Determinants of electricity consumption in South Africa: Insights from linear and nonlinear modeling approaches

Purpose: This study investigates the determinants of electricity consumption in South Africa, focusing on economic, demographic, and energy-related factors from 1980 to 2023. Methodology: The study employs linear models (Dynamic Ordinary Least Squares and Canonical Cointegrating Regression) and a nonlinear Threshold Autoregressive (TAR) model to analyze the relationships between electricity consumption and its determinants. Results: Economic growth, electricity prices, and income per capita are found to be positive determinants of electricity consumption, while population growth and inflation exhibit negative relationships. The TAR model reveals asymmetric effects of these determinants across different income regimes. Theoretical contribution: This study extends the literature on electricity consumption determinants in developing countries by incorporating both linear and nonlinear modeling approaches, providing a more comprehensive understanding of the complex relationships involved. Practical implications: The findings inform policymakers and energy stakeholders in South Africa on effective strategies for managing electricity demand, promoting energy efficiency, and addressing the ongoing challenges in the electricity sector. Sustainable Development Goals (SDGs): SDG 7: Affordable and Clean Energy; SDG 9: Industry, Innovation and Infrastructure