- Buildings Guide
- Policy Guide
- Appliances Guide
In response to the rapidly growing energy demand, the respective need for extended generation and distribution capacities as well as considering GHG emission reduction targets, the South African government began establishing policies for energy efficiency with the “Energy Efficiency Strategy” in 2005 and with the “Electricity Regulation Act” in 2008. Since then, South Africa has already developed a considerable energy policy framework. However, compared to other countries, such as those presented in the world-wide bigEE Policy Guide, South Africa’s policy package for energy efficiency in buildings and appliances still is less comprehensive.
The South African “National Energy Efficiency Strategy” is very broad and provides sector-by-sector guidelines for the implementation of efficient practices within the South African economy. There are eight goals, grouped in terms of social, environmental and economic sustainability, and which include in particular the objective of “affordable energy for all”. Measures include efficiency labels and minimum energy performance standards, energy management activities, energy audits, and the promotion of efficient behaviour (UNEP SBCI 2009). The strategy also sets a 12% target for the reduction of the overall final energy demand by 2015 as well as specific reduction targets of 10% in the residential sector and 15% in the commercial sector (OECD/IEA 2013c).
In 2008, the South African government’s vision, strategic direction and framework for climate policy were announced to ensure stability of the electricity network and to avoid power blackouts. Specific measures to achieve these aims were e.g. energy efficient fittings in buildings, energy efficient street lighting, solar water heating, etc. The National Energy Efficiency Agency was also established with the aim to foster the topic “Energy Efficiency” on the political agenda and to support policy making with the development of strategies, networking programmes, awareness campaigns, measurement and verification activities, etc. The first voluntary standards for buildings were also set in 2008. According to the regulation, commercial and residential buildings are required not to exceed a specified maximum of energy demand and a maximum annual consumption. Other following policies included the Green Star SA rating tool for new office constructions, an initiative for retrofitting governmental buildings, a CO2 tax, and green procurement initiatives.
The opportunity for energy efficiency in the building and appliance sector was recognised by the South African Government as far back as the mid-1990ies. While the Energy White Paper (1998) identified specific programmes and measures, it was the introduction of the National Energy Efficiency Strategy (NEES) in 2005 which marked the beginning of policy formation, when the security of power supply deteriorated.
In South Africa, two core institutions are in charge of implementing policies designed to promote energy efficiency. On the one hand, the South African National Energy Development Institute (SANEDI) is assigned with, among other things, raising awareness and promoting demonstration projects for energy efficiency. On the other hand, Eskom, the national utility, was given the task of developing and managing the country’s Demand Side Management (DSM) programme, which financed EE measures across all sectors. Funding is achieved through government budget and Eskom has legally been enabled to recover EE expenses through the electricity tariff, which has been increasing in recent years. The programme, which had a strong focus on the residential sector, offering rebates for heat pumps / Solar Water Heaters, and a CFL exchange programme, was suspended in 2013 due to a shortage of funds and it is not clear if it will be re-activated.
The Government’s White Paper on Energy Policy (1998) identified the need to conserve energy. It listed several smart sets of policies for buildings and appliances to achieve savings. However, little action was taken and the Government only started to implement EE programmes when the ever-rising energy demand brought South Africa’s power system to the brink of collapse. The power shortage, which was forecasted by Eskom for 2007, resulted from a government decision in the late 1990s to not build any new power stations with taxpayer’s money (New York Times 2008, Eskom). However, the government failed to attract private power investors and when a new build programme was announced only in 2004 it was too late. Since 2008 the country has experienced rolling blackouts and new power plants will be commissioned 2015/16 at the earliest.
