NATIONAL CLEANER PRODUCTION CENTRE

SOUTH AFRICA

Industrial Energy Efficiency Project (IEEP)

“Lessons learned from South Africa’s Industrial Energy Efficiency
Project”

SADC Industrial Energy Efficiency Conference

NAMPOWER Convention Centre – 16 May 2019

Adrian Rudolph
Presentation Points

o Context

o Policy and Finance

o Project Structure

o Catalysts and Outcomes

o Lessons Learnt

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NATIONAL CLEANER PRODUCTION CENTRE
SOUTH AFRICA

Context
“The profile of energy efficiency has risen, due
to increased concerns about local and global
environmental impacts of energy use.
Challenges to energy security have also
brought energy efficiency to the fore, as they
directly contribute to reducing energy use.”

Source: IEA

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 Global CO2 Emissions Reduction
Scenarios

Source: IEA Energy Efficiency 2018

 Electricity Tariff Elasticity
Eskom Sales MWh vs Price c/kWh

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Sales MWh Price c/kWh

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 NATIONAL CLEANER PRODUCTION CENTRE
SOUTH AFRICA

Policy and Finance

 Role of Policy and Finance
 The basis for any project is legal certainty

 Absence of a regulatory framework kills a project

even if capital is available

 Policy action is needed to ensure that economic,

security and other benefits are realised

 When evaluating project finance applications, the

impact on the community is a key determinant

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 Industrial Energy Efficiency needs….

Product
Costs

Policies &
- 57%
Institutions Resource
Savings
- 43%
Better management & Capital
Skills, low cost initiatives investment
Implementation
& Services

Investments

Average Best
efficiency performance

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9
 SA Regulatory Landscape
o Energy White Paper - 1998
o National Energy Efficiency Strategy (NEES): (2005-2015), (2016-2030)
o Renewable Energy White Paper – 2003
o Electricity Basic Services Support Tariff Policy - 2003
o Biofuels Industrial Strategy - 2007
o National Climate Change Response Strategy (NCCRS)
o National Energy Act No. 34 of 2008
o Integrated Resource Plan for Electricity 2010-2030 (IRP2)
o Integrated Energy Plan (IEP) (not yet promulgated)
o Income Tax Act Amendments (12i/k/l…) – Tax incentives for EE savings
o SANS 941 – Energy Efficiency of Electrical and Electronic Apparatus
o 2nd National Communication to UNFCCC
o Energy Efficient Leadership Network (EELN)

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Absender | Titel | TT.MM.JJJJ | Seite 10
 NATIONAL CLEANER PRODUCTION CENTRE
SOUTH AFRICA

Project Structure
 IEE - A Global Programme
Operational in 18 countries
Planned activities in 10+ countries

Operational
South Africa Philippines
Moldova Egypt
Russia Indonesia Planned
Turkey Iran activities
Ecuador Ukraine Other donors
Malaysia Colombia
 Swiss State Secretariat for Economic Affairs
Thailand Macedonia
Vietnam  UK Department for International Development
Myanmar
India  Government of South Africa

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 SA Energy Efficiency Milestones
Widespread Power Outages in RSA

DME publish
first NEES Original Phase of SA
IEE Project Launched
Original SA IEEP GEF SA IEEP PII NEES 2015-2030
Project Ends Launched Published

2005 2008 2010 2011 2014 2015 2016 2017 2018

ISO 50001:2011 ISO 50006 ISO 50047 ISO 50001:2018

Published ISO 50015 ISO 17741 Published
Published Published

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 Project Objective and Framework
Mainstreaming Energy Management Systems, Energy Systems
Optimization and ISO 50001, to realize increased investment in industrial
energy efficiency.

Component 1 Component 2
Support and Guidance in Promotion of Energy
Policy Development Management Standards

Component 3 Component 4
Capacity Building Demonstration Plants and
Awareness Raising

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14
 Capacity Building Focus

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 Energy Management Rationale
The evidence: Most energy efficiency in industry is achieved
through changes in how energy is managed rather than
through installation of new technologies

The problem: Energy efficiency is not integrated into daily

management practices

The solution: A systematic approach is required

and top management must be engaged in the
management of energy

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 Why a System Approach Matters
• Industrial operations are more variable than commercial or
residential
• Production schedules change
• Utilities need to follow production yet remain optimized
• Potential savings are much greater
• Implementation costs are often lower through fast payback
often measured in months

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 NATIONAL CLEANER PRODUCTION CENTRE
SOUTH AFRICA

Catalysts and Outcomes

 Success Factors for EnMS Deployment
 Level and quality of policy support,
including regulation, for promotion
& implementation of EnMS
Policies &
Institutions
 Availability of competent EnMS
EnMS Skills,
Implement. &
workforce on the “Supply” and the
Services “Demand” sides

