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The Sustainable Energy Resource Handbook

The

Sustainable

Energy Resource Handbook

South Africa Volume 1

The Essential Guide

South Africa Volume 1 www.energy-resource.co.za

www.energy-resource.co.za

Ingersoll Rand Industrial Technologies provides products, services and solutions that enhances its customers’ energy efficiency, productivity and operations. It offers a diverse and innovative range of products ranging from complete compressed air systems, tools and pumps to environmentally friendly microturbines. It also enhances productivity through solutions created by Club Car®, the global leader in golf and utility vehicles for businesses and individuals. Ingersoll Rand provides solutions in virtually all industrial markets. No matter where you are located, Ingersoll Rand is committed to serving you and providing you with the information you need regarding your product. Its worldwide network of distributors, certified, factory trained technicians, and engineers are a phone call away — ready to support you with innovative and cost-effective service solutions that will keep you running at peak performance. Ingersoll Rand is committed to enhancing its customers’ efficiency, productivity and operations through its diverse and innovative Ingersoll Rand branded product offerings. It is part of Ingersoll Rand Corporation, a $13 billion company global diversified industrial company with a 100-year-old tradition of technological innovation. It has the depth of knowledge, expertise and experience to be the best solution to meet your requirements – from its complete compressed air systems, to tools, pumps, material and fluid handling systems, and its environmentally friendly microturbines. Ingersoll Rand shares the world community’s growing concern for the planet and are committed to driving environmental progress. With a century-long history of innovation in energy-efficient and environmentally friendly technologies, it strives to help its customers meet their sustainability goals by offering solutions to operate more efficiently, use less energy, and cut down on carbon dioxide emissions. Ingersoll Rand promises to care as much about the planet as it does about all other aspects of its business. Progress is Greener Tel.: +2711 565 8600 E-mail: IngersollrandSA@irco.com

The

Sustainable Energy Seminar

CSIR Convention Centre, Pretoria – October 2010

Seminar Date: Thursday 6th October 2010 Venue: The CSIR International Conventional Centre, Pretoria Registration: 07h30 – 08h00

Presented by

The world’s current energy prospects are – simply put – unsustainable. Nothing less than an energy revolution is required to achieve the targets that have been set globally and in South Africa. Yet even the most stringent goals can be realised, with sufficient commitment from all stakeholders. Introducing the Sustainable Energy Seminar 2010 – an event that seeks to provide practical solutions for South African energy stakeholders. The Sustainable Energy Seminar will bring together some of the country’s energy stakeholders who will be playing meaningful roles in either initiating energy efficiency and renewable energy projects and policy or specifying and manufacturing the products and technologies that will change the way we deal with energy in South Africa. Top South African and International presentations and focused workshop sessions will be jam-packed into this 1-day Seminar which will be held at the CSIR Convention Centre in Pretoria on the 6th October 2010. The Seminar will be accompanied by an exhibition of industry products and services and delegates will be able to network with the country’s sector decisionmakers as they enjoy a tea and lunch service between sessions. Delegate rates are very reasonably priced and further information is avaible on www.energy-resource.co.za

Interact personally with South Africa`s leading energy sector stakeholders, policy-makers, designers and specifiers such as: • Property Owners • Engineers • Environmental Designers • Urban and Town Planners • Architects • Building Certiﬁcation Professionals • Technologists • Facilities Managers • Plant Engineers • Government Managers and DG’s • Utilities managers and consultants • Commercial Property Owners and Developers • Heavy Industry Private Sector • Heavy Industry Public/Parastatal/Mining • Corporate Commercial Managers • Academia and Research Institutes • Councils and Voluntary Associations • City Managers • Municipal Managers

The

Sustainable

Provisional Seminar Themes: (incorporating environmental, economic and social impacts) • The South African context • The ideal sustainable energy vision • Existing electricity generation and possible new, more sustainable generation technologies • Commercialisation of renewable energy • Existing electricity transmission and possible new, more sustainable transmission technologies • Existing electricity distribution and possible new more sustainable distribution technologies • Implementation of sustainable energy by municipalities • The perception of consumers regarding sustainable energy

Energy Resourc

Handbook

South Africa

Volume 1

The Essential

Guide

www.energyreso

urce.co.za

endorsement messages

endorsement messages LJ Grober President SAEE

The main objectives of the Southern African Association for Energy Efficiency (SAEE) is to be a not-for-profit energy efficiency coordinating body and a driver of networking, information dissemination, and awareness creation in all energy efficiency matters. As a chapter of the Association of Energy Engineers (AEE), the SAEE is committed to increase energy efficiency, utilize innovative energy service options, enhance environmental management programs, upgrade facility operations, and improve equipment performance -- while at the same time bolstering the bottom lines of organisations. The SAEE is your source for information on the dynamic field of energy efficiency, utility deregulation, facility management, plant engineering, and environmental compliance. With a full array of information outreach programs from technical seminars, conferences, books to critical buyer-seller networking tradeshows, job listings, and certification programs, the SAEE and AEE offers a variety of information resource tools. Mission To provide a proactive, integrated networking capability for all energy stakeholders to add value to the business of energy in Southern Africa. Vision: To provide energy excellence through networking, capacity building and empowerment. Serving the stakeholders of the energy efficiency market and promoting energy efficiency by addressing their needs and being a conduit for information dissemination.

