Modelling the economic impact of electricity tariff increases in the ferroalloys industry

Abstract

With the rapid and sharp rise in energy prices in South Africa, the cost of energy is becoming a value that cannot be ignored in the industrial sector. However, there are still many practices adopted in industry that do not take energy cost as a prime consideration. These practices focus rather on immediate and direct savings in materials and machinery. In the Metal smelting industry this immediate and direct perspective can result in the incurring of costs that are greatly magnified by the large amount of power consumed. This discrepancy presents an opportunity for significant savings through intelligent scheduling of operations. The development of an analytical model will help to determine when production is profitable, given the market forces at play at any particular instance. Special emphasis is placed on the cost of electrical energy, since it can vary on an hourly basis. The study is based on the experience and knowledge gained at Mogale Alloys - a Ferroalloy smelting company in Krugersdorp, Gauteng.