The future impact of the current electricity crisis on Sasol South Africa

Terblanche, Michelle (2008-12)

Thesis (MPhil)--Stellenbosch University, 2008.

Thesis

Towards the end of 2007, South Africa started experiencing widespread rolling electricity blackouts as the electricity demand exceeded the supply from energy giant Eskom. The crisis reached its tipping point when industries, including Sasol, were requested to reduce their electricity consumption by 10%. The purpose of this research was to identify alternative futures for Sasol in the light of the current electricity crisis. The scenario process was used to develop the following independent scenarios for Sasol: • Fuel to the fire. The country is amidst an ongoing nationwide electricity crisis and Sasol is still dependent on Eskom for more than 50% of its electricity demand. The end result is reduced turnover, shortage of liquid fuels and a decrease in Sasol’s contribution to the economy. • Ignorance is bliss. This is a world where Sasol is independent of Eskom for electricity supply despite the country’s continuing electricity crisis. Independence is ideal but unfortunately it comes at a cost. It is about taking painful action in the near term to forestall even more painful consequences in the future. • Blessing in disguise. Sasol is dependent on Eskom for the majority of its electricity requirement. The reliability of electricity supply in South Africa recovered and there is an overall awareness regarding energy efficiency and a positive adoption of alternative energy technologies. • Icing on the cake. Sasol is completely independent of Eskom and Eskom managed to restore the integrity of electricity supply. The end result, Sasol can continue with its planned growth and expansion. In order for the scenarios to be useful for Sasol, it is necessary to incorporate them into the strategic agenda. Some considerations include the gradual replacement of traditional fossil fuels, carbon capture and sequestration, advanced coal electricity generation (clean coal technology), increasing the use of renewable energy sources and developing the hydrogen economy.

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