South Africa’s electricity crisis is well-documented, with load-shedding becoming a daily reality for millions. However, few realize that a single industrial facility—South32’s Hillside aluminium smelter in Richards Bay—consumes enough electricity to cause an entire stage of load-shedding on its own.
The Hillside Smelter: A Power-Hungry Behemoth
The Hillside smelter is South Africa’s largest single electricity consumer, accounting for approximately 5% of Eskom’s total energy sales annually. This massive facility, the only aluminium smelter in the country and the largest in the southern hemisphere, produced 720 kilotonnes of aluminium in its last financial year.
Aluminium is a versatile metal used in everything from beverage cans and kitchen utensils to aeroplane parts and high-tech electronics. Its production, however, is incredibly energy-intensive. The Hillside smelter consumes around 10.3 terawatt-hours (TWh) of electricity each year, with a peak draw of 1,205 megawatts (MW)—more than the demand cut from the grid during one stage of load-shedding.
The Broader Impact of Industrial Energy Use
While the Hillside smelter is the most prominent example, it is just one part of a broader industrial sector that consumes vast amounts of electricity. Mining smelters, iron and steel producers like ArcelorMittal, and fuel refineries operated by Sasol are also significant contributors to Eskom’s load.
Industrial customers, including mines, smelters, and refineries, collectively consume about 30% of Eskom’s electricity. However, their contribution to Eskom’s revenue is disproportionately low, raising questions about the fairness of their tariff structures.
Preferential Tariffs and Lack of Transparency
Eskom’s major industrial customers benefit from negotiated pricing agreements, which offer them preferential tariffs. These deals are justified by the customers’ substantial contributions to the economy, but the details remain shrouded in secrecy.
The Democratic Alliance (DA) has called for greater transparency, accusing Eskom of concealing critical information about these agreements. Kevin Mileham, the DA’s spokesperson on electricity and energy, revealed that 17.27% of Eskom’s electricity consumption is billed through negotiated pricing agreements or international sales, yet this only generates 8.5% of Eskom’s revenue.
“Eskom cannot continue to hide behind a veil of administrative opacity while ordinary South Africans shoulder an increasingly unsustainable electricity pricing burden,” Mileham argued.
Load Curtailment and Economic Justice
Industrial customers are also part of Eskom’s load curtailment programme, which allows them to avoid load-shedding by reducing their demand during grid constraints. While this helps stabilize the grid, it raises concerns about the fairness of the system, particularly as households and small businesses bear the brunt of load-shedding.
Mileham emphasized that transparency is not just a financial issue but a matter of economic justice. “Eskom’s failure to disclose the revenue generated from these agreements raises questions about whether these deals truly benefit the economy or merely serve the interests of a few at the expense of the public,” he said.
The Future of Energy Consumption in South Africa
As South Africa continues to grapple with its electricity crisis, the role of large industrial consumers like the Hillside smelter will remain under scrutiny. Balancing the needs of these energy-intensive industries with the broader goal of equitable energy distribution is a complex challenge that requires transparency, accountability, and innovative solutions.
Key Takeaways:
- South32’s Hillside aluminium smelter consumes 5% of Eskom’s electricity, enough to cause a stage of load-shedding.
- Industrial customers, including mines and refineries, account for 30% of Eskom’s electricity consumption but contribute disproportionately less to its revenue.
- Preferential tariffs and lack of transparency around industrial energy deals have sparked calls for greater accountability.
- Balancing industrial energy needs with equitable distribution remains a critical challenge for South Africa’s energy future.
By addressing these issues, South Africa can move toward a more sustainable and fair energy system that benefits all its citizens.
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