THE CASE FOR AN ESCo BIG BROTHER IN SOUTH AFRICA

Energy service companies are essential to the development of largescale, demand-side energy efficiency in this country. SANEDI believes that a Super ESCo is the key to unlocking this potential.

The South African economy is highly energy intensive due to its historic focus on extractives, abundant coal supplies and efforts to keep energy prices low. Consequently, there was little incentive for commercial, public, industrial or residential consumers to invest in energy efficiency (EE) interventions or to change their energy-use behaviour. This was compounded by a generally low awareness about the opportunities for EE and the limited availability of targeted financial products.

Despite the recent strengthening of EE drivers, such as positive policy changes and above-inflation energy price increases, EE has not reached the scale and scope needed to meaningfully reduce GHG emissions and decouple economic growth from energy use. Energy-demand reduction is also not being used effectively to address the current electricity supply crisis.

Strengthening the existing energy service company (ESCo) market in South Africa, coupled with improved EE financing, can help unlock large-scale demand-side EE.