Abstract:
South Africa has been experiencing a series of power cuts since 2008 due to the
state‐owned electricity distributor's (Eskom) insufficient power generation
capacity. The ongoing energy crisis has negatively impacted the growth and
development of the South African economy. Therefore, it is imperative to have
an insight into what explains electricity demand in an attempt to address
issues facing the energy sector and electricity access at the provincial level.
The study's main objective is to examine the determinants of electricity
demand in the nine South African provinces from 1995 to 2019 to highlight
regional intervention and policy implementation potential. The empirical
examination was carried out through two‐panel estimation techniques,
namely Fixed Effects and the Pooled Mean Group, to account for time‐
invariant unobservable individual aspects that can be associated with the
observed explanatory variables and to provide both short‐ and long‐run
coefficients thus allowing the intercept, the slope coefficients and the
regression for electricity demand to be province‐specific in the short‐run.
The results demonstrate the importance of examining the demand for
electricity at the provincial level and providing critical province‐specific
developments that can potentially influence economic growth.
