Companies operating in South Africa are under enormous financial pressure, and electricity expenditure is a major contributor to this. The good news is that reducing operating costs is one of the easiest ways to lower your energy bill, and it’s within every business owner’s control to do so.
That’s according to Tygue Theron, business development manager at Energy Partners Intelligence – a division of Energy Partners and part of the PSG group of companies – who says many local businesses are inadvertently paying far more in energy tariffs than they Rightly shouldn’t. “When you consider that there are over 900 tariff options available to South African electricity users, it is clear that it is entirely possible for a company to be awarded the wrong tariff. But tariffs are only one part of an electricity bill, there are many other intricacies to consider. The type of consumer/buyer they are, whether they are billed directly by Eskom or their local municipality, their physical location and a host of other factors play a role in how one is billed.
He says taking a close look at and understanding your electric bill is the first step to lowering your costs. “There are three main sections of an electricity bill that should be reviewed to see where costs can be reduced: energy loads (reduce consumption), peak power loads (change behavior), fixed loads and others (partially unavoidable).
Next, you have to make sure that the company is on the right rate. “Many businesses bear the brunt of annual municipal rate increases of 6% to 15% simply because they don’t know they may be on the wrong rate structure. The best way to approach this is to work closely with a specialist who will analyze the company’s monthly electricity bill and compare it to a comprehensive tariff database, which any responsible energy engineer will have. Once they understand what they are being charged for and if they are on the right rate, the company will be in a good position to negotiate with their municipality for better rates.
Energy Partners Intelligence has achieved savings of up to R71 million for customers on rate changes and billing claims. “In addition, our customers have saved up to R136 million in tenant bill collection, and we currently have R13.3 billion in bills under management. Of course, this requires ongoing engagement with the local municipality to ensure there is always a good relationship on which to base future negotiations.
Digging deeper into the changes businesses can make to reduce expenses, Theron advises installing a meter on the energy box to accurately measure usage and verify usage charges on the electric bill. “The data will show if the business is being billed correctly for usage (mistakes happen) and can help identify where changes in behavior are needed to minimize energy consumption and further reduce costs. For example, a business could pay up to four times more for energy during peak hours compared to off-peak hours, so businesses should schedule their most energy-intensive operations during off-peak hours whenever possible. monthly electricity expenses.
The maximum load a company reaches during the day also has a noticeable effect on its bill. “Once again, the available data will provide a clear picture of the company’s energy consumption and help find ways to move these peaks to different times or bring them down to a lower threshold. If, for example, certain machines need to be ramped up before use, it may be useful to start them at 4:00 a.m. to avoid the high energy load during peak hours. Another potential solution may be to avoid running all the machines at the same time to distribute energy peaks throughout the day.
From there, Theron says the options abound. Once a company has made these behavioral changes and benefited from the resulting cost savings without having spent capital, it becomes easier to advocate for alternative solutions that require some capital outlay. “Companies can work with an energy engineer to perform a full equipment audit and possibly install new, more energy-efficient equipment. And they can also start looking for alternative energy sources such as solar power, to use less grid power,” he says.
For a municipal bill, the items mentioned above are the factors most likely to affect energy expenditure. However, Theron points out that if companies are billed directly by Eskom, this can become even more important. “This is where things like environmental subsidies, taxes and other fees start to play a role. About 20% of our customers fall into this category, all of which means that these companies need a service provider who can get even more involved in collecting data and finding the best solutions. »
“With each annual increase in electricity prices, companies see their own profit margins shrink. It has become more important than ever for companies to minimize risk by measuring their energy consumption and reducing their carbon footprint. And in the process of becoming energy efficient, reducing their own operating costs and becoming more profitable and sustainable,” concludes Theron.