Turning sugar into electricity
SUGAR GROUP Tongaat-Hulett is on a drive to sweet talk sugar companies into diversifying their revenue streams by selling their surplus electricity to Eskom. Currently, Tongaat-Hulett’s two sugar mills sell surplus electricity to an unidentified “green” electricity trader for resale as certified renewable electricity to consumers.
Tongaat-Hulett is believed to be in talks with the Department of Minerals & Energy (DME) and Eskom to facilitate the sugar industry’s market for large-scale cogeneration of renewable electricity. However, TongaatHulett declines to give details. But Finweek understands that talks between the DME and the group are at an advanced and sensitive stage.
Should a market for renewable electricity be established, sugar companies stand to generate a lot of cash. On the other hand, Eskom will appreciate any initiative to supply electricity to the national grid because it operates under “tight conditions”.
However, the growth of a renewable energy sector – such as electricity generated from excess sugar bagasse – is likely to be restricted by the low price of coal-generated electricity.
Tongaat-Hulett’s mills at Felixton and Maidstone produce excess bagasse, which is a waste product from cane sugar production used to produce surplus electricity. Sugar mills burn bagasse to fire mill boilers to generate steam and electricity. Thus bagasse is a biorenewable energy source for sugar factory boilers. Any excess electricity generated in a factory could be sold into the national grid.
Reliance on bagasse as a fuel source cuts coal usage at sugar factories. Illovo Sugar, Africa’s largest sugar cane producer, also uses bagasse as boiler fuel. “This unique process also results in the group having minimal reliance on fossil fuels, such as coal, for its energy requirements,” says the group. Coal usage within the Illovo group consists of less than 10% of total energy used.
Ironically, sugar companies are not big customers of Eskom but are interested in supplying their excess electricity to SA’s power utility. But a move to large-scale cogeneration of renewable electricity by sugar companies requires significant capital investment. Tongaat-Hulett seems to be ready to finance such a project.
With any luck, electricity generated from sugar could be very lucrative for sugar companies while assisting Eskom to cope with the increasingly high demand for electricity in SA.