Electricity and Control October 2020

ENERGY MANAGEMENT + THE INDUSTRIAL ENVIRONMENT : PRODUCTS + SERVICES

Checking tariff structures can save energy costs

With over 900 different tariff options, the South African municipal tariff structure for grid-tied electricity is com- plicated and businesses often are not on the correct or best tariffs for their operations. Consequently, many are inadvertently paying significantly more in energy tariffs than they rightfully should. And with continuing annual tariff increases, businesses can benefit from reviewing their electricity bills and usage patterns as a first step towards cost savings in energy management. Tygue Theron, Commercial Head at Energy Partners Intelligence – a division of Energy Partners and part of the PSG Group, says ensuring that a business is being billed correctly for electricity by its local municipality, Eskom or the landlord, can often lead to significant savings. A simple switch to the optimum tariff structure can save up to millions of rand a year. “A detailed tariff analysis should be the first step in any organisation’s energy management process,” he says. “The South African municipal tariff structure for grid- tied electricity is complicated, with over 900 different tariff options. In addition, Energy Partners anticipates a possible 25% increase in electricity charges for the 2021/22 financial year. What is certain, is that Eskom still needs a lot of capital, which it can source either through tariff increases or another equity injection. We expect a substantial portion of the state-owned entity’s debt will become the end users’ burden in the near future.” Theron says Energy Partners has witnessed multi- ple cases where local businesses have decreased their monthly electricity bills by as much as 15% by simply switching to the optimal tariff structure. “By building a comprehensive tariff database, we advise clients on which tariff structures are most suitable for the business, and through this consultative process often assist in sav- ing millions on energy costs.” He notes that Energy Partners Intelligence has achieved up to R48 million in savings for some of its clients within the first year of switching to the correct municipal tariffs. “These savings recur every year, in effect, as tariffs increase. In addition, since we began in the South African fuels market as Petredec looks to grow beyond KZN. Speaking about the launch of Petrefuel in South Africa, Petredec Group CEO, Giles Fearn, said: “We welcome the Jubane team to the Petredec family and look forward to the successful integration of the business within our new Petrefuel division. We intend to build on the considerable success that Jubane has enjoyed to date and grow our footprint as part of a larger fuels distribution network, including LPG.”

providing this service, our clients have saved up to R12 million in total bill claims and up to R129 million in tenant bill recoveries.” Explaining the great number of different tariff structures, Theron says, “The 900+ different tariff types are applied according to the type of business that is using the power, the amount used and the time when the client’s usage is at its peak. Most businesses are bearing the brunt of annual municipal tariff increases because they are often unaware that they are being billed according to the wrong tariff structure.” He says the various tariffs were put in place to encour- age more conscientious energy use among businesses. “It is therefore not a matter of trying to get as much as possible out of businesses, it is actually a method to in- centivise organisations to use power more responsibly. This is why, if one trusts a service provider to navigate this complex system, reducing energy spend can be fair- ly straightforward for a business.” For businesses that want to reassess their own energy costs, Theron advises: “The first step is to find out which tariff the company is on, and which alternative tariffs they can be switched to.” The next step is to see if there is any metered data for the business, so that comparative tariff costings can be simulated at the current consumption rate. Most big businesses have electricity meters which can provide in- valuable information about how the site is using energy throughout the day or week. “Instead of simply accepting the high monthly energy bill, businesses can look into the data provided by meters to see when and where there is an unnecessary waste of energy. For example, if air-conditioning runs for a whole building or facility through the weekend when the workforce is at home. The meter often reveals easy- to-implement savings opportunities to cut costs.” The final step is ongoing engagement with the munic- ipality to make sure accounts are in good order and that the billing is calculated correctly. According to Theron, “Managing a large company’s energy bills, identifying the right factors to motivate for billing claims and push- ing municipalities to apply tariffs accurately is extremely time-consuming and requires specialised skills.” The Covid-19 lockdown and continuing constraints on operations are still causing significant decreases in profit margins for many businesses. This makes it all the more important to become as energy efficient as possible to save business costs. “Getting a business onto the op- timal tariff structure is by far the most cost-effective and least disruptive way to start doing that,” Theron says. For more information contact Energy Partners. Tel: +27 (0)21 941 5140 Email: intelligence@energypartners.co.za Visit: www.energypartners.co.za

Tygue Theron, Commercial Head at Energy Partners Intelligence.

For more information contact Petredec Email: giles@petredec.com Visit: www.petredec.com

Electricity + Control OCTOBER 2020

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