Sasol product to slash power bills

2010-10-13 06:41

Johannesburg - An alternative source of energy from Sasol [JSE:SOL] will provide thousands of homeowners with a significantly smaller monthly energy account, as well as a smaller carbon footprint.

On Tuesday the petrochemical giant introduced its new Sasol Homegas product at the Waterfall Country Estate in Midrand, currently the largest property development in the country and the first to use the gas.

The product is liquefied petroleum gas (LPG), which is stored in large 6 200-litre to 22 500-litre gas tanks on the premises of the development for use as an alternative energy source.

It is the first such project and Sasol plans to roll it out on a large scale countrywide in new developments.

It's a step in the direction of a greener future, said Pieter Claassen, Sasol Oil’s manager for new business development.

It is especially targeted at developers of new housing and at the low-income housing market.

He said the gas would be used to heat water, for indoor heating and for cooking.

At the same time the houses will be supplied with solar panels.

This would reduce the average household's dependence on electricity by about 60%. The saving on the total electricity account would be 18% to 20% and households’ carbon footprint would come down 40% to 50%.

It would considerably reduce the pressure on South Africa’s electricity network and ensure that buildings had a reliable alternative source of energy at all times, lightening the household burden of rising electricity tariffs.

This gas is already being used in millions of homes globally, but its use in South Africa has always been limited because the country until recently had cheap electricity.

The infrastructure to install the product will add to developer’s costs.

Claassen said a R1.5m house would cost an average of 1% more to build and low-income houses about 2% more.

Mark Corbett, chief executive of Century Property Developments which is developing Waterfall, said the gas will be stored on the premises and distributed to each house.

Each house will have its own gas meter and households will be able to pay for the gas in advance.

Waterfall is currently the biggest residential development in the country and 3 000 houses will be built there over the next five years.

Corbett said the stands sell for between R600 000 and R6.5m for units from 600m² to one hectare. The first three stages, a total of 700 erven, have already been sold.

Sasol Homegas will be installed by qualified staff in compliance with all international and domestic safety standards.

The gas has a distinct smell, so that any leaks can be picked up and traced immediately.

 - Sake24

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  • Johan - 2010-10-13 06:50

    And there goes the price of gas - we old dog know the trick

  • CTheB - 2010-10-13 07:31

    This seems somewhat disingenuous. It only applies to new housing developments. At least at the moment. The cost of installing infrastructure in existing areas is going to be high. And as demand for gas goes up the price will go up. And, as far as I remember, SA doesn't exactly have large reserves which means importing.

  • Louie - 2010-10-13 07:38

    A few years ago there was a French team who approached the SA government, with regards to supplying SA with natural gas from Mozambique (we already have a gas-pipeline that runs from Moz to SA)! Our government was not interested, even though it meant cheaper electricity for its citizens (typical). Our government is still in the process of erecting coal power stations, not good news for the environment. If you had to drive through Mpumulanga from JHB towards Chrissiesmeer, you will be shocked at the devastation caused by numerous new coal mines in the area. Mark my words, these coal mines are going to bugger-up our already stretched water resources... not good news at all! Why can government not deal with these issues efficiently, when the solutions are so clearly visible?? ... I suppose the bottom line is that they go with whoever has the deepest pockets, with no regard for the environment or the citizens of our land!! ... How sad.

  • La Volpe - 2010-10-13 07:46

    Haha heat your house with gas and pay R10K a month

  • Kaalie - 2010-10-13 07:47

    Ja well no fine, but will it cost more, or less, than electricity?? There is a bit of an alternative energy bandwagon going.

  • DavidD - 2010-10-13 07:53

    This a misleading headline. Power bills will not be slashed by 60%, only the electricity portion will be replaced by a gas bill instead.

  • Tonyp - 2010-10-13 07:56

    Only just over a year ago SASOL could not produce enough LPG to satisfy the country's needs, what has cahnged as this was only a by product previously?

