National Energy Regulator Research Articles

The Impact of Financial Development and Economic Growth on Renewable Energy Supply in South Africa

Eskom’s power plants in South Africa face frequent breakdowns due to a lack of maintenance and increasing energy demand. The high dependence of South Africa on coal for power generation, which is a resource that significantly contributes to carbon dioxide (CO2) emissions that impact the environment negatively, could be reduced by considering renewable energy sources. Renewable energy supply, dependent on private sector funding and economic growth, is seen as a solution to energy and environmental problems. The study aimed to examine if financial development and economic growth impact renewable energy supply in South Africa and to discover if co-integration exists between these variables, including the variables defined as the determinants of renewable energy supply, namely: CO2 emission by coal power generation; secondly, coal electricity supply; thirdly, coal price changes; and lastly, load shedding levels. The research gap identified for the study is twofold. Firstly, there is a lack of research on the relationship between renewable energy supply, financial development, and economic growth, specifically in South Africa. Furthermore, the existing research on these variables in other countries has produced inconclusive results. Secondly, minimal research has been conducted on how economic growth impacts renewable energy supply in emerging markets. Thus, the present study sought to bridge the gap and contribute to the scientific body of knowledge related to the drivers of renewable energy supply. The autoregression distributed lag (ARDL) model was employed to test if economic growth and financial development have a statistically significant impact on renewable energy supply, as well as to test the direction of the relationship, for an observation period from 1990 to 2021. The results proved that financial development and economic growth were reported to have a statistically significant positive impact on renewable energy supply in the long run and the short run. A study on the relationship between financial development, economic growth, and renewable energy supply in South Africa can influence policy reforms and assist the National Energy Regulator of South Africa (NERSA) and the government in developing and implementing renewable energy policies that encourage the deployment of renewable energy infrastructure to increase renewable energy supply, particularly regarding factors associated with addressing challenges in financial development and economic growth.

Comparative Analysis of the Effect of the Evolution of Energy Saving Regulations on the Indoor Summer Comfort of Five Homes on the Coast of the Basque Country

In the last decade, several European directives have been established to contribute to the 2020, 2030 and 2050 energy saving targets and impose energy efficiency requirements for new construction, existing buildings and building renovation operations. One of the ways to achieve said objectives is to rely on the most demanding energy efficiency labels existing in Europe, such as Passivhaus, and to implement similar concepts into the national energy regulations of European countries based on a high-performance thermal envelope (high insulation and high-performance windows), high airtightness and high-performance heat-recovery ventilation systems, and solar heat harvesting. This energy conservation concept has shown to be effective for houses with low-density occupation in cold climates, but may cause severe overheating problems in denser collective housing in temperate and hot climates with higher solar radiation. To assess this impact, five flats in three developments from different periods that range from no insulation at all to a nZEB, Passivhaus-certified high-rise are compared in this paper, using data from a monitoring campaign during the summer of 2020. The results show and quantify the strong impact the evolution of the energy saving regulatory trend has had on summer indoor comfort, which may in some cases lead to previously unnecessary air conditioning for cooling and, ultimately, be counterproductive towards the end goals of reducing energy consumption and greenhouse-effect gas emissions and mitigating climate change.

ЗА ПРЕДЕЛИТЕ НА НЕЗАВИСИМОСТТА НА НАЦИОНАЛНИЯ РЕГУЛАТОРЕН ОРГАН В ОБЛАСТТА НА ЕНЕРГЕТИКАТА

The article analyses the risks to the independence of regulators as a fundamental element in the liberalization of energy markets in the European Union in the light of the capture theory. Issues related to the normative aspects and current case law determining the parameters and guarantees for the independence of the regulatory authorities are studied. These are examined in the context of the current electricity price crisis and the national measures taken to address these challenges in relation to the regulated segment. Recommendations are formulated to align with good practice and with the current requirements related to the independence of the national energy regulator.

Strained Relations in the Provision of Electricity Services: City of Cape Town v National Energy Regulator of South Africa and Minister of Energy

This note considers the judgment in City of Cape Town v National Energy Regulator of South Africa (NERSA) and Minister of Energy (unreported case number 51765/17 of 11 August 2020), which attracted much attention for its challenge of the constitutionality of section 34 of the Electricity Regulation Act, 4 of 2006. Although the question of constitutionality was not discussed in the judgment, it is argued that this was an oversight and a missed opportunity to unpack the role of municipalities in the provision of sustainable electricity services. Further, the note considers the challenges of intergovernmental relations in co-operative government (from a conceptual and practical perspective) and concludes that this case highlights the importance of good relations between organs of State, especially where contentious but important issues have arisen.

