Proposed principles for the evaluation and funding of DSM projects

The regulatory policy on energy efficiency and demand side management (EEDSM) for South African Electricity Industry was published in the first quarter of 2004. In general, the policy has served its purpose well and given rise to the establishment of a DSM industry in South Africa. Several changes to the electricity industry landscape in South Africa have however prompted a revision of the policy. These changes include: a. Low generation plant reserve margin prompting a requirement for accelerated DSM implementation. Opportunities to streamline the DSM project evaluation, approval and implementation process need to be pursued. b. An energy shortage in addition to a capacity shortage. The current policy places strong emphasis on load shifting projects as opposed to energy efficiency projects. Proposed changes to the regulatory policy should result in more EEDSM solutions being implemented, but more importantly should see a healthier focus on energy efficiency initiatives which offer a greater benefit to the national economy and the environment.