The Impact of Electricity Trade on the Environment in South Africa

In the early 1990s, about two-thirds of South Africans were without electricity, relying on dirtier and less convenient fuel such as coal. As a result, urban air is severely degraded, with health guidelines for concentration of particulate materials being exceeded. Eskom dominates the electricity market of sub-Saharan Africa generates about 95% of South Africa's electricity. Electricity generation has been showing an upward trend in South Africa, with an increase of approximately 40% between 1990 and 2000. More than 85% of the coal produced in the country is used to generate electricity. Energy prices in the country do not reflect the impact of pollution and other externalities, and hence undermine investment decisions that could favour less polluting technologies. The study will investigate factors determining the demand of energy in the electricity sub-sector and evaluate the main environmental issues associated with electricity production in the country. The research will also investigate possible long run shifts in production technology.