Amanda Luxande REEEP Regional Secretariat for Southern Africa

REEEPâ&#x20AC;&#x2122;s targeted actions help developing countries towards a low carbon development path. Since its operationalisation in 2003, REEEP has supported at least 129 projects in over 65 countries. These targeted interventions have had a multiplying effect which contributes to reduced greenhouse gas emissions and provide economic benefits for some of the poorest people in the world. As we move through the challenges of a global economic crisis, it is increasingly important that we exploit opportunities presented by low carbon growth in integrating energy systems into the way in which economies function. While the threat of climate change within such a context seems insurmountable, there are tools and technologies available for this cause. This book shows how innovative approaches can help deliver low carbon energy on the ground. Low carbon technologies for the reduction of global emissions such as energy efficient technologies and renewable energies featured in this energy resource handbook is one important way to address the effective deployment and dissemination of clean energy solutions. This is necessary in emerging economies such as those in Southern Africa where the potential to improve access and promote development through both renewable energy and energy efficiency is high.

the sustainable Energy Resource HANDBOOK

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More than fifty thousand people in South Africa will read at least one of the Handbooks in the ‘Sustainability Series’ this year. The 5 Handbooks in the series are published by alive2green in a high quality A5 format and are available for purchase online at www.alive2green.com/handbooks. The Sustainability Series Handbooks tackle the key areas within the broader context of sustainability and include contributions from South Africa’s best academics and researchers. The Handbooks are designed for government and business decision makers and are produced in Volume format. Each new Volume builds on the previous Volume without replacing it. The Sustainable Transport and Mobility Handbook and the Green Building Handbook deal with two sectors that are the largest contributors to greenhouse gasses. The Water and Energy Handbooks tackle the issues and solutions that South African’s face with two of our most important resources and finally the Waste Handbook deals with the principles concerned with waste minimisation and ultimately waste eradication. The Handbooks also profile some of the top companies and organisations that are represented in each important sector.

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Handbook enquiries: info@alive2green.com Advertising enquiries: sales@alive2green.com

endorsement messages

endorsement messages Peet Du Plooy The Environmental Goods and services Forum of South Africa

Bio-energy holds a huge amount of potential for electricity generation and fuel supply in Southern Africa on a sustainable basis. It also holds the potential to have a positive social impact on communities. The Southern African Bioenergy Association (SABA) aims to encourage the private and institutional sector to get involved in the Bio-energy market in South Africa. SABA is a non-government, non-profit organisation that supports the Sustainable Energy Resource Handbook for its potential to increase the spread of information with regards to alternative energy solutions. SABA members are part of a network that enables them to market their products and services, take part on a platform to discuss governmental institutionâ&#x20AC;&#x2122;s most suitable rules and regulations to develop a sustainable and profitable bioenergy sector in Southern Africa and to support regional interaction, co-operation and trade within Southern Africa. The Sustainable Energy Resource Handbook will promote these activities for the broader sector of alternative energy in general.

The 20th century was powered by an abundance of fossil fuel. In the 21st century, this is no longer an option: fossil fuels like coal and oil are rapidly becoming more expensive. These costs are not simply financial, but also social: pollution and climate change are already costing lives and livelihoods and will continue to do so for decades to come. Fortunately, the search for alternatives has highlighted many new opportunities. There is already more than a hundred billion dollars of investment in clean energy every year, supporting double-digit growth figures and adding to the more than two million jobs that already exist in renewable energy only (not counting the many more involved in energy efficiency). By 2020, the clean energy sector is set to become the third largest in the world. How will South Africa tap into this opportunity? To date, progress on the clean energy front has been slow: our renewable energy investment falls well short of our African neighbours like Kenya and Egypt; not to mention the massive growth in other developing nations like China, India and Brazil. The Environmental Goods and Services Forum works with green industries and government to unlock this potential. The Sustainable Energy Resource Handbook will help equip both industry and policy makers with much-needed information for a clean energy future in South Africa.

www.egsf.org.za the sustainable Energy Resource HANDBOOK

Editor’s note

Editor’s Note Dr Elsa du Toit (with Michael Pead) Associate Director of Saha International SA (Pty) Ltd

Energy plays a central role in the economy of both industrialised and less-developed countries. All countries face major energy challenges in this century and most particularly over the next decades. Today, more than 400,000 PJ per year of global primary energy demand, results in an estimated 150,000 PJ of useful energy after conversion in end-use devices and therefore final consumption by the customer. Thus, 250,000 PJ or two-thirds of primary energy demand is presently lost in energy conversion, mostly as low and medium temperature heat (UNDP/WEC/UNDESA, 2000). To ensure sustainability going forward it is essential that the entire energy cycle from mining the raw material, conversion technologies, transmission, distribution as well as consumption approaches and technologies be completely overhauled. There is room for significant improvements in the entire energy cycle. Within this context, the authors of this handbook consider how to overcome the current problems associated with crossing from status quo energy technologies to more advanced technologies in a phased and in a sustainable manner. It is believed that technological advances both in energy efficiency and new and renewable energy, that lead to highly efficient energy use, are promising investments. It is the practical implementation and changing of the system and the paradigms that have been in existence since 1891 when the first power station was established in Kimberley, that seem to be the real challenge. Unfortunately the excess electricity capacity in South Africa in the 1980’s encouraged all buildings, industrial plants, houses, equipment etc. to be “over” designed. Too many lights, pumps, fans and motors too big for the process they are suppose to drive, ignoring passive thermal design of houses, and high standby power of equipment, are the consequence of that. South Africa will have to rely on retrofits in the short term but over the medium and long term optimal designs will be essential. We are indebted for the inputs made by the various contributing authors. Their considered and extensive submissions are based on years of experience in their field and have made the publication of this Handbook both a reality and a worthwhile endeavour, hopefully for the industry. We are similarly indebted to the publishers for entrusting the important task of guest editing this publication to SAHA. It is our hope and desire that this modest publication will contribute to the vital debate of how we shape our energy cycle to become more sustainable in the future. As Maurice Strong said: “We need what I have often called an ecological approach to the management of these resources and we do not have that now. We have the inertia of past habits, unsustainable habits.” Elsa du Toit Editor the sustainable Energy Resource HANDBOOK

