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Send  Share  RSS  Twitter  19 Dec 2010

POWER SUPPLY:  Eskom's Attractive Incentive


Recent Western Cape Business News

ESKOM has launched an attractive financial incentive scheme that rewards property developers for introducing energy efficient lighting into their developments over the next three years.
Hoping to drive rapid energy efficiency projects, the electricity utility will compensate companies for replacing traditional fixtures, re-lamping inefficient lamps and retro-fitting wasteful fixtures or lighting controls.  “Eskom’s energy supply is still severely constrained and future demand will exceed supply unless energy consumers reduce their consumption,” says Andrew Etzinger, head of Eskom’s Integrated Demand Management initiative.  “The local commercial property sector currently consumes up to 15% of Eskom’s energy output. Lighting accounts for a substantial portion of this and is estimated to be responsible for between 37% and 45% of electricity consumption in office buildings.  It is therefore imperative that we work together with property developers and owners to reduce lighting consumption,” Etzinger says.
Under the scheme, known as Eskom’s Standard Offer Pilot Programme, the utility will pay developers specified amounts for verified reductions in energy consumption achieved through the installation of energy efficient lighting technologies.
By participating in the programme, property owners also stand to benefit from a reduction in the energy consumed by their lighting systems.   With electricity prices set to increase by a further 25% per annum over the next two years, replacing inefficient lighting fixtures with more efficient ones will help owners mitigate the impact of future price hikes.  
The programme is available to organisations with projects that have a minimum demand of 50kW and a maximum demand of 1000kW from Mondays to Fridays between 18h00-22h00. To participate, developers need to submit an application to Eskom which then goes through an eight week process which includes a technical evaluation and an initial measurement and verification report. Once Eskom has signed off the application, the project developer then implements the project at his own cost.
Eskom will pay an incentive of 34 cents per kWh saved over a period of three years according to predetermined savings targets. Payment is subject to a measurement and verification process, paid for by the utility, and the reward is capped at just over R4 million per project submission.
Developers need to ensure that they dispose of obsolete lamps and inefficient ballasts in an environmentally sound manner, confirm that these items will not be reused, and obtain an independent disposal certificate. In addition, lighting solutions must comply with the minimum requirements of the Occupational Health and Safety Act of 1993.
Eskom pays 40% of the initial purchase price to the project developer upon completion of the energy efficient installation, followed by three annual performance payments of 20% of the initial purchase price in year one, and concluded with a 20% payment of the annual adjusted purchase price in years two and three.  The initial purchase price is adjusted based on the actual savings achieved. All payments are subject to review and verification carried out by independent measurement and verification professionals. “This programme forms a key initiative in our overall drive to aggressively reduce energy consumption.  We have allocated R30 million for its implementation.  By enlisting the aid of electricity users, municipalities and energy services companies we intend achieving a demand saving of 7 MW, resulting in an estimated energy saving through this programme of 88.2 GWh by 2013,” says Etzinger.
Interested parties may request the application forms from standard, and can find a list of approved M&V entities at under the load management menu.

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