Conformity
Assessment
 Credible demonstration to
organizations and the market of
EnMS tangible benefits

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 Resources and Tools

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20
 The Human Factor

DESIRED EFFECT
“Behaviour change can offer
unique and hard to replicate
BEHAVIOURAL CHANGE competitive advantages and
is necessary in a world of
COMMUNICATION ubiquitous technology which
can no longer be relied on to
maintain a cutting edge.”
www.iee-sa.co.za TRUST Industrial Energy Project
Manager
 Project Savings
Actual Savings 2011- 2018
60

50

40

30

20

10

Energy Saved Emissions Mitigated Financial Savings

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22
4.5 terawatt hours 4.1 Million tCO2e 3.4 Billion Rands
 NATIONAL CLEANER PRODUCTION CENTRE
SOUTH AFRICA

Lessons Learnt
Key EnMS Lessons…

• Savings can be achieved through

purely behavioural and operational controls
• It is a critical factor to have an EnMS in place to
support systematic implementation
• Integrate ISO/SANS 50001 requirements into the existing
certificated ISO 9001 Management System
• Benefits also include having an electricity management
system in place, and the development of a sound regression
baseline using both tons converted and cooling degree days
as the drivers.

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 What can be Improved
• Effective top management commitment and support not visible
• Failure rates especially during management/ownership changes
• Lack of perceived value to small companies
• Level of numeracy of non-engineers and energy metrics difficulties
encountered
• Disconnect between financial and energy EnPIs, targets and
savings
• Sustaining EnMS beyond the implementation year
• Awareness of EnMS and its significance is increasing, yet most
organisations are struggling to implement it effectively
• There remains considerable scope to develop more sophisticated
EnM strategies that mine cost effective savings more fully

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25
 Socio-economic Impacts

Solomon Coatings: Sockit Manufacturing: Willard Batteries: ArcelorMittal Saldanha:

The company implemented
the IEE Project SME energy
assessment findings which
turned the company back
to profitability. The
company saved around
R 6,500 per month over a
period 10 months in
electricity costs with a
resultant increase in
production output of 40%.
The IEE Project identified
four energy system
optimisation opportunities
and a fuel switch, all of
which the Company
implemented. The
Company installed a
paraffin boiler which
allowed it to increased its
machine pool by 30% .
By implementing an EnMs,
supported by the IEE
Project, the Plant has saved
over R 3 million between
2012 and 2013. As a result
of the energy savings the
Plant has been expanded
with 20% in production
capacity.
The IEE Project has
directly assisted Mittal
Saldanha to improve its
energy efficiency and
reduce production costs.
It has facilitated the
company saving
approximately R 89 million
in 2011 in energy costs,
helping them to remain in
business.

SA IEE Project Outcomes SA IEE Project Outcomes SA IEE Project Outcomes SA IEE Project Outcomes

1 0 416 1 237 Direct Jobs retained

4 20 66 0 Direct Jobs created
5 20 482 1 237 Total Direct Jobs
*Outcomes largely attributed to the IEE Project’s interventions, but acknowledging that other variables
would have influenced the outcomes to varying degrees across the study sites.

Total Direct Jobs retained = 1 654

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Total Direct Jobs created = 90
Overall Direct Jobs = 1 744
 New Approach
• Innovative and expanded service offering (technical
support, productivity enhancements, water efficiency,
waste management, financial matchmaking, plant
and process design advisory service,…)
• Address industrial and commercial needs with new
energy systems capacitation (power quality, industrial
scale refrigeration and chiller systems, biogas, process
heating,…)
• Exploit the potential for digitalisation in process and
energy system optimisation (digital twins, smart sensors,
meta data, ubiquitous connectivity, …)
• Pro-active support and input in effective EE policy
formulation

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 Case Study ~ Automotive OEM

Johnson Matthey South Africa

 Automotive Sector
COREX
 Started implementation of EnMS in 2012
• Target ISO 50001 certification Steel shop

RHF
 Completed implementation inDR-Plant
9 months
Johnson Matthey 2012-2013 Mills
 4 large projects implemented
Annual Electricity Savings 9.4 GWh • Compressors optimisation;
Annual Monetary Savings R 8.7 M optimising chillers; production
related projects
- Cost savings from projects R 5.5 M
- Cost savings from behavior R 3.2 M
changes & operational efficiencies
Success Factors
 Full support and resources from top
Total Investment R 620 000 management
Payback Period (years) 0.8  Strong Energy Manager leadership
ISO 50001 Certified 2014  Weekly meetings of Energy Team
 Adjusting existing structures to energy
2014 - 2016 Savings
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16.3 GWh specifics (policies, procedures &
reporting)
 @NCPC_SA

THANK YOU

EMAIL
ARudolph@csir.co.za

WEBSITE
www.ncpc.co.za
www.ieeproject.co.za