Recommended Strategy for an Integrated National

Approach to EEPresentation to the Parliamentary

Portfolio Committee on Energy

6 September 2012

Energy EfficiencyHow are we Doing?

2

Score Card

SCORE

Fact Base - Lacking

Objectives - Arbitrary

Strategy – None

Implementation – Ad -

Hoc

Contents1. Status:

A. Fact Base

B. Objectives

C. Strategy

D. Implementation

2. Solution

3

Growth: Economic & Jobs Requires more energy

Source: ExxonMobil Outlook to 2040

Improved Standard of Living - Requires more energy

Source: ExxonMobil Outlook to 2040

Changing Energy Mix

RSA - Usage per sector Energy & Demand

Mining 18%

Industry 49%

Commerce

10%

Trans-port 2%

Agricul-ture 4% Residen-

tial 17%

Energy Consumption

Mining 14%

Industry 35%

Commerce 10%Transport 2%

Agriculture 4%

Residential 35%

Demand

Sources: Frost & Sullivan & Eskom

Myth Busting - “Industry is inefficient due to low electricity prices”.Industry have for a long time been working hard to reduce their energy intensity & will continue to do so

0.06

0.07

0.08

0.09

0.1

0.11

0.12

0.13

0.14

0.15

0.16

0.17

40 000

90 000

140 000

190 000

240 000

290 000

340 000

390 000

440 000

490 000

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

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1987

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1989

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1991

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1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Inte

nsit

y M

Wh/

GD

P R

mill

ions

MW

h

RSA MWh net sentout

Electricity Intensity (MWh/Rm GDP)

Cost viz Potential: Setting Priorities

Need a Framework for Analysing Opportunity Specific Barriers

An example of “Addressing the barriers” in High Income Housing

Must Determine Potential: Probable, Doable & Most LikelyWithout serious economic Impact

BACK UP

Residential and commercial: Potential savings levers and initiativesWithout serious economic Impact

Bottom Up Fact Base Required Detail required for residential sector

(Source: DSM Sector Analysis, 2007. Residential demand: 13,908MW, Residential consumption: 46,402 GWh)

30

28

kitchen appliances (cooking, laundry and cool storage)

water heating

18

lighting

5

otherlosses

15

4

household consumption(% contribution per end use)

17 83

35 65

electricity consumption (% annual consumption)

maximum demand(% maximum demand)

residential all other sectors

residential all other sectors

14

LSM 1 – 3(number of appliances)

Market segment 1 (~21% of households)

And then by sector Type technologies and end uses varies across market segments

(Source: Frost and Sullivan Market Analysis for Residential market 2012

LSM 4 - 7(number of appliances)

LSM 8 – 10(number of appliances)

Market segment 2(~58% of households)

Market segment 3 (~21% of households)

54.1 m

4.1 m

6.5 m

22.1 m

10.7 m

0.09 m

1.2 m

2.4 m

44.4 m

3.2 m

5.0 m

11.2 m

5.5 m

0.8 m

2.4

2.4 m

2011/11/09 15

6.8 m

0.2 m

0.9 m

3.2 m

1.8 m

-

-

0.1 m

lighting

geysers HVAC (heating and cooling)

Kitchen appliancestelevisions

Pool pumps

Motors

Fans

Contents1. Status:

A. Fact Base

B. Objectives

C. Strategy

D. Implementation

2. Solution

16

Objective SettingAn Iterative Process to find the right target in time

17

Actual

ConsumerEnergy Usage

Best in Class

Best Known Technology

Theoretical Best

Compressible over time

Not Compressible

Contents1. Status:

A. Fact Base

B. Objectives

C. Strategy

D. Implementation

2. Solution

18

19

Step 1: Develop a thorough knowledge base

Step 2: Refine policy options and set targets

Step 3: Implement priority initiatives

Step 4: Establish a long-term Energy Efficiency Programme

Fact Base to ImplementationIn Integrated Phased Approach

Contents1. Status:

