Strategies for energy efficiency funding in the absence of industrial Eskom-IDM support

Abstract

In the absence of industrial Eskom-IDM (Industrial Demand Management) funding, industry is forced to look elsewhere for energy efficiency project funding. This paper outlines various taxes and government incentives for cleaner production and energy efficiency technologies in the South African mining and manufacturing context. The applicability, eligibility and financial benefit for each of the following incentives are investigated: National Cleaner Production Centre (NCPC); Clean Development Mechanism (CDM); Section 12I Industrial Policy Projects; Section 12L Tax Incentives; Manufacturing Competitive Enhancement Programme (MCEP); IDC Green Energy Efficiency Fund. The universal objective of these incentives is to stimulate the reduction of Greenhouse Gasses (GHG) by 34% by 2020 and 42% by 2025. This commitment was made by South Africa in the National Climate Change Response White Paper. However, in reality carbon tax, electricity cost inflation and a declining economy are the driving forces for industry to participate in these initiatives. These policies and programmes are promulgated by several different spheres of government and it is therefore important to understand the eligibility criteria when a combination of these programmes is utilised. This quick guide will create awareness and assist energy managers in the procurement of energy efficiency project funding