A structured approach to select energy efficiency incentives applicable to industry

Abstract

In recent years, energy efficiency has grown significantly in importance. Energy efficiency improvements are among the most cost effective ways to reduce energy consumption and CO2 emissions. Measures such as policies, incentives and disincentives have been put in place to encourage energy efficiency. South Africa’s industrial sector is full of untapped potential for energy efficiency improvement through many available incentive programmes. Selecting an appropriate incentive for a project can have a large impact on the profitability and sustainability of a business. Energy efficiency incentives offer great rewards in terms of financial or technical support. However, these incentives are often complex, governed by intricate rules and regulations. Extensive research is required to make an informed decision on which incentive to select. The research process is a timely and costly exercise because the information available is complex and wide-ranging. Therefore, a structured approach to select an appropriate energy efficiency incentive is required. Developing an incentive selection process requires an analysis of previously implemented approaches. This study investigates various approaches, and key contributions from each study are incorporated in the selection procedure. Four main steps formulate a new structured approach. The approach focuses on refining information, selecting important facts, creating a flow diagram and lastly verifying the approach. The main outcome of the structured approach is an easily adaptable selection process, which is used to choose an incentive. The structured approach is applied to energy efficiency incentives in South Africa specifically focusing on industrial applications. The resulting selection process is verified by using the literature reviewed and validated by using multiple case studies. The information used for each case study is obtained from previously implemented projects that made use of specific incentives. In each case study, the selected incentive is the same as the incentive implemented. The structured approach is designed to be easily adapted as the incentives are updated. The approach can also be applied to incentives in different countries and for different sectors. The resulting flow diagram provides fast answers to complex questions, reducing the amount of time and money spent on investigating viable incentives. Therefore, the problem statement was addressed adequately.