Implementing Energy Efficiency and Demand Side Management : South Africa’s Standard Offer Model
This report evaluates opportunities for South Africa to adopt a low carbon development pathway through a standard offer model. The standard offer aims to: provide customers and energy service companies a predetermined amount for delivered energy or demand savings, allow them to efficiently and rapidly structure and propose energy efficiency and demand side management projects, streamline the project approval process and scale-up project development and implementation, simplify the contracts between the utility and the energy service companies or customers, reduce the burden on the utility staff for project evaluation and processing, provide transparency to project proponents on the payments for delivered savings, facilitate the leveraging of commercial financing for energy efficiency projects, and reduce the utility's risk by making the payments. The report concludes that while South Africa has taken important steps towards implementing key elements of a national mitigation strategy; some practical problems, capacity limitations, and market and institutional barriers have affected the progress to date. The support outlined in this briefing note has helped to diagnose and address some of these limitations and barriers by adapting lessons from international experience to South Africa.