Electricity tariffs


The electricity prices of South Africa still falls within the global average [Statista, 2015], and have been significantly cheaper than other African countries according to research during 2012 [Frost & Sullivan, 2012]. On a global ranking, South Africa had moved to the tenth highest electricity prices, moving up by 4 place between 2014 and 2015 [Statista, 2015], and are losing its competitive advantage, which can be seen with the increase of mining operation costs to levels above industry norms [EIUGoSA, 2014; Banerjee et al., 2015]. The electricity tariffs has increased by 445% from 2008 to 2016 [Nersa, 2008-2016], with the first minor increase of 2,2% approved for the 2017/2018 financial year which might mean a stabilisation of the electricity tariffs.

Figure: Eskom average tariff vs. inflation (CPI)

Figure: Electricity consumption per electrified household and price of electricity (2014) [EnerData]

References

Banerjee, G.S., Romo, Z., McMahon, G., Toledano, P & Robinson, P. (2014) ‘The power of the mine: A transformative opportunity for sub-Saharan Africa’, Final report, Washington D.C.: World Bank Group, ESMAP, Africa Region Sustainable Development.

Energy Intensive User Group of Southern Africa (2014b), ‘Electricity cost as a percentage of annual expenditure’

Frost & Sullivan, (2012), African Electricity Pricing Analysis: Balancing Cost-reflective Tariffs and Government Intervention for Affordable Electricity Provision

NUS Consulting, (2015) ‘Energy Market Survey’, NUS Consulting

Statista, (2015) ‘Global electricity prices for selected countries’, 2015