Field: Energy efficiency in buildings, Energy efficient design
Technical Function Unit: Providing investment subsidies
Geographic Area: South Africa

South Africa - Municipal Energy Efficiency and Demand Side Management

In order to shore up energy supply following national shortages and blackouts, the Government of South Africa introduced a series of measures promoting energy efficiency. One scheme – the Municipal Energy Efficiency and Demand Side Management – is providing investment subsidies to municipalities to carry out energy efficiency interventions including more efficient traffic signals and street lighting.

The challenge:

In South Africa, a failure to keep generating capacity up with economic and population growth created a large energy shortage that led to an energy crisis in late 2007. Alongside this, and despite significant growth in renewable energy generation in the region, around three quarters of South Africa's energy needs are directly derived from coal. Improving energy efficiency is considered to be one of the most promising solutions to shore up energy security in the country and to achieve rapid, ambitious and cost-effective emission reductions.

The measure:

The South African Government published the country’s first National Energy Efficiency Strategy in 2005. The strategy outlined targets within different areas of society including energy efficiency in buildings, the industrial and mining sectors, power generation and transport.

Various sector specific energy efficiency improvement programmes were implemented, including the Public Building Energy Efficiency Programme, and the Industrial Energy Efficiency Programme. The Municipal Energy Efficiency and Demand Side Management (EEDSM) Programme supported municipalities to carry out energy efficiency measures at local level.

Within the Municipal EEDSM Programme, municipalities can apply for funding to help them plan and implement energy saving measures including more efficient traffic signals, street lighting, municipal buildings, water purification and pumping plants. Proposals are evaluated based on their energy saving potential, costs and pay-back period.

The grant covers:

  • Project planning and determination of energy consumption baselines;
  • Establishment of a business plan and technical specification for proposed project;
  • Implementation of approved project (investment in energy efficient design, technologies and installations);
  • Energy efficiency awareness; and
  • Measurement and verification of energy savings.

Since its inception, more than 50 municipalities have received funding totalling over 1 billion ZAR. The average payback period for the investments was 4 years. Improved energy access resulting from energy system improvements are also expected to contribute to social benefits that include enhanced health and education for local communities. New employment opportunities are further positive spin-offs from implementing energy efficiency interventions.

Since its start in 2009 significant funding (over R1 billion) has been dedicated towards the programme and 54 municipalities have participated.

Lessons learnt:

By providing incentives the programme was able to stimulate public procurement of energy saving measures above and beyond what would have been achieved if the municipalities were left to their own devices.

Involvement of international organisations in the design, implementation, monitoring and evaluation played an important role in the success of the programme. Collaboration with international partners, such as the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in this case, provided critical financial capacity-building, support to technology development and transfer.

Monitoring, reporting, measurement and verification requirements were included in the programme to help evaluate the impact of the scheme, however the quantification of energy savings has been an ongoing challenge.

Further deployment:

Given that energy efficiency measures generally pay for themselves in the medium term they should be an attractive policy. GML for this scheme is estimated to be 9.

Links:

http://www.greengrowthknowledge.org/sites/default/files/downloads/resource/Inclusive_Green_Growth_in_South_Africa.pdf p17

https://www.researchgate.net/publication/305442755_Implementation_of_the_municipal_energy_efficiency_and_demand_side_management_programme_in_South_Africa