Electricity tariffs increased by 57% in three years

ROYAL Swaziland Sugar Corporation (RSSC) Managing Director Nick Jackson says from 2008 to 2010 the price of electricity increased by 57%.

He said power had been increasing by about 25% annually. Jackson said the company’s strategy would be to displace most of its imported electricity.

He said the corporation would install two 30-megawatt turbo alternators at both Simunye and Mhlume factories, adding that construction work had already begun at the Simunye factory.

He said they would substitute power so as to give control over escalating costs and that there was also potential for further expansion into export of power.

Meanwhile, it was reported that RSSC spends about E200 million a year in electricity, making this the second highest bill the company incurs.

The installation of the two 30-megawatt turbo alternators at the company’s factories would cost E100 million and the project was expected to be completed by the end of next month. Currently, the company has its own energy but it is not enough.

RSSC General Manager-Manufacturing John Mark Sithebe said the installation of the 30-megawatt alternators would create capacity to substitute imported power, thus creating self-sufficiency.

“Eskom has indicated its intention to seek high tariff increases over the next few years in the order of 20-25% per annum.

These increases will inevitably be passed on by the Swaziland Electricity Company (SEC) to its customers in Swaziland, resulting in abnormal electricity cost increases for RSSC,” Sithebe said.

RSSC currently generates power using cane or bagasse, which they said was not enough. Sithebe said the board approved E72 million funding which would go towards improving energy efficiency in the two factories, thereby minimising the energy used to generate power for factory use.

“We have done the figures and are sure that this initiative will decrease RSSC’s cost of sugar and ethanol production,” he said.

...Ethanol project penalties duplicated

ONE of the challenges experienced by the Royal Swaziland Sugar Corporation (RSSC) in its ethanol project is the duplicity of excise penalties by the South African Revenue Service (SARS) and Swaziland Revenue Authority (SRA).

However, it has been reported that such was not experienced by the company’s South African competitors. Managing Director Nick Jackson said RSSC also experienced higher bond requirements compared to its South African competitors.

“Costs of transportation are also higher. Worth noting is that RSSC produces high grade fermentation ethanol from sugarcane molasses. Ethanol production is not regulated like sugar, it is a bit more informal,” he said. Jackson, who was speaking at the Sugar Conference 2011 held at Happy Valley Hotel, said ethanol had markets in the Southern African Customs Union (SACU), European Union (EU) and African region.

source: observer