Last year, South African businesses were spared from Eskom’s proposed 32% tariff hike, which would have come into effect from 1 April 2023, with energy regulator Nersa postponing its decision on this for the next two financial years. Had “gremlins” not slipped into the calculations, as per Nersa’s explanation, this could have been another crippling expense for South African businesses to foot, especially as they use between 15,000 kWh and 50,000 kWh of electricity annually depending on the size of the company.
“We’ve had a reprieve – but that 32% tariff hike is still on the table. Businesses are already paying very large amounts for their electricity consumption. Add to this the further costs they are hit with each month should they exceed their Notified Maximum Demand (NMD) limit. Businesses can no longer afford for their energy use to remain unmanaged, particularly in light of the continued turbulent economic conditions,” says Roger Hislop, Energy Management Systems Executive at CBI-electric: low voltage’s newly launched energy management division, CBI :energy.
“As the old cliché goes, ‘you can’t manage what you can’t measure’, so if businesses don’t know what is contributing to their electricity bills, it becomes very difficult for them to control it,” he explains.
To illustrate, Hislop shares that a client was spending upwards of R120,000 every month on electricity but did not know what was contributing to this. “While they were aware that approximately R30,000 was going to NMD penalties, which is money straight down the drain, of the R90,000 for consumption they could only guess what was using it up. At the same time, they were spending hours trying to manually compare consumption data against their utility bill.”
“The best way for business owners to start tackling spiralling electricity costs is to implement managed smart metering at several key points in their electrical network. This enables them to gather and analyse real-time electricity consumption data,” he says. “Once they can identify where energy is being consumed, measures can be put in place to reduce wasting their money and energy.”
Hislop notes that while everyone has their part to play when it comes to reducing energy consumption, relying on the company’s employees to change their behaviour often doesn’t yield optimal results. “Unless electrical load management is automated, a business’ ability to reduce its consumption costs is fairly limited.”
Adding to the above expenses, ongoing load shedding is losing businesses millions in revenue from being unable to operate during outages, not to mention consequential damage to equipment and machinery. All told, this is costing the country’s economy R4 billion per day. It’s unsurprising then that a number of companies are actively seeking out alternative power supplies to avoid reliance on the unstable grid. In fact, the commercial and industrial sector accounts for about 70% of new rooftop solar photovoltaic (PV) installations nationally.
“Currently, many solar PV systems have batteries that can typically provide a few hours of backup if sparingly used, because they only have limited capacity. Big batteries are very expensive. While PV provides a measure of energy cost reduction, it is battery storage that provides the critical energy security to make sure machines and computers are still running. But it is essential to have load management to prevent the battery from draining unnecessarily – someone heating their leftover pizza in the company kitchen at lunchtime could flatten the batteries, crippling the business,” points out Hislop.
“In today’s business climate, companies are primarily concerned about reducing their upfront capital. However, they need to consider all the costs associated with unmanaged consumption including their Environmental Social and Governance (ESG) and carbon footprint reduction objectives, as well as their ability to keep trading and servicing their customers,” he concludes.