business Re-Solution ( email )

South Africa

HOME PAGE: http://www.businessresolution.co.za

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