Investment in electricity distribution capital infrastructure in South Africa: The role of regulation

Background: The electricity distribution industry in South Africa is faced with numerous challenges that include distribution capacity shortages and backlog in investments. Aim: This study was carried out to investigate the role of regulation in enabling investment in distribution capital expenditure. Setting: The study focusses on the licensed electricity distributors and the energy regulation institution in South Africa. Methods: Primary data for the study was collected through interviews with 16 Energy Regulator officials responsible for analysing and approving electricity distributor tariff applications. Secondary data was collected and analysed through a sample of 112 electricity distributors in South Africa. Results: It is established that the National Energy Regulator of South Africa has put a number of processes and methods in place to ensure that electricity distributors (EDs) are efficient in their operations and that the tariffs they charge customers are not excessive and are aligned to specific benchmarks as approved by the regulator. However, a majority of EDs are not performing according to the benchmarks. For instance, they are operating at a negative surplus, which does not allow them to make sufficient investment in infrastructure refurbishment and acquire new infrastructure. The study also discovered that EDs are spending the minimum 6% required by regulation on repairs and maintenance. Conclusion: The conclusion of the study is that in the absence of a regulatory methodology that allows EDs to earn a required return on assets, benchmarks play a big role in ensuring that they are performing at the level required and that through the surpluses they generate, they can invest in the acquisition of new infrastructure for capital gain. However, regulation alone is not sufficient to ensure that capital investment is adequate; government intervention through infrastructure grants is also necessary and a private sector capital injection.

Digital Community Biomass Power Plant Competitiveness in Thailand

The participation of citizens and communities as partners in energy projects are transforming the energy system. Community enterprise initiatives are offering new opportunities for local residence to get actively involved in energy matters. Meanwhile, the worldwide deployment of digital technology in energy sector has become a trending subject of sorts among industry giants as well as the start-up investor community, with applications ranging from grid transactions, financing and transparency in supply chain. This paper reviewed the community biomass power plants sector to comply with the resolution of the National Energy Policy Council, rules and regulations based on a Porter's Diamond model. The results show that such collaborations between local residents and private sector or private sector with state organisation can lead to win-win situations, digitalizing the community biomass power plant by connect all relevant sectors through digital platform and sophisticated innovation in particular Fintech and IT have important potential implications for the implementation of a range of sustainable development and enhancing security and efficiency of the power plant. It is considered to be of great importance in order to enhances competitiveness and will continue to be supported by the government.

Allowed Revenue of Network System Operators in the Croatian Energy Sector and Interest Rate Changes on the Croatian Capital Market

Abstract The energy sector is characterized by market and monopoly activities. Monopoly activities include network activities, transmission and distribution of electricity, and transport and distribution of natural gas. For this reason, the revenue of the network activities is defined as allowed income, and it is under the control of the national energy regulator. In Croatia, this is the Croatian Energy Regulatory Agency. The allowed revenues of the network system operator in the Croatian energy sector are defined by the methodologies for individual network activities, which are based on the method of eligible costs. Network activities are usually capital-intensive activities. Capital cost is an element of the eligible cost method and is accounted for as a weighted average cost of capital (WACC). WACC affects the allowed revenue of the network system operator and the network tariff. It depends on the interest rates on debt capital, the risk-free rate, the market risk premium and the corporate tax rate. Changing the interest rate on the capital market, which also depends on the credit risk of the country, affects both the change in WACC and the change of tariffs for transport / transmission of energy. Amortization and operating expenses of the network operator, approved by the energy regulator, also have a significant impact on allowed revenues. The impact of the WACC change on the allowed revenue and network tariffs of network system operators has a different impact on the network tariffs, which depends on the structure of the eligible costs of a particular network system operator. Changing WACC affects the changes in tariffs of the network system operator. The aim of the paper is to determine how an interest rate change affects the WACC and how the change in WACC affects the change in the allowed revenue and the network tariff of the gas transport operator and the transmission of electricity in Croatia. The paper will analyse the tariffs of electricity transmission and natural gas transport in Croatia and compare them with those in the European Union.

