The Economic Impact of Electricity Price Increases on ... - Eskom

Providing transition credits that are proportional to existing
electricity consumption or other carefully targeted subsidies could
be a means to accommodate the special characteristics <strong>of</strong> the most
vulnerable consumers
• Finally, given that electricity in prices in South Africa have been subsidised implicitly by the taxpayer
for a considerable length <strong>of</strong> time, it can be argued that it is necessary to provide additional
‘transition’ support to industries that have come to rely on low electricity prices as a source <strong>of</strong>
comparative advantage and that are vulnerable to price increases .
• Providing transition credits that are proportional to existing electricity consumption or other carefully
targeted subsidies could be a means to accommodate the special characteristics <strong>of</strong> these
particularly vulnerable consumers.
• Identifying the vulnerable sectors for targeted policies would present some significant challenges
since there is considerable variation in the vulnerability <strong>of</strong> different firms and sub-industries within
major sectors to electricity price increases
• Policy makers may want to consider supporting only those vulnerable industries that also make a
significant contribution to the economy.
Providing
targeted
support to
vulnerable
industries
Accelerated
EEDSM
48
Subsidies
Policy Options
Promoting
competition in
the electricity
supply
industry
Gradual price
adjustments
Transition credits
Provide transition support to vulnerable industries
Exploring the
policy options
available
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