NCPC-SA: South Africa RECP: A VEHICLE FOR INDUSTRIAL EFFICIENCY

AND COMPETITIVENESS

NCPC-SA PRESENTATION TO:

Parliamentary Committee on Trade &

Industry

19 MARCH 2013

Presentation

Content

• National Context

• The DTI Green Industry Unit

• Salient Features of the Manufacturing Industry

• NCPC-SA Mandate & Core Focus Areas

• Resource Efficiency Programme & Outcomes

• Industrial Energy Efficiency Programme &

Outcomes

• Questions & Answers

1. The IPAP sets out government’s industrial policy

and implementation plans to create critical platforms

that are used as a basis for scaling up key strategic

sectors.

2. Issues of climate change have increasingly moved

‘Green Industries” to the centre of the global stage

in a wide range of multilateral and bilateral fora,

agreements, policy perspectives and programmes

and government is committed to introduce

economic instruments that would support Green

Initiatives.

NATIONAL CONTEXT

The Green Industries Chief Directorate’s main objective is

to promote the industrial development of a new South

African Green Industry Sector, and improve the resource

efficiency (RECP) of existing industries in South Africa

with a strong emphasis on building its productive capacity

in partnership with stakeholders and aligned with the New

Growth Path’s target of 300 000 additional direct jobs by

2020 to green the economy, with 80 000 in manufacturing

and the rest in construction, operations and maintenance

of new environmentally friendly infrastructure

The dti Green Industry

Unit Main Objective

Enablers for Green Economy

• Regulatory framework

• Market-based instruments

• Innovation, science and technology

• Greater localisation and manufacturing

• Investment, finance opportunities and financing

instruments including leveraging of funds

• Availability of skills

• Institutional capabilities and capacity

• Partnerships

The DTI’s Green

industries

Current Focus Areas

• Renewable Energy and Nuclear Energy

• Energy and Resource Efficiency and Cleaner Production

• Waste Management and Recycling

• Water and Waste Water Industries

• Industrial Climate Change Response Measures?

Cleaner production

and climate change

focus…

• NCPC

– Enhancing Competitiveness

– Undertaking an Impact assessment and Strategic Review to achieve a wider reach at lower cost and mitigate against Climate Change

• GHG mitigation analysis for industry

– A comprehensive approach to ensure we realise opportunities, improve competitiveness of existing industries, guide required structural change in a responsible manner and ensure that our energy intensive sectors do not collapse

RECP-MANUFACTURING

Declining Share of

Manufacturing Sector

Contribution to national GDP

0

10

20

30

40

50

60

70

1946

1948

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

% S

ha

re

Source: SARB

Tertiary sector

Secondary sector

(incl. Manufacturing)

Primary sector

(Agriculture & Mining)

• SA economy increasingly

dominated by services-related

sectors - in line with

international trends.

• Share of the manufacturing

sector - the 2nd largest sector

of the economy - decreased

sharply since the early 1990s in

light of globalisation, trade

liberalisation and an

increasingly challenging global

trading environment.

MANUFACTURING SECTOR

IN SOUTH AFRICA…

1. South Africa has a highly established, diversified manufacturing

base able to compete in the global economy;

2. Manufacturing sector provides a locus for stimulating other sectors-

services, and drives employment creation and economic

empowerment

3. In 2008, manufacturing contributed 16.2% of Annual GDP –second

largest contributor to SA economy. In 2011, manufacturing reduced

its contribution to GDP to 14.6%. (SA-the Good News via Buanews,

2012);

4. Dominant manufacturing sectors identified are agroprocessing,

automotive, chemicals, ICT, electronics, metals, textiles, clothing

Manufacturing

5. Value Add in a perpetual decline for the last 9 years

6. Negative Balance of Trade escalating

NCPC-SA MANDATE…

The dti’s industrial sustainability programme for

RECP to enhance manufacturing industry

competitiveness through the mechanism of:

• renewable energy, water, materials and energy

efficiency

• waste management

that potentially contribute to industrial

development, localisation, economic growth and

job creation .

