Energy

Energy efficiency has become increasingly important to Illovo, given the growing demand and increasing cost, and the corresponding impact on the environment along with the risk of power outages from national grids. We are focused on reducing the environmental impact of our products, including efforts to drive new levels of energy-efficient performance. We proactively monitor and manage energy consumption throughout the group’s operations, and constantly look for ways to improve the energy efficiency of its production processes.

This includes employing better management systems, improving our own staff awareness and investing in new technologies. Sugar cane offers excellent opportunities and competitive advantages for the production of renewable energy sources compared to other agricultural crops. Currently, 90% of the energy consumed within Illovo’s operations was sourced from renewable resources, replacing fossil fuel alternatives.

Investing in renewable energy

Various by-products of the sugar manufacturing process present the industry with the opportunity of generating the bulk of its energy requirements. A worldwide trend has seen sugar mills reaching a point where they have generated surplus energy to be exported, creating significant ecological and economic benefits. We have kept abreast with these developments and are pioneering cane trash biomass collection in the Southern African sugar industry.

Co-Generation

Dry, fibrous bagasse, remaining after the extraction of juice from the crushed stalks of sugar cane, provides us with a substantial renewable energy opportunity for co-generation. It serves as a replacement for fossil fuel sources such as coal and electricity generated from coal, which thereby reduces GHG. In addition to bagasse certain of our operations – Ubombo in Swaziland, Nchalo in Malawi and Noodsberg in South Africa – are able to supplement their co-generation capacity by utilising additional green cane biomass and wood as boiler feedstock. We are continuing to assess opportunities to increase the co-generation capabilities of all our operations.

In addition to the environmental and cost benefits, co-generation provides a potential source of additional revenue through the export of energy into national grids. With its integrated co-generation facility, it is anticipated that our Ubombo mill in Swaziland will export 55 GWh to the national grid over a 48-week period by 2015. In 2012/13, a total of 36.95 GWh was exported to the national grid. The sale of this renewable energy directly enables the SEC to reduce its Scope 1 emissions and consequently its customers’ Scope 2 emissions. Based on the Swaziland grid emissions factor published by the GHG Protocol (a purchased electricity calculation tool – 480kgCO2 per MWh), the sale of this electricity enabled SEC to avoid 18 068 tCO2e in 2012/13. During the year, and on a test basis, Zambia Sugar also exported a small amount of power into the national grid.

Bioethanol

An additional renewable energy opportunity provided from the by-products of sugar processing is the fermentation of molasses to produce bioethanol. We continue to give consideration to entering the bioethanol market at certain operations, as we believe that there are significant potential commercial opportunities associated with renewable energy, which currently only represents a very small fraction of the total global energy use.

Following a series of preliminary investigations, detailed technical feasibility studies in Zambia are currently underway. However, our move into the market will depend largely on the commercial viability and implementation of enabling blending regulations within the country. The production of bioethanol would provide us with the opportunity to further decrease our fossil fuel usage and GHG emissions further, as well as provide an additional revenue stream.

For more information see Environmental Impact 2012/13 Annual Report

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