While electricity consumption in South Africa continues to grow strongly, growth in production has ultimately been constrained by capacity problems, analysts said on Tuesday.
February’s year-on-year growth in electricity consumption was unchanged from January’s growth at 5,1%, while growth in the production of electricity fell to 3,4% from January’s 4,1% growth.
The analysts pointed out, though, that electricity production actually fell by -0,2% on a seasonally adjusted, month-on-month basis, while consumption was unchanged.
“One notable development over the past year is that growth in imports has been very strong. Last month, we observed that South Africa is still a net exporter of electricity, with exports exceeding imports since mid-2003. In addition, exports of electricity have grown much faster than imports over the last four years. This trend appears to be reversing, with electricity imports in 2007 at levels very similar to that of exports,” the analysts stated.
They explained that the first quarter of the year is typically a time of low electricity consumption, as manufacturing output is lower than the annual average and consumer demand at the end of summer is typically low.
“It is possible that electricity exports will rise once again in the coming months as demand rises again,” they added. “It is also true that a portion of exports may be driven more by political than by economic considerations.
“However, domestic demand may yet trump regional interests, as South Africa’s manufacturing fortunes in the short to medium term may rely heavily on any spare capacity. If this is the case, growth in electricity exports will be much lower in 2007 than it has been for the previous four years,” the analysts concluded. — I-Net Bridge