Eskom Holdings South Africa is one of the top 20 utilities in the world with a generation capacity of 41 194MW. It generates approximately 95% of the electricity used in South Africa and approximately 45% of the electricity used in Africa, providing the backbone that undergirds the stability and growth of many national economies on the continent.
After an extended period of excess generation capacity and very low electricity prices, South Africa ran into electricity supply constraints in 2007 when the growing need for electricity outpaced the rate at which power stations were being built. This resulted in the country experiencing repeated power outages from late 2007. Since then the ability to supply South Africa’s electricity needs has remained a challenge and electricity supply is likely to remain vulnerable into the foreseeable future.
In 2004, Eskom officially launched its energy efficiency and demand-side management programme – it evolved over time to be established as the Integrated Demand Management (IDM) Programme under the auspices and guidelines of the National Energy Regulator of South Africa (NERSA). Although initially an initiative to predominantly create awareness amongst business and homeowners about the need and importance to use electricity wisely, it soon transformed into a strategic imperative of national importance aimed at demand and energy savings in response to the projected supply shortfall.
The objective of the IDM Programme was to produce a balanced demand reduction portfolio that would cost-effectively and timeously respond, as best as possible, to system requirements. It considered a wide range of solutions with programme implementation costs, energy and demand impact, sustainability, implementation lead times and the combined impact on the system profile top of mind. In doing this, a bespoke combination of energy efficiency, demand management and demand response measures were utilised.
The IDM programme encompassed the whole economy - but notably the commercial, residential and industrial sectors – and focussed on the broadest range of electricity end uses and technologies. Lighting, water heating, household appliances, pool pumps, pumping, heating and ventilation, process optimisation, compressed air, efficient motors and variable speed drives offered the most immediate opportunities for electricity savings.
In the early stages of the IDM Programme, demand and energy savings achievements were dominated by mass roll-outs in the residential sector. In addition, owing to South Africa’s extensive mining sector and its relatively high consumption of energy, a large number of projects - specifically around pumping, process optimisation and compressed air - were also implemented. It soon became apparent that smaller industrial and commercial businesses were unintentionally “excluded” from the programme as the structure of the funding models did not favour them.
An extensive innovation process then ensued and several more flexible funding models were developed and launched. Standard technologies with proven savings were offered in different options and payment was made only after realisation of expected savings. This caused a huge influx of projects to be registered under the umbrella of the IDM Programme and, more importantly, a much wider group of businesses began participating in energy saving initiatives. The new funding models, namely the Standard Offer and Standard Product programmes, also had a far less onerous approval process and contracts were awarded to customers much quicker.
In the residential sector mass roll-outs of Compact Fluorescent Lamps (CFLs) initially targeted lower income households. Over time, energy efficient Light Emitting Diode (LED) down-lighters became affordable for free issue and resulted in another innovative funding model, aimed at higher income households, being developed - the Residential Mass Roll-out Programme targeted homes that offered an opportunity for the installation of a range of energy efficient technologies.
The entire IDM programme was supported by a series of successful communication campaigns. All sectors of the market are targeted - the goal being long-term behavioural change that seeks to inculcate smart electricity use and energy efficient business and lifestyles whilst providing advice to customers on how to make the switch to energy-efficient technologies for a more sustainable and environmentally friendlier way of living and working.