27 August 2010 – As things stand, SA will be caught napping when the economy recovers and demand for electricity increases, because the country seems to have put energy efficiency on the back burner.

Eskom has said that SA’s electricity supply will be tight in the period between next year and 2012 and after 2017. These time-lines are linked to the commissioning of Eskom’s two 4800MW coal-fired power stations, Medupi and Kusile.

When the government introduced the energy efficiency strategy in 2005, it said the solution to the electricity supply-demand imbalance should not always entail the commissioning of new power. The strategy must include demand reduction . In fact, the argument is that reducing electricity demand is a cheaper and quicker solution to the imbalance that Eskom is warning us about.

Some have even called it "the low-hanging fruit". If it is so important, what is stopping SA from realising the potential of energy efficiency?

In her foreword to the energy efficiency strategy, former m inerals and e nergy m inister Phumzile Mlambo-Ngcuka said awareness of the costs and benefits of energy efficiency was "a neglected area". She made the comments in 2005, a few years before the January 2008 electricity crisis.

Because memories of the near calamity of 2008 are still vivid, the lack of enthusiasm on energy efficiency is strange.

Perhaps the introduction of ISO 50001 – a new standard for energy management that will establish an international framework for industrial plants or entire companies to manage all aspects of energy – will encourage firms to embark on energy efficiency with vigour.

Ian Langridge, principle electrical engineer at Anglo American, says ISO 50001 will be ready next year. The standard will enable businesses to systematically set and reach energy-use goals, and realise cost savings.

Mr Langridge says ISO 50001 will make measuring and monitoring energy usage easier. Anglo American spent about 1bn on energy last year. Since the 2008 electricity crisis, the mining sector has been at the forefront of energy savings.

In fact, according to Eskom’s industrial sector project manager, Jethro More, mining accounts for more than 90% of the 278MW verified savings from industrial customers in the 2008- 09 financial year.

Eskom’s senior manager in the integrated demand management division, Dhevan Pillay, says that, as a measure to ensure power supply, the utility wants its large industrial customers to implement energy efficiency initiatives to reduce their consumption up to 15%.

The utility is in an energy efficiency partnership with BHP Billiton ‘s Hillside plant, one of its key customers. The partnership entails introducing changes at the company’s plant.

These include "real time" monitoring of electricity consumption, solar water heating, energy efficient lighting and energy audits, Mr Pillay says. The partnership also extends beyond the plant, as it includes the roll-out of compact fluorescent light bulbs and geyser blankets to employees.

"The savings achieved (through) employees is counted on the company’s savings. We have to think out of the box," Mr Pillay says.

He says Eskom has introduced an energy management programme to identify energy efficiency opportunities. The pillars of the energy management programme include electricity efficiency, water efficiency, renewable energy and alternative energy, he says.

Mr More says Eskom’s demand-side management programmes assist customers with project funding "to make projects feasible in terms of payback and sustainability".

"Funds are available with immediate effect on a first come basis," he says.

Eskom has approximately R5,3bn available to spend on various demand-side management programmes in the next three years.

Carbon and Energy Africa GM Denis Es says the potential of energy has not been fully realised.

Mr Es points to the lack of sufficient return on investment as one of the barriers to energy efficiency projects. But the trade in carbon credits could be the answer to this problem.

Mr Es says the environmental benefit of energy efficiency projects can be converted into a financial commodity. The United Nations’ clean development mechanism makes investments in renewable energy and energy efficiency projects in developing countries feasible by providing an extra source of income through the sale of carbon credits.