South Africa's government policies must let sugar production diversify into energy production, allow up to 1.6 GWh of electricity into national power grid from co-generated bagasse or face industry contraction, sugar industry says

LOS ANGELES , November 1, 2011 () – South Africa’s sugar industry warns that government policies need to allow sugar production to diversity into energy production or face a likely industry contraction, with ramifications for the economy including the flight of capital and capacity from the country, Business Day reported Nov. 1.

The country’s sugar industry needs the government to allow up to 1.6 gigawatt hours of electricity into the national power grid from co-generated combustion of cane fiber, or bagasse. The group also needs the government to support infrastructure development for production of ethanol and implementation of a 2% ethanol blend for gasoline to foster an ethanol market.

Diversification into large-scale power generation and ethanol production are needed for the sugar industry to survive, according to South African Sugar Association executive director Trix Trickham.

The sugar industry has output of 20-million tones of cane annually, which is equal to 1.75 million tons of coal and a potential power-generation of 1.6 GWh.

A co-generation agreement in the country could produce investment of between 15 billion rand and 20 billion rand over the next three to six years, with 80% sourced domestically, Trickham said. With a mandatory gasoline-ethanol blend implemented, the sugar industry’s spending in agriculture, new electricity generation, and fuel-ethanol plants would grow to between 20 billion rand and 30 billion rand.

Nearly 320,000 jobs are tied to the development of such a renewable energy resource and South Africa’s sugar industry is in a position to start development immediately, Trickham said.

The primary source of this article is Business Day, Gauteng, South Africa, on Nov. 1, 2011.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.