19 20

18 11

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2009/11/27 4:11 PM

The

Sustainable

Energy Resource Handbook

South Africa Volume 1

The Essential Guide EDITOR Dr Elsa du Toit CONTRIBUTORS Barry Bredenkamp, Dr Elsa du Toit , Ferdi Kruger, Gary D Burch, Professor Harald Winkler, Marlett Balmer, Micheal Pead, Dr Pieter Rousseau, Raj Chetty and Steve Apps LAYOUT & DESIGN Rashied Rahbeeni

HEAD OF SALES Annie Pieters TEAM LEADER: SALES Andre Evans ADVERTISING SALES Rowena Cupido, Theodore Jacobs, Beulah Poggenpoel, Ntsikile Kasana CHIEF EXECUTIVE Lloyd Macfarlane

SUB-EDITOR Trisha Bam

DIRECTORS Gordon Brown Andrew Fehrsen Lloyd Macfarlane

MARKETING MANAGER Cara-Dee Macfarlane

PRINCIPAL FOR AFRICA & MAURITIUS Gordon Brown

MARKETING ASSISTANT Anri Tredoux

PRINCIPAL FOR UNITED STATES James Smith

GENERAL MANAGER Suraya Manuel

PUBLISHER

ACCOUNTS & ADMINISTRATION Wadoeda Brenner Chantall Okkers THANKS TO Solar Zone and M-Techindustrial for selected images

www.alive2green.com www.energy-resource.co.za

The Sustainability Series Of Handbooks

PHYSICAL ADDRESS: Suite 207, Building 20 Waverley Business Park 1 Kotzee Road Mowbray Cape Town South Africa 7705

ISBN No: 978-0-620-45068-3. Volume 1 first Published 2010. All rights reserved. No part of this publication may be reproduced or transmitted in any way or in any form without the prior written consent of the publisher. The opinions expressed herein are not necessarily those of the Publisher or the Editor. All editorial contributions are accepted on the understanding that the contributor either owns or has obtained all necessary copyrights and permissions.

IMAGES AND DIAGRAMS: TEL: 021 447 4733 Space limitations and source format have affected the size of certain FAX: 086 6947443 Website: www.alive2green.com published images and/or diagrams in this publication. For larger Company registration Number: PDF versions of these images please contact the Publisher. 2006/206388/23 Vat Number: 4130252432

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THE SUSTAINABLE ENERGY RESOURCE HANDBOOK

Hydro electricity in South Africa Currently, just over one-third of the world’s hydro potential is developed. Realistic hydro potential is greatest in Asia, followed by South America and then Africa. Africa’s hydro potential is not evenly spread throughout the continent and varies from enormous hydro potential in countries such as the Democratic Republic of the Congo to water scarce countries such as South Africa. The management of water supplies in South Africa has developed into a science to ensure that it is used to its full potential and to this end, unique partnerships have developed between Eskom and the Department of Water and Environmental Affairs.

Eskom’s hydroelectric power stations

Eskom has three types of hydroelectric power stations; conventional reservoir (Gariep and Vanderkloof), run-ofriver (Colley Wobbles, First and Second Falls and Ncora) and pumped storage schemes (Palmiet and Drakensberg). The two pumped storage schemes are joint ventures between the Department of Water and Environmental Affairs and Eskom. Not only do they generate peaking power for the Eskom national grid, they are also part of systems transferring water to important industrial and metropolitan centres – innovative projects that optimise scarce water resources.

Protection of biodiversity

The Drakensberg Pumped Storage Scheme is part of a water transfer from the Thukela River across to the Vaal Triangle. The Palmiet Pumped Storage Scheme transfers water from the Palmiet River catchment to Cape Town. Palmiet is located in the Kogelberg Biosphere Reserve, the heart of the Cape Floral Kingdom and the first biosphere in South Africa. Eskom was a signatory to the application for biosphere status from UNESCO and is committed to upholding the principles of MAB (Man and Biosphere) in supporting the biodiversity of this unique fynbos region. Construction has started on Ingula, a new Eskom pumped storage scheme in the Drakensberg Mountains. Conservation of the wetlands, grassland and escarpment forest at Ingula - all critical habitats - is of utmost importance. These habitats ensure sustained water supply

Hydro Visitors Centres:

Drakensberg: 036 4386 046 Palmiet: 021 859 2690 Ingula: 036 342 3122

to the project and region, help conserve biodiversity and are home to several endangered species including the White-winged Flufftail. The Ingula Partnership, between Eskom, BirdLife South Africa and Middelpunt Wetland Trust, was established in March 2004 to protect these habitats and conserve this wetland area. The first pumped storage power station to be built in South Africa was the Steenbras Power Station that is owned and operated by the City of Cape Town.

What is hydroelectricity?

