Businesses to source own energy

Janine Myburgh, President of the Cape Chamber of Commerce and Industry

Nearly half the businesses in Cape Town are planning to generate their own electricity and reduce dependence on Eskom supplies, according to a survey of members of the Cape Town Chamber of Commerce and Industry.

They were answering the question: “Do you intend to invest in renewables to generate some or all of your electricity and thus reduce dependence on Eskom?”

Nearly 47% percent of respondents said they intended to invest in renewables while 53% percent said they did not.

Admittedly, the sample was small, but we have spoken to people in the industry, and they believe the response is a fair reflection of how businesses are planning to cope with the ever-rising price of electricity.

We have already seen many businesses invest in roof-top solar including the V&A Waterfront, so we know it is happening but we were surprised by the high percentage of businesses which plan to make their own electricity.

It gives us a glimpse into the future and it is clear that there will be major changes in the electricity industry.

In many other countries there are substantial subsidies for roof-top solar, but South African businesses are making the decision on purely commercial grounds and without any financial inducements.

Concern about future Eskom supplies and tariffs can also be seen in Saldanha Steel’s plans to get involved in a new 800 MW gas-fired power station. The interesting thing about this is that Saldanha Steel’s CEO is Paul O’Flaherty, the former financial director of Eskom.

If anybody is in a position to estimate the tariffs we are likely to face in the future it is Mr O’Flaherty, and he has come to the conclusion that it will be significantly cheaper to generate his own electricity.

The trend to “own generation” will have far-reaching consequences. Firstly, it is decentralising the electricity generation and opening up an exciting new industry which should create many jobs in the Western Cape.

Secondly, Eskom will be losing many of its best customers. It is already complaining about revenue shortfalls, but there is worse to come.

The Chamber has said in its presentation to the National Energy Regulator of South Africa (NERSA) that Eskom tariff increases are counter-productive and its customer base will be eroded. Now we are seeing the proof of this.

Where will Eskom find the customers for Mr Zuma’s nuclear power stations?