NCPC-SA PROGRAMMES…

ALIGNMENT: KEY FOCUS AREAS

TO STRATEGIC OBJECTIVES…

STRATEGIC OBJECTIVES KEY FOCUS AREAS

• Effectively communicating the

benefits and advantages of

RECP/EE

• Awareness raising workshops

• Build RECP/IEE Capacity and

Capability in South Africa

• Train local experts

• Build Institutional Capacity

• Enhance RECP/IEE knowledge

• Develop Sustainable

Intrapreneurs/Entrepreneurs

• Enhance the competitiveness of

priority sectors identified through

IPAP

• Offer technical assistance

• Facilitate implementation

• Assist with investment

opportunities and linkages to

MCEP and other relevant incentive

programmes

ALIGNMENT: KEY FOCUS AREAS

TO STRATEGIC OBJECTIVES…

STRATEGIC OBJECTIVES

KEY FOCUS AREAS

• Contribute to the shaping of

relevant economic policies around

CSP/RECP and the Green

Economy

• Provide Policy advice

• Assist with the development of

appropriate policy tools and

economic instruments

• Accelerate the uptake of

RECP/IEE practices and increase

the penetration of RECP/IEE

services and offerings;

• Through demonstration projects,

showcase sustainable RECP

successes and outcomes

WHAT IS RESOURCE

EFFICIENCY(RECP)?

• Resource Efficiency can be defined as the efficiency with which

we use energy, water and materials throughout the economy

which is the value added per unit of resource input…

• In an economic sense and for the purposes of of the NCPC-SA

mandate, Resource Efficiency refers only to intermediate goods,

energy, water and materials which aim at improving input-output

relations of these resources in the production process, while

also mitigating environmental impacts caused by the process.

THE TRIPLE BOTTOM LINE…

RECP addresses the three sustainability dimensions individually and

synergistically:

– ECONOMIC: Production Efficiency: optimization of the productive use of

natural resources (materials, energy and water);

– ENVIRONMENTAL: Environmental management: minimization of

impacts on environment and nature through reduction of wastes and

emissions; and

– SOCIAL: Human Development: minimization of risks to people and

communities and support for their development.

Priority Sectors Aligned to

IPAP…

2002 TO 2006

1. Clothing and Textiles

2. Agro-processing

3. Chemicals

Sectors added in 2006

2006 TO 2013

4. Automotives

5. Pulp and Paper

6. Metals and engineering

7. Tourism and Hospitality

8. Built-Environment

9. Mining (IEE only)

Our approach to RECP assessments is

guided by the following key themes

THEMATIC FOCUS…

• Water

• Energy

• Materials

• Waste

WHAT TO LOOK FOR…

Identify all uses of water by

creating a water flow chart

Identify all energy types and

costs

Identify all materials including

hazards and create a material

flow chart

Identify all waste streams by

creating a waste stream flow

chart

OVERCOMING BARRIERS…?

Why RECP: What’s in it for the

Manufacturing Business??

Cost savings through reduced wastage of energy, water and

materials

Improved operating efficiency of the plant

Better product quality and consistency

Recovery of some wasted materials (Reuse)

Possibility to improve the working environment (health and safety)

Improvement of the enterprise’s image

Better compliance with environmental regulations

Cost savings on end-of-pipe waste treatment

New and improved market opportunities

WHAT ARE THE DESIRED

IMPACT AREAS?

• Competitive manufacturing industries

• Company Bottom line returns

• Resource Efficient and productive companies

contributing to low carbon economy

• Business Growth & Sustainability

• Market Access

• Job retention or job creation

How do We Know Real

Benefits Exist through RECP?

