Immediate action necessary for energy announcement
[{“type”:”text”,”content”:”An estimated 25% of the countryu2019s food production is reliant on irrigation and energy-intensive industries. Alleviating loadshedding is, therefore, a vital concern for the agricultural sector. The implementation of the presidentu2019s plan will thus be crucial to ensuring South Africau2019s food security. nnOf prime importance for relieving the burden of loadshedding on the sector, is the removal of the 1 MW limit on embedded generation in the sector. This limit has made it uneconomical for the sector to invest in power generation and there is no reason why the 100 MW generation cap should not have been previously extended to the agricultural sector. The sector has the ability to significantly ramp up generation, but government must remove all unnecessary restrictions in order to unlock private capital investment in energy generation for the sector.nnEngagements on this matter to date have yielded no results, and this must now be addressed with urgency. In light of the presidentu2019s address, Agri SA will be writing to minister Gwede Mantashe to urgently address this matter. nnThe escalation of loadshedding has come at a particularly difficult time for the sector. Over the past year, the sector has seen above inflation increases in the cost of vital inputs like fuel and fertiliser. The recent interest rate hikes have only exacerbated these cost pressures as South Africau2019s farmers currently carry more than R190 billion in debt. The resulting increase in debt servicing costs will leave the countryu2019s farmers in an extremely precarious situation. It is therefore imperative that government takes immediate action to curtail the additional costs that loadshedding has imposed on the nationu2019s food producers by ensuring they can rapidly begin investing in small-scale embedded generation where possible.nGovernment must also announce the details of the plan to enable the sale of excess power into the grid. This would ensure that the benefits of increased sector-generated energy are shared with Eskom-reliant consumers around the country u2013 including those small-scale farmers who may not be able to afford the investment in embedded generation currently. nnIf these limits on agricultural sector power generation are lifted timeously, government will also need to invest in the safety and stability of the energy infrastructure to ensure that the grid is prepared to handle any excess power generated.nnAgri SA will make every effort to ensure that the sector can contribute to the alleviation of the energy crisis, but government must take the necessary steps without delay to enable the sector to play its part.”,”position”:0,”id”:”dK5DDn7sH8Wqq935″}]