Managing energy costs in business sustainability

21 November 2014

THE NERSA-approved hikes in energy costs between 1 April 2013 and 31 March 2018 will represent at least a 47% increase in the electricity costs for businesses over the five year period, with an additional increase due in 2015 following the recent approval of the regulatory clearing account for Eskom.

Managing business sustainability on the back of these annual electricity tariff increases along with the current threats to energy security and the fluctuating fuel price is a critical balancing act for South African companies.

Despite the considerable potential to reduce operational costs through the more efficient management of energy, many companies are still not proactively identifying opportunities that will immediately enhance energy efficiency. "Many low hanging fruits that would alleviate the pressure of energy price hikes and supply constraints while redirecting the savings back into the business for deployment elsewhere are being left hanging on the tree," explains Val Geen, Head of Energy at the National Business Initiative (NBI) responsible for the implementation of the Private Sector Energy Efficiency programme (PSEE). In June 2013, the NBI was awarded £8.6-million (more than R150-million) by the UK Government through its Department for International Development (DFID) to implement the PSEE as a countrywide programme of support for energy efficiency improvement in the private sector.

The programme is supported by the South African Department of Energy and technical support is provided by the Carbon Trust, leveraging its experience of similar programmes in the UK. The NBI is a voluntary coalition of South African and multinational companies committed to working towards sustainable growth and development in South Africa.

The subsidised services offered by the PSEE are aimed at assisting companies of all sizes -from small right through to large entities- to improve energy efficiency, save costs and enhance long-term business competitiveness and sustainability. These services are provided by experienced third-party consultancies with competencies in energy strategy, green buildings, HVAC, pumps, motors, lighting, compressed air and industrial processes, contracted by the PSEE and overseen by a team of professional programme managers and account managers.

Achieving greater levels of energy efficiency is a vital driver of business and indeed South Africa's economy, but it does not need to be a cumbersome or burdensome undertaking. By coming on board with the PSEE, participating companies will have access to subsidised, professional consultants to assist with the establishment of energy consumption baselines, implementation plans, data gathering and benchmarking against global best practices, that will combine to create a sustainable business environment that places energy efficiency at its core, and most crucially, much of which can be achieved without any capital investment upfront.