This report summarizes South Africa's energy challenges, efforts to establish a low-carbon energy strategy through the Power Conservation Program
and several World Bank backed initiatives to help the country save energy, reduce greenhouse gas emissions, and help South Africa cope with a power crunch. The Power Conservation Program has proved its effectiveness. The economic benefits of the program include the reduced need for dispatching expensive, oil-fired power plants. The national electric utility, Eskom, has maintained the Power Conservation Program as an option that can be expanded beyond the large industrial customer base, if further power shortages arise due to an imbalance between electricity supply and demand. The system is well understood among Eskom's staff, integrated into business processes, and it can be adjusted to accommodate a larger customer base, if necessary. It is an excellent hedging mechanism that can help Eskom to manage power system reliability if the reserve margins deteriorate in the future.