This paper investigates the relationship between South Africa’s total electricity intensity and that of the OECD members, a very important trade block. These results will assist in ascertaining possible scope for improvement, if such exists. This is necessary as electricity is an essential input for production, and hence it affects the competitiveness of the country.
Calculating the electricity intensities, defined as the ratio of electricity consumption to total output, we found that South Africa’s electricity intensity has more than doubled between 1990 and 2007. All the OECD members’ (excluding Iceland) weighted growth in electricity intensity was lower than that of South Africa by a considerable margin. The sectoral analysis showed that the majority of the South African sectors are more electricity intensive.
To improve its industrial competitiveness and, as an additional benefit, contribute towards achieving its stated commitments towards reduction of greenhouse gas emissions, South Africa will have to improve its total and sectoral electricity efficiency levels, that not only were higher but also increasing at an alarming rate.