One of the positive effects of the power supply shortage has been increasing efforts in the field of energy efficiency. In 2005, the National Energy Efficiency Strategy (NEES) was published introducing an overall energy efficiency target of 12%, with individual targets for different sectors (energy and mining, commercial and public buildings, residential, transport). The South African National Energy Development Institute (SANEDI), and to a lesser extent Eskom (the national utility) have the task to achieve the objective of the NEES. Moreover, the NEES aligns with other Government priorities, such as climate change; local content; job creation and resource efficiency, which means that many Government Ministries are required to act. The main ones include: National Treasury (incentives and taxes); Department of Trade and Industry (national standards, enforcement); Department of Public Works (Government Buildings) and Department of Environmental Affairs (GHG emissions).Standards were implemented for appliances and buildings. The Global Environment Facility (GEF) and UNDP approved a $4.3m funding application for the appliances Standards and Labelling Programme (S&L) that covers 12 appliances and includes refrigerators, washing machines, A/C, and water heaters. The programme is due to come into effect in 2015.
Policy roadmap and targets for ultra-low energy buildings/retrofitsThe government of South Africa has not issued a special policy roadmap to achieve ultra-low energy buildings or retrofits, or energy-efficient appliances. However, the National Energy Efficiency Strategy provides high level targets and measures to achieve overall sector targets by 2015. In 1998, the government published the White Paper on the Energy Policy of the Republic of South Africa. Energy efficiency in buildings was seen as an important issue for all households: “Building thermally efficient low cost housing presents an opportunity to promote energy efficiency and conservation. There is also great potential to stimulate energy demand management and other strategies in middle and high-income households. Energy savings would free resources and delay the need for further investment” (Department of Minerals and Energy 1998, p. 10). In this White Paper, the government committed itself towards implementing (GIZ 2013, p. 29):
The NEES proposes similar measures as already determined in the White Paper, most of which, as is shown in the following sections, are waiting to be implemented. Since 2010 the residential standards and labelling programme was introduced which covers 12 appliances, and the SANS10400-XA regulation regulates the maximum allowable energy consumption in new buildings.
Voluntary Agreements with commercial or public organisations
In 2005, the National Business Initiative (NBI) launched the voluntary Energy Efficiency Accord, whereby participants (large businesses) committed to pursue the national energy efficiency targets. 23 companies and seven business associations initially signed the accord. During the first three years, the total number of participants increased to 40 members including companies from various sectors. While figures suggest that the Accord led to energy savings and to investments in energy efficiency (DoE 2008), funding for energy efficiency upgrades in buildings were generally channelled through the Eskom DSM programme. Moreover, government institutions did not participate, which GIZ (2013, p. 72) considers to be a “a missed opportunity for government to lead by example in this space”. As power supply is fragile in South Africa, large energy consumers have an interest to limit their power demand in order to avoid rolling blackouts and to sustain their production or services.
In 2008, Eskom, based on the Electricity Regulation Act and the National Energy Act, launched the voluntary Energy Conservation Scheme (ECS), which aims at large scale energy consumers of more than 25 GWh to achieve a 10% energy reduction, on average (GIZ 2013, p. 63f.). ECS requires consumers to use energy more efficiently by using penalties. However, as the scheme was voluntary, there was limited participation from consumers.
In South Africa, several international organisations are active in order to promote energy efficiency in the building and appliance sector. For example, the German Gesellschaft für Internationale Zusammenarbeit (GIZ) actively promotes capacity building and awareness raising measures. In the multilateral realm, the Global Environmental Facility (GEF) provides support for minimum energy performance standards (MEPS) and mandatory labels for appliances. International financing institutions, such as the German bank for reconstruction (Kreditanstalt für Wiederaufbau, KfW) and the French development agency (Agence Française de Developpement, AfD) provide enormous amounts to the South African government to, for example, increase the availability and attractiveness of credits in order to incentivise the private sector in undertaking such energy efficiency investments in their building stock. The Department for International Development (DFID) is funding the Private Sector Energy Efficiency Programme (PSEE) hosted by the NBI which provides advice and subsidises energy audits.
The intentional experience gained by such organisations my enable the government of South Africa to leapfrog over certain policy shortcomings formally made by those institutions.