In a hydroelectric power station, water stored behind a dam wall or in a river is conveyed to a hydraulic turbine, which is turned by the force of the water. The turbine drives a generator rotor, to which it is coupled by a shaft, thus generating electricity. After the water has completed its task, it is discharged back into the river downstream of the power station.

What is a pumped storage scheme?

Pumped storage schemes store a constant volume of water in their systems, which is “re-used” to generate power. Such schemes consist of two reservoirs, one higher than the other, with the power station situated between the two. Reversible pump-turbines pump water from the lower reservoir to the upper one during periods of low electricity demand – using electricity available from coal and nuclear base-load stations. When power is required during peak periods, the pump-turbines are switched to the generating mode. The water in the upper reservoir is allowed to flow back to the lower reservoir, through the pump turbines, thus generating electricity.

Blue Planet Prize

Every effort is made to manage these hydroelectric power stations in a sustainable manner, as demonstrated by the Blue Planet Prize awarded to the Palmiet Pumped Storage Scheme by the International Hydropower Association in 2003. The Blue Planet Prize is for schemes demonstrating technical, economic, social and environmental good practice – and excellence in one or more of these aspects.

Contents 16 Chapter 1 Introduction â&#x20AC;&#x201C; Context and definitions 30 Chapter 2 The Sustainable Electricity Vision for South Africa 44 Chapter 3 The South African Wholesale Market for electricity 56 Chapter 4 The environmental, economic and social impact of existing generation and possible, new more sustainable generation technologies 66 Chapter 5 Energy efficiency and cost savings potential of heat pump water heaters 76 Chapter 6 Renewable Energy and transmission system constraints 84 Chapter 7 Distribution of New Technologies 100 Chapter 8 Consumption of Energy 118 Chapter 9 Perceptions of urban communities during the energy crisis 132 Chapter 10 Hybrid Renewable Energy Systems 144 Chapter 11 Concluding remarks from the Editor

the sustainable Energy Resource HANDBOOK

B-BBEE Verification B-BBEE Verification The objective of B-BBEE verification is to obtain a B-BBEE certificate for external use by a company (a measured entity) seeking to measure its B-BBEE contributions. B-BBEE verification is performed by verification agencies that provide an independent assessment of the contributions a measured entity The objective of B-BBEE verification is to obtain a B-BBEE certificate for external use by a company (a measured entity) seeking to measure its B-BBEE has made towards the empowerment of black persons. contributions. B-BBEE verification is performed by verification agencies that provide an independent assessment of the contributions a measured entity has made towards the empowerment of black persons.

1. Which scorecard is applicable?

The Broad-Based Black Economic Empowerment Act 53 of 2003 gives

the minister of trade and industry authority to legislate Codes of Good 1. Which scorecard is applicable? Practice. The Codes of Good Practice are a collection of targets and

indicators that are measured to determine the extent of a company’s contribution Black to Broad-Based Economic Empowerment (B-BBEE). Broad-Based EconomicBlack Empowerment Act 53 of 2003 gives

The Targets and indicators vary depending on the company’s turnover. the minister of trade and industry authority to legislate Codes of Good Treatment of targets and Practice.Annual The Sales Codes of Category Good Practice are a collection < R5 000 000 Exempt Micro Enterprise Exempt from compliance indicators that are measured to determine the extent of a company’s (EME) with all targets and indicators contribution Black (B-BBEE). < R35to 000Broad-Based 000 Qualifying SmallEconomic Enterprise Empowerment Benefit from reduced targets, (QSE) fewer indicators Targets and indicators vary depending on the company’s turnover. > R35 000 000

Annual Sales

Generic

Stringent targets, and sensitive weightings

Category

Treatment

Certain industries have industry specific targets, which are defined in < R5 000 000 sectorExempt Enterprise fromscope compliance special codes.Micro Industries which fall Exempt within the of a sector (EME) with all requirements. targets and indicators code, must be measured against sector specific All other industries are measured on the ordinary Codes of Good Practice. The < R35 000 000 Qualifying Small Enterprise Benefit from reduced targets, sales thresholds for industries falling within the scope of a sector code (QSE) indicators differ from those provided herein. A list of allfewer applicable sector codes and thresholds is available on www.iquadvs.co.za/thresholds.

> R35 000 000

Generic

Stringent targets, and sensitive weightings

2. B-BBEE contribution levels

Certain industries have industry specific targets, which are defined in Measurement against the targets and indicators prescribed by the special Codes sectorofcodes. Industries which fall within the scope of a sector Good Practice will result in a B-BBEE Scorecard. A B-BBEE

code, must be measured sector specific All other certificate is issued against by a verification agencyrequirements. after it has verified the B-BBEE scorecard. A B-BBEE certificate certifies the measured entity’s industries are measured on the ordinary Codes of Good Practice. The B-BBEE contribution level. The contribution level is based on the total sales thresholds for industries the scope of a sector code number of points achievedfalling on thewithin scorecard. differ from those provided herein. A level list ofachieved all applicable sector codes entity and In addition, the contribution by the measured entitles its customers to recognise their spend with the measured thresholds is available on www.iquadvs.co.za/thresholds. entity at a given percentage. This percentage is often referred to as the ‘procurement recognition level’, or simply recognition level.

2. B-BBEE contribution levels

3. What elements do you measure?

Targets and indicators are divided into 7 measurable elements:

3. What elements do you measure?

Element

Simplistic summary

Ownership

Who owns the business?

Management the business? Targets andControl indicators are dividedWho intocontrols 7 measurable elements: Employment Equity

Who works in the business?

