The South African National Energy Development Institute (SANEDI) in collaboration with the Department of Energy and the South African-German Energy Programme (SAGEN) implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is building up an online register of Energy Service Companies (ESCO register). Since the register portal’s launch in November 2016, about 40 ESCOS have registered, which are currently reviewed. The aim is that the register assists the public and private sector in identifying, designing, developing, financing and implementing co-generation or energy efficiency and demand side management projects in buildings, for street lighting or the water infrastructure.
“Energy service companies play an important role in advancing energy efficiency in South Africa. But the term ESCO might be misleading: South Africa’s ESCOs are not full-service providers, but rather consultancies advising commercial or municipal customers on energy efficiency,” explained Ulrich Averesch, who manages the ESCo Register at SAGEN. The online database should be available to the public in the 1st quarter 2017.
The ESCOs selected for the list will be categorised based on their capabilities, size and experience from full (Tier 1) to partial certification (Tier 2). Once it is accessible to the public, the register will be reviewed each year to ensure that information is up to date and to allow ESCOs to achieve a higher certification level as they mature.
Municipalities to retake control over energy supply
Energy efficiency – and here, electric efficiency in particular – has entered the public discussion after power shortages became quite frequent over the years. As power plants were ageing and required maintenance and new construction faced delays, drastic measures – such as planned load shedding for several hours – had to be taken during more severe outages. Some of the 271 municipalities in South Africa now aim at taking back their power plants and grids from the energy monopolies to secure electricity supply.
Small share of heating and cooling needed
Although ESCOs are crucial to energy transformation at local level, there are stark differences of quality and expertise between companies. The GIZ and its partner organisations have been looking around the country for ESCOs that may be able to deliver consulting services, such as retrofits of street lights, lighting in buildings, or “high masts” – floodlights mounted on masts of up to 40 metres to provide security lighting in townships. Heating and cooling account for a fairly small share of energy use in South Africa and have not yet been in the main focus of ESCOs. In the private sector, it is the shopping malls and hospitals which show increased interest in energy efficiency. Another potential field of application might be the water infrastructure, e.g., to supply energy to water pumps or cogeneration units for wastewater treatment.
To be listed, a company can submit a Request for Qualification (www.sanediesco.org.za). Detailed questionnaires about expertise, experiences and references are then used to assess the business. An ESCO which meets certain criteria will later make it into the register. Many ESCOs develop from small consulting firms, so they tend to have a more technical than commercial focus. “We will offer training programmes to those still lacking knowledge in a certain field,” said Averesch.
In addition to the power shortages, a national energy efficiency demand side management programme (MEEDSM) had sparked the interest of municipalities in energy efficiency, Averesch said. On average, South African Rand (ZAR) 230 million (around EUR 16 million) will be available to up to 30 municipalities each year for energy efficiency investments. Averesch emphasised that “qualified ESCOs can be a big help to the MEEDSM when it comes to implementing a project in one fiscal year.”
ESCo Register: www.sanediesco.org.za/
GIZ South Africa: www.giz.de/en/worldwide/312.html
South African-German Energy Programme: www.giz.de/en/worldwide/17790.html
National Energy Development Institute: www.sanedi.org.za/
Department of Energy: www.energy.gov.za/
This text was written by Eva Augsten, a German freelance journalist specialising in renewable energies.