Electricity in South Africa is becom-ing an expensive commodity, which supports the business case for converting commercial properties into more energy efficient environments, says Broll Property group utility manager and South African Property Owners Association (Sapoa) Energy Efficiency Task Team chairperson: electricity Douw de Kock.

“The South African building regulations have never before catered for a demand to create energy efficient buildings and the current stock is inefficient owing to design, insulation, equipment and operation,” De Kock told delegates attending the Intelligent Building Automation 2009 symposium, in Johannesburg, last week.

He added that the global economic meltdown had not passed South Africa unnoticed and that the effect had been felt within the property industry.

“The past decade was good for property owners and tenants were in abundance, with rentals being maximised to ensure optimum income for property owners. Indications from property owners are that rentals escalated around 70% during the past five years.”

Higher rentals, combined with increased operating costs and a slowdown in the economy, resulted in significant increases in outstanding rent, legal cases as well as vacant spaces, primarily in retail spaces.

Electricity has increased so significantly during the past two years that it accounts for 20% of operating costs, compared with 10% three years ago.

“The projected cost of electricity will have a significant effect on the property industry, with tenants demanding space within more energy effective buildings and landlords reducing their operating costs through energy efficient measures in common areas and owner-operated spaces,” said De Kock.

He noted that a change in owner operations had been observed, with property owners requesting services from consultants to reduce overall energy consumption by assisting tenants in reducing their costs.

“Business cases for energy efficient projects deemed uneconomical two years ago are getting the go-ahead in current times because of the change in electricity costs and shorter payback periods.”

De Kock pointed out that the Sapoa energy efficiency task team had embarked on a national roadshow to educate its members on the changes within the market and on how to save energy, with emphasis on intelligent metering to allow property operators and their consultants to measure and understand the use of electricity in their buildings as a first step towards creating an energy efficient building.

“Proposed tax incentives for metered and verified savings further support the business case for energy efficiency and do allow for larger projects to become viable with the potential for better savings.
“With the increase in electricity costs, the proposed tax incentives, increased vacancies, anticipated demand for energy efficient space and evidence of tenants struggling, the question could be asked: ‘Can any property owner afford not to embark on projects to create property spaces with lower operational costs that are also environmentally friendlier?’”

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