Skills Development

Element

Who is trained by the business?

Preferential OwnershipProcurement

WhoWho doesowns the business purchase from? the business?

Enterprise Development

Management Control

The efforts of the business to develop Who controls business? enterprises externalthe to itself?

Socio-Economic Development Employment Equity Contributions

Contributions made by the business for Who works in the business? social causes?

Simplistic summary

Whowhile is trained by thecompany business?is ASkills QSEDevelopment can select any four of the seven, a Generic measured against the targets for all seven elements. Preferential Procurement

Who does the business purchase from?

Enterprise Development

The efforts of the business to develop 4. Framework for verification enterprises external to itself?

In performance of our duties as a verification agency, IQuad BEE Socio-Economic Development Contributions made by the business for Verification is guided by the B-BBEE Act 53 of 2003, and subsequent Contributions social causes? legislation including the Codes of Good Practice and the verification manual issued by the dti.

A QSE can select any four of the seven, while a Generic company is The processes followed during the verification are necessary to ensure measured against the targets for all seven elements. compliance with the stringent standards maintained by verification agencies in support of the accreditation of verification agencies.

4. Roles Framework for verification 5. of the parties A measured entity is responsible for conforming to the requirements for In performance of our duties as a verification agency, IQuad BEE B-BBEE verification. A verification agency is responsible for carrying out Verification is guided by theofB-BBEE Act 53entity’s of 2003, and status subsequent a factual thorough evaluation the measured B-BBEE and for granting a B-BBEE based on the result. legislation including the score Codes of Good Practice and the verification manual issuedentity by the dti. therefore: The measured should

B-BBEE Status Level

Qualification

B-BBEE Recognition Level

t Implement initiatives capable of measurement under the codes.

Level 1 contributor

> 100 Points

135%

t Provide the information required to develop a B-BBEE scorecard. The processes followed during the verification are necessary to ensure t Maintain and provide evidence of implementation supporting of the compliance scorecard. with the stringent standards maintained by verification agencies in support of the accreditation of verification agencies.

Level 2 contributor > 85 but 125%prescribed by the Measurement against the targets and< 100 indicators Level 3 contributor > 75 but < 85 Codes of Good Practice will result in a B-BBEE110% Scorecard. A B-BBEE Level 4 contributor > 65 but < 75 100% certificate is issued by a verification agency after it has verified the Level 5 contributor > 55 but < 65 80% B-BBEE scorecard. A B-BBEE certificate certifies the measured entity’s Level 6 contributor > 45 but < 55 60% B-BBEE contribution level. The contribution level is based on the total Level 7 contributor > 40 but < 45 50% number Level of points achieved on the> 30 scorecard. 8 contributor but < 40 10% Non Compliant contributor < 30 In addition, the contribution level achieved by0%the measured entity entitles its customers to recognise their spend with the measured entity at a given percentage. This percentage is often referred to as the ‘procurement recognition level’, or simply recognition level.

B-BBEE Status Level

Qualification

B-BBEE Recognition Level

The verification process is similar to an external financial audit, as the illustration overleaf demonstrates. A company conducts daily operations and generates a profit. In the course of operating it gathers and records information that provides input into its financial records. These financial records are formatted into management accounts and the management accounts and supporting financial records are utilized by the financial Aauditors measured is responsible conforming theoutcome requirements for in theentity ‘verification’ of their for financial records,tothe of which is audited financial B-BBEE verification. A statements. verification agency is responsible for carrying out

5. Roles of the parties

a factual thorough evaluation of the measured entity’s B-BBEE status and for granting a B-BBEE score based on the result. The measured entity should therefore: t Implement initiatives capable of measurement under the codes. t Provide the information required to develop a B-BBEE scorecard.

6. Verification process

7. Validity period

Our process for verification and obtaining a certificate of compliance:

Process

Duration

t IQBEE receives the completed application for

2 days

B-BBEE certificates are valid for 12 months from date of issue.

8. Appeals process In the event that the measured entity does not agree with the final score awarded by IQuad BEE Verification, the measured entity may lodge a written appeal within 14 days of receipt of the final verification certificate

BEE services form. t IQBEE evaluates information and calculates a

and scorecard. The measured entity should provide the reasons why the measured entity differs from the verification agency in allocation of

verification fee. t IQBEE compiles a verification proposal

points, and refer to the prior evidence submitted.

and attaches the terms of engagement for

IQuad will handle all appeals in accordance with IQuad BEE Verification

acceptance. This offer is valid for 30 days. t Entity signs terms of engagement indicating acceptance (within 30 days).

1 - 30 days

t IQBEE sends the client Information pack, the

1 day

pre-audit information request together with the invoice for payment.

9. Feedback IQuad BEE Verification is a customer-focused organization and

t Entity completes the pre-audit information request, gathers requested evidence and submits to IQBEE.

30 days

t IQBEE completes a document review of the information, initiates the audit plan and compiles a preliminary scorecard.

14 days

t IQBEE notifies the entity of the proposed date of on-site verification, the samples selected for verification and a schedule of any additional information required.

procedure for appeals and complaints, which is published on our web site and available upon request.

14 - 30 days

In the event that you are unhappy with any aspect of our process or services, we invite you to contact our Managing Director â&#x20AC;&#x201C; Wade van Rooyen on 041 391 0600, or wadevr@iquad.co.za. Formal complaints should be made in accordance with our appeals and complaints procedure accessible on www.iquadvs.co.za.

