The EPC Nexus

Section 19(1)(b) of the National Energy Act of 1998 (act no. 34 of 2008) of South Africa requires all public and private buildings with a net floor area of more than 1000 square meters and 2000 square meters respectively to prominently display an Energy Performance Certificate (EPC) in their eligible buildings by 7 December 2022 for face penalties. However, as I stated in my last article, the EPC is not viewed by government as the end but a start of greening the building sector in South Africa in order to reduce energy demand and carbon emissions.

Government wants to improve energy efficiency in public sector buildings and facilities by 50% and private buildings by 37% (https://www.savingenergy.org.za/programmes/index.html). For this target to be realised, building owners and government need to think beyond the EPC and adopt an integrated approach that includes all necessary stakeholders. I have called this the "EPC Nexus". This is an integrated process that includes building owners, Energy Services Companies (EsCos), lenders, and Measurement and Verification (M&V) Inspection bodies.

This nexus should be composed of expert EsCos, M&V inspection bodies, and willing lenders. Most importantly, it should establish standard operating procedures for evaluating proposed energy efficiency projects and for providing financing and monitoring for projects through their lifecycles to ensure energy savings are achieved and sustained.

There are more than 300 EsCos (some expert and some aspiring) registered and evaluated in the South African National Energy Development Institute (SANEDI) EsCos register (https://sanediesco.org.za/tier-results). Along with the numerous EsCos, there are thousands of buildings in the country that need to improve their energy performance but the EsCos and building owners rarely seem to connect or know of each other. Furthermore, EsCos tend to lack the financing to implement energy efficiency projects. Banks and private lenders keen on improving sustainability have lending facilities but very few energy efficiency projects get approved. The reasons for this are many but one of the key reasons identified is the lack of assurance for energy savings. This is where M&V inspection bodies come into play, they can provide assurance of energy efficiency project viability, quantify the energy savings and provide assurance to lenders and project sponsors.

What we need is a centralised platform (a nexus) to bring all the stake holders together. This nexus should be composed of expert EsCos, M&V inspection bodies, and willing lenders. Most importantly, it should establish standard operating procedures for evaluating proposed energy efficiency projects and for providing financing and monitoring for projects through their lifecycles to ensure the energy savings are achieved and sustained. This will improve the adoption of energy efficiency and ultimately lead to a decrease in energy demand and reduce carbon emissions from the building sector.