A. Fact Base

B. Objectives

C. Strategy

D. Implementation

2. Solution

20

EE Road Map (Example Carbon Budgeting

1. Plot Base line Emissions 1990 - 2010 and Inventory 2011

2. Plot the Three Emissions Outlook 2012 to 2050

3. Flagship Abatement Program

4. Develop and Agree GHG Data MRV Meta System

5. Develop National Reporting System (NEIS) "MRV"

6. Define Regulated Entities (Unique Generic Significant Activities)

7. Plot Macro Abatement Potential (Top Down)

8. Develop Sector Abatement Potential (Bottom Up)

9. Identify Assess Policy Suite Options

10. Assess and Select Policy Suite Options

11. Risk Assessments and Plans as Required

12. Develop South Africa Abatement Potential

13. Finalise Activity/Sector GHG Allocations

14. Finalise South Africa’s Draft 1ST Country Budget

15. 1st Pass Country 2050 Scenarios - Transitioning to a Low Carbon Economy

Jun Aug

Sept Dec

Jan Apr

Jun Aug

Sept Dec

Jan Apr

Jun Aug

Sept Dec

2012 2013 2014

Urgent Next Steps

Indicative only Still to be agreed

Project

Contents1. Status:

A. Fact Base

B. Objectives

C. Strategy

D. Implementation

2. Solution

22

Split of energy consumption across sectors*TWh; 2007

47

27

218

95Industrial

Mining

Residential

21Commercial

14International

8Agricultural

6Traction

Total

CountryBase Line

Past SavingsOpportunities

SectorBase Line

Past SavingsOpportunities

ServicesBase Line

Past SavingsOpportunities

FacilityBase Line

Past SavingsOpportunities

Top D

own

Average industry savings potential% consumption

8 18

6 15

15 30

10 20

10 15

12

10

8

20

Low effort

High effort

Residential and commercial consumption activitiesGWh

11 280Air-conditioning

10 260Lighting

6 480Water heating

4 050Standby

3 630Refrigeration

2 970Cooking

1 680Off ice equipment

7 650Other

48 000Total

Potential levers to reduce consumption Initiatives

• Use lower settings

• Reduce reliance on air-con and heaters

• Reduce water consumption

• Insulate properly• Use ef f icient appliances

• Use CFL bulb• Reduce street light

consumption

• Use solar water heaters, • install shower operations• Insulate geysers

and pipes

• Switch-of f appliances• Switch to ef f icient appliances

• Eff icient ref rigerators

• Roll-out gas stoves

• Use energy ef f icient of fice equipment

• Use ef f icient appliances

Estimated savings*GWh

*Cost estimatesRm / Gwh

1,900

1,100

330

790

670

28

490

330

0.5

0.9

11

1.2

1.2

0.8

1.2

1.2

5,630

• Switch-of f appliances at the source

• Use ef f icient ref rigerators

• Use less cooking time• Find alternative cooking

source• Use ef f icient equipment

• Use ef f icient appliances• Switch of f af ter use

1

2

3

4

6

5

**

Bottom

up

SimultaneousTop Down &Bottom up

24

CAMCO: Interaction between EE objectives and wider national development plans

Energy efficiency objectives

National and local spatial

planning

Transport planning

Economic and industrial

development

Research, innovation and

skills development Carbon

abatement policies

Built environment and human settlements

Environmental policies and air

quality management

Policy Integration

25

Monitoring and Evaluation

Planning

Implementation

Monitoring and evaluation

Review

Development of Knowledge base, including baseline setting

Formulation of Energy Efficiency Strategy & Action Plan

Target setting

Strategy and Action Plan review

Target review

Performance improvements and

decision making

Review of cost-effectiveness

Project implementation

Monitoring, reporting and

verification systems

Policy integration

Data monitoring and analysis

Reporting of results

Target evaluation

Thank You