10. Who can issue certificates? Verification agencies must be accredited by the South African National Accreditation System (SANAS). SANAS accredit verification agencies on the R47-02 standard, which establishes the accreditation requirements, and provides confidence that processes of verification agencies address the principles of impartiality, competence, responsibility, openness, and confidentiality.

t Entity agrees a proposed date in writing. t On-site visit takes place. t IQBEE finalises for review.

welcomes your feedback on our services. We will periodically contact you for formal feedback by way of a customer satisfaction survey.

7 - 14 days

t IQBEE reviews and issues the certificate ready for distribution. t Complaints & appeals.

Effective 1 Feb 2010, only accredited verification agencies and verification agencies that are in possession of a pre-assessment letter from SANAS may issue B-BBEE certificates. All certificates issued by verification agencies prior to 1 Feb 2010 remain valid for a 12-month period from date of issue.

5 Reasons to comply with B-BBEE t Pressure from customers. t Companies that do business with government departments are required by law to demonstrate compliance with the Codes of Good Practice. Tenders, licences or concessions may be withheld from noncompliant companies.

t Individual companies achieve greater compliance when they purchase from suppliers with high compliance levels. t A compliant company will obtain a competitive advantage over its non-compliant competitors. t Voluntary compliance creates economic opportunities for all.

Contact IQuad BEE Verification Johannesburg Woodmead Estate Axiam House 1 Woodmead Drive Woodmead, 2128

Cape Town Tijger Park 2 Second Floor Willie van Schoor Avenue Bellville, 7530

Durban Office 2C, 2nd Floor Royal Palm, 6 Palm Boulevard Umhlanga New Town Centre Gateway, Umhlanga Rocks, 4321

Port Elizabeth IQuad Place 56 Mangold Street Newton Park, 6045

Bloemfontein 13A Barnes Street Westdene, 9031

Tel: +27 11 797 8400 Fax: +27 11 797 8655

Tel: +27 21 300 0013 Fax: 086 219 6600

Tel: +27 31 583 0900 Fax: +27 31 583 0909

Tel: +27 41 391 0600 Fax: +27 41 365 5860

Tel: +27 51 448 2077 Fax: 086 677 6130

Email wadevr@iquad.co.za Website www.iquadvs.co.za

an IQuad Group company

EFFECTIVE SYSTEMS, EXPERT KNOWLEDGE, EXCEPTIONAL PEOPLE

chapter 1: INTRODUCTION â&#x20AC;&#x201C; Context and Definitions

the sustainable Energy Resource HANDBOOK

chapter 1: INTRODUCTION – Context and Definitions

INTRODUCTION – Context and Definitions Dr Elsa du Toit (with Michael Pead) Associate Director of Saha International SA (Pty) Ltd

The world’s current energy prospects are – simply put – unsustainable. Despite all the talk about climate change, in recent years energy demand has continued to increase and global carbon dioxide emissions along with it. The change needed to achieve the aims of the Long Term Mitigation Scenario (LTMS)a, particularly the Required by Science scenario done by the Department of Environment is daunting. Nothing less than an energy revolution is required to achieve targets such as a 34% emission reduction by 2020 and a 42% reduction by 2025. Yet even the most stringent goals can be realised, with sufficient worldwide commitment. Does this commitment genuinely exist? It is reassuring to know that human ingenuity can rise to this challenge. Existing technology – primarily in energy efficiency and renewable energy – is an obvious first step, but it is ultimately new technologies that hold promise of economic opportunity and benefit. However, new technology is generally more expensive and often a tradeoff is required between environmental / social and economic benefits and is even more pronounced in a developing country such as South Africa. Furthermore, to implement sustainable energy initiatives in South Africa, the practical implementation framework and readiness of markets to implement must be well coordinated with policy instruments such as carbon taxes, standards, incentives and education and awareness campaigns, and all three pillars of sustainability must be addressed in a balanced manner. This Handbook aims to identify the practical ‘coal face’ constraints that make the implementation of sustainable energy cumbersome or challenging. In most instances sustainable energy initiatives have taken decades, sometimes up to 50 years to establish themselves. Although there is an opportunity for ‘leap frogging’ and ‘technology jumps’ for South Africa, a firm basis to address the unique practical constraints in South Africa is essential. Once these have been identified, suggestions or recommendations should be made on what exactly it would take to achieve sustainable energy, and realistic interim milestones for the 2025 vision to be achieved. Sustainable energy is a significant topic in itself, so to provide some focus and structure this Handbook has been structured around the electricity value chain only, as follows: • The context; • The ideal sustainable energy vision; • Existing electricity generation and possible new, more sustainable generation technologies and its environmental, economic and social impact; • Commercialisation of renewable energy and its environmental, economic and social impacts; • Existing electricity transmission and possible new, more sustainable transmission technologies and its environmental, economic and social impact; a LTMS is a study done by the then Department of Environment and Tourism (DEAT) in 2009. The aim of the study was to determine the emission reduction as required by science for South Africa to prevent a two degree centigrade increase in temperature.

