As business reels from the current economic climate, we look at methods to improve energy efficiency.
Once again, South Africa find themselves with load shedding. The dreaded stage 2 only adds further pressure to business and industry. Not only are we dealing with lockdown, but we also need to keep the lights on.
Industries are struggling. Businesses are closing, and costs are rising.
BusinessTech reported that “Cape Town’s plan to get off Eskom’s grid” was hit with a legal setback. Eskom initially had a case filed against them in 2017!
Based on the shortage of coal, which generates most of Eskom’s output, as well as the poor performance of the Eskom’s generators, they are struggling to keep up with demand. Not only does this mean an extended period for business to experience load shedding, but it also means the cost of electricity is once again, going to climb.
Looking at the mining sector as an example, Deloitte reported that one of the significant challenges in the industry is “rising energy costs” in addition to shortages in infrastructure as well as geopolitical & social risks.
MiningMX said the sector, in 2019, produced 259 million tons of coal and that burning this coal generates 70% of SA’s power. Eskom bought around 45% of that coal to burn in their thermal power stations.
Keeping the lights on in the long run
Thinking of all the challenges, there is no easy fix. Business and industry will continue to feel the pinch, and industries will feel the real impact of rising energy costs for years to come.
So, what can we do to improve our energy efficiency in addition to the “From Ramaphosa to Eskom, #PutSAFirst” campaign, as reported in Times Live?
Businesses should look to calculating their potential savings on their utility bill.
Have a look at some examples of potential monthly savings on an average bill of R 35,000 per month by investing in PFC. Considering both the municipality that bills you and your industry, we list these potential monthly savings.
- Large warehouse supplied by City Power: R 12,600
- Data Centre supplied by Ekurhuleni: R 11,200
- Large food retail store supplied by Emfuleni: R 11,900
- Food processing plant supplied by Ethekwini: R 11,900
- Chemical industry supplied by Midvaal: R 11,200
- Cold storage warehousing supplied by Tshwane: R 11,200
Try out our calculator and see how much you could save by investing in power factor correction (PFC) equipment, as one of the ways to improve your energy efficiency.
Reducing electricity cost to increase profit
By using example 6 above (Tshwane municipality bill of R 35,000 for a cold storage company) the potential net benefit after 10 years is R 2,484,000 (taking into consideration annual tariff increases of 8%)! The required investment is approximately R36,000, meaning that the payback period is just over 3 months. You would be hard-pressed to find an investment with such a favourable return, anywhere else.
Think of what that monthly saving could mean for your business.
One of our customers actually recovered his investment of R 395,000 in just under 18 months! Over 10 years (the life expectancy of PFC equipment) the total projected savings sat at 4 million Rand.
As Eskom warns of more power outages and recovery in industry waits, post-Covid, these savings are just 1 of the ways to improve energy efficiency. Alpha Power is offering a complimentary PFC inspection in addition to energy audits and power factor correction installations.
We would love to work with you in your industry to save you money on your monthly electricity bill, to help keep the lights on.
As a corporate member of the Southern African Association for Energy Efficiency Confederation (SAEEC), as well as an associate member of the Electrical Contractors Association of South Africa (ECASA), we trust that we are in the best position to give you and your business the energy efficiency knowledge and savings you need. Contact us for any other questions we haven’t covered.