УДОСКОНАЛЕННЯ ТАРИФНОЇ ПОЛІТИКИ У СФЕРІ ЕЛЕКТРОЕНЕРГЕТИКИ ДЛЯ ДОСЯГНЕННЯ СЕКТОРАЛЬНОЇ ТА МАКРОЕКОНОМІЧНОЇ ЗБАЛАНСОВАНОСТІ

Розглянуто проблеми формування тарифної політики в умовах переходу на нову модель ринку електричної енергії в Україні та впровадження стимулюючого ціноутворення у сфері електроенергетики. Визначено основні вади наявної моделі ринку електроенергії; інституціональну структуру і функціональну взаємодію ринкових сегментів нової моделі ринку, заснованої на вільному ціноутворенні на електричну енергію як товар. Акцентовано увагу, що для досягнення секторальної та макроекономічної збалансованості необхідним є належне обгрунтування цін на послуги з розподілу електричної енергії в умовах переходу на нову модель ринку, оскільки тарифи на ці послуги і надалі регулюватимуться державою.Показано, що основними критеріями при формуванні адекватних тарифів в Україні мають бути: посильне фінансове навантаження на більшість учасників ринку електричної енергії з метою забезпечення його збалансованості; достатнє фінансове забезпечення для підтримання належного технічного стану енергетичної інфраструктури. Визначено головні недоліки наявної нормативної бази для впровадження стимулюючого ціноутворення на послуги з розподілу електричної енергії в Україні та причини, пов’язані з відстроченням застосування стимулюючого ціноутворення на дані послуги в Україні.Охарактеризовано основні складові елементи структури стимулюючого ціноутворення, які закладено в економіко-математичну модель з метою сценарного прогнозування фінансово-економічних показників сектору розподілу електричної енергії. Розкрито, що отримані за результатами моделювання прогнозні показники тарифів на розподіл електричної енергії для різних категорій споживачів, а також агреговані фінансово-економічні показники електророзподільних компаній, слід розглядати як галузеві орієнтири для прийняття рішень на рівні національного енергетичного регулятора.

Determinants of household electricity consumption in South Africa

Little is known about residential electricity demand in developing countries. In order to shed some light on this topic, this study combines data from South Africa's recent Income and Expenditure Survey with data from the National Energy Regulator of South Africa to estimate the determinants of residential energy demand. Combining electricity tariff data from the regulator with expenditure survey data from households provides an opportunity to explore the determinants of the demand for electricity. Due to the large number of zeroes in the dataset, a two-part model is employed. The results indicate that household income and electricity price are major demand determinants, and for the full two-part model, electricity demand is normal, as well as downward sloping, although inelastic in both cases; as expected, substitute fuel use impacts these elasticities. We also find that access to free basic electricity, a policy designed to improve access to electricity does what is expected. It is associated with increases in the probability that households purchase electricity and reduces total expenditure on electricity. Household demand is also higher for appliance-rich households in urban areas, especially if there are more household members and they live in larger dwellings.

Clarifying the parameters of the Crown’s duty to consult and accommodate in the context of decision-making by energy tribunals

This article examines two recent decisions of the Supreme Court of Canada dealing with the Crown’s duty to consult and accommodate Indigenous communities in the context of decision-making by Canada’s national energy regulator, the National Energy Board (NEB). While the Court reached a different conclusion on the merits in the two cases, the cases do articulate a common understanding of the relevant legal rules. As a consequence, the decisions offer important insights as to what will suffice to discharge the Crown’s obligations and what will not. The article outlines the evolution of the Crown’s duty to consult and accommodate in the context of the relationship between Indigenous communities and settler society within Canada and then examines the two decisions for the additional guidance that they offer to decision-makers and their advisers in the particular context of independent regulatory tribunals like the National Energy Board.

