Companies must adopt energy efficiency strategy in light of proposed price hike, expert warns

Businesses and consumers were sent into a tailspin after a report detailing a drastic rise in electricity tariffs.

July 17, 2012

Businesses and consumers were sent into a tailspin after a report detailing a drastic rise in electricity tariffs by state-owned power utility Eskom was leaked to the press. The report, which has not yet been confirmed by Eskom, stated that the company planned an increase of at least 14,6% per year over each of the next five years – more than double the inflation target.

This could climb to 19% if the government introduces their carbon tax as planned.

Tim James, MD of sustainableIT, has urged companies to be proactive in reducing their electricity costs. “To contain Eskom’s price hikes there is no doubt that companies need to be investing in and adopting energy efficiency as a business priority,” he says. “This achieves two significant objectives, namely to contain operating costs and to assist Eskom with alleviating the strain we have on the national grid.  We are where we are, and like it or not, all of us need to be contributing to a collective goal of energy reduction.  Due to higher electricity prices, the paybacks on such investments have diminished significantly.”

James says that although lighting and air conditioning are primary sources of electricity wastage, companies should not overlook the impact their IT infrastructure (e.g. servers and PCs) has on power consumption. “If businesses start by implementing best practices in their IT environments, they can already make a huge dent in their utility bills,” he explains. “By properly power managing a desktop for example, the savings amount to as much as 1kWh per day which at today’s average corporate rates is over R1 per day in savings.  Over thousands of workstations these numbers add up to significant cost reductions.”

Analysis done at one of the top 4 banks in the country discovered that over 90% of their PCs were being left on overnight, largely for IT administration purposes. “A simple, tech solution can enable wake-on-lan technology that reduces PC energy (without interfering with their nocturnal security patching) and shut machines down when they aren’t required,” James explains. In this example the monetary savings were in the many millions.

James urges companies to start actively investing in such technologies in response to the price hike. “With the latest round of price hikes, and the historic trend over the past few years, and what is still to come, there is no doubt that customers need to be taking a serious look at investing in energy efficient technologies.  Eskom rebates are available to assist companies through this process and those that don’t invest, do so at their peril,” he warns.