The most important barriers inhibiting the sustainability and growth of energy service companies (ESCOs) in South Africa
Kellermann, Johann (2009-12)
ENGLISH ABSTRACT: It has been established worldwide that energy efficiency undertakings are the fastest, most cost-effective and cleanest way to extend energy supplies. When the energy supply made available through energy efficiency projects are compared with increasing primary supply
through building new conventional generation facilities, the former is in most cases also
safer, more reliable and a more secure form of investment. Energy service companies (ESCOs) are the recognised implementation vehicles of energy
efficiency projects and have been in use internationally for many years for this purpose.
Globally, however, ESCOs do not have a good history of being viable business enterprises. The most important barriers identified internationally hindering ESCOs’ growth
and sustainability were the potential customers’ lack of awareness, information and
understanding regarding energy efficiency projects, the financing of these projects, as well
as the support of government on energy efficiency policies and regulations. The urgency of implementing energy efficiency measures in South Africa is critical based on the precarious situation of the national electrical suppliers’ ability to provide electricity unfailingly to all its current and future customers. The South African electrical energy situation should therefore provide tremendous opportunities to the local ESCO industry. The aim of this study was therefore to reiterate the importance of energy efficiency
projects and to describe the barriers to growth and sustainability experienced by ESCOs in
South Africa against the international backdrop. This was done by way of a survey sent out
to all registered ESCOs in South Africa.
Based on the responses to the survey, the South African industry is in dire straits and is
hindered by various barriers to their growth and sustainability. The study identified eight
major barriers in the South African ESCO industry which are similar to those experienced
by ESCOs internationally. The uniqueness of the local barriers however, is that the
industry operates in a highly regulated environment and that these regulators, being the
government and Eskom, are recognised as the main perpetrators responsible for most of
these barriers, largely due to a lack of dedicated action.
Furthermore, the study shows that it is critical for all role players in the South African
energy efficiency industry, and specifically the South African government and Eskom, to
recognise these barriers and to assist in solving them to improve the growth opportunities
in the ESCO industry. Removal of these barriers will not only improve the electricity
situation, but will also have a number of positive effects on the micro and macro-economic
levels of South Africa, as well as the environment.
Finally, the study makes suggestions about the way forward through a number of actions
to be taken to lower or remove the most important of these barriers.
AFRIKAANSE OPSOMMING: Dit is reeds wêreldwyd bevestig dat energie-effektiwiteitsprojekte die vinnigste, kostedoeltreffendste
en omgewingsvriendelikste manier is om energiebronne uit te brei.
Wanneer die energieverskaffing wat beskikbaar gestel word deur energieeffektiwiteitsprojekte
vergelyk word met die vermeerdering van primêre energie deur die
bou van nuwe konvensionele opwekkingsfasiliteite, is eersgenoemde in die meeste
gevalle ook veiliger en ’n meer betroubare en stabiele beleggingsvorm.
Energie-diensmaatskappye (energy service companies (ESCOs)) is die erkende
implementeringsmediums vir energie-effektiwiteitsprojekte en word reeds baie jare lank internasionaal vir hierdie doel aangewend. ESCOs het egter wêreldwyd nie ’n goeie rekord
as lewensvatbare sake-ondernemings nie. Die vernaamste hindernisse wat ESCOs se
groei en welvaart stuit is internasionaal geïdentifiseer as voornemende kliënte se gebrek
aan bewustheid, inligting en begrip rakende energie-effektiwiteitsprojekte, die finansiering
van sodanige projekte, asook die ondersteuning van die regering ten opsigte van energieeffektiewiteitsbeleide en -regulasies.
Daar is groot dringendheid om energie-effektiewe projekte en maatreëls in Suid Afrika te
implementeer, gebaseer op die huidige onsekerheid of die nasionale elektrisiteitsverskaffer wel in staat is om ’n betroubare bron van elektrisiteit aan sy huidige en voornemende kliënte te voorsien. Die Suid Afrikaanse elektriese energie situasie behoort daarom heelwat geleenthede te skep vir die plaaslike ESCO-industrie.
Die doel van hierdie studie was dus om die belangrikheid van energie-effektiwiteitsprojekte
te beklemtoon en om die hindernisse te omskryf wat ESCOs in Suid Afrika se groei en
welvaart stuit, gesien vanuit ‘n internasionale perspektief. Dit was gedoen deur ‘n vraelys
aan alle geregistreerde ESCOs te stuur.
Na aanleiding van die terugvoering op die vraelyste, sukkel hierdie industrie om kop bo
water te hou weens verskeie hindernisse wat hulle groei en welvaart stuit. Hierdie studie
identifiseer agt belangrike hindernisse in die Suid-Afrikaanse ESCO industrie wat
ooreenstem met die wat deur internasionale ESCOs ondervind word. Die uniekheid van die
plaaslike hindernisse is egter dat die industrie werksaam is in ‘n streng gereguleerde
omgewing en dat die reguleerders, die regering en Eskom, ook uitgewys word as die vernaamste skuldiges wat verantwoordelik is vir meeste van die hindernisse, hoofsaaklik as gevolg van hulle gebrek aan toegewyde uitvoering van take.
Die bevindinge van hierdie studie toon verder dat dit krities is vir al die rolspelers in die
Suid-Afrikaanse energie-effektiwiteitsindustrie, spesifiek die Suid-Afrikaanse regering en
Eskom, om hierdie hindernisse te erken en om saam te werk om hulle te oorkom en sodoende die groeigeleenthede in die ESCO-bedryf te verbeter. Die verwydering van hierdie hindernisse sal nie alleen die elektrisiteitsituasie verbeter nie, maar sal ook ’n aantal positiewe invloede hê op die mikro- en makro-ekonomiese vlak van Suid-Afrika, sowel as die omgewing.
Die studie sluit af met voorstelle rakende die uitvoering van verskeie aksies wat die
verwydering van die vernaamste hindernisse tot gevolg sal hê, of die hindernisse se impak
op die industrie sal verminder.
Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/894