In March 2020, Sphere Solutions, a major South African manufacturer of transcritical CO2 systems, and its partners met with the five commercial banks in South Africa to discuss cooling-as-a-service – a pay-as-you-go financing mechanism – as the means for implementing transcritical CO2 refrigeration systems in South Africa.

Sphere has been collaborating for almost a year on bringing the CaaS model to South Africa with GFA Climate & Infrastructure, a Cape Town, South Africa-based consulting firm, and the Basel Agency for Sustainable Energy (BASE), a Swiss non-profit spearheading the global Cooling as a Service Initiative

At the March meetings, Sphere, GFA Climate & Infrastructure and BASE presented the funding structure for CaaS and the first projects to be implemented by Sphere Solutions. One of the five banks will be selected as the funder to partner with GFA, Sphere Solutions and BASE, and then approach a South African retailer about converting stores to transcritical CO2 and accelerating recovery after the COVID-19 lockdown. 

Over the last decade, Sphere has been rolling out CO2 refrigeration “as a far more sustainable alternative to HFCs and their damaging effects on the environment,” said Marcel Steinberg, CEO of Sphere. “With CaaS, we hope to drive the adoption even faster as we remove some of the negative perceptions around upfront CAPEX costs, which seem to be impediments to implementation for smaller retailers.”

CaaS is designed to lower market barriers to adoption of energy-efficient cooling products. With its increasing demand for cooling and rising electricity costs, South Africa a considered a particularly good candidate for the implementation CaaS; the business case has been accentuated by the impact of the COVID-19-induced business lockdown.

“South Africa is in the envious position of being able to implement a first-of-its- kind financial instrument,” said Johnathan First, Managing Director of GFA Climate & Infrastructure. “It catalyses global thinking in a local context with definite climate mitigation outcomes.” He noted that CaaS has been endorsed by Global Climate Lab, a prominent global climate-finance innovation association. 

Implementation tools

To implement the CaaS model, Sphere has developed a number of business tools, including pricing packages, a CaaS contract aligned with local regulations, and modifications in Sphere’s daily operations to manage CaaS.

Under CaaS, maintenance teams are optimally situated to guarantee on-site presence within two hours of fault detection; the model does not require end-user staff for the monitoring or maintenance of any cooling equipment.

“In these days of turmoil, the urgency of smart and sustainable financial and technical solutions is even more undeniable,” says Thomas Motmans, Sustainable Energy Finance Specialist at BASE. “Companies such as Sphere and GFA are leading the path towards sustainability, green development and the circular economy. We encourage other organizations to follow the footsteps of these innovators.“

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