The energy crisis that has been rolling blackout in South Africa has been affecting most business industries badly with load shedding, with many businesses shutting down due to being unable to keep up with the load shedding and finding means to substitute.
The picturesque valley two hours drive southeast of Cape Town, Berene Sauls founder of Tesselaarsdal Wines is one of the wine farms being affected by an unending power outage. The company is running behind schedule.
According to Bloomberg, The crush from her latest harvest was delayed, bottling often slows to a standstill and she’s been forced to repackage badly labelled batches of Pinot Noir and Chardonnay.
Sauls, who founded Tesselaarsdal Wines in 2015 and has been in the wine industry for 22 years said, “It’s stressful. We have eight hours of work production and only four hours of power.”
With load shedding lasting up to 12 hours a day leaving most businesses, healthcare facilities and schools depend on backup generators. Most of the businesses had to shut down due to the faltering economy.
According to a Bloomberg report, the central bank estimated load shedding curbed economic growth by as much as 3.2% points last year and anticipates just 0.4% growth this year.
South Africa’s wine industry which is more than 300-year-old has been affected, with load shedding affecting all stages of production.
Communications manager for Vinpro, Wanda Augustyn said when power cuts interrupt the watering the vines can experience “partial stresses” which can reduce the size and number of fruit.
“We expect measurable, but not a catastrophic, impact. At this stage it still has a big impact on producer profitability due to additional capital layout to realise the same harvest size and quality,” she said.
Once harvested grapes cannot get disrupted meaning the refrigerator or climate control can’t get disrupted as it will cause the grapes to get damaged or overripe, according to industry associations.
Load shedding jeopardises the timely crushing and pressing of grapes, while the unstable temperature can badly affect fermentation processes leading in off-flavours.
According to Sauls, she has maintained production of about 10 500 bottles a year and with power cuts affecting bottling lines and packaging they “ can’t sell it if we don’t have the means to package it.”
Sauls’ winery cannot afford a generator leaving her team to rush through preparations, label and package bottles before the next-four hour load shedding in order to fulfil large orders and avoid lost sales.
Elunda Basson, award-winning cellar master at the renowned Steenberg Vineyards said, “The costs of paying for electricity supply at inflated rates, as well as having to pay for diesel costs to run the two generators at our premises — this has vastly exceeded the budgeted amounts. It is not easy, but at least we can still produce at full capacity to supply the local market and export.”
Basson said, “Consumers are also struggling. We have only increased wine prices by 7% this year. It’s impossible to recover the entire cost from price increases.”
The winery is receiving cost estimations for off-grid options including solar, inverters and batteries. Last year, the wine industry contributed more than R55-billion to GDP last year, with exports worth R10-billion, according to industry group Wines of South Africa.
According to South African Wine Industry and Information Systems, an industry association, the 2023 harvest has dropped with an estimation at 1,2 million tonnes, which is 14.2% smaller than last year.
The drop is a result of a combination of factors, including cold, wet weather, and an uprooting of vineyards due to disease.
The government of Western Cape commissioned a report on the impact load shedding causes on wine industry. It stated that if load shedding gets worse than stage 6 the wine grape production won’t be sustainable if the power cuts get worse.
“For now, bigger cellars may handle this crisis best,” CEO Rico Basson said. “Smaller farms and cellars may, however, experience a lot of challenges because it is just too costly to invest in generators.”
Source: Bloomberg Reports