All about ESCO,s

    Industry partners-essential to achieving DSM objectives
    International experience in the power generation sector has shown that energy efficiency goals cannot be achieved without the assistance of companies in the private sector. These companies operate by establishing a three-way partnership between themselves, the electricity supplier and the consumer.
    They make use of their knowledge of the technologies and programmes in the Demand Side Management process to determine the best way of obtaining results at consumer premises.

    How they work
    Typically, an independent energy services company (ESCo) will approach a potential client- for instance a commercial premises developer- and offer to carry out an energy audit at no cost. The objective is to determine whether energy savings can be made. If positive, the company uses its audit findings to draw up a proposal outlining the savings impact and related cost structure of the project. The electricity supplier then assesses the outcome and, if it is regarded as feasible, makes funds available to the ESCo for the project.
    What is required to become a registered ESCO?
    To become a registered supplier an ESCo must be registered with Eskom- the only approved “wholesaler” of electricity in South Africa. All companies applying for registration with Eskom have to undergo an intensive screening process. Each company is registered and classified as either Category A (Industrial), Category B (Commercial) or Category C (Residential) suppliers.
    The Eskom DSM evaluation process considers;
    • The experience of the ESCo
    • The approach they take towards managing projects
    • The technical, financial and legal approach of the potential supplier to projects
    • The procurement approach
    After undertaking this process Eskom is able to make an accurate assessment of the ability of the ESCo and the experience and qualifications of the Esco’s staff and their sub-contractors. Its suitability to operate in a sector is defined, as is its approach to projects and its financial stability.
    A growing, self- regulated industry
    As with any credible, growing industry in South Africa, ESCo’s have established two professional associations. The aim of both the South African Association of Esco’s (SAAEs) and the Black Energy Service Companies Association (BESCo) is to “promote and protect the South African Esco industry for the benefit of all stakeholders.
    Both organisations hold forums at which matters of industry importance are discussed. It uses a Code of Conduct to regulate the professional activities of members. It also insists that registration with Eskom DSM is a basic requirement of membership.
    The Association has been instrumental in promoting the services of its members through a “listing “process and communicates regularly with major players in the electricity regulation sector on behalf of its membership.
    The benefits of cooperation
    The cooperation between Eskom DSM and ESCo’s offer considerable benefits to South Africa. By promoting energy efficiency together they can:
    • Reduce power demand and consumption, thereby increasing financial benefits.
    • Help implement government and regulatory body plans for achieving energy reduction targets.
    • Promote energy efficiency measures that reduce greenhouse gas emissions, as well as reducing water consumption.
    Full details on DSM and ESCo’s as well as guidelines for registration can be found on

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