Renewables, wheeling agreements could help local manufacturers

The success of the manufacturing sector, which plays an important role in economic development and is important for job creation, depends on reliable, stable and affordable energy supply.

Manufacturers in South Africa could benefit from investing in renewable energy to not only provide that energy, but also to reduce carbon emissions, consulting firm BMA director Meghan King told delegates at the recent Manufacturing Indaba.

Electricity trading company Etana Energy CEO Evan Rice, meanwhile, discussed the twin imperatives of decarbonisation and energy security, without massively increasing costs for manufacturers.

He suggested that local manufacturers consider either investing in their own solar installations or accessing low-carbon electricity through energy wheeling agreements with independent power producers.

Rice noted that, while wheeling is available for medium-voltage customers, large energy users and some municipalities connected to State-owned utility Eskom’s transmission network, municipalities need to also have an approved wheeling policy in place.

He pointed out that the National Energy Regulator of South Africa had a consultation paper out on a national wheeling framework, which he said would set a consistent methodology for wheeling and wheeling tariffs that should fast-track and open up the market to more large users.

Rice explained that, while wheeling was not a new concept for South Africa, until recently, the cost of building new power plants specifically for wheeling energy around the country, was too high.

He argued that a national wheeling framework was critical, noting the importance of setting common standards for how wheeling tariffs were set and how reconciliations happened.

He said this should make the implementation of IT systems and billing systems easier across the broader set of municipalities in South Africa from a policy perspective.