No load shedding, but big firms go off grid

Some of Durban’s prominent firms say they have invested millions of rand in alternative energy sources despite Eskom’s recent success of hitting over 100 days without load shedding.

The power utility announced last week it had reached a milestone of over 100 days without load shedding.

ArcelorMittal South Africa (Amsa) also announced last week that they would continue with longs business, saying the absence of load shedding had led to a growth in the manufacturing business.

Amsa said recent increases in power generation, coupled with renewable energy projects scheduled to come online over the next two years, suggested the drag on economic growth caused by electricity shortages should gradually diminish.

Major companies such as paper company Sappi, Toyota and private healthcare provider Netcare told “The Mercury” they were going off the grid despite over 100 days of no load shedding, adding that they were not prepared to take any risks.

Sappi Southern Africa CEO Alex Thiel said Sappi was on a continual drive to reduce its reliance on bought electricity.

“It’s not only to ensure an uninterrupted and stable power supply to its operations but also to reduce its reliance on coal-generated electricity and to reduce its GHG emissions,” said Thiel.

“Sappi’s South African operations are currently approximately 50% electricity self-sufficient, meaning we still rely on Eskom and the national grid to supply roughly half of our needs.”

Thiel added that in some instances, such as their Ngodwana Mill, they were also able to produce sufficient electricity to feed back into the grid.

“For the most part, Sappi can proactively manage its electricity demand during load shedding periods to keep critical equipment running without significantly impacting production output. Unfortunately, while 100 days without load shedding is very positive, unstable Eskom power supply to our plants continues to cause disruptions at our operations through power dips and surges which can bring our plants down completely, despite having our own local power supply.”

Dr Erich Bock, acting managing director of the Netcare hospital division, said the 100 days without load shedding marked a significant positive development for the country and its people.

“We can confirm that, apart from an increase in energy cost, Netcare’s operations are generally not affected by load shedding, as 10 years ago we invested in backup diesel generators in all our facilities. We also use solar power during daylight hours and outside of load shedding.

“This means that safe, sustainable care is delivered without disruption throughout our hospitals.”

Bock added that during load shedding they had no option but to make provision for backup power to keep hospitals operational. “Given that we have not had load shedding for 100 days, Netcare’s facilities have not needed backup power, and we have, therefore, not incurred diesel costs.”

Toyota South Africa Motors said they managed production at its Prospecton Plant in Durban during load shedding as an internal matter.

“We are constantly looking into alternative energy and have already invested in solar power in parts of our operations between Johannesburg and Durban.”

Professor Wikus van Niekerk, dean of engineering at Stellenbosch University, said major companies wanted to be self-sufficient when it came to power.

“I can understand the move to solar as we look at Durban. They have at least 200 days of sun a year. Solar is a cheaper option for businesses that are buying electricity from Eskom or local municipalities.”

Van Niekerk said the issue was that there was no guarantee that load shedding was a thing of the past.

“We are definitely happy, but the problem is we just don’t know if load shedding will come back. We have been in this situation before and the wheels have come off and then we are back to Stage 4.

“I’m not saying that will happen but companies do need to protect themselves if load shedding comes back.

Being less reliant on Eskom means the power utility and municipalities could review their tariff module prices to prevent businesses going off the grid.”

Ruse Moleshe, managing director of RUBK, an energy and infrastructure consulting and advisory company, said major companies made alternative arrangements to Eskom, meaning that part of the demand for power from Eskom may be reduced, potentially impacting Eskom’s revenue.

“However, none of the major energy-intensive energy consumers have alternatives that meet all their needs or are self-sufficient.

“They still need a reliable and secure supply from Eskom to power most of their industrial activities/needs.”

Moleshe added that a well-functioning Eskom made planning their activities easier and mitigated the loss of income from intermittent access to energy.

“It is important that Eskom maintains its momentum and continues to make improvements that can guarantee a reliable electricity supply to power our industries.”

Waldo Krugell, an economics professor at North-West University, said 100 days without load shedding benefited the economy, particularly energy-intensive industries.

“However, a positive bump in output is going to be smaller than we thought because many companies have already made a partial transition to renewable sources. That transition takes the pressure off Eskom, but it also means that many of their paying customers need them less, or not at all.”

The Mercury