The need for corporate South Africa to move collectively towards alternative energy sources has been heightened by the recent disruption at the Medupi power station, says Energy Partners energy solutions divisional head Alan Matthews.
“Unfortunately for corporate South Africa, Eskom’s inability to deliver uninterrupted electricity has a massive impact on companies’ yearly earnings.”
Moreover, government recently announced that load-shedding was costing the economy billions of rands a month. These losses often go unnoticed because it is revenue not earned, as opposed to actual financial losses, notes Matthews.
To reduce the effect of load-shedding on revenue streams, alternative energy sources could be used strategically. “A combination of generators, together with renewable sources of energy, such as solar and wind, can facilitate key business processes during load-shedding,” he notes.
He adds that the nature of renewable energy is variable as it depends heavily on external sources and storage technology, which is still very expensive in South Africa. Owing to this, energy efficient buildings are usually powered by a combination of grid electricity, generators and green energy sources to ensure the most cost effective solution.
“Often, renewable and backup energy solutions – such as generators – are incor- porated into a business’s existing infrastructure as this methodology reduces the risk of business interruption and is the most cost efficient,” states Matthews.
He adds that many organisations are being left behind in the shift towards energy optimisation, owing to a misconception that the implementation costs are very high.
However, this is no longer the case, as there are multiple funding options available to assist businesses with the transition, the least risky of which is a gain share agreement. This agreement means an energy solutions provider invests in an organisation and is rewarded based only on results achieved.
Matthews states that, in the gain share funding models, the energy solutions provider invests in a company’s energy efficiency by funding the solution and assuming responsibility for the operation of the equipment.
“Only when savings are realised, is the solutions provider rewarded for its results – meaning the client is cash flow positive from day one, without carrying performance risk or investing its own capital.”
However, Matthews warns that businesses must be sure to partner with a reliable and experienced energy solutions provider, because, even though the financial risk is mitigated, operational risk is involved when outsourcing critical business processes.
“In light of the dire energy situation in South Africa – which does not show any signs of abating – businesses must invest in alternative energy solutions and ensure that all energy processes are optimised to ensure that load-shedding does not hinder revenue streams,” he concludes.