Ensuring affordable electricity as a vital socio-economic right in South Africa

This article examines the socio-economic impacts and effects of unlawful electricity tariff increase in South Africa. Access to electricity is a vital socio-economic right in South Africa because of its intrinsic role in the fulfilment of other social economic rights. The availability and accessibility of electricity guarantees the success of many businesses and the survival of many households, particularly the rural poor. Eskom, a governmental parastatal, generates, transmits and distributes electricity for the people, and charges for these services are rendered based on the tariff approved by the National Energy Regulator of South Africa (NERSA). Recently, NERSA decided to approve tariff increase requested by Eskom which was against the Electricity Regulation Act 4 of 2006 and the Constitution of the Republic of South Africa 1996. This increase was contested and nullified in court. If this tariff increase had not been challenged in the court, it would have had a devastating impact on the well-being of the people, particularly the poor. Using literature relevant to socio-economic rights to modern energy, particularly electricity, this article accentuates that electricity is a basic socio-economic right in South Africa that must be accessible and affordable to all. It explains the importance of judicial intervention in ensuring that socio-economic rights are made available and accessible to the people. It points out that the court will not hesitate in using its judicial power to extend any opportunity which allows poor people to access and enjoy right to modern energy and electricity and other socio-economic rights in South Africa.

The rise of Renewable Energy implementation in South Africa

As the seventh coal producer in the world, around 77% of South Africa’s electricity is generated from coal resulting in a high level of environmental degradation. South Africa’s per capita greenhouse emissions are the highest in Africa. Besides, centrally generated power is not able to reach the remote areas because of the lack of distribution infrastructure. South Africa has a large potential for both, solar and wind power generation, with smaller potential for biomass, landfill gas and hydropower. Our focus in this paper is the solar and wind energy implementation in South Africa. With an average of 2,500 hours of sunshine per year, and 4.5 to 6.6 kWh/ m2 of radiation level, South Africa is among the top three in the world. The total wind power potential of South Africa is estimated to be 6,7000 GW, and is found to be competitive with the solar potential. The Government of South Africa, Department of Energy, and the National Energy Regulator of South Africa have developed policies and projects for the procurement and implementation of renewable energy to supplement its fossil fuel based production for greater sustainability and diversification in energy sourcing. In turn the provincial and municipal leadership have produced their own strategies to instigate sustainable energy usage. The Renewable Energy Independent Power Producers Procurement Program (REIPPPP) has allocated to over 92 Power Producers to injecting over 6,300MW of power into the power grid, mainly from solar and wind generation. The embracing of green energy has led to reduction in energy production costs, job creation, foreign investment and buy-in from local stakeholders. These projects are often located in rural areas, impacting local communities through job creation, development and improved quality of life. However, a number of impediments still need to be addressed as South Africa assimilates this new industry.

Can energy policies affect the cycle of carbon emissions? Case study on the energy consumption of industrial terminals in Shanghai, Jiangsu and Zhejiang

This paper proposes an approach to calculate the time series of cumulative carbon dioxide (CO2) emissions between 1995 and 2014 based on industrial energy consumption data in three Eastern China jurisdictions in Shanghai, Jiangsu and Zhejiang during these two decades. Using the Hodrick-Prescott filter, the fluctuation components of the cumulative CO2-emission time-series data in the three provinces are obtained. Subsequently, a grey correlation-based change-point search algorithm is used to determine change-points in these data. Additionally, the CO2-emission time-series is divided into stages based on the change-points. The cycle characteristics of national energy policies, laws, and regulations are compared with those of the cumulative CO2-emission cycle of the three provinces to analyse the impact of energy policies on CO2 emissions. This study shows that, although the industrial structure and trends in the CO2 emission time-series data of the three provinces are different, their cumulative CO2-emission cycle remains the same from 1995 to 2014. The variation characteristics of the cumulative CO2 emissions for each cycle during this period are well aligned with the stage characteristics of energy policies, laws, and regulations, indicating that energy policies play a consistent role in regulating such emissions. This study examines low-carbon production and sustainable energy development, and offers suggestions for issuing and perfecting energy policies, laws, and regulations, considering the indicators of energy consumption and CO2 emissions.

