An investigation into the drivers and barriers to energy efficiency within medium and large manufacturing firms operating within the eThekwini municipal area

Abstract

Preliminary investigations on energy efficiency of manufacturing firms operating in South Africa have shown that no previous study on the barriers and drivers to energy efficiency was conducted. It was also found that South Africa is the only member within the Brazilian, Russian, Indian, Chinese and South African (BRICS) community that has not conducted any formal study on the drivers and barriers to Energy efficiency despite the current energy challenges the country faces. Whilst the National Energy Efficiency Strategy (NEES) was developed and targets were set to improve the country’s efficiency landscape, this strategy failed to account for the barriers and drivers to energy efficiency operating within the local context. This research study sets out to investigate whether an energy efficiency gap exists within manufacturing firms operating in the eThekwini Municipal Area (EMA) and by inference, the national context. It goes on further to analyse the drivers and barriers to Energy Efficiency (EE) within such firms. Such drivers and barriers are then analysed by firm characteristics and across manufacturing sectors. The results are interesting and contribute well to the general body of knowledge on EE in South Africa. It was found that whilst there is a degree of adoption and awareness of EE technologies amongst manufacturing firms, the quality of the adoption profile is poor. This poor quality profile suggests the possibility of an energy efficiency gap. The barriers and drivers that were found to be significant were also found to be mostly similar across manufacturing sectors. A main finding is that firms are very sensitive to cost and are mainly driven to adopt EE technologies only where there exists an opportunity for cost savings. It was also found that taken together, institutional barriers pose the greatest hurdle to EE adoption. Several interesting results were found in terms of how the barriers and drivers vary with the characteristics of the firm. The findings of this research indicate that more can be achieved in terms of energy efficiency within the manufacturing subsectors in South Africa. Policy-makers should take into consideration the salient findings of this research when drafting new policy on energy efficiency.