• Energy Research

The purpose of this paper is to investigate energy substitution possibility among the fuel types used in the industrial sector of the Nigerian economy. An econometric model, utilizing the translog cost func-tion, is estimated for nine major industries in the industrial sector - non-metal, basic metal, fabricated metal, chemicals, food and beverages, paper, tex-tile, wood and others. Fuels are aggregated into four categories: electricity, oil, gas and coal. The model is estimated using time series data over the period 1970 - 2000. The results vary across the industries for different fuels. The conclusion provides future directions for interfuel substitution in the industrial sector of the Nigerian economy.

AbstractAn energy-focused macro-micro approach is used to assess the poverty implications of government policy response to increases in international oil prices in South Africa. The first scenario assumes that increases in international oil prices are passed on to end users with no changes in government policy instruments. In this scenario, poverty indicators increase. The second scenario assumes that the world price increases are nullified by a price subsidy by the government. This scenario still leads to an increase in poverty as the beneficial price effect is cancelled out by a decline in households’ income induced by the financing method used. While revenue generated from a 50 per cent tax on windfall profit of the petroleum industry helps to minimize the loss in government revenue, it does not contribute to mitigating the increasing poverty trend, since the decline in saving and investment under this scenario restricts the country's growth, employment and income distribution perspectives.

A CGE model of South Africa is used to find the potential for a double or triple dividend if the revenues raised from an energy-related environmental tax are recycled to households and industry through lowering existing taxes. Four environmental taxes and three revenue-recycling schemes are compared. The environmental taxes are (i) a tax on greenhouse gas emissions, (ii) a fuel tax, (iii) a tax on electricity use, and (iv) an energy tax. The four taxes are constructed such that they have a comparable effect on emissions. The revenue is recycled through either (i) a direct tax break on both labour and capital, (ii) an indirect tax break to all households, or (iii) a reduction in the price of food. A triple dividend is found - decreasing emissions, increasing GDP, and decreasing poverty - when any one of the environmental taxes is recycled through a reduction in food prices.

Abstract Electricity demand in South Africa has grown at a very rapid rate over the past decade. As part of reform initiatives to enhance long-term sustainability of the country's electricity industry, South Africa's authorities have in recent years sought to develop an electricity pricing framework that is cost reflective and forms the cornerstone of demand management schemes meant to foster changes in consumption behaviour and enhance efficiency in resource use. The effects of any pricing policy on aggregate electricity consumption will depend on a useful understanding of the factors that influence electricity demand, and the magnitude to which electricity demand responds to changes in such factors. In this context, this paper applies the bounds testing approach to cointegration within an autoregressive distributed lag framework to examine the aggregate demand for electricity in South Africa during the period 1960–2007. The results indicate that in the long run, income is the main determinant of electricity demand. With electricity prices having an insignificant effect on aggregate electricity demand, future pricing policies will need to ensure that electricity prices are cost reflective and enhance efficiency of electricity supply and use.

Two questionnaire surveys of fuel use by low-income households in Zimbabwe were conducted in four small towns in 1994, and in these towns plus four larger towns in 1999. An energy transition from wood through kerosene to electricity occurred (a) with rising household income, (b) with increasing electrification status among towns and (c) over time in the smaller towns, in spite of falling household incomes in two of the towns. Increasing discrepancy in the incomes of higher and lower income groups over time was not associated with greater divergence in their fuel choices. By 1999 electricity was used by almost all households in towns with good electricity supplies, while use of firewood in these towns was infrequent. However, even the wealthiest households continued to combine electricity with other fuels, usually kerosene. Electricity use by less affluent households is apparently limited by lack of connections in the home and by access to appliances, while fuel prices, which are subject to government subsidies and fell in real terms over 5 years, have been less important. Zimbabwe's urban domestic energy policy has had considerable success in terms of equity, but this is increasingly difficult to maintain given present economic and political uncertainty.

This paper discusses the procedures and results of constructing a greenhouse gas (GHG) emissions inventory for South Africa, using the official national energy balance for 1998. In doing so, the paper offers a snapshot of the South African energy supply and demand profile and encompassing greenhouse gas emissions profiles, disaggregated into 40 economic sectors, for the reference year. For convenience, energy supply and use are reported in both native units and terra joule (TJ), while emissions are expressed in carbon dioxide equivalents and reported in giga-gram (Gg). While carbon dioxide makes an overwhelming contribution to global anthropogenic GHG emissions, the inclusion of methane and nitrous oxide offers considerable richness to the analysis of climate change policies. Applying the energy balances, it was possible to compile a comprehensive emissions inventory using a consistent methodology across all sectors of the economy. The inventory allows the economic analyst to model various economic policies either with fuel as an input to production, or the consumption of fuel or the emissions generated during combustion, as a base of the analysis. The dominant role of coal as a source of energy, with a total primary energy supply (TPES) of 3.3 million TJ or 70 per cent of the total TPES, is clearly shown. Emissions from coal combustion (263 783 Gg of carbon dioxide equivalents or 74.7 per cent of total emissions) are henceforth the largest contributor to total emissions, estimated to be 352 932 Gg carbon dioxide equivalents.

Abstract Three levels of analysis are used to track the channels by which South Africa and its people are impacted by an increase of oil prices, namely the macro-economic level, the meso-economic level and the micro-economic/household level. The paper uses an economy and energy integrated approach to quantify these different channels. The approach combines a household survey dataset and an input–output dataset to implement the models. Results indicate that the impacts on the macroeconomy are negative, with gross domestic product falling and the current account balance worsening. All of the industries falling into the high intensive oil – use group witness an increase of their input cost that is above the economy – wide average. The impact of doubling paraffin prices results in poor households in rural areas and among the “Black” population, in particular, witnessing an increase of their cost of living which is much higher than their corresponding highest expenditure quintile groups. An increase of transport fuel hits the richer households much harder. The distributional impacts of rising transport cost as a consequence of high oil and oil-products prices shows that median quintile expenditure groups observe the highest impact both in urban and rural areas and especially among the “Black” population.