0

10 000 000

20 000 000

30 000 000

40 000 000

50 000 000

60 000 000

70 000 000

2003 - 2009 2009 - 2010 2010 - 2011 2011 - 2012

Iden

tifi

ed S

avin

gs (

Ran

ds)

IDENTIFIED SAVINGS SUMMARY 2003 - 2012

Waste management

Material

Water

Energy

Assessments Completed = 107Sites Assesed = 107

Assessments Completed = 68Sites Assesed = 49

Assessments Completed = 98Sites Assesed = 61

Assessments Completed = 150Sites Assesed = 86Total sites Assessed: 303

Total Assessments: 423Total Savings: R 179 378 400

SUCCESSFUL RECP CASE

STUDY OUTCOMES… Example: 4 Small – Medium Chemical companies 5 Medium – Large Textiles, leather & footwear companies

Option DescriptionSaving

(Rand)

Investment

(Rand)

Simple

Payback (Yrs)

Environmental Benefit

(per year)

CO2e

(kg/yr)

Boiler Improvement

i. Steam leaks

ii. Pressure control

iii. Insulation

iv. Boiler feed air control

v. Condensate return

vi. Steam trap maintenance

324 200 126 500 1.0

46 900 kg Low Sulphur

Oil

3 kL/yr heavy fuel oil

750kL Water

158 700

Compressor Control

i. Air leak maintenance

ii. Vairable speed control

iii. Pressure control

iv. Flow control (Accumulator)

177 232 329 975 1.9 267 641kWh 156 982

Energy Management

i. Washbath covers (insulation)

ii. Washbath Insulation

37 295 n/a n/a31 116kWh

303kg LPG32 500

Lighting Retrofitting

i. Replacement of bulbs

ii. Retrofit of Electronic Control Gear

iii. Natural lighting

iv. Task lighting

479 937 753 511 1.6423 695 kWh

1.8kVA154 552

Option DescriptionSaving

(Rand)

Investment

(Rand)

Simple

Payback (Yrs)

Environmental Benefit

(per year)

CO2e

(kg/yr)

Logistics Management

i. Installation of speed governing systems in

vehicles

ii. Eco driving training

46 274 1 000 0.1 4 345L Fuel 11 421

Material Optimisation

i. Overspray reduction (LP/Hi Vol)

ii. Spray booth humidity control

iii. Operator training spraying technique

152 076 202 000 1.32 194L Paint

788L Thinnersn/a

Stenter Control

i. Reduceexhaust air in stenters

ii. Stenter burner cycling (1 x operational, 1 x

standby)

880 000 50 000 0.18250L HFO

30% red HFO

23000

n/a

Raw Materials Waste Management

i. Installation of Bobbin Nose Cone Yarn Guides 10 000 10 000 1.0

500 yarn bobbins

(approx 0.2% of yarn

usage)

n/a

Waste Management

i. Drum Reconditioner pre-delivery inspection

ii. Operator awareness training

22 200 n/a n/a

5% reduction in

hazardous waste

generated

n/a

Solid Waste Management

i. Waste sorting and recovery of useable

material

ii. Negotiation of waste removal price (incl.

recycleable material tariff)

36 000 1 000 <0.1 n/a

Water Management

i. Water efficient showerheads

ii. Tap leakages (i.e. push tap vs twist tap)

iii. Cooling water recovery (closed loop)

21 752 12 000 0.6375kL water

2 555kWh2 940

2 186 966 1 485 986 <1 yr 540 095

SUCCESSFUL RECP CASE STUDY

OUTCOMES…

INTERNSHIP PROGRAMME THAT

PROMOTES GREEN

PRODUCTIVITY...

Purpose of Sustainable Internship Programme:

Integrating talented graduates into the mainstream

economy that combine academic training with “real

world experience” and application through skills and

technology transfer with a specific focus on green

productivity

INTERNSHIP PROGRAMME

OUTCOMES & BENEFITS

Gaining Industry Experience

Employability through green skills opportunity

Resource Efficiency Implementation

Bottom line Savings through green

productivity improvement

Intern

Industrial Energy Efficiency Project Industrial Energy Efficiency

Improvement Project

Industrial Energy Efficiency Project

Project Achievements to date

Mar 2010- Mar 2013

March 2013

Gerswynn Mckuur

29

Industrial Energy Efficiency Project

Why this Project?

30

Project Scope and

Objective

Scope o 4 Year Project: April 2010 – End March 2014

o Target Sectors: Automotive, Agro-Processing, Chemicals and Liquid Fuels, Metals & Engineering and Mining.

Objective To increase energy efficiency in the target industrial sectors,

thereby alleviating the country’s acute power shortage while at the same time improving productivity, competitiveness and reducing CO2 emissions.

