South Africa’s energy crisis is impacting on business and consumers as power supplies remain unreliable and heavy users of electricity such as manufacturing companies being asked to reduce usage by up to 20%. But what is the extent of Eskom’s delivery capability; what are the proposed solutions by the City of Cape Town and Western Cape Government to support business continuity and productivity; and what plans can each business put in place to manage demand and ensure generation of energy from alternative energy sources. This is what we discussed at our recent Sustainability Forum on 27 March 2015 with Jim Petrie, Energy Director in the WC Government and Colin Devenish, Executive Manager of Operations at the V&A Waterfront.
Here are the main points raised at this forum:
- Energy supply is likely to be an issue for the next 5 years and it is costing the economy R20bn – R80bn per month.
- As the energy mandate is split across a number of government departments, there are challenges regarding strategic alignment. There is also currently a lack of clear policy as the update and delivery of the Integrated Energy Plan (IEP), Integrated Resource Plan (IRP) and the Gas Utilisation Master Plan (GUMP) have stalled.
- In particular, the modelling for the IRP 2010-2030 was done pre-global financial crisis and the cost of nuclear energy is now 40-50% higher while the cost of renewable energy has dropped significantly.
- Fortunately regional government, including WC Government, City of Cape Town, GreenCape and the EDP, has facilitated conversation with businesses on measures that the city and province can take to ensure energy security. This is an ongoing dialogue which Accelerate Cape Town is involved in.
- One of the key issues for municipalities is municipal revenue protection. They plan to introduce electricity tariff structures to promote smart electricity use and enhance municipal financial stability by 2017.
- Energy efficiency is critical and needs to be prioritized ahead of energy generation. Businesses can reduce energy consumption by addressing lighting (LED lights, use of natural light, switching off lights at night); AC usage (increase internal building temperature, utilizing units across buildings) and by approaching building management differently.
- The cost of energy from alternate energy sources such as wind and solar has reduced considerably with solar PV, specifically, being a good option for business. However, storage of energy is still an issue and new battery technology to store power will be a game changer.
- Another issue regarding renewable energy is that Independent Power Producers (IPP’s) can only sell to Eskom, but a dialogue is being explored for municipalities to purchase power directly from IPP’s.
- The WC Government sees big opportunities in the renewable energy and natural gas sectors in terms of market opportunities and job creation.