  • Solo - 2010-10-13 07:56

    Would love to be on mainline gas in my suburb

  • Rock the boat - 2010-10-13 07:59

    Why does it take for the price of electricity to go up before we find an alternative solution ? Was the CO2 problem not adequate justification to introduce this energy sourc ?

  • Derrick - 2010-10-13 08:08

    Show us the details, how you get to these cost savings. It is not just a question of gas price versus electricity price per unit. Show us the details !!!! How much is consumed to do the same, are they going the link the gas price to just below the electricy price (some 38% increase).... The list goes on, tired of being conned.

  • Carl Muller - 2010-10-13 08:11

    Our stove top went and we replaced it, with gas. We also have a gas heater and braai. Will soon import solar system for the house and geyser.

  • PeterM - 2010-10-13 08:20

    If this is so great why do the users need to install solar panels as well. In addition why not just use it instead of coal to fire the power stations.

  • James - 2010-10-13 08:21

    Those were the days when JHB had a gas works in the auckland park area. Then Sasol came along and apparently half-heartedly started laying on domestic gas supplies to various areas, with the exception of the western "suburbs" of JHB called Florida, Roodepoort and so on. So we are still at the mercy of the bottled gas pirates in those areas at R149.00 per medium container. I would consider switching to gas, at least in the kitchen, for my peace of mind at being able to ditch ESKOM on that score. Furthermore, gas ovens are far superior to the electric variety, not forgetting to mention gas hobs.

  • aj - 2010-10-13 08:39

    only thing new is large tanks on residential development site. Been done on industrial sites for years. Nothing different to getting yourself a coupl of 48kg tanks at your house without the underground infrastructure costs. The solar panels are for salor water heating and that is where the biggest saving comes in. And gas price is now controlled by government and linked to petrol/oil price. This gas is a byproduct of sasol oil from coal process.

  • John - 2010-10-13 08:46

    Between my wife and i we can supply the entire town with gas. We love to dish out a bit of gas

  • Richard - 2010-10-13 08:55

    Sasol does not see their gas supply as an alternative for electricity. Check out their web site for pricing policy. It is going to be 20% more expensive than your present electricity bill. Electricity Pricing The VPM does not make provision for competition with electricity and was designed to compete directly with petroleum products. If a customer's real alternative is electricity, the following steps are taken. * Determine actual electricity tariff for customer. * Adjust electricity price for efficiency relative to gas. * Add premium of 20% to adjusted electricity price to account for capital expenditure. * This calculated gas price becomes the base price which is then escalated annually in July according to the PPI for Electricity, Gas and Water or any other escalation formula as negotiated.

  • Fredman - 2010-10-13 09:16

    Determining costs requires a simple conversion and knowing the energy content of gas (for LPG it is 49.6 MJ/kg). Electricity is charged per kwh and gas by Gigajoule (GJ). 1 GJ=277.8 kwh. Egoli Gas charges R192.06/GJ which is 69 cents per kwh. LPG cost (assuming R150 per 9kg bottle) is R1.21 per kwh - bigger bottles may be cheaper. Joburg electricity ranges from 58.75 to 62.95 cents per kwh (sliding scale). So electricity is marginally cheaper than Egoli gas and significantly cheaper than LPG, but the piece of mind to be able to cook and heat when the power is off may be worthwhile for many.

  • GRAHAM - 2010-10-13 09:19

    As an SA living abroad, and now familiar with gas as a source of heating, I can say that it will reduce your costs if you use it to heat your house in winter and convert your geyser / stove to a gas system. It is efficient, the heat when cooking is instant, etc. The cost initially will be replacing your appliances, etc. The bigger issue is rolling it out in all areas. If you do convert, do it properly and install central heating throughout your house for heating. My utility costs - elec / gas / water - are far lower than what I was paying in SA for just elec / water.

  • SA Citizen - 2010-10-13 09:54

    It is absolutely astounding to read the comments with regard to this article. Is there anyone in South Africa with something positive to say? Is this all that can be contributed? Someone in South Africa is actually making an effort to utilise their brain and provide a solution to the power problem. Would you prefer they did not try? It certainly confirms that the difference between those that create solutions and those that do not is simply the ability to criticise rather than assist. May your frustration turn to action so that your actions will allow you to see the positive side of this country.