Industrial Energy Efficiency Project

Components of the Project

32

Industrial Energy

Efficiency

Effective Policy

Framework

Energy Management

Standards

Capacity Building

Demonstration and

Communication

Industrial Energy Efficiency Project Component 1- Policy Framework

Support an effective national policy framework for implementing and

monitoring industrial energy efficiency in South Africa

Achievement: National Energy Efficiency Strategy (NEES)

reviewed and gazetted.

• NEES Gazetted in November 2012

• Stakeholder Workshop to collect public comments on NEES held

on 24th Jan 2013

• 31 Jan 2013: Closing date for Public Comments on 2nd Review of

NEES

33

Effective Policy

Framework

Energy Management Standard

Industrial Energy Efficiency Project

Component 2- Standards Introduction and Promotion

Supportive standards and capacity in place (compatible with ISO energy management standard)

Achievements:

• SANS/ISO50001 adopted as national Energy Management Standard

• Qualification requirement developed to become SANS/ISO 50001 Lead Auditors

• SANS/ISO 50001 Lead Auditor Training Curriculum developed

• 9 SA delegates registered with SAATCA as SANS/ISO 50001 Lead Auditors

35

Energy Management

Standards

Capacity Building & Training

Industrial Energy Efficiency Project

Component 3 – EnMS and ESO Capacity Building

Programme

A cadre of qualified industrial energy management systems

(EnMS) and system optimisation(ESO) experts available as

technical resource to industry and the country.

Capacity Building

Capacitating

Outcomes

SANS/ISO 50001 published

July 2011.

Lead Auditor Workshop:

October 2012.

SANS 50010: Measurement

and Verification of Energy

Training Outcomes

86 National workshops

1 877 Delegates

31 Qualified Experts

19 National Trainers

Nine ISO 50001 Lead Auditors

Growth of skilled energy consultant base

Legacy of energy systems optimisation capacity in participating companies

Growing industrial sector and company awareness, engagement and dialogue

around energy challenges and solutions.

Industrial Energy Efficiency Project

Component 3 – EnMS and ESO

Capacity Building Programme

As a result of the participation in the Training Programme offered by the project, the 1st group of 7 South African based large industrial companies started EnMS and ESO implementation.

• Toyota (Prospecton)

• Gelvenor Textiles (Durban)

• PPC Lime Acres and De Hoek

• St Gobain (Gyproc, Cape Town)

• Arcelor Mittal (Saldanha Bay)

• SAB Miller (Krugersdorp)

39

Demonstration Plants

Industrial Energy Efficiency Project

Component 4- Auditing, Demonstration and Communication

Piloting/Demonstration Programme

EnMS Implementation Results over 2 years (2011-2012)

Company

Name

Savings

(kWh)

Savings

(ZAR)

tCO2

Emissions

Reduction

Capital

Investment

(ZAR)

Comments

ArcelorMittal 174 002 409 170 300 000 166 519 tbc Mostly No/low cost investment

projects.

Toyota-SA 13 845 056 9 630 962 11 904 4 913 612 Represents 73 energy saving

projects

Gelvenor Textile 1 993 340 1 096 336 1 908 0 Only 3 no cost projects declared.

Saint-Gobain 1 835 832 1 009 706 1 757 0 No cost behaviour changes

excluding on-going water gauge

project.

