Eskom’s plans to increase the cost of electricity could drive up demand for the transport of large-scale solar power farms.
The agriculture industry will increasingly turn to solar power to meet the energy needs of their operations, Agri Western Cape CEO Carl Opperman has warned at a public hearing on the planned rate hikes.
He told the National Energy Regulator of South Africa (Nersa) that it would be more economical for farmers to provide their own power if Eskom was allowed to increase electricity tariffs in order to make up the R66.6 billion the power utility says it has lost over the past three years.
Opperman said tariff hikes would add cost pressures to the food industry, which was already in a “tight corner” as prices had been negatively impacted by the drought in the Western Cape. This, he said, would negatively affect employment in the sector.
“The drought has resulted in 50% less onions and 80% less potatoes being planted,” he said. “This has translated into a R40-million loss of wages for agricultural workers.”
He added that farmers would ultimately have to absorb these costs as they were price takers and could not necessarily pass higher costs onto consumers.
“Wine sellers are off the grid,” Opperman told the panel during Nersa’s public hearings on Eskom’s regulatory clearing account application. “That is more cost-effective than being with Eskom at this point in time.”
He also said that solar energy offered more stability for farmers.