Renewable energy as an economically viable solution for the agriprocessing industry

The agriprocessing industry faces the challenge of maintaining financial sustainability at the rate of increasing electricity tariffs and uncertainty of energy supply within South Africa. This challenge is further compounded by climate change impacts with variable temperatures and rainfall cycles that have become erratic. As with other industries, the agriprocessing sector must also consider environmental and ethical compliance standards which adds another layer of complexity to maintaining a viable sector. 

Under these circumstances, renewable energy, namely through embedded generation, has been recommended as the green solution that the agriprocessing industry is in need of to cope with energy supply and financial uncertainty. The cost per kWh has decreased due to global uptake influencing the decline in manufacturing costs and within South Africa, power purchase agreements (PPAs), offer a solution for financing renewable energy systems such as solar, where capital outlay is required. Entering into a PPA in South Africa is a way for agribusiness to shield themselves from energy tariff increases, as it is possible to purchase renewable energy at a lower rate than what the public energy utility can provide, with a fixed tariff increase.

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