South Africa’s electricity crisis: macroeconomic, macro sectoral, and fiscal consequences and p[...]

Request for Research Proposals
South Africa’s Electricity Crisis: Macroeconomic, Macro Sectoral, and Fiscal Consequences and Policy Actions Required

The United Nations University World Institute for Development Economics Research (UNU-WIDER), together with the National Treasury of South Africa, is requesting research proposals under the second phase of the Southern Africa – Towards Inclusive Economic Development (SA-TIED) programme. The papers generated under this Request for Research Proposals (RfRP) will be published as a part of the macro-fiscal analysis and policy modelling workstream of the programme. Submission deadline: 18 June 2023.

Background

Since 2008, South Africa has been subjected to ‘loadshedding’—a term used to describe planned power cuts intended to limit electricity demand to its constrained supply. However, as the Energy Availability Factor has fallen since 2017, days with loadshedding increased to over 200 in 2022, with loadshedding having deteriorated further in the first four months of 2023 and projected to become even worse over the next 18–24 months. In addition, many of South Africa’s aging coal power stations are scheduled for decommissioning in the next decade, while the failures of Bid Windows 5 and 6 to secure a renewable energy supply has shown that South Africa lacks the transmission capability to transmit power from any newly built renewable power generation facilities in the Northern, Western and Eastern Cape.

The impact of loadshedding on the economy and its various sectors also holds implications for fiscal policy. Constrained GDP growth results in the constrained growth of tax revenue, which, in turn, further limits the government’s spending envelope. The latter makes budgetary prioritising more difficult, especially if increasing expenditure on public infrastructure is one of the priorities. Fiscal policy is further impacted as limited economic growth results in higher levels of unemployment and poverty and, thus, more pressure to expand social expenditure.

To understand the impact of loadshedding on the economy as a whole, but also its asymmetric impact on economic sectors and companies of various sizes, will require detailed analysis. Such analysis will also assist in understanding which policy instruments can be used to soften the impact. The fiscal impact of constrained economic growth resulting from loadshedding—accompanied by increased pressure to expand government’s social expenditure on the back of a shrinking tax base—also requires detailed analysis. The analysis will also point to the requisite policy steps that will increase electricity supply.

Important Dates

1. 25 May 2023: Launch of Requests for Research Proposals (RfRP)
2. 10 July 2023: Target date for informing on funding decisions
3. 15 November 2023: Target date for submission of first drafts of papers
4. Week of 1 December 2023: Target date for work-in-progress workshop
5. 15 February 2024: Target date for submission of revised near-final draft papers and a one-page summary of key findings

Proposal Submission Procedure

The proposal should be no more than three pages of A4 paper in length, excluding cover page and references. Please use 12-point font, 1.5 line spacing, and standard margins. The proposal should clearly state the research objectives, study design and methods, data sources, and policy relevance. The cover page should contain the complete contact information of researcher(s), and a 120–150-word abstract summarizing the research question, main method, data, and expected contribution to the policy debate.

Submission of proposals is done electronically by using the online form on the RfRP announcement page. There are three forms to select from: one for individuals, another for groups of individuals, and a third for non-profit organizations. Details (such as address, gender, nationality, date of birth) of all researchers involved will need to be entered to the form and the cover page, the proposal, and short CVs (five pages or less) of researcher/s uploaded. Please familiarize yourself with the form in advance.

Budget Submission

Submission of a budget is not required for the proposal.

Contact Information

Any questions on the proposal process should be sent to researchproposal2@wider.unu.edu by 18 June 2023. All queries and responses will be published on the RfRP announcement page. Selected answers will be updated on a rolling basis.