SA firms to drive down energy costs

2013-10-17 14:20
Solar panel. (Duncan Alfreds, News24)

Solar panel. (Duncan Alfreds, News24)

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Cape Town - The rising cost of energy and tighter competition has spurred some large companies to examine energy efficiency as a business advantage.

Around 30 companies which have signed up to the Energy Efficiency Leadership Network (EELN) participated in a survey on energy efficiency.

The results show that 33% had an energy efficiency initiative with a formal structure at executive level.

Only 8% had a dedicated structure for energy efficiency.

While the numbers appear to be low, it is important to note that the research indicates that energy efficiency has taken on a growing role as companies look to reduce operating costs.

Company culture

"These findings are important for us in determining how the private sector can be supported in our programmes in the future," said Valerie Geen, head of Energy for the National Business Initiative (NBI).

The Energy Efficiency Leadership Network is a project of the NBI in conjunction with the SA German Energy Programme (Sagen) and the German development agency (GIZ).

Some companies have moved to limit their energy costs by changing company culture.

"We've done a lot of work on energy efficiency over a number of years and that was really the first focus from an environmental and a cost saving initiative," Justin Smith, Woolworths sustainability manager told News24.

Vodacom and Woolworths have installed solar panels that have not only seen the firms reduce the running costs of their head offices, but also serves as an example of their commitment to environmental practices.

"We've got the stage now where we've saved about 27% on relative energy use from the benchmark we set in 2004 just through the efforts of our teams over that time," said Smith about the impact of the solar installation.

The roof installation is estimated to produce 48 000kWh of energy savings per year and the company monitors it closely to learn about its energy consumption.


According to the research, only 40% of companies had set energy reduction targets. Businesses said obstacles to target setting included a lack of energy consumption baselines and accurate methods of measurement.

The increasing cost of electricity supplied through the national grid has influenced companies to move toward alternative solutions that would see them being able to maintain operational integrity, while reducing costs.

While the capital costs of a renewable energy system may expensive, it had the potential to return the investment in a relatively short period of time.

Vodacom spent about R10m on its solar installation, and expects it to pay for itself in less than a decade.

"A couple of years ago, you were looking at a return of investment of about 17 years for a simple payback model; it has come down to where you can reach payback anywhere between eight and 12 years, but with this particular project here, and also because we've entered into an agreement with Eskom, our payback is around 5.5 years," Chris de Jongh, manager of Repairs and Maintenance for Facilities South at Vodacom told News24.

One of the challenges for companies to adopt energy saving strategies is that few (26%) have carried out formal energy audits to determine the best methodology to increase energy efficiency

The EELN called for companies to be supported as they moved toward lower energy consumption.

"Areas for continued support to companies include capacity building, agreeing on reporting and measurement methodologies, and support in technology choices for energy efficiency improvement," said Dr Peter, Mukoma, the technical lead of the EELN.

- Follow Duncan on Twitter
Read more on:    vodacom  |  woolworths  |  environment

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