In the current energy landscape in South Africa everybody agrees on the need to consume and waste less energy. But how?
Many tips to saving are free and involve simple behavioural changes; such as switching off lights which aren’t in use, turning off your geysers when you go away for the weekend or switching off your TV or any other electrical appliances at the wall rather than leaving it on standby (to avoid vampire power usage). These are great and all you need is a little self-motivation and diligence. However, the reality is that in order to save a bit more, you need to spend a bit.
What motivates you?
When making an investment decision, big or small, there are so many different approaches, methods, technologies and tips to energy saving that it can make your head spin and leave you indecisive. Also, not all approaches and technologies are applicable to all situations or work in harmony with each other. So, what do you base your decision on?
Eldo Energy sees two motivating factors driving people toward energy savings:
Some people want to be as green as possible and are driven by a desire to be socially responsible and save the planet, regardless of investment cost, but this is most certainly not the majority.
At the end of the day most people want to save energy so they can save money in the long run. Although they’re happy that they’re doing something green, it’s most often secondary to the incentive of putting more money into their pocket.
How much bang for your buck?
So, if money savings are what motivate most people to save energy, then it all comes down to how much bang you’re going to a get for your buck.
In business terms this is defined by 3 factors:
- What interventions are possible at the particular site? Each site has different energy systems and different operational requirements, defining which technologies and approaches are possible and effective.
- What do each of these interventions cost?
- What is the potential saving to be achieved by a particular intervention at a particular site?
These 3 factors help Eldo to simulate different scenarios for their clients, and to provide the client with the solution which gives them the best possible ROI (return on investment), thereby helping them to maximize the savings for the money they spend.
Eldo can even help a client make good investment choices, which at first lie outside the client’s capital budget, through Eldo’s various asset financing, leasing and rental options.
Understanding and using rebates
But that doesn’t sound very complex. Comparing the cost of interventions to the energy and money savings they will unlock seems pretty straightforward. So where is Eldo’s unique value add? It comes in providing the entire value chain from inception to implementation.
The cream on top is providing access to the myriad different rebate and incentive schemes for energy efficiency. These incentive schemes (provided by Eskom, the South African government and international bodies like the UN) have different advantages, are aimed at different types of interventions, and can be difficult and time consuming to understand and participate in.
For example, Performance Contracting is a program which pays for each kWh (kilowatt hour) permanently removed from a consumer’s baseline (normal consumption). This initiative is available through a limited number of energy services companies, which have a certain scale through aggregation. Packaging such initiatives with an energy reduction plan improves the return on investment, and makes the implementation of the interventions more financially rewarding.
It costs hundreds of millions of rands for power producers to build new Mega Watts (1000 kW) of generation capacity, which varies with different kinds of generation sources. Renewables for example are cleaner with zero-emission generation, but there is the high cost of capital investment. Vice versa with coal generation being cheaper. This energy imbalance requires collaboration between consumers, municipalities and generators of clean and dirty power as benefits can be unlocked. Energy and demand savings free-up the amount of energy at only a fraction of the cost of either generation method, creating a Virtual Power Station.
Carbon financing and credits
Carbon financing is another key component for larger energy efficiency projects. If a business begins an energy efficiency program without considering this aspect, it may be too late to jump on board retrospectively. Energy efficiency interventions which have measurable and verifiable reductions in energy consumption (verified by 3rd party M&V body) generate proportional reductions in the carbon emissions, which ultimately reduce the carbon footprint of a business or organisation.
If the carbon emission reduction is large enough and the project is strategically aligned, an organisation’s energy efficiency initiatives can generate Carbon Credits, which can then be traded on the carbon markets.
Eldo is able to help turn these carbon savings into certified carbon reduction (CER) certificates as well as facilitate their trade, resulting in real cash returns for the customer. Carbon credits, along with all the other incentives, change energy efficiency from being a financially viable option into an extremely financially attractive one and a ‘must do’ in today’s business world.
By seeking to maximise returns of consumers, effective energy reduction plans are born. Eldo’s knowledge and experience of the various incentives in the market, along with their access to incentives restricted to the general public, make them the perfect partners for all energy and resource management initiatives. Their holistic approach and unique ability to make financial sense out of energy efficiency is just one of the factors that sets Eldo apart from its competitors. With Eldo you can sleep soundly at night knowing that you’re doing your part to help the planet, while at the same time fattening your wallet, rather than emptying it.