Industrial Energy Efficiency Project - SA

Overview of Phase I Outcomes

Alfred Hartzenburg

21 July 2015

2

Planned activities

IEE – A Global Programme

Operational

South AfricaMoldovaRussiaTurkeyEcuadorMalaysiaThailandViet NamIndia

PhilippinesEgyptIndonesiaIranUkraineColombiaMacedoniaMyanmar

Operational in 17 countries Planned activities in 10 countries

Other donors Swiss State Secretariat for Economic Affairs UK Department for International Development Government of South Africa Government of Italy

Training Statistics

>210 Training workshops conducted

>3 000 Engineers, technicians and managers trained

119 National Experts 46 National Trainers29 ISO 50001 Lead

Auditors

Industry EngagementParticipating Large Companies 153

SME Energy Assessments Conducted 231

Companies Reporting Savings 41

Host Training Companies 22

Candidate Companies 90

Demonstration Plants 77

Case studies developed 32* Some of the 54 Actively Reporting Companies has signed to be Demo Plant for more than 1 Discipline

Industry Engagement

Demonstration Projects

77 20%

Case Studies Developed

32 8%

SME Energy Audit Trends

Implementation Savings Reported

Actual Savings

EnMS / ESO Implementation Savings Achieved

System kWh CO2 (tonnes) Rand Value EnMS 901 098 244 857 336 889 608 205

ESO 440 524 889 394 132 237 538 706

Total 1 341 623 133 1 251 468 1 127 146 911

(Payback Period less than 2 years)

Project Outputs AchievementsEnMP benchmarking assessment/study (national and international). Not Achieved

Formulation of 2nd review of NEES Completed June 2012

Industrial Sector Consultation workshop on EnMP. Not Achieved

Adequate numbers of institutions and personnnel accreditated for verification of compliance

29 ISO 50001 Lead Auditors Qualified

Advanced (40) and Expert (41) and Vendor (2) Level EnMS and ESO Training courses conducted (cumulative). Total trained perons - est 2,000 (cumulative). Establish 3 TRC's.

i. >210 Workshops ii. < 3000 Persons trained iii. 119 Experts qualified iv. 46 National trainers v. 1 (PTA) established and 1 (DBN) under development.

i. 205 energy audits completedii. 17 enterprises implement EnMSiii. 8 enterprises implement ESO

i. 231 energy audits completedii. 49 enterprises implemented EnMSiii. 58 enterprises implemented ESO

25 case studies documented and widely circulated i. 32 Case studies documented and ii. 29 Case studies in progress

Direct Energy Savings - 500 GWh 1 341 GWh savedDirect CO2e Savings - 478 500 tonnes 1 251 tonnes CO2e saved

Performance Summary

Implementation Drivers

ECM Implementation Drivers R² P-Value Significance FSize (%) annual electricity tariff Increase 0.9920 0.0040 0.0040

No of Companies implementing ECM's 0.9005 0.0511 0.0511

Electricity tariffs 0.8930 0.0550 0.0550

Cooling Degree Days 0.7473 0.1356 0.1356

Heating Degree Days 0.7345 0.1430 0.1430

IEE Project Team Size 0.6093 0.2194 0.2194

No of training workshops 0.5049 0.2895 0.2895

Implementation Reality

Management Commitment

Familiarity with

principles of EnM

Familiarity with ISO

Management Systems eg.

9000 & 14000

Other stakeholder interest and

support

Accelerants to Implementation

Required

ImplementationAid

Behavioural Economics

Sub-metering pays dividends when verifying the performance of energy conservation measures (esp for bottom-up sanity checks)

Develop a strong measurement plan to verify results and see that it gets implemented

Energy savings from operational improvements are not permanent. Savings when plants are down evaporate when plants get busy.

Reflections

Winning Culture and Environment• Demonstrable and visible top management

commitment

• An ISO / WCM environment promotes a culture conducive to sustainability

• After exhausting no cost improvements a willingness to spend in order to save

• Plant stability and reliability

• Allocation of resources

Sustainability Failure

• Energy cost proportionately low

• Limited resource allocation

• Low level of operator awareness and interest

• Top management unaware and / or disinterested in energy team achievements and challenges

• Competing and disruptive reporting priorities

• Savings not sustained

Sustainability Failure

”…energy efficiency initiatives that are not monitored and maintained typically have a six-month half-life of their benefits. That is, they lose half of their economic benefits every six months if left largely untouched.” Emerson’s James Beall, a principal process control consultant who helps manufacturers optimize their processes

The world’s leading sustainability consultancy

Results of SA IEE Project interventions

18

Solomon Coatings: 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%.

Sockit Manufacturing: 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% .

Willard Batteries: 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.

Mittal Saldanha: 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 n 2011 in energy costs, helping them to remain in business.SA IEE Project Outcomes

Direct Jobs retainedDirect Jobs created

Total Direct Jobs

1 23741

200

66416

0

5 20 482 1 237

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

*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.

Tot Direct Jobs retained = 1654Tot Direct Jobs created= 90Overall Direct Jobs = 1744

The world’s leading sustainability consultancy

Mapping Disposable Income*

19

Disposable EarningsR 0.25 mill

Disposable Earnings R 0.7 mill

48%

75%

Disposable Earnings

R 64.6 mill

Sockit ManufacturingWillard Batteries

1

2

R 5 mill

$

Disposable annual income earned by workers (IEE direct employment) living in the local community (excluding bonuses and overtime and after deductions and tax)

Arcelor Mittal Steel Saldanha Works

Solomon Coatings

1

2

R 42 000

R 90 000

Income retained p.a. in local community to generate further economic activity

Disposable Earnings

R 206.3 mill

$72%

Percentage earnings within local community

R 25 mill

*Calculations in this slide are based on IEE Direct Local Employment = jobs crated/retained as a direct consequence of the IEE Project interventions.

• Project Funders: dti, DoE, Seco, UKAid• Implementing Agent: UNIDO• Project Host: CSIR• Project Custodian: NCPC-SA • Skills Development: Wynand Van Der Merwe, Sybil

Rowles, Phyllis Manamela• Marketing & Comms: Julie Wells, Fatimah Boltman,

Constance Mokhoantle• IEEP Project Team: Faith Mkhacwa, Sashay

Ramdharee, Milisha Pillay, Ngoanathari Maja, Bianca Latchman, Ajay Trikam, Brent Goliath, Adrian Rudolph, Phumla Makae

Acknowledgements

• IEEP Phase II• National Energy Act 2008: Energy reporting• National Energy Strategy• Carbon Tax• ISO 50002, 50002, 50006, 15015• Reliable Power Supply• …

Key Milestones & Challenges

thank you

any questions?

Alf Hartzenburgahartzenburg@csir.co.za

www.iee-sa.co.za