Industry body Agri SA has welcomed the National Energy Regulator of South Africa's (Nersa's) publication of the Draft Market Inquiry Report into fixed charges and Eskom's Retail Tariff Plan.
The findings of the report confirm the concerns Agri SA has consistently raised regarding the disproportionate impact of recent tariff reforms on agriculture, the industry body says.
The inquiry concludes that while the move towards more cost-reflective tariffs is appropriate in principle, implementation has produced unintended consequences for sectors such as agriculture. It specifically recognises that irrigation-intensive farming operations have limited ability to shift electricity demand and that changes to the time-of-use (TOU) tariff structure have materially increased production costs.
The findings closely mirror the evidence submitted by Agri SA and its members, Canegrowers South African and Grain SA, during the inquiry. This demonstrated that a typical 250 kVA irrigated farming operation experienced an increase in yearly electricity costs from about R408 000 to R539 000 - a 32% increase in a single season.
Electricity has consequently become the second-largest input cost after labour.