Russia’s energy in 2030: future trends and technology priorities

PurposeThe purpose of the study is to discuss and critically assess the outcomes of the Foresight study of the Russian energy sector, undertaken in 2014 in the course of a large-scale national Foresight exercise – “Science and Technology (S&T) Foresight 2030”.Design/methodology/approachIn this paper, the author performs an ex post evaluation of the Foresight study. The methods used are the literature review of the research and analytical publications that appeared after 2014, policy analysis of new national energy regulations and technologies, interviews and expert panels, and performing a final SWOT (strengths, weaknesses, opportunities and threats) analysis of the Foresight study.FindingsAs a result of the study, the expediency, efficacy, process efficiency, quality, impact and process improvement of the National S&T Foresight 2030 were assessed. Moreover, the SWOT for the National Foresight and its energy-related outcomes were identified. The National Foresight methodology and its outcomes are critically reviewed, and recommendations for their refinement are made.Research limitations/implicationsFuture research on the topic may include subsequent ex ante and ex post evaluations of energy technology foresights that will include revised lists of technologies, given the rapidly changing energy markets, as well as an assessment of the integration of the study results in the energy and S&T policy documents.Practical implicationsThe practical implications of the study are linked with turning the prospective R&D areas identified through the Foresight into state priorities for funding energy research. Energy companies may utilize the study results in their development plans and R&D strategies.Originality/valueThis paper offers a valuable insight in the future of energy research and technologies in Russia. It is a comprehensive study that covers all energy aspects from extraction of hydrocarbons to fuel cells and nuclear energy. An ex post assessment of the study is made with implications for the future research.

Computational Design and Parametric Optimization Approach with Genetic Algorithms of an Innovative Concrete Shading Device System

Office buildings in contemporary architecture usually have a high value of window to wall ratio (WWR) determining transparent façade as the most important part of the building façade to control solar gains, thermal losses and visual comfort. Therefore, in order to fulfill strict National energy regulations and LEED requirements, façades require a proper balance between transparent and opaque or shaded surfaces to avoid overheating, optimizing daylighting aspects and outdoor perception. Concrete is usually used in building sector for primary structure or secondary structure of cladding solutions. With new concrete materials and innovative digital fabrication process is possible to rediscover concrete for high performance façade/shading solutions. The aim of this paper is the development of high performance concrete static shading system using computational design approach and its optimization, by genetic algorithms, based on several parameters such as radiation control, outdoor view and daylight indexes and energy performance.After the development of a geometry definition managed with a parametric modelling approach (Rhinoceros and Grasshopper), genetic algorithm optimization were used in order to define the openness's sizes and their cutting angle to minimize solar radiation entrance during year, maintaining outdoor view. The possible geometric alternatives were part of a sensitivity analysis with Radiance and Energy-plus engine to assess the shading system performance in terms of daylighting and energy use. In order to evaluate their performances a study case, a single office unit placed in Milan (Italy) was defined, considered with wall facing outdoors, having a WWR of 86%, and five surfaces adiabatic. The results shows that using this approach is possible to develop an effectiveness shading solution able to control radiation over the year and likewise guarantee a high performance regarding the outdoor perception and visual comfort.

The Impact of Regulation on Competition in Telecommunications and Piped Gas

This article examines the ex ante powers to regulate competition bestowed on the Independent Communications Authority of South Africa (ICASA) in terms of the Electronic Communications Act, Act No 36 of 2005 (ECA) and on the National Energy Regulator of South Africa (NERSA) in terms of the Gas Act, Act No 48 of 2001 (Gas Act) and the regulators’ recent exercise of these powers to regulate prices in the mobile telecommunications and piped gas industries. Since 1999, the South African competition law authorities have focused on the reactive or ex post exercise of their statutory powers in terms of competition legislation, in order to detect and prosecute anti-competitive behaviour. This includes industries regulated by another sector regulator such as in the electronic communications sector (ICASA) and in the piped gas sector (NERSA). Several complaints against dominant suppliers in these industries have been successfully prosecuted in terms of the Competition Act, Act No 89 of 1998 (Competition Act). There have been far fewer efforts by the sector regulators to proactively exercise their ex ante regulatory powers in order to create a market structure and conditions that facilitate competition in the sectors that they regulate. In this article, we examine the recent exercise of powers by ICASA and NERSA in the mobile and piped gas industries. We conclude that the provisions of the ECA have facilitated (i) the identification and analysis of relevant markets lacking in adequate competition and (ii) the promulgation of regulation that is needed to develop a more competitive environment in due course. However, ICASA's process in exercising its statutory powers has been slow and has suffered from various deficiencies. On the other hand, the analysis indicates that the legislation governing NERSA’s ex ante powers, and the way in which NERSA has enforced that legislation, has led to counter-productive regulation, which has hindered competition in the sector. Accordingly amendments to the Gas Act are required. Amendments effected to the ECA retain guidance to the regulator on how to conduct a market review, but the regulator should exercise these powers more often.