According to its mission statement, the South African National Energy Development Institute (SANEDI) aims at advancing “innovation of clean energy solutions and rational energy use that effectively supports South Africa’s national energy objectives and the transition towards a sustainable, low carbon energy future” (SANEDI 2012, p. 9). SANEDI consists of two main branches: Applied Research and Energy Efficiency. The agency’s Energy Efficiency branch is in charge of five sub-programmes (SANEDI 2012, p. 91f.):
The National Energy Act, 2008 (N 34 of 2008) provides the legal ground for SANEDI in order to reach the country’s energy targets. The energy agency started its operations in 2011, has incorporated the former South African National Energy Research Institute and the National Energy Efficiency Agency and can be regarded as the implementing arm of the Department of Energy (SANEDI 2012). In the first year of activity, SANEDI’s budget included R177 million (SANEDI 2012, p. 23f.).
Energy saving obligations for energy companies
In line with the NEES, the energy sector has been set an aspirational (voluntary) target of 15% in final demand by 2015. Eskom generates almost all of South Africa’s electricity (>95%), although this will drop as renewable energy provided by independent power producers enters the system (but is specifically excluded in the NEES). All transmission is done by Eskom and distribution is shared with the municipalities (60%), with Eskom distributing 40%. Thus this target applies specifically to Government entities and targets opportunities such as new coal generation plants, reducing T&D losses and improving all operations within the utility, except for the thermodynamic cycle of existing generation plants.
Eskom has been given responsibility for financing energy efficiency measures under the DSM programme (Energy Sector Management Assistance Planning (ESMAP) 2012, p. 4). Eskom developed specific EE programmes to target the industrial, commercial and residential sectors. For the latter, Eskom introduced rebates for solar water heaters and heat pumps. The NEES allocates the following saving targets: Overall 12%; Industry and Mining 15%; Commercial and Public Building Sector 15%; Residential 10%; and Transport 9%.
Feed-in-tariff for certified energy savings
The Standard Offer Programme as well as the Performance Contracting Programme implemented by Eskom as part of the Energy Efficiency Demand Side Management Program can be regarded as FITs for certified energy savings. Commercial and industrial energy users are paid a fixed amount for proven energy savings by Eskom. For more information on the programmes, please refer to the financial Incentive section and the bigEE good practice policy examples.
Removal/reduction of subsidies on end-user energy prices and on energy supply
The Government Free Basic Electricity (FBE) programme was announced in 2000, and promulgated in 2002. It provides for a ‘self-targeted’ subsidy of 50kWh per month of free electricity to indigent households. Self-targeted (Department of Energy, 2013) is defined as ‘Households that are "poor" generally have a low demand for electricity. Their needs could adequately be met by restricting the current drawn from the supply to about 10* Amperes. These households would consume the free basic electricity at no cost and pay the approved tariff for all units of electricity consumed above the free allocation’ FBE is accepted Government policy with no plans to phase it out.
*Note: Although the official limit is 10A, this has been increased to 20A for most installations.
It is a requirement of the legislation that local authorities keep a register of indigent households who have applied for FBE and other services. It is a requirement that the applicant is able to prove ownership and that he/she is the full time occupant of the household. However, in practise this is often not the case (NERSA, 2013) and many local authorities do not keep registers resulting in most houses receiving FBE regardless of whether they qualify or not. In 2010 it was estimated that 1 million households receive FBE but as many as 4 million qualify for it. Conversely there is wide scale theft with Eskom reporting that theft of 4,000 GWh / annum, which is 50% of its residential sales. This number excludes municipal theft. (FRIDGE, 2010). In a recent study (Eskom 2014d), it was found that recipients of FBE are far less responsive (inelastic) to electricity tariff increases compared to other low and middle-income households.
Energy/CO2 taxation and emissions trading
Discussion on a carbon tax in South Africa kicked off in 2010 and became more concrete with a policy paper published on the issue only in 2013. The Carbon Tax Policy Paper issued by the National Treasury announces 2015 as the starting year for the taxation scheme (National Treasury 2013, p. 15). However in two successive budgets the start date was postponed to 2015 and then 2016. There is very strong opposition to the carbon tax and there is reasonable chance that the National Treasury may abandon this programme. While the scheme is seen as a chance to reduce the “risk of embarking on redundant large-scale major capital projects and investments” (ibid., p. 7) like fossil fuel power plants, the National Treasury also argues that the carbon tax “will minimise the need for retrofitting” (ibid.), as companies will be encouraged from the outset to ensure that capital projects and investments are ‘climate resilient’.
