Posted on: May 13, 2009 Posted by: Diane Swarts Comments: 0

South Africa. Authorities should consider a combination of financial incentives and punitive measures to inculcate a culture of energy efficiency, says a senior Agence Française de Développement (AFD) official.

With SA’s reserve margin (the percentage difference between available electricity capacity and forecasted peak demand) at relatively low levels, the government is punting energy efficiency as a measure to stabilise electricity supply. A healthy reserve margin ensures that abrupt changes in electricity demand do not endanger electricity supply.

Speaking ahead of a conference on energy efficiency, AFD regional director Christophe Richard said that financial incentives were one mechanism to change behaviour patterns. "The renewable energy feed-in tariffs that Nersa (the National Energy Regulator of SA) has announced is a step in the right direction. It shows government’s willingness to encourage renewable energy," Richard said.

Nersa’s offer for renewable energy feed-in tariff, released in March this year, has been widely acclaimed. Given the relatively high capital costs, prospective investors need attractive tariffs to ensure "reasonable" return to their investment.

"There are a whole range of other options but the last one should be to punish those who do not use energy efficiently. Higher electricity prices, although controversial at the moment, are also an option. It can lead to a change in behaviour," he said.

Richard said the global economic crisis should be seen as an opportunity to invest in energy efficiency technology. "If thought through in the right way, this crisis is an opportunity. If this requires long-term financing, financial institutions must play a role," he said.