Petroleum industry significantly impacted on by loadshedding

21st November 2023 By: Darren Parker - Creamer Media Contributing Editor Online

Petroleum industry significantly impacted on by loadshedding

Sapia executive director Avhapfani Tshifularo

The South African Petroleum Industry Association (Sapia) says the ongoing loadshedding crisis has significantly impacted on its members, with widespread power outages affecting various sectors of its business operations, with substantial implications.

Among the areas of business most affected by loadshedding, Sapia reports that the purchase and operation of generators at operating facilities such as depots and service stations have contributed significantly.

These standby generators have become imperative for safety reasons at depots and necessary for uninterrupted customer service at service stations. However, installing and maintaining generators have contributed to additional costs being carried by Sapia members.

“The energy crisis has long-term economic effects on these businesses. Increased fuel and maintenance expenses decrease disposable income, indirectly impacting on the nation's economy,” Sapia executive director Avhapfani Tshifularo says.

In response to the crisis, Sapia says its members have taken physical measures to mitigate the impact of loadshedding. Apart from installing generators, many service station sites have, or are in the process of installing, solar panels to reduce reliance on electricity supply from Eskom or the municipalities.

However, this transition towards self-generation of electricity comes with significant capital costs.

The Department of Mineral Resources and Energy has also identified the use of liquefied petroleum gas (LPG) to offset peak electricity demand that occurs in the morning and evening. 

The roll-out of the doubling demand strategy for LPG is supported by Sapia, as it not only relieves grid pressures during these times, but it also contributes to diversifying the energy mix and cleaner air through the replacement of coal and biomass burning for heating and cooking. Replacement of fuel with a cleaner burning alternative also contributes to the fight against climate change.

Regarding the fight against climate change, Sapia says it must be recognised that the transport sector's transition pace is likely to be slow in the absence of incentives. Consequently, hybrid and full internal combustion engines are expected to remain a significant part of the car pool for an extended period.

Despite this, the association says that promoting renewable transport fuels, such as bioethanol and biodiesel, has to be considered to make the energy mix more sustainable and promote development and employment in impoverished areas.

However, government support and incentives remain vital to promote these alternative fuel sources.

“Sapia is actively engaging with the government, particularly the National Treasury, by proposing measures to facilitate the introduction of bioethanol into the petrol pool,” Tshifularo says.

He adds that it is important to establish government policies, adequate financing and collaboration among all stakeholders to achieve a long-term renewable energy solution.

“Sapia calls for a directed research approach that is well suited to the South African environment and not something that has been imported from elsewhere,” he says.

One year since the implementation of the Energy Action Plan in August last year, Sapia emphasises that significant transformation in the energy sector is yet to be realised.

It says that urgent action is required, necessitating substantial capital investment. As a significant portion of South Africa's electricity generation fleet is set to retire by 2030, Sapia says a clear pipeline for its replacement is crucial for planning and progress.

In the short term, the energy crisis remains a substantial contributor to the pressure faced by Sapia members, fuel retailers and, consequently, consumers.

“In the longer run, if this electricity cliff of 2030 is not adequately addressed, then significant economic damage will continue,” Sapia says.