Our producers harvest the sun by utilizing this energy to convert rainfall, inputs, and labor with precision and without interruption into valuable starch and oils. Storage operators store the harvest safely by utilizing electricity generated from coal-fired plants distributed directly by Eskom or municipalities. However, the cost of storage is becoming exorbitant as the reliable supply of affordable electricity dwindles year after year. On the 31st of May, Agbiz hosted a workshop that brought together experts, agribusinesses, and the mining sector to investigate how companies can secure their energy needs.
The energy supply needs not only to be affordable but the supply needs to be sustainable. In addition, there is a global energy transition from fossil fuels (coal) to renewable energy sources that coincides with digital transformation. The latter needs a sustainable supply of sufficient electricity and the demand for sufficient and reliable electricity supply will therefore increase at storage complexes. The storage sector’s basket costs are exposed to unique challenges and specific cost increases that are yet not fully reflected in storage rates. The availability and cost of electricity play an extremely important role in the storage sector and the weight of this cost item (Excluding diesel cost for diesel generators) compared to the total storage cost is 13,1%. This cost item is expected to increase annually by an average of 5,4% which is considerably higher than the inflation target of the Reserve Bank of 4,5%.
Storage operators keep a watchful eye on electricity as a cost item and will ensure that they recover the energy costs in their rates for storage sufficiently. In the future, the countryside may witness the development of solar energy plants that co-generate energy for a hub of say twenty storage complexes with their micro electricity grid completely off the grid. It may not only be the producer that will be harvesting the sun to turn the energy of the sun into starch and oils. Storage operators may have to follow suit to store the commodities safely and green.