Energy matters
Energy in South Africa and your operation
By AskGareth About Energy
Part 2
The purpose of this article is to share insight on the lesser known facts about the South African energy sector. This is the second of six articles that will build your knowledge and give you decision making power through insight.
In the previous edition, we set the background looking at the key inputs before making an electricity investment decision, i. e. the surrounding environment and options at your disposal.
Thank you for all the questions since the first edition, sent to AskGareth @ energysecurity. co. za. The questions were focused on your current position, challenges that you experiencing and steps relating to‘ getting your house in order’. Many questions referenced the utility bill and quick interventions that could be actioned for immediate result. Including several questions relating to on-site generation decisions.
Let’ s put this discussion in context!
Why is it important that you have your house in order prior to investing in on-site generation decisions?
When we engage with new clients, agricultural clients, the business development team will assess and rate clients in one of five categories. One being a client that has recently started to understand their energy position and five, typically clients that already have on-site generation and a dedicated resource or team looking at energy and energy efficiency weekly.
At least 50 % of the clients we build relationships with are unaware at the start of the discussion that their energy waste is as high as 35 % of their monthly utility bill. Now we are not saying that the client is purposefully wasting energy by leaving working areas running or generally not aware of the cost. Rather we stating that you know from gut feeling that there are areas of waste, but it’ s difficult to pinpoint? One good example is power factor:
Frequently, end use customers pay a significant premium each month in demand charges because their Power Factor is below a threshold set by the utility in the rate tariff
Taking February as an example, this means that only 80 % of the incoming current does useful work(@ Max Demand where it is measured by the utility). To complicate the matter further, its usually worded as The charge payable per unit of the Maximum Demand supplied during any 30
Figure 1, Power Factor @ Max Demand
consecutive minutes of the billing period( e. g. a month) measured in kilovolt-ampere( kVA). With the correct support, the solution is relatively simple and easy to implement once the environment is understood.
In context, should this client have decided to invest prior to understanding his current energy position, he would have over invested up to 30 %?
This is true as the investment decision could have been clouded by information that skewed or misrepresented the requirements, therefore leading to unnecessary capital expenditure.
Your ability to get your‘ house in order’ does not need to be as cumbersome as power factor! Many times, the utility has billed incorrectly resulting in cash outflow that is far higher than what you should be paying. Provided a methodical approach is followed in analysing the data the utility will review your complaint in a reasonable period. If there are errors on your bill you can go back as far as three years to rectify the error. Should you need to migrate your tariff( limited options in the agricultural sector) to a better option there is no utility that can stop you from doing so provided you have the case to prove this.
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SABI | APRIL / MAY 2017