In contrast to an emissions trading system, the carbon taxation system has been found to be better suited in the South African context since the energy sector, which is responsible for a large amount of CO2, is dominated by a single player. Such a structure would not facilitate the trading of emission certificates. However, the Policy Paper acknowledges that a trading system may supersede the taxation scheme at some point in the future.
The paper offers three ways for defining the taxation design. It is argued that “[the] best option is to impose the levy directly on the emissions of actual GHG or carbon dioxide equivalents (CO2-eq). However, such a tax on actual emissions appears to be administratively complex.” The paper does not provide for any ex-ante evaluation data, but supports the Copenhagen Accord of 2009 where South Africa committed itself to reduce its GHG emissions to 34% below its “business-as-usual” growth trajectory by 2020, and by 42% by 2025, subject to specified conditions.
Regulation of energy companies
The “Regulatory Policy on Energy Efficiency and Demand-Side Management for the South African Electricity Industry” issued by the National Electricity Regulator, places the responsibility for delivering on EEDSM targets with Eskom, but also obligates South Africa’s eight metropolitan municipalities (largest cities) to incorporate EEDSM into their planning and to ensure EEDSM implementation. This document remains the only formal guideline for EEDSM implementation but in practice it has been superseded by the Multi-Year Price Determination (MYPD) process.
The MYPD started in 2006 whereby Eskom submits a three-year (now five-year) application for price increases supported by an EEDSM implementation plan, which is subject to NERSA review and approval. The most recent version is the MYPD for the period 2013-2017. It requested an annual 16% tariff increase, which would provide R13bn to target 1,730 MW of savings (Eskom, 2012 pg. 98). NERSA ruling was R5.1bn but Eskom still needed to deliver 89% of the targeted savings (Eskom, n.d.b).
Minimum energy performance standards (MEPS) for buildings & equipment
The National Building Regulations and Standards Act (1977) makes it an offence to construct any building without the approval of the Local Authority. The Regulation refers to the SANS 10400 series of standards including the applicable Compulsory Specifications.
The current National Building Regulations were published in 2008. In 2010 a draft of the Proposed Amendments to the National Building Regulations was published to make provision for the inclusion of Part X (Sustainability). To support these amendments, the new standard SANS 10400-XA was developed by a technical committee at the South African Bureau of Standards (SABS) . This part of SANS-10400 provides the requirements for compliance with Part XA (Energy Usage in Buildings) of the National Building Regulations and came into effect in November 2011.
There are three ways to comply with the National Building Regulations:
In addition, although there are no specific regulations which are impeding the uptake of energy efficiency programmes, there are conflicting policy objectives and historical institutional frameworks which should be aligned. For example, the fines that can be imposed for transgressing the building regulations were set in the 1970s and as a result they are now nominal. Builders are known to break the law and pay the fine rather than comply to the regulations as this is a cheaper option and in all likelihood in line with customer requirements. In this context such ineffective penalties are a disincentive to be law abiding.
The White Paper on Energy Policy of 1998 identified MEPS for residential appliances as an effective approach to achieve energy savings in the residential sector in South Africa. In 2005 the country’s first National Energy Efficiency Strategy (NEES) was developed and in the same year the Department of Minerals and Energy (now Department of Energy) introduced a voluntary labelling scheme with limited impact. In 2007, the DOE and the UNDP country office agreed to submit a joint application to the Global Environment Facility (GEF) for financial support in order to implement a mandatory Standards and Labelling (S&L) programme. In 2008, SABS formed the Working Group 941 (WG941), which was mandated to develop SANS 941. The SANS 941 identified energy efficiency requirements, energy efficiency labelling, measurement methods and the maximum allowable standby power for a set of appliances. The final set appliances selected for the programme are: refrigerators (including freezers and combination units); washing machines; dryers; dishwashers; electric water heaters; ovens; A/C and heat pumps. The programme is expected to come into effect in 2015.