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• E xisting electricity distribution and possible new more sustainable distribution technologies and its environmental, economic and social impact; • The perception of consumers regarding sustainable energy; and • Concluding remarks

Definitions Definition of Sustainable Energy Sustainable energy can be defined as follows: Energy produced and used in ways that support human development over the long term in all its social, economic, and environmental dimensions. This definition seems to be generally accepted in South Africa, but, the definitions of the sub-sections under sustainable energy eg energy efficiency versus demand side management still seem to create a lot of uncertainty. Is the one a subset of the other or is it the other way around? A broader interpretation of sustainable energy may allow the inclusion of fossil fuels and nuclear fission as transitional sources while technology develops, as long as new sources are developed for future generations to use. A narrower interpretation includes only energy sources that are not expected to be depleted in a timeframe relevant to the human race. Another way of understanding sustainable energy is by looking at what it is not, and here the following explanation could be suggested: “The antithesis of sustainability is a disregard for limits, commonly referred to as the Easter Island Effect, which is the concept of being unable to develop sustainably, resulting in the depletion of natural resources.” Part of these natural resources that face depletion would be fossil fuels used for energy generation - and one must also consider the impact of large coal mines on the environment and loss of lives and livelihoods. Sustainable energy in the South African context currently refers to energy efficiency and renewable energy, but implementation possibilities include vast numbers of possible projects in these two areas ranging from inexpensive types of demand management projects (straw bale houses, mud stoves and behaviour change) to expensive initiatives on the supply side (photovoltaic panels and wave energy technologies). In addition, the complex nature and inter-linkages between these different options should not be underestimated.

Definition of Renewable Energy In our view there is no universally accepted definition of renewable energy. A description that captures the widely agreed characteristics is, “Renewable energy (sources) capture their energy from existing flows of energy, from on-going natural processes, such as sunlight, wind, flowing water (hydropower), biological processes such as anaerobic digestion, and geothermal heat flow. The most common definition is that renewable energy is from an energy resource that is replaced by a natural process at a rate that is equal to or faster than the rate at which that resource is being consumed.”

Definition of Energy Efficiency The simple definition for energy efficiency is using less energy to provide the same level of energy service, or using the same amount of energy to provide an improved energy service and this would be applicable to industrial, commercial and residential energy consumers.

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chapter 1: INTRODUCTION â&#x20AC;&#x201C; Context and Definitions

Definition of Demand Side Management The term Demand Side Management (DSM) (often used interchangeably with energy efficiency) is what an electricity utility would do to manage the demand on the electricity grid. The biggest demand would be from industrial sources and municipalities. In this regard Eskomâ&#x20AC;&#x2122;s DSM projects were specifically designed to do load shifting in order to reduce the demand in peak periods. Other types of options would include peak clipping, load shifting, demand market participation, etc.

Objectives of this handbook in terms of focus area This Handbook focuses briefly on energy from an electricity perspective and it by no means captures all the complex issues, but merely tries to reflect on a few basic principles and fundamentals that should be in place before sustainable energy projects are considered for implementation.

Three pillars of sustainable energy The three pillars of sustainability are: environmental, economic and social upliftment. Energy efficiency and renewable energy could address all these aspects of sustainability in some way but, for any sustainable energy projects to be termed successful, all the pillars should be addressed in a very consistent and uniformed approach across governments, business and academia.

Environment Pillar of Sustainable Energy Why is this pillar important? The global warming debate has forced all countries to put a bigger emphasis on the management of the environment. Political concerns over the security of supply of energy, environmental issues related to global warming, climate change and sustainability have highlighted the need to move the worldâ&#x20AC;&#x2122;s energy consumption away from fossil fuels. We have used about half of the available oil and gas resources and a decrease in production is predicted. In South Africa, the remaining coal reserves are located deep underground and are becoming more difficult and expensive to mine. Furthermore, most reserves are situated in pristine areas such as the Waterberg in the Northern Province, making it more problematic to obtain the necessary environmental impact assessments to mine coal and build power stations. A move away from fossil fuels would possibly create economic pressure through carbon emissions trading and green taxation. Some countries are taking action as a result of the Kyoto Protocolb. South Africa ratified the Kyoto Protocol and is classified as an Annex II (developing) country with no targets; however, much is being done in the sustainable energy arena with a number of strategies at national, provincial and local government levels. Under the Kyoto Protocol, each industrialised country is assigned a greenhouse emissions quota. To make the process work, the treaty allows emitters who fail to curb their pollution sufficiently to purchase Certified Emission Reductions (CERs) from a project in a developing country that earns CERs under the Clean Development Mechanism (CDM). The CDM is a market-based mechanism that was introduced as a means to allow developed countries some flexibility in meeting their emissions targets, while at the same time aiming to transfer cleaner technologies to developing countries for their economic development programmes. Investors can, therefore, identify projects in a developing country that will reduce emissions, and negotiate an agreement with the project developers to purchase the CERs generated by the project. b

Kyoto Protocol: an international agreement between countries to reduce greenhouse gas emissions. the sustainable Energy Resource HANDBOOK

chapter 1: INTRODUCTION â&#x20AC;&#x201C; Context and Definitions

Status Quo in South Africa In South Africa the brisk carbon trade that was expected has started with some trepidation. A Designated National Authority (DNA) which manages the CDM process has been established. It has not performed as well as initially expected but practical constraints in this regard, such as the time it takes for projects to be approved and to receive funding, the administrative burden to apply and the relatively low cost of electricity in South Africa have hampered progress. These are being addressed by the parties to the agreement. It is expected that this area will receive more attention in the future, and now that electricity tariffs are on the verge of rising significantly it is expected that this option might become more attractive to South Africans.

