Analysis of Energy System in South Africa Using Exponential Smoothing Approach and Regression Technique

Analysis of Energy System in South Africa Using Exponential Smoothing Approach and Regression Technique

Mohammad Mehdi Ghiasi (University of KwaZulu-Natal, Durban, South Africa), Alireza Aslani (Interdisciplinary Department, Faculty of New Sciences and Technology, University of Tehran, Tehran, Iran) and Younes Noorollahi (University of Tehran, Tehran, Iran)
Copyright: © 2016 |Pages: 17
DOI: 10.4018/IJSEM.2016070104


The energy demand has increased dramatically in the recent decades. Due to the limitations and environmental effects of fossil fuels, secure level of energy supply is vital for economic and social development. This work is to review the energy sector in South Africa. After that, the consumptions of coal, oil, natural gas, and nuclear energy are estimated by employing simple exponential smoothing methodology. Finding shows that the primary energy consumption in the South Africa is correlated as a function of population growth rate, industrial growth rate, and GDP.
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1. Introduction

1.1. Introduction to SA

Republic of South Africa is located at the southern part of Africa. There are six neighboring countries namely Namibia, Botswana, Zimbabwe, Mozambique, Swaziland, and Lesotho. The land area of the SA is about 1,219,090 square kilometers that situate the country as the 25th-largest country in the world. Considering the population, the SA is 24th-most populous nation having approximately 53 million people. SA has three capital cities including Cape Town, Pretoria, and Bloemfontein as legislative capital, executive capital, and judicial capital, respectively.

In 1910, the SA obtained its independence from the United Kingdom with the name of Union of SA. 1964 was the year of the declaration of the Republic of SA. In 1994, the apartheid was ended and the first democratic government came into power. The main challenge for the government was transforming the SA from an import substituting industrialization country to a regime with export abilities (Sandrey, n.d.). Despite the change in policy, however, the growth in the economy was insufficient to overcome the problems from the apartheid era. Furthermore, the income inequality is still high. This is followed from the low employment rate, in particular for black South Africans (OECD, 2015).

Nowadays, SA is a member of several important international organizations and alliances like Group of 77, G20, G8+5, and World Trade Organization. Hence, it can be said that SA has a good international reputation. Based on the world fact book published by Central Intelligence Agency (2016), SA is a middle-income country and is categorized as an upper-middle-income by the World Bank (2016). According to the World Bank (2016), the economies can be classified into 5 distinct groups in terms of the ease of doing business: Rank 1-38, Rank 39-76, Rank 115-152, and Rank 153-189. SA is ranked 73rd. It demonstrates the potential of SA for business activities.

For measuring the economic growth of a country, numerous approaches and methodologies can be utilized. Among the available methods, investigation of the gross domestic product (GDP) is a common choice for the application of interest. According to the National Development Plan (NDP), the SA’s government should achieve the more than 5% real GDP growth on average annually. In addition, 11 million new jobs should be added. The expected result is the elimination of the poverty and reduction in the inequality by 2030 (OECD, 2015). More information and detailed explanations on the subject of the economy of SA can be found in the literature (Bhorat, Hirsch, Kanbur, & Ncube, 2008; The International Bank for Reconstruction and Development / The World Bank, 2015; International Energy Agency, 2014; Eberhard, 2011).

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