Total 191 676 637 182 037 004

182 088 5 413 612

Demonstration and

Communication

Industrial Energy Efficiency Project

Component 4- Auditing, Demonstration and

Communication Piloting/Demonstration Programme

23 Medium-Large companies participating in current EnMS implementation

programme

42

Province Company Annualized kWh Saving Payback (Yrs) Period

Eastern Cape XXXXX Foods 2 628 708 1.5 2012/2013

Eastern Cape Automotive Supplier 301 564 0.9 - 2.9 2012/2013

Eastern Cape Automotive Supplier 912 970 0 - 1.2 2012/2013

Eastern Cape XXXXXX Batteries 2 817 649 2.0 - 3.9 2013

Gauteng Automotive Manufacturer 500 000 3.7 2012/2013

Gauteng Automotive Supplier 438 409 0 - 0.2 2012/2013

Gauteng XXXXX Glass Company 1 936 287 0 2013

Western Cape Wine/Distillery Company 70 000 0 2013

Western Cape XXXXX Plastics /Packaging 666 667 1 2013

Western Cape Paper and Pulp 1 456 998 0 2013

Total Energy Saving

Achieved 12 408 252 kWh

SME Energy

Savings Identified

Automotive 35%

Clothing & Textile 6% Agro-processing

18%

Metal Allieds & Engineering

14%

Chemicals, Plastics & Pharmaceuticals

14%

Manufacturing 10%

Printing 1%

Mining 1%

Other

DESIRED OUTCOMES AND IMPACT

OF RECP & IEE PROGRAMMES…

DESIRED OUTCOMES…

Outcomes

Outcomes

Outcomes

• Adopt RECP/IEE

• Understand benefits of RECP/IEE

• Stimulate Green Skills Need

• Competence in RECP

• Adopt a systems approach

• Cost Savings

• Reduce Carbon Emissions

• Resource Optimisation

• Clean Technology Uptake

Aw

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Ra

isin

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Cap

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g

IPA

IMPACT (LONG TERM OUTCOMES)…

Impact

Impact

Impact

• Increase National Efforts in RECP

• Collaborative Initiatives

• Expansion of NCPC-SA Offering

• RECP Clusters

• Recognition of Green Occupations

• Strengthen Expert Database

• Behaviour Changes towards sustainable development

• Creation of Green Jobs

• Enhance Value Addition

• Business Sustainability

• Industrial Competitiveness

• Promote industrial competitiveness & diversification

• Job retention

Aw

are

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ss

Ra

isin

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Cap

acit

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IPA

Energy Management Business Case

48 48

Technical Savings Potential (%)

Sector and Product OECD Countries Developing Countries

Petroleum refineries 10-15 70

Chemical and petrochemical

Steam cracking (excluding feedstock) 20-25 25-30

Ammonia 11 25

Iron and Steel 10 30

Cement 20 25

Pulp and Paper 25 20

Textiles 10 20

Food and beverage 25 40

Other sectors 10-15 25-30

Source: UNIDO 2008 and 2011

Energy Savings

Potential

Relative % of

Turnover

Textile Energy Use

Spinning 34%

Weaving 23%

Wet Processing 38%

Other 5%

Typical Energy Balance in Textiles

Energy Saving

Opportunities

• Motor system optimisation

• Steam system optimisation

• Compressed air system optimisation

• Lighting retrofit

• Removal of water from textile through vacuum impregnation and

vacuum roll extraction

• Efficient drying and settling technologies eg. RF, sieve drum driers

and thermo pack, etc…

• Reduce dye liqour ratios

• Desizing, Scouring and Bleaching process modifications

• Supercritical dyeing techniques

• Ultrasonic assisted wet processing

• Foam technology

• Etc….

Conclusions

• The days of cheap energy are over!

• The textile industry is a significant but low energy efficient sector.

• Energy systems optimisation offers no/low cost energy saving

opportunities beyond which the implementation of best available

technologies can serve to further drive down energy demand.

• Energy consumption patterns vary for different types of units and

different types of products so an important step towards energy

savings is to establish machine-wise and unit-wise energy

consumption indicators (EnPI’s) to enable the evaluation of potential

energy consumption to inform buying decisions.

• Industry data collection remains a challenging task and

benchmarking EnPI’s will serve to attain confluence in product cost

and pricing structures.

National Cleaner Production Centre of South Africa

Pretoria: +27 12 841 3772 * Cape Town: +27 21 658 2776 * Durban: +27 31 242 2365

Email: ncpc@csir.co.za

Websites: www.ncpc.co.za www.iee-sa.co.za

Thank You

National Cleaner Production Centre of South Africa

Pretoria: +27 12 841 3772 * Cape Town: +27 21 658 2776 * Durban: +27 31 242 2365

Email: ncpc@csir.co.za

Websites: www.ncpc.co.za www.iee-sa.co.za

ANY QUESTIONS???