by Philip König, Royal HaskoningDHV

With the National Energy Regulator of South Africa (NERSA) having recently reached a settlement with Eskom paving the way for the utility to increase its electricity tariff by more than 15%, businesses and homes alike are faced with soaring utility bills.

While installing renewable energy options that cover energy needs at lower tariffs, is not feasible for all users yet, despite falling costs of these solutions and improved storage solutions. Implementing demand-side strategies could help businesses reduce the impact of higher energy costs.

Demand-side management is much more strategic than installing motion-sensitive light switches throughout an office or factory – although that is indeed part of it.

A comprehensive demand-side strategy starts by understanding the consumer’s demand profile. This is the amount of energy that is consumed at the consumer site over a certain period (typically 24 hours). This profile is compared with the utility tariff structure for the same period with the purpose of reducing and optimising the demand during the higher tariff periods.

This demand profile is also compared to the contracted maximum demand to verify if it exceeded and for how long as this is usually charged at premium tariff, often leading to unnecessary and unexpected extra costs.

A good start is to examine manufacturing and business processes, to determine what is operating when and for how long. Sometimes a simple change like not starting all the machinery at the same time can make a difference, as can running some processes consecutively, instead of in parallel. Shifting production times can also make a difference, as the utility charges higher tariffs in the early morning and evening peak demand times. Some industries have already adapted to this and run their high energy processes during the late morning or early afternoon off-peak periods.

The possibility of using renewable energy resources and associated storage solutions to supplement or replace the demand during those peak tariff times and turning to the utility’s power during less expensive off-peak times, is becoming more attractive as the utility tariff increases.

Smart energy management is one of the solutions which could help commercial and retail markets manage their demand more effectively. For example, aligning climate control systems in an airport with the passenger and air traffic can help reduce energy costs by adjusting the HVAC system’s energy demand based on the number of people in the facility.

Information from an airline booking system could predict passenger volumes, which, together with the known thermal capacity of the building, allows a smart energy management system to adjust and optimise building systems, saving on the energy demand.

Similarly, a smart energy management system could reduce the HVAC energy demand in shopping malls, which depend on air conditioning for the comfort and safety of shoppers.

Demand side management is however not a one-size-fits-all solution for all markets and should be applied as part of a more holistic energy management approach used to review not only the energy demand, but also energy losses.

These interventions include tariff-linked strategies, thermal capacity approaches, or even upgrading the insulation of roofs, walls, and windows of buildings. Implementing steps to avoid losing energy via uninsulated buildings, for example, could in turn reduce demand – which in turn could reduce costs in line with the user’s tariff profile.

Engaging with an expert in energy and demand side management is the most cost-effective approach to finding new ways of working and living; using smart asset management to optimise productivity – and keep energy costs under control.

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