Other legal requirements
In 2012 the DoE introduced regulations on the mandatory provision of data. The regulations require designated consumers (users who exceed the threshold of 180 TJ or 50 GWh per annum) to:
Mandatory energy performance certificates & equipment labels
For 2014, the Department of Public Works (DPW), supported by the Department of Energy (DoE) and SANEDI under the Energy Efficiency Programme, plans to establish mandatory energy performance certificates (EPCs) for selected public building types. EPCs inform about the energy consumption of buildings and, normally, are provided by the building owner to a potential buyer. Thus, EPCs create an incentive for building owners to invest in energy efficiency measures as low operational costs of a building increase the buildings marketability.
Apart from some pilot studies, which have been supported by the GIZ and the German Fraunhofer Institute, EPCs have not become effective yet.
In 2005/06, the Government of SA introduced a voluntary label for refrigerators, which was a precursor to a mandatory Standards and Labelling (S&L) Programme. The voluntary scheme targeted refrigerators but encouraged manufacturers to extend it to all their appliances. The voluntary programme had limited impact. With no support or signals from Government on the implementation of a mandatory programme, it was soon forgotten and abandoned by manufacturers and retailers. In 2007, the DOE and the UNDP country office agreed to submit a joint application to the Global Environment Facility (GEF) for financial support in order to implement a mandatory S&L programme.The Government started in 2011 a new approach to introduce mandatory standards and labels. The project will be completed in 2016 and includes:
Provision of information
South Africa’s energy agency SANEDI has been mandated to design and implement energy efficiency campaigns to raise public awareness. While SANEDI’s Annual Performance Plan states that the plan was to be developed by 2013, as of November 2014 the action plan is still to be developed. In the absence of an approved and adequately funded plan, SANEDI has had to rely on advocacy by presenting at industry conferences and endorsing projects. For example, the My Green Home ( ) EE demonstration project retrofitted and trained the occupants of a middle income home who managed to halve their energy consumption. Eskom has been running numerous campaigns (Power Alert and 49m) encouraging users to reduce energy consumption and the DoE has also indicated that it is planning to launch a campaign. Thus it is unclear at this stage as to which Government department will take overall responsibility of provision of information.
Since 2007, the Green Building Council South Africa (GBCSA) has been raising awareness about green buildings and introduced a rating system. The voluntary building rating system is based on the Australian Green Star rating, which was introduced in 2003, but adjusted to the South African built environment. The rating is not limited to energy and considers water conservation, waste reduction, non-motorised transport and design. Like the Australian system, the GSSA certification differentiates between
In Q1 of 2014, GBCSA celebrated its 50th certified building, three of which achieved “world leadership”, 13 are “South Africa excellence” and 34 are “best practise” (GBCSA 2014). More buildings are likely to follow, as the Department of Public Works (DPW 2012) will require a “best practice” minimum certification for new public buildings and for existing public buildings that undergo major renovations. However, in the context of total number of buildings being built annually this is still a very small percentage.
In achieving 50 certified buildings, the GBCSA estimates annual savings of 76 million kWh, which is equivalent to providing 5,300 South African households with electricity. This is 34% more than the savings of the reference case, which is based on the South African National Standard (SANS) 10400 Part XA. The GBCSA concludes by saying that due to rapidly increasing energy prices, amortisation periods are becoming shorter making investments in energy efficiency more attractive and that GBCSA-certification is considered to increase a buildings property value as well as its marketability. For more information on the programmes, please refer to the bigEE good practice policy example on the Green Star Programme.
Through its Energy Efficiency and Demand Side Management programme, Eskom facilitates “energy efficient electricity usage by supporting behavioural change and the switch to energy efficient technologies, systems and processes” (Eskom 2014b).
