South Africa remains firmly within the grip of an energy crisis, with Eskom openly battling to generate enough power to meet the needs of the country. Loadshedding went over 100 days in 2015, highlighting the plight of the beleaguered service provider and underscoring the importance of having reliable energy alternatives and power management strategies in play. Ratings agency Standard & Poor has said that loadshedding has cut an estimated 0.3 percent from South Africa's economic growth and, as early as February 2015, economists predicted a lower GDP forecast at a punishingly high cost. Businesses need to find solutions that can provide them with reliable infrastructural support until the energy crisis has been resolved, and take their role in reducing usage far more seriously.
"Energy costs are out of control and PricewaterhouseCoopers (PwC) has said that energy demand will triple between 2000 and 2050," says Neil Cameron, GM, Johnson Controls Building Efficiency. "If renewables only start to play a role by 2020 locally, then decision-makers need to address energy costs and consumption now."
Organisations must manage costs, control risk and implement sustainable practices through energy strategies and policies that are rigorously upheld and managed. They must also ensure that these strategies are monitored regularly and refined, keeping track of consumption and identifying areas that need improvement.
Dr Raj Naidoo, director at Enermatics, adds: "For medium to large-sized companies, an energy management policy and strategy is essential, with the primary priorities being the reduction of their carbon footprint, saving energy and saving money. This type of commitment starts at the executive level and requires the right resources that are accountable and empowered."
Bottles everywhere
According to the World Bank Group, 20.8 percent of South African firms see electricity as a major constraint to business and a serious cause for concern. This alone should ignite an organisation's commitment to investing in alternative solutions and finding ways of mitigating its own impact on the grid.
"Business decision-makers can play a substantial role in resolving energy management, from monitoring and measuring technology to creating awareness and contributing to an internal culture change," says Llewelyn Venter, head: Business Development and Strategy, Green Gain. "Priorities should be in creating an enabling environment and this means putting the correct tools in place so that once the culture starts to change and there is adoption of new best practice in terms of energy usage, the systems are already there to make the transition easier."
Paul Renshall, CEO of Total Utilities Management Services, recommends that the business ask some pertinent questions before investing in any solution. Do you know when you use the most electricity? What equipment is costing the most in kilowatt-hours? An energy management system can only be effective if it can provide a detailed power usage log.
"Some solutions are also able to remotely switch off lights and other equipment in order to cut costs and usage," says Renshall. "Smart meters are an intelligent option as they allow the business to get more out of the energy supply that they have. They are an essential innovation that helps to manage energy distribution and supply globally, and have been introduced into the world's major metropolitans. What's more, smart metering is an integral facilitator of the much vaunted smart city, alongside effective energy management and service delivery."
Smart meters have enormous potential as they can help relieve the beleaguered energy supply through closer monitoring and control as well as guaranteed cash collection. Their value is obvious, especially when held up against the fact that Eskom's Energy Losses Management Programme has shown that nearly 65 percent of all energy 'theft' in Eskom supply areas is actually carried out by the business, industrial, commercial and agricultural sectors. With smart meters, what is paid for is what is delivered.
Dr Naidoo adds: "Solar PV and solar water heating are also gaining momentum in the market, along with energy efficiency devices such as LED lighting and heat pumps. The challenge is the capital upfront costs with energy interventions and the resources required to keep energy optimised."
Rating agency Standard & Poor has said that loadshedding has cut an estimated 0.3 percent from South Africa's economic growth.
Through training and awareness, and potentially even linking individual key performance indicators to energy behaviours, organisations can drive employee awareness and ensure the effectiveness of any energy management system.
"Implementing an Energy Management System can help change the company culture so as to ensure that stakeholders who inherit processes do not drop the ball, basically creating a sustainable energy-aware mind-set across the board," says Venter. "The ISO 50001 Standard provides businesses with a best practice international benchmark against which to measure themselves. With awareness of energy- saving incentives from government as well as increasing pressure on businesses to show energy-savings from their clients, it's a no-brainer that implementing an Energy Management System in your business is vital in ensuring the continuity of your business going forward."
Stats
1. Energy expert Chris Yelland estimates the cost of just Stage 1 loadshedding at ten hours per day over 20 days to result in losses of R20 billion each month.
2. Stage 3 can cost R80 billion per month.
3. The South African GDP in 2014 was R4 trillion - the loadshedding potentially eliminated one to two percent of this total.
4. The World Bank finds losses due to electrical outages at a percentage of annual sales to be 0.7 percent at 0.9 outages per month for a duration of two hours.
5. 1.9 percent of South African firms get their electricity from a generator.
6. 18.4 percent of firms own or share a generator.
7. Statistics SA has found that electricity generation decreased by 4.9 percent year-on-year as of August 2015.
8. Electricity consumption decreased by 5.4 percent year-on-year in August 2015.
Loadshedding by numbers
The cost of loadshedding at a glance
- Loadshedding and fuel costs saw biggest drop in turnover since 2010
- Eight key industries saw turnover tumble 5.2% in the first quarter of 2015
- Mining and manufacturing experienced steep decreases of 6.5% and 28%
- Employment opportunities impacted as jobs disappear, with 44 000 white collar jobs gone since January 2015
- Eskom produces around 95% of SA's electricity
- Eskom's supply has decreased by 1.82% as independent producers rise up to 8.51%
- Electricity available for consumption across the country has dropped by 1.13% from January 2013 to December 2014
- March 2015 saw Eskom apply for a 9.58% tariff increase, in the same month businesses were seeing losses of up to R4 million thanks to loadshedding
- Eskom's request for an increase was denied, but the 100 days of loadshedding have taken their toll
- Medupi and Kusile power stations, each desperately needed, have been substantially delayed
- Loadshedding has replaced crime as the leading threat to the SME
- Economist Peter Attard Montalto from Nomura described the impact on the SA economy as if it had lost a major industry
- The impact extends beyond power to infrastructure as technology, equipment and lights take the strain of power surges and blackouts
The onus is on business
According to Statistics SA, only 18 percent of the average yearly use of electricity is used by residential accounts, with 58 percent used by manufacturing and mining. The United Nations Environment Programme has found that buildings consume 60 percent of the world's energy supply and are the biggest contributor to global greenhouse gas emissions. In a typical commercial building heating, ventilation and air-conditioning account for 45 percent of the energy consumed, with chillers devouring a heavy 25 percent.
According to the World Bank Group, 20.8 percent of South African firms see electricity as a major constraint.
Neil Cameron, GM, Johnson Controls Building Efficiency, says: "The use of a building management system (BMS) is essential as it ties together the various systems - chiller plant, air handling equipment, sensors within the facility measuring environmental change and billing systems. The intelligence within a BMS system allows the business to refine controls and ensure savings. Businesses should also make use of a service provider that can help them understand energy usage, design a strategy, implement it and monitor it."
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