Generation of a Tropically Adapted Energy Performance Certificate for Residential Buildings

Since the 1990s, national green building certification indices have emerged around the globe as promising measurement tools for environmental-friendly housing. Since 2008, tools for countries in the Northern “colder” hemisphere have been adapted to tropical countries. In contrast, the Tropically Adapted Energy Performance Certificate (TEPC), established in 2012, translates the United Nations’ triple bottom line principle into green building sustainability (planet), thermal comfort (people) and affordability (profit). The tool has been especially developed and revamped for affordable green building assessment helping to reduce global warming. Hence, by the comparably simple and transparent energy audit it provides, the TEPC examines buildings for their: (1) contribution to reduce CO2; (2) transmission rate in shielding a building’s envelope against the effects of the tropical heat; (3) generation of thermal comfort and (4) referring total cost of ownership to green the building further. All four dimensions are measured in the rainbow colour scale in compliance with national energy regulations. Accordingly, this research examines the tool’s implementation in tropical countries. Exemplified tropical case studies in residential areas seek to demonstrate the practicability of the approach and to derive a holistic certification by an internationally accredited certification board.

Conflicts between national regulatory cultures and EU energy regulations

The research question is whether and to what extent the regulatory approach of command and control which is dominant in the energy sector accounts for implementation and enforcement deficits, and should be replaced or, at least, complemented by reform measures based on the public administration concept of collaborative governance. After a brief overview of the 2009 EU legislative package of energy regulations, three concepts of regulatory cultures are identified for Great Britain, France, and Germany which are based on the state paradigms of the enabling state (GB), the providing state (F), and the ensuring state (D). The main characteristics of the three national regulatory systems are outlined for the energy sector. Differences and conflicts between national regulatory cultures and EU energy regulations are identified, and linked to implementation and market deficiencies. Finally, alternative approaches to energy regulation are outlined on the basis of the concept of collaborative governance.

Financial viability of agroforestry for bioelectricity generation on various farm types in the Western Cape, South Africa

ABSTRACT South Africa relies on fossil fuels for generating more than 80% of its electricity. While projections of known reserves indicate sufficient coal for 114 years, air pollution from coal power plants causes serious environmental damage. The production of lignocellulosic biomass for generating bioelectricity seems to be an appropriate option in order to become less dependent on fossil fuels. In this article, the potential for producing this type of biomass was investigated for the Cape Winelands District Municipality (CWDM). First, the potential area for production in a Short-Rotation Coppice (SRC) system was identified by means of Geographic Information Systems (GIS). After assessing suitable tree species and their productivity rates, an annual supply of about 1.4 million tonnes per year could be expected, using exotic species such as Eucalyptus cladocalyx. Three scenarios were assessed by means of farm modelling. The first scenario describes woody biomass production as a single production activity on fynbos/uncultivated land, not competing with other agricultural activities. In the second scenario, biomass production is introduced as an additional enterprise on a dryland winter-grain farm, typically in the rainfed grain- and livestock-producing Gouda/Hermon farming area. The third scenario describes biomass production in an intensive farming environment. Given the National Energy Regulator of South Africa (NERSA) tariff for bioelectricity, it can be concluded that woody biomass production in a short-rotation system, either as a soleproduction business or integrated into a farming business with other agricultural activities, can be economically and financially viable. Land values, however, have a large influence on viability.

Forecasting electricity demand in South Africa: A critique of Eskom’s projections

Within a short period, Eskom has applied to the National Energy Regulator of South Africa (NERSA) for the third time since the 2008 electricity crisis, proposing a multiyear price determination for the periods 2010−2011 and 2012−2013. The new application, submitted at the end of September 2009, motivated for the debate of strategies with which the consequences of the proposed price hikes could be predicted, measured and controlled. In his presentation to Parliament in February 2009, Eskom’s then CEO, Mr Jacob Maroga presented the current energy situation in the country, the reasons for the crisis in 2007−2008, as well as the challenges of the future. The purpose of this paper is to contribute some new ideas and perspectives to Eskom’s existing arguments regarding the demand for electricity. The most important issue is the fact that Eskom does not sufficiently take into account the impact of the electricity prices in their electricity demand forecast. This study proposed that prices have a high impact on the demand for electricity (price elasticity of -0.5). Employing similar assumptions for the country’s economic growth as Eskom, the results of the forecasting exercise indicated a substantial decrease in demand (scenario 1: -31% in 2025 and scenario 2:-18% in 2025). This study’s findings contrasted significantly with Eskom’s projection, which has extensive implications as far as policy is concerned.