A German-SA partnership has made money available for developing local green companies.
The IDC and the German Development Bank (KfW) have partnered to make a R500-million facility available for energy efficiency and self-use renewable energy projects, called the Green Energy Efficiency Fund.
As South Africa looks to transform its economy to a low-carbon economy, improved energy efficiency through reduced energy consumption is vital to maintain a stable energy supply and ensure energy security.
The Green Energy Efficiency Fund seeks to support self-use renewable energy technologies in South Africa and encourage long-term competitiveness and job creation through energy savings.
The fund targets companies in the private sector that plan to implement financially viable projects that will result in significant energy or emissions savings. It finances investment in equipment and technologies that use less energy to produce the same amount of work or which make use of renewable sources rather than fossil fuels. The fund aims to assist companies seeking to produce a higher quality of products with less wastage, which results in lower energy consumption per unit of useful products produced.
One company that has benefited from the fund is Cape Town-based SME Impahla Clothing, which has achieved a 25% reduction in electricity usage by installing a solar photovoltaic system. The company produces sports and leisurewear under licence to an international brand.
"Electricity accounts for more than 90% of our carbon emissions and, in order to reduce our carbon footprint, we took the decision to find alternative sources of energy," says Impahla Clothing managing director William Hughes. "Solar energy, although not a cheap option, was the most obvious."
The company approached the IDC for assistance and funding to install a grid-connected rooftop photovoltaic system. The result was a saving of 50 tonnes of CO2 and 48,5MWh of electricity per year.
"We're confident that the solar installation will generate between 30% and 40% of our energy requirements, which will reduce our carbon footprint, save us money and improve our sustainability into the future," says Hughes.
Solar Network, which provides solar water heaters on a lease-to-own basis to private households and commercial buildings such as guesthouses, also approached the Green Energy Efficiency Fund to grow its business.
"Our mission was to make solar water heaters accessible and affordable," says Solar Network CEO Quinton Zunga. "The Green Energy Efficiency Fund will enable Solar Network to roll out solar water heaters to at least 400 households by removing the challenge faced by many clients in financing the high upfront costs."
Pollutants and corrosive agents
Solar water heating systems are one of the most cost-effective uses of solar energy, replacing more than 40% of electrically-heated water.
South African Calcium Carbide (SACC) is one of SA's producers of chemicals for desulphurisation in the steel industry. An energy intensive company, SACC will use funding from the IDC to develop a 7.8MW co-generation plant to replace part of the power it currently uses from the grid.
During the production process, raw materials are heated in an electric arc furnace to between 2 000°C and 2 100°C. Waste gas is produced, and is flared.
After the funding, a scrubber plant will clean the waste gas of pollutants and corrosive agents before it feeds into the co-generation units, thus reducing the need for fuelling from the electricity grid.
"The decision to invest in a co-generation plant came on the back of increasing electricity prices and constraints, as well as growing environmental concerns," says SACC GM Claudio Siracusano. "We spend close to R7-million on electricity a month but this new co-generation plant will cut this bill by about 20%. The additional 8MW capacity will enable the company to operate at full production, [rather than our current] 70% capacity because of electricity constraints."
The project will result in energy savings of approximately
45000MWh each year, will cut energy consumption by 18% and reduce CO2 emissions by 46 000 tonnes per year.
Projects which are eligible under the Eskom Integrated Demand Management programme are also, in principle, eligible for financing from the Green Energy Efficiency Fund. This provides an option for bridging finance to address the funding gap between the actual investment and the process required to obtain Eskom incentives or rebates.
Source: IDC Access