While South Africa has made great strides in developing energy efficiency projects to mitigate dwindling electricity reserves, more needs to be done to encourage and support firms to undertake the transition from “business as usual” to becoming energy-conscience businesses.
This view emerged during an Industrial Development Corporation (IDC) conference, in Sandton, on Tuesday, as several speakers outlined the success of energy efficiency projects in an initially hesitant country.
Eskom Integrated Demand Management (IDM) senior GM Andrew Etzinger said South Africa had reduced its energy use by the equivalent of six 600 MW power stations during the past year, through initiatives under the State-owned power utility’s Demand Side Management programme.
The residential and municipal sectors had accounted for 77% or 2 714 MW of the total savings during 2012, followed by the industrial and mining sectors with a saving of 625 MW and the commercial sector with 228 MW.
This compared with the reduction in 2011 of 376 MW by the residential and municipal sectors and 105 MW and 103 MW by the mining and industrial and commercial sectors respectively.
Etzinger noted that the distribution between industrial, mining and residential was not ideal, adding that the initiative aimed to encourage greater energy savings from the industrial and mining and commercial sectors over the next year.
He commented that if it were not for the projects and initiatives implemented and the resultant savings achieved, “the lights would not be on” and Eskom would have had to shift to load shedding, as South Africa entered its coldest season.
Industry and mining consumed 49% and 18% of electricity respectively, with demand falling to 35% and 14% respectively at night, while the residential sector consumed about 17% electricity during the day, rising to 35% during peak demand.
Eskom would also continue with the R3-billion third phase of its residential mass roll-out programme, as it awarded the tenders and arranged the financing to move forward with the energy-saving project.
Since 2011, the IDC’s R500-million Green Energy Efficiency Fund (GEEF) – backed by German development bank KfW – had provided project finance of R174-million, or 35% of the GEEF budget, for 17 companies, said KfW GEEF team leader Jose Luis Bobes.
He added that 69% of the funds were committed to small and medium-sized enterprises.
The fund, which seeks to promote energy efficiency and “self-use” renewable-energy projects primarily within energy-intensive industrial sectors, had saved about 386 930 MWh and 383 445 t of carbon dioxide (CO2) equivalent since inception.
He believed that, with the current “interesting pipeline” of projects, the sector would see “big growth”.
The IDC had further committed R10.4-billion in support of alternative green energy projects, including R7.5-billion, or 76% of the total, for renewable energy, R620-million for fuel-based energy-generation initiatives, R422-million for energy efficiency initiatives and R1.4-billion for biofuels.
The Industrial Energy Efficiency Improvement Project – a National Cleaner Production Centre initiative – had also reported success, with most of its targets met.
Project specialist Faith Mkhacwa said that a saving of about 87-million kWh was recorded through the implementation of energy management systems at ArcelorMittal South Africa’s (Mittal's) Saldanha Works operations, Toyota South Africa, Gelvenor Textiles and Saint-Gobain.
Through lighting retrofitting, energy management, compressor control and boiler improvement projects at medium chemical companies and large textile, leather and footwear companies, over 700 000 kWh collectively was saved.
Further, annualised savings of R18.3-million at Kraft Foods, Impala Platinum, Mittal’s Saldanha Works operations, SAB Maltings, Da Gama Textiles and Rhodes Foods Group were achieved through energy system optimisation.
“We have some of the best resources in South Africa,” said IDC green industries senior account manager Rafikh Ismail, citing the country’s vast opportunities for the development of solar and wind energy and biodiversity, along with the potential for job creation, economic diversification and skills development.
South Africa relied largely on coal reserves for electricity generation, leaving open many options for the development of renewable energy, particularly on the back of the nation’s uncertain energy security.
“Future energy supply is not expected to be sufficient to match the anticipated demand, and increased pressure on price and energy security force industry players to focus on green initiatives,” said Bobes.
But the development of a diverse electricity sector incorporating renewable-energy sources faces many challenges, including limited skills and slow, hesitant take-up of new energy efficient development projects.
KfW head Busso von Alvensleben commented that nonconducive policy frameworks and unfavourable market conditions, managing the interests of diverse stakeholders, the lack of adequate definitions for energy efficiency targets and eligibility criteria, and maintaining energy savings and CO2 emission reductions remained some of the challenges faced by South Africa.
The National Energy Regulator of South Africa’s granting Eskom yearly increases of 8% for the period from 2013/14 to 2017/18, instead of the 16% it had requested, had also contributed to the failure in the take-up of energy efficiency projects, with companies believing that 8% was manageable, as opposed to the capital outlay for implementation.
He added that a lack of awareness and skills, as well as insufficient motivation for change, further hampered the uptake of projects.