Demand-side management initiatives to be introduced by Eskom

Posted On Monday, 02 June 2003 02:00 Published by eProp Commercial Property News
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Demand-side management initiatives to be introduced by Eskom shortly could lead to significant reductions in property operating costs, says Richard Murphy, head of the facilities management division of Old Mutual Properties.

Property-Housing-ResidentialHe says the extent of any savings will depend on landlords' willingness and ability to engage in the initiatives. "Eskom has indicated it wishes to save 180 megawatts on the national grid over the daily domestic peak consumption period of 6pm to 9pm and 6am to 8am. Eskom will substantially fund approved projects that contribute to overall saving. "A study we have conducted on behalf of Old Mutual is that 3,5MW can be saved at its Mutual Park head office in Pinelands through a modern, state-of-the-art emergency generating system powering the site without taking a supply from the mains at the Eskom peaks. This system, with its ability to load-shed when required, will be submitted to Eskom for consideration to part fund should it fit their evaluation criteria.

"The emergency system is needed to power the site and its infrastructure under emergency conditions. If approved as a project, the property owner could enjoy a 65% subsidy on the capital cost of the system." Additional savings in property operating costs could flow from the forthcoming introduction of regional electrical distributors, says Murphy. End users will have an option to purchase their electricity from the regional distributors at discount rates. Murphy says tenants are benefiting from reductions in operating costs achieved through a combination of initiatives in facilities management.

"The main initiatives centre on benchmarking of costs, simplifying procurement channels. This could be done, for instance, through the introduction of national purchasing of consumables - from light bulbs and cleaning materials to major components of centralised air-conditioning and electrical systems, as well as close monitoring of service levels agreements which specify penalties for any non-conformance. "In the case of Old Mutual Properties, R10-million will be saved over 10 years on lift and escalator contracts through benchmarking of costs and the development of what is now a standard lift/escalator agreement for the entire industry. By reducing procurement channels from 25 entities to three, a further R6,23-million has been saved in the last two years in soft services such as cleaning, landscaping and security.

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