One of Eskom’s core awareness raising measures is the “49M Initiative” (referring to the country’s 49 million inhabitants) launched in 2011. The aim of the campaign is to inform people about energy efficiency, to change their habits and to, eventually, realise energy savings. Crucial elements of the campaign are three mobile stands, which include several household appliances. These “houses” travel throughout the country to malls, universities and trade fairs and South Africans are educated about household energy consumption. Between March and December 2011, the 49M Initiative reached more than 500,000 people directly and several millions through radio commercials and newspaper articles (Launchfactory 2014). A second and more direct campaign is Eskom’s Power Alert initiative, which flights television adverts during peak periods that show the current status of the grid and requests households to switch off non-essential appliances when the grid is overloaded or unstable. More recently, Eskom’s campaigns have been reduced and its EEDSM programme suspended due to financial constraints.
In 2014, GIZ funded GBCSA to run the ‘My Green Home’ programme. The six-month programme accompanied a South African family and their home on their journey to a more energy-efficient life. Within the six months, the family was able to save 53% of their baseline electricity consumption through behaviour change and building retrofits. During the period, traditional and social media transported results to the public and, finally, a My Green Home Guide was published in order to support other South Africans in achieving high energy savings (My Green Home 2014). Eskom’s 49M and SANEDI endorsed the project.
Eskom provides two kinds of calculators for assessing the costs of power consumption for several types of appliances including refrigerators, entertainment equipment, etc. With the basic calculator, the Eskom client can calculate the costs of energy consumption for appliances individually. The comprehensive version lets one to include multiple appliances and obtain the total costs of energy consumption (Eskom 2014b). The calculators can be found on the Eskom website
Feedback and measures on behaviour
In 2013, there were 184 licensed municipal and 13 private electricity distributors in South Africa. Each distributor having its own rules and protocols resulted in 2,312 different tariff structures (NERSA, 2013). In general terms however, electricity consumers are split between pre-paid and post-paid and the prevalence of each varies. In Cape Town for example, almost all homes are on pre-paid meters whereas in Johannesburg these are normally only found in lower income homes. Over the last few years, some of the country’s eight designated metropolitan cities have started installing smart meters to reduce administrative issues such as incorrect billing, frequency and cost of meter readings and disconnections. National Government and Eskom developed policies and plans to introduce domestic time of use tariffs but these were unsuccessful and limited to pilot projects.
“Time of use” tariffs do exist for commercial and industrial users.
Financial incentives for approaching ULEB /exceeding MEPS
Under its umbrella programme “Integrated Demand-Side Management” (EEDSM), Eskom offered financing support through different sub-programmes. Thereby, Eskom is able to recover expenses through the tariff revenues it generates. The initiatives are briefly sketched below, but are no longer available due to the suspension of the EEDSM by Eskom in 2013, due to funding constraints.
Following the 2008 power blackouts, within weeks Eskom launched the Solar Water Heating Rebate Programme, after the energy saving potential of SWHs had already been assessed in 2004. The programme targets the residential sector, where electrical water heaters account for as much as 40% of the monthly consumption.
The original target of one million SWH installed by 2014 appears to be unrealistic given that less than 200,000 SWH were distributed by 2012. At the beginning of 2014 there were 395,088 recorded SWH installations (Parliament, 2014).
When introduced in 2008, the programme only targeted high income groups where it was believed the greatest energy savings could be achieved. In 2010, the DoE decided to use the rebate to install low-pressure systems in Reconstruction and Development Programme housing (free Government housing for indigents). These houses did not have electrical water heating units and it is therefore questionable to what extent the programme is resulting in actual energy savings. Eskom estimated that the SWH rebate programme contributed 60 GWh in 2011. However, the social benefits of this programme are out of question. The initial phase suffered from administrative problems (GIZ 2013, p. 62 & p. 68f.), and although steps have been taken to improve the process it remains problematic. Under pressure from heat pump manufacturers, Eskom extended the rebate to this technology in 2011.
