Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom
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Overview of <strong>Multi</strong>-<strong>Year</strong> <strong>Price</strong> <strong>Determination</strong><br />
2013/14–2017/18 (MYPD 3)<br />
4.5 Impact on economic sectors<br />
Page 90 of 144<br />
The vulnerability of sectors to electricity price increases can be measured by the relative<br />
electricity intensity of the sector, as indicated in Table 39. Looking at the sectoral impact at<br />
such a high level may be misleading, however, as the different subsectors – or even different<br />
firms within a sector – will be affected differently. For example, the impact on the mining<br />
industry as a whole is vastly different to the impact on the basic metals sector.<br />
Table 39: Relative vulnerability of economic sectors to electricity price increases<br />
Sectors<br />
Electricity intensity<br />
(GWh/USD million)<br />
Ranking Output<br />
share<br />
Basic metals 1.095 1 7.1% 7<br />
Mining and quarrying 0.634 2 14.6% 2<br />
Non-metallic minerals 0.524 3 1.6% 12<br />
Agriculture and forestry 0.316 4 6.0% 8<br />
Paper, pulp and printing 0.207 5 2.8% 10<br />
Chemical and<br />
petrochemical<br />
0.203 6 16.3% 1<br />
Transport 0.089 7 12.5% 3<br />
Wood and wood products 0.069 8 1.4% 13<br />
Textile and leather 0.067 9 2.5% 11<br />
Food and tobacco 0.021 10 12.0% 4<br />
Machinery and equipment 0.005 11 2.9% 9<br />
Transport equipment 0.003 12 9.8% 6<br />
Construction 0.002 13 10.5% 5<br />
Source: Inglesi-Lotz and Blignaut, 2011.<br />
Ranking<br />
Generally speaking, mining and manufacturing will be hardest hit. Less energy-intensive<br />
sectors, such as the finance and business services sector (not indicated on Table 39), are<br />
less likely to be negatively affected.<br />
The vulnerability of some economic sectors to electricity price increases should not change<br />
the country‟s approach to electricity tariffs in general. A case cannot be made for curbing<br />
tariff increases for all in an effort to protect the few: lower prices for all customers would