Sanas field manager
South African National Accreditation System (Sanas) field manager Linda Grundlingh, says: “The country was the first globally to officially introduce a standard (SANS 50010:2011) for M&V and the accreditation of those that may perform M&V, which has led to South Africa becoming involved and nominated to lead the international (technical committee) dealing with the M&V of energy efficiency.”
The government’s National Energy Efficiency Strategy, currently under review, sets a target for energy savings of 12% by 2015.
This target, to be achieved through energy efficiency measures, was originally driven by the need to mitigate the negative effects of energy use on the environment. Following the 2008/2009 electricity blackouts, energy efficiency also became one of the cheapest and quickest ways to reduce demand in order to bridge the supply gap until new build programmes could increase base-load provision.
“Sanas was requested to develop fit-for-purpose guidance documents, qualification criteria and training material for M&V assessors,” says Sanas senior manager Mpho Phaloane.
“Sanas fast-tracked the process and launched its M&V accreditation programme for M&V bodies in the fourth quarter of 2010.”
South Africa has also launched tax incentives around energy efficiency. Phaloane says: “To the best of our knowledge, South Africa is the only country globally that has essentially declared through the promulgation of the 12-L regulations, that energy efficiency is a source of energy that has a price and can be procured and traded as we would trade renewable energy or fossil fuels.
“Tax incentives are being introduced for businesses that can show measurable energy savings. The promulgation of the regulations on the allowance for energy efficiency savings came into operation in November 2013. The 12-L regulation sets out the process for determining the amount of energy efficiency savings, and the requirements for claiming the proposed tax deduction.”
Accrediting M&V facilities
Sanas’ accreditation programme for M&V bodies serves to provide government with the assurance that the companies assessing M&V tax claims are qualified to do so and that the savings claimed are valid.
The energy efficiency tax incentives (12-I and 12-L) were introduced recently and require a high level of accuracy.
This has necessitated the introduction of an independent accreditation system to ensure that M&V practitioners do have the necessary competence, which includes qualifications, systems and equipment in place, to accurately perform the task of M&V.
Criteria for accreditation have been established and agreed to by relevant stakeholders, including specific requirements for various scopes. Sanas is therefore “open for business” to accredit M&V facilities in South Africa, in line with SANS 50010 and ISO/IEC 17020, Phaloane says.
The uptake of companies (facilities) requesting Sanas-accreditation has been sluggish, he notes, seemingly because most M&Vs were waiting for the tax incentive regulation to be promulgated, as this would guarantee a demand for accredited M&V service.
The regulations for the 12-L Energy Efficiency Tax Incentives were released in November 2013 and this regulation does indeed stipulate the compulsory requirement of using a Sanas accredited facility (with the requisite M&V professional/practitioner), to carry out the necessary baseline determinations and annual performance assessments, to qualify for the tax incentive.
Addressing greenhouse emissions
Sanas senior manager Dr Elsabe Steyn says: “In addressing climate change, countries including South Africa are developing policies to reduce their resource consumption, energy consumption as well as the carbon intensity of their economies.
“South African organisations also have to manage and save energy, reduce their greenhouse gas (GHG)emissions and operate in an environmentally sustainable manner because organisational performance is no longer measured only on profits, but also on how sustainable and environmentally-friendly the activity that generated those profits was.
“Energy and environmental management as well as climate change response plans have become some of the key performance indicators in the measure of organisational performance,” she says.
Sanas supports South African organisations’ efforts to make their industries greener. The South African industry, through Business Unity South Africa (Busa), identified the need for an accreditation programme for GHG validation and verification bodies, says Steyn.
“Busa approached Sanas through the department of trade and industry (dti) in 2012 with a request that we develop an accreditation programme for validation and verification bodies for greenhouse gases emissions of organisations and projects. The aim is to have a pool of accredited validation and verification bodies available in South Africa,” she says.
The overall aim of GHG validation or verification activities is to give confidence to industry, government and other stakeholders that rely upon a GHG assertion, Steyn says.
“The industry that makes the GHG assertion is responsible for conformity with requirements of the relevant standards or GHG programmes such as SANS/ISO 14 064, which helps organisations to quantify their greenhouse gas emissions and communicate on them, and SANS/ISO 14 064 and SANS/ISO 14 065, which provide an internationally agreed framework for measuring GHG emissions and verifying claims made about them so that “a tonne of carbon is always a tonne of carbon”.
The validation or verification body is responsible for completing an objective assessment and providing a validation or verification statement concerning the responsible party’s GHG assertion based on evidence.
Using a Sanas accredited validation and verification body improves the integrity, transparency and credibility of data used for organisational GHG assertion statements.
“In addition to the above programmes,” says Sanas project manager for research and development Tumelo Ledimo, “Sanas is busy developing an accreditation programme for energy performance certification bodies that will evaluate the energy efficiency of a building and provide a certificate to that effect for renters/buyers to use to see how much energy is used by a facility before they rent or buy it, in the same way people compare the fuel efficiency of various cars.”
The programme, says Ledimo, is being developed and piloted this year and is expected to launch in 2015.
The support provided to industry in its use of energy is incentivised by several dti programmes, in addition to the tax incentives in place. Dti chief director for industrial development, Dr Tshenge Demane, says: “We have a number of incentives through the dti’s flagship Industrial Policy Action Plan and are leveraging government’s infrastructure building programme to support the industrial sector.”
Under the Manufacturing Competitive Enhancement Programme, grant funding is available for industrial policy projects including greenfield or brownfield installations.
Section 12i of the Income Tax Act provides for an additional allowance on assets (new or used), applied to a project that qualifies as an Industrial Policy Project (IPP) defined in relation to assets used in the manufacturing sector. The project must be approved by the minister of trade and industry.
Projects larger than R200-million qualify for this allowance. The incentive in relation to a qualifying project comprises:
- 75% of the cost of a new and unused manufacturing asset used in an IPP within an Industrial Development Zone (IDZ); or
- 35% of the cost of a new and unused manufacturing asset that is used in an IPP
- If the qualifying project constitutes a preferred project, the incentive comprises:
- 100% of the cost of a new and unused manufacturing asset used in an IPP within an IDZ; or
- 55% of the cost of a new and unused manufacturing asset used in an IPP.
The incentive (tax deduction) is limited to:
- R900-million for greenfield projects with preferred status
- R550-million for greenfield projects with qualifying status
- R550-million for brownfield projects with preferred status
- R350-million for brownfield projects with qualifying status.
Measurement and verification of savings will be required to verify that savings are sustained over the incentive benefit period of four years.
This article has been paid for by Sanas. Content has been sourced and signed off by Sanas.