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South Africa Sugar Millers May Miss Out on Clean-Power Contracts

Nov. 7 (Bloomberg) -- South African sugar-cane millers may miss out on government contracts to produce clean energy because bagasse, a by-product from the industry, isn’t regarded as renewable, according to Remgro Ltd.’s TSB Sugar Holdings unit.

TSB supplies 2 megawatts to 7 megawatts to the country’s grid, Nico Stolz, an engineer at the Malelane, Mpumalanga-based company, said in an interview. “If we use the leaves of sugar cane to generate power, we have the potential to supply more.”

South Africa, where chronic electricity shortages led to the suspension of mines and factories in 2008, has embarked on a program to boost generation by awarding contracts to build wind, solar and biomass plants. Sugar millers, which already generate power to run their operations, are willing to invest to produce more energy, the South African Sugar Association said last year.

Bagasse, the part of sugar cane left once the juice has been extracted, isn’t regarded by the government as a renewable source of electricity, Stolz said at TSB’s Malelane mill, which is self-sufficient in power. TSB can generate an additional 20 megawatts at Malelane, the same amount at its Pongola mill and 30 megawatts at Komati, according to Stolz’s estimates.

The sugar industry is able to add 1,000 megawatts to the grid, according to Stolz. The price of supply would be “slightly higher” than the government’s long-term price of power, he said, declining to give a figure.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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