The Economic Impact of Electricity Price Increases on ... - Eskom
The Economic Impact of Electricity Price Increases on ... - Eskom
The Economic Impact of Electricity Price Increases on ... - Eskom
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Assessing the impact <str<strong>on</strong>g>of</str<strong>on</strong>g> electricity price increases <strong>on</strong> sector employment,<br />
output and pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability<br />
30<br />
Introducti<strong>on</strong><br />
• In the previous secti<strong>on</strong> we assessed the relative vulnerability <str<strong>on</strong>g>of</str<strong>on</strong>g> different sectors, sub-industries and firms in the<br />
South African ec<strong>on</strong>omy to rising electricity prices. But it is also important to c<strong>on</strong>sider the impact rising prices would<br />
have pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability, output and employment in these sectors.<br />
• <str<strong>on</strong>g>The</str<strong>on</strong>g>re are a few studies that attempt to assess the impact <str<strong>on</strong>g>of</str<strong>on</strong>g> electricity price increases <strong>on</strong> the different sectors and<br />
firms within the South African ec<strong>on</strong>omy. <str<strong>on</strong>g>The</str<strong>on</strong>g>se studies typically focus <strong>on</strong> the impacts <strong>on</strong> employment, output, and<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability for the various sectors or sub-sectors over various periods <str<strong>on</strong>g>of</str<strong>on</strong>g> time and under different assumed price<br />
increases.<br />
• We discussed the results <str<strong>on</strong>g>of</str<strong>on</strong>g> two separate empirical analyses <str<strong>on</strong>g>of</str<strong>on</strong>g> the impact <str<strong>on</strong>g>of</str<strong>on</strong>g> rising electricity prices <strong>on</strong> the South<br />
African ec<strong>on</strong>omy:<br />
o <str<strong>on</strong>g>Electricity</str<strong>on</strong>g> <str<strong>on</strong>g>Price</str<strong>on</strong>g> <str<strong>on</strong>g>Increases</str<strong>on</strong>g>, <strong>Eskom</strong>’s Capital Expenditure Programme and <str<strong>on</strong>g>Impact</str<strong>on</strong>g> <strong>on</strong> the SA Ec<strong>on</strong>omy,<br />
c<strong>on</strong>ducted by Pan-African Investment & Research Services in May 2011.<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> net impact <str<strong>on</strong>g>of</str<strong>on</strong>g> rising electricity prices and <strong>Eskom</strong>’s six-year capital investment programme were evaluated<br />
in the c<strong>on</strong>text <str<strong>on</strong>g>of</str<strong>on</strong>g> both a dynamic time-series macro-ec<strong>on</strong>ometric (TSME) framework and a static Computable<br />
General Equilibrium (CGE) framework.<br />
o Meeting South Africa's Future <str<strong>on</strong>g>Electricity</str<strong>on</strong>g> Needs - An <str<strong>on</strong>g>Ec<strong>on</strong>omic</str<strong>on</strong>g> Growth and Development c<strong>on</strong>ducted<br />
by C<strong>on</strong>ningarth ec<strong>on</strong>omists in 2011<br />
As part <str<strong>on</strong>g>of</str<strong>on</strong>g> the study the vulnerability <str<strong>on</strong>g>of</str<strong>on</strong>g> sector pr<str<strong>on</strong>g>of</str<strong>on</strong>g>its to real electricity price increases were modelled and<br />
compared.<br />
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