Eskom standard offer programme

Submitted by: Jonathan Ramayia, Wednesday, December 14, 2011

Eskom offers energy efficiency (EE) rebates, as part of their integrated demand-side management (IDM) programme. IDM aims to reduce the electricity demanded by higher electricity users including industry and local authorities. 

One of the main arms of the programme is the Standard Offer Programme (SOP) where Eskom will pay a set rate in c/kWh for the total energy savings after a company has implemented an approved energy saving programme. The set c/kWh paid back is dependent on the technology used (see table below).

With or without the Eskom subsidy an energy efficient intervention will  reduce your monthly running costs!Here are some of the things to consider when deciding whether your company should apply for the programme:

  1. Will your energy efficient intervention result in savings between 50kW and 5MW per year? If not then the SOP is not a good idea for your company.
  2. Does your company have capital to undertake energy saving interventions? You will have to cover the upfront costs of the interventions before you receive any pay back from Eskom.
  3. Eskom will pay back for only the energy saved at a published rate, e.g. 42c per kWh saved. Eskom will not pay for the entire set of interventions, therefore in order to see if you could afford this you should probably hire an energy auditor or energy services company (ESCo) to determine how much the proposed interventions will actually cost you. Nevertheless, you still need to finance the upfront capital for the project, including the payment of an ESCo and the monitoring and verifications M&Vs.
  4. The rate is only applicable to savings made during 6am and 10pm and excludes weekends. This means that if your business operates mainly outside these peak hours it probably isn’t a good idea to apply for the SOP.
  5. The contract duration will be 3 years.

Process:

The process is fairly onerous, but the rewards of doing all the hard work should be felt for years to come given that it will reduce your electricity bill substantially. Because of this onerous process, Eskom has designed the programme so that it only makes sense for very large power users (including municipalities) to apply for the SOP. The following steps outline the process in its very basic terms.

  1. Develop a ‘project’ and bring in an energy auditor (ESCo)
  2. Do initial M&V and submit plan to Eskom
  3. Eskom to approve, M&V and baseline to be conducted
  4. Contract finalisation and permission to start interventions

For more information visit the website: http://www.eskomidm.co.za/industrial/sop

 

Jonathan Ramayia