Two other programmes, designed to increase the energy efficiency in the residential sector are the Residential-Mass Roll-out (RMR) and the Compact-Fluorescent Lamp (CFL) programme. For the latter, Eskom bulk-purchased lamps and distributed those for free to households between 2004 and 2012. During that period 54 million lamps were replaced resulting in 2,173 MW demand savings. Under the RMR Eskom-appointed installers provide certain types of technologies to homeowners and tenants free-of-charge. The set of technologies comprises, for example: CFL’s, low flow shower heads and geyser timers (Eskom 2014c). In 2011 Eskom undertook a study to determine the viability of offering an incentive for energy-efficient appliances. It was decided not to proceed, as the savings were deemed too small, too long term and the M&V costs too high relative to the project savings.
Larger energy savings from 50 KW to 5 MW were also incentivised through the Standard Offer Programme (SOP) launched in 2010. Eskom approved projects receive between 42-120 c/kWh over a three-year period. Technologies, which qualified for SOP funding, include lighting systems, building management systems and hot water systems. Since savings must be achieved within a particular period of the day (between 06:00 am and 10:00 pm), the programme has aimed at reducing peak demand in particular (Institute for Industrial Productivity 2013; GIZ 2013, p. 61f.). According to GIZ (2012, p. 62), SOP energy savings amounted to 209 GWh between 2010 and 2012.
To avoid excessive M&V to verify savings, Eskom developed the Standard Product Programme that pre-approves certain technologies, which are expected to realise savings (Wang et al. 2013, p. 265, GIZ 2013, p. 63). This programme targets slightly smaller projects (<100 kW) than the SOP.
For large energy savings coming “from a basket of projects” (GIZ 2013, p. 62) from the industrial and commercial sector, the Energy Performance Contracting Programme was established. Over a three-year period, project-related energy savings should be 30GWh, at least. Then, energy savings generate a reward between USD 0.07 and 0.012 in peak and off-peak periods, respectively. As of 2012, Eskom has contracted projects amounting to 1,307 GWh (Wang et al. 2013, p. 265; GIZ 2013, p. 62).
The Figure below summarizes the Eskom programmes by size and target market.
Programmes outside of Eskom, which have now become of greater significance with the suspension of the Eskom DSM programme, include:
Under the Municipal Energy Efficiency Demand Side Management Programme, Government of South Africa distributes grants to 19 municipalities in order to improve the energy efficiency of public lighting and buildings. The city of Cape Town, that accessed DoE-controlled municipal EEDSM funds, realised energy savings of more than 12,000 MWh (City of Cape Town 2014);
The Department of Trade and Industry’s, Manufacturing Competitiveness Enhancement Programme (MCEP). Financial support is provided to encourage local manufacturers to upgrade their production facilities by investing in new machinery and processes. One of the five sub-components is green technology and resource efficiency (DTI). This programme does not support building retrofits to support 10400-XA.
12L Tax Incentive. This is the likely replacement of the Eskom DSM programme. The programme is managed by SANEDI and provides incentives for businesses that can show measurable energy savings. A tax deduction is valid for all energy efficiency projects that reduce energy use and is claimable until 2020 and is available for savings in all energy forms and not only electricity. The programme is in its second year and although the structure has received favourable reviews from business, the level and duration of the rebate (one year and 12.6 cents/kWh) is deemed too low given the M&V costs. SANEDI will be conducting a review of the programme in 2015 and submit the findings and recommendations to National Treasury. Is it is a requirement of this incentive that the methodologies used to calculate energy savings comply with SANS 50010 – Measurement and Verification of Energy Savings.
Under the programme “Division of Revenue Act” Municipalities apply to National Treasury for additional funding which may only be used for EE programmes to reduce operational costs. The programme achieved 18.3 GWh of savings in 2012/13 (GIZ, 2013). Moreover, through the Energy Efficiency and Demand Side Management (EEDSM) policy, Eskom was able to recover expenses for EE programmes through tariffs.
Several funds are available to provide soft loans for EE projects. The majority of these are financed from international Government agencies:
Education & training
GIZ funded and launched the Building Energy Auditor Training (BEAT) programme in cooperation with the Department of Environmental Affairs (DEA) and in being implemented by Eskom. The programme, implemented by Eskom, trains energy auditors who are then awarded contracts by the utility. As of April 2013, 70 auditors had been trained and a further 200 were undergoing training (GIZ, 2013b).
