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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% change in real electricity prices<br />
<str<strong>on</strong>g>The</str<strong>on</strong>g> results suggest that electricity intensity in itself is not a good<br />
predictor <str<strong>on</strong>g>of</str<strong>on</strong>g> ‘pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it vulnerability’, some relatively low-intensity industries<br />
such as paper and wood products have slim pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it margins and <strong>on</strong> this<br />
basis are vulnerable to price increases<br />
Mining sector pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it vulnerability to real price <str<strong>on</strong>g>Increases</str<strong>on</strong>g><br />
% increase in Real <str<strong>on</strong>g>Electricity</str<strong>on</strong>g> <str<strong>on</strong>g>Price</str<strong>on</strong>g>s<br />
450<br />
400<br />
350<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
500<br />
450<br />
400<br />
350<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
10 10 10 10 10 10 20 30 40 50<br />
90<br />
150 150 150 150 150<br />
Low electricity intensive manufacturing pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it vulnerability<br />
10 10 20 20<br />
150<br />
200<br />
Source: (C<strong>on</strong>ningarth Ec<strong>on</strong>omists, 2011)<br />
250<br />
200 200<br />
350 350<br />
250<br />
450<br />
400<br />
<str<strong>on</strong>g>Impact</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> rising<br />
electricity prices <strong>on</strong><br />
different sectors<br />
Results<br />
• Within the mining sector,<br />
gold, platinum, ir<strong>on</strong> ore,<br />
silver, magnetite and<br />
asbestos mining are the<br />
most vulnerable to electricity<br />
price increases<br />
• Manganese and coal mining<br />
emerge as the least<br />
sensitive to electricity price<br />
increases and at 2006 levels<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> pr<str<strong>on</strong>g>of</str<strong>on</strong>g>itability could have<br />
absorbed real electricity<br />
price increases in excess <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
200%<br />
• Am<strong>on</strong>g the manufacturing<br />
industries with a relatively<br />
low electricity intensity,<br />
paper and wood products<br />
and printing and publishing<br />
appear to be the most<br />
vulnerable to price<br />
increases, presumably<br />
because rising electricity<br />
prices would <strong>on</strong>ly put further<br />
pressure <strong>on</strong> their already<br />
slim pr<str<strong>on</strong>g>of</str<strong>on</strong>g>it margins<br />
©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.<br />
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