  • Trev - 2010-10-13 10:02

    anouther money maker for the SA Gov

  • Gas not that cheap - 2010-10-13 10:38

    We installed an LPG-fed fireplace a few years back. What we save on electric heating is now spent on gas. You don't gain much except that your heating still works when ESKOM does not...

  • Tboss - 2010-10-13 10:47

    another business opportunity for sasol,18-20% electricity saving can add nicely to their revenue.capitalists!!!

  • DreshKay - 2010-10-13 11:21

    @Louie, you are really a sad and lonely person. Bitter about how your life turned out? @CTheB - Please have relook the basic principle of supply and demand and costs

  • Jamo - 2010-10-13 12:06

    Hey, SA Citizen, you mindless optimism may give you a warm fuzzy feeling inside but "trying" isn't going to cook your meals and warm your toes on those cold winter's nights. I, for one, welcome robust debate- let's test out the ideas and not just stamp everything with the alternative energy badge and ignore the facts and figures.

  • Expensive - 2010-10-13 12:06

    Anyone know of a product that Sasol sells that is cheap or competitive? They have a stranglehold over numerous industries, plastic for one. I know of people in the packaging business that refuse to fill up at Sasol Garages out of principle. Gas is good if you can get it cheap.

  • David - 2010-10-13 13:02

    @ Fredman-what you fail to take into account in your calculations is firstly, they are using 22 500l tanks-i am sure there will be a buy in bulk discount when compared to 9kg tanks? Secondly, gas is a far more efficient way of heating and cooking as opposed to electricity (ever tried boiling water on a stove plate as opposed to a gas top?)-therefore despite unit costs being more, less units are used therefore overall costs wwill decrease.

  • Tristan - 2010-10-13 13:10

    @DreshKay, you should not insult other peoples opinions just because you disagree. it is THEIR opinion and you are entitled to your own.

  • investor - 2010-10-13 13:17

    interesting that it is LPG. this is by specification a mixture of propane and butane and came originally from the distillation of crude oil at about 2% of the barrel as the refineries were set up. apart from imports the supply was inelastic. Sasol gets natural gas from Mozambique which it would have to process to get to the formulation for LPG. JHB town gas is basically moz gas and on the pipeline there is a branch to Maputo for use by Mozal and also town direct users in Maputo. Sasol gas as a company also offers a methane rich gas.Believe LPG is a government legislated price

  • ir8m8 - 2010-10-13 13:30

    just a concern, seeing that we have such an impeccible level of quality in SA...what safety precautions will be built in order to avoid any and all explosion scenario's

  • Diamond Dog - 2010-10-13 15:01

    Tboss commie. What viable solution has this dreg "ruling" party offered i.t.o solving our energy crisis. We are constantly being told to come up with solutions to the different plights of society but when we do some neo-commie must critisise the advice or attempt. I'm sure the ANC government is pulling at their hair whilst grinding on their teeth for selling off the public share of SASOL. VIVA SASOL. Capitalism rules chop. That's why you are in the position to voice your opinion here and nogal with a computa at that. Hypocrites.

  • Globalpuppy - 2010-10-13 15:18

    In principle, this is a good idea and is the norm in most of the developed world. The unfortunate thing for SA is that Sasol has the monopoly so we will be ripped off as usual with the price of gas

  • Freddy - 2010-10-13 16:28

    SOS. Which "tenderpreneur's pocket" are we going to fill up? However the idea is feasable consdering what I read in the Bussiness Report section of the PTA News today.

  • AJ - 2010-10-14 09:43

    At last we are doing what the rest of the world has been doing for years. Gas must be used for all heating allpiances. LPGas prices are dropping due to more competitors in the parket and the price regulation inplemented recently, and electrical prices has and will be rizing by 50%in the furture.these tenants will never look back again.Need this for the low income market as well.

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