The Swiss Development Corporation (SDC) funded a programme run the by South African Institute of Architectural Technologists (SAIAT) which trained building control officers on the new 10400-XA regulations. The programme ran over a three-year period until 2013 and focused on five mid-sized municipalities.
Certification of qualified actors
Technology and service providers for the Eskom Residential Mass Rollout Programme are selected via a tender process. For the SWH and Heat Pump rebate programme, technology providers must register their company with Eskom. Companies need to meet certain minimum criteria, such as that the company is registered, its tax affairs are in order, black economic empowerment credentials. Only products with the SABS mark passed the national standard qualify for rebates. This test provides the Q factor, which indicates the kilowatt-hours (kWh) of electricity it is expected to save on a typical day. This is then used by Eskom to calculate the value of the rebate.
Energy efficiency clusters / networks
In 2011, the Department of Energy and the National Business Initiative (NBI) launched the Energy Efficiency Leadership Network, which is an instrument to facilitate energy efficiency in South Africa’s businesses through sharing of information and best practices.
This initiative targets large energy users and thus it has limited focus in the building or appliance sector.
In 2013, the NBI introduced the Private Sector Energy Efficiency (PSEE) programme, funded by UK Department for International Development (DFID), which offers discounted energy audits to large, medium and small companies. The ESCO’s that undertake the audits must register and demonstrate that they have the requisite skills before they are allowed to be on the panel.
Public sector programmes
An objective of the Department of Public Works (DPW) Energy Efficiency Programme was to showcase the viability of energy efficiency measures in new and existing public buildings to the private sector. Unfortunately, however, the “programme has not been developed to date and the interventions being considered have not been approved internally. The delays are partly due to a lack of skills and resources within the DPW as well as limited interaction with the DoE. As a result the DPW did not spend any of the funds allocated to this project since 2009” (GIZ 2013, p. 75). An effort to revive the programme was made in 2014 but to date no tangible results or outcomes have been published. Introducing EE to public buildings has proven to be difficult with many bureaucratic and procedural obstacles. There appears to be limited political will and as a result the efforts are under–resourced and have very limited budget.
There are isolated examples of best practice, for example the Department of Environmental Affairs (DEA) new head office in Pretoria is certified as 6 star rated building – world leadership.
Bulk purchasing & co-operative procurement
In order to achieve large-scale energy savings in the residential sector, Eskom has established two bulk-purchasing measures: the Compact Fluorescent Lamp Programme and the Residential Mass Roll-out Programme. For more information, please refer to the Financial incentives section.
Competitions & awards
Competitions and awards may be facilitating factors for manufacturers or developers to really focus on energy efficiency during their design and manufacturing or construction process, respectively. In South Africa, Eskom has introduced the eta awards. The Greek eta symbol stands for efficiency. The annual awards is accompanied with a small prize money and awarded in several categories, including the residential, commercial and industrial sectors. However, the award does not exclusively focus on energy efficiency in buildings (Eskom 2010).
The utility company Eskom has integrated an innovation programme into the EEDSM and invites technology and equipment suppliers to develop new or innovative ideas under the Performance Contracting Program.
The following policies in South Africa can be considered as worldwide good practice examples (GPE):
Energy Efficiency and Demand Side Management Incentive Program
Type: Feed-in-tariff for certified energy savings
Furthermore, bigEE presents here all relevant implemented policies (IP) in South Africa:
Green star South Africa Rating System
Type: Provision of information
Section 12L of Income Tax 58 of 1962
Type: Financial incentives
Solar Water Heating and Heat Pump Rebate Programme
Type: Financial incentives
SANS 10400XA National Building Regulation
Type: Minimum energy performance standards (MEPS)
Residential Mass Rollout Programme
Type: Financial Incentives for ULEB and deep retrofits
Manufacturing Competitiveness Enhancement Programme (MCEP)
Type: Financial incentives