Objectives of this handbook in terms of the Environment Pillar of Sustainable Energy The chapters that follow will discuss the environment-specific side of existing generation, possible improvement of plant efficiency, clean coal technologies such as fluidised bed and underground coal gasification technologies. The commercialisation of renewable energy technologies in an environmentally friendly manner is addressed, as it has been neglected in the past. Requirements for a sustainable transmission and distribution system to successfully incorporate renewable energy technologies and energy efficiency measures are looked at.

Economic Pillar of Sustainable Energy Why is this pillar important? It should be noted that energy efficiency projects lead to a saving in money as less energy is used while production remains at the same level, and as the electricity tariffs continue to rise, more and more energy efficiency projects will become financially viable and worthwhile to implement. However, the upfront capital costs of these projects is perceived to be a major barrier for implementation. There are also some renewable energy sources that are already economically viable eg landfill gas. Financial mechanisms should be required only for those renewable energy sources that are currently too expensive e.g. solar and wave technologies and energy efficiency projects with a large upfront capital investment requirement. The private sector is expected but is not motivated, to undertake the level of investment required by developing countries. For investment to increase, the returns on energy efficiency and renewable energy projects will need to match the risks. This is required on a sufficiently widespread basis to deliver the scale of sustainable energy projects required. However, piece meal investments are unlikely to be sufficient to drive sustainable energy projects at the level and speed required. Some assistance from Government will be necessary. Part of the answer is to deploy innovative financing and funding schemes like Public Finance Mechanisms (PFMs). PFMs are financial commitments made by the public sector that alter the riskreward balance of private sector investments. They include grants, concessional finance, risk mitigation instruments and market aggregation activities.

Status Quo in South Africa For change to take place, innovative and new approaches will be required with strong government support. The electricity sector requires a paradigm shift. There needs to be a buy-in for sustainability 20

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and practical issues e.g. intermittency, lack of financing mechanisms, lack of skills and large scale implementation abilities, bulk electricity requirements of the industrial sector, hybrid solutions and private, public partnerships must be addressed urgently.

Objectives of this handbook in terms of the Economic Pillar of Sustainable Energy In this handbook a chapter has been dedicated to deal with the economic aspects of current electricity generation, transmission and distribution efforts in comparison to possible new renewable technologies and inefficiencies in the system to determine which makes more economic sense at this stage of South Africa’s development path. The appropriateness of implementing expensive renewable energy technologies from a supply side, while neglecting the inexpensive demand possibilities, such as sun stoves and straw bale houses in a country where there is high unemployment and poverty is addressed.

Social Pillar of Sustainable Energy Why is this pillar important? In South Africa there is a significant gap between the rich and the poor. According to the Ginic co-efficient, South Africa ranks lowest in the world followed by Brazil. Government is therefore prioritising projects that could have a positive impact on poverty alleviation, and energy plays a major part in this. Access to sustainable energy is recognised as a key factor in sustainable poverty-oriented development. Energy services such as cooking, heating, lighting and communication are central to social upliftment. However, energy services used for generation and transmission are indispensable to economic progress. The viability of renewable energy projects is linked to local availability of material: “Detailed knowledge of ecological conditions and the social environment makes it possible to choose an environmentally friendly technology that is suited to local conditions. Locally available knowledge can be applied, local construction materials used, and existing production capacity developed further. In addition, existing distribution structures can be activated to disseminate such things as energy-saving stoves and solar home systems. Access to credits for start-up investments, method of payment, maintenance costs, etc. must also be taken into account. Use of proven technologies and their continued adaptability to local conditions has been shown to be more sustainable than use of the most innovative technologies. Capacity development and motivation of local actors as the agents of technological change are prerequisites for project sustainability.” It is possible to develop specific programmes, that are financially viable while specifically addressing poverty and the environment and there are many different case studies from other developing countries supporting this premise. Energy projects have the capability to create long-term added value that benefits poor population groups above all. Examples from the micro financing industry in South Africa could be looked at in order to enable the financing of modern energy systems for the residential sector. In addition, sustainable financial mechanisms such as soft loans, and opportunities to achieve economies of scale by placing large orders, could ease investment costs for poor households over the c

Gini Coefficient is commonly used as a measure of inequality of income or wealth. the sustainable Energy Resource HANDBOOK

chapter 1: INTRODUCTION â&#x20AC;&#x201C; Context and Definitions

long term. Renewable energy could be profitable from an economic point of view alone. In any case, transparent economic accounting based on the three pillars of sustainability and information about subsidies that may be needed should be included in all project planning. In undertaking the sustainable approach to evaluating projects, realistic and transparent assessment costs and the benefits of different technological options will be achieved. To ensure poverty alleviation, an assessment is required on how benefits are distributed and who profits from such technologies. Cost assessment must include all the costs including transaction costs, research, feasibility studies, implementation of the project, as well as external costs. Specific incentives may be needed to develop energy systems. Transparent cross subsidies from urban consumers should be considered in order to cover the costs of rural energy supply and to reduce supply disparities. Maintenance of all projects has been neglected in the past and therefore it must receive special attention to ensure proper implementation without subsidies.

Status Quo in South Africa South Africa recently published its Integrated Resource Plan (IRP)d with a limited requirement from renewable energy resources, even though investors seem to be ready to implement on a large scale. Tariff increases due to the implementation of renewable energy technologies are a major concern. However, it is believed that if externalities such as air pollution and environmental degradation and the costs associated with these as well as benefits such as job creation and economic growth are taken into consideration it could make the case for more sustainable energy projects. A carbon tax and energy efficiency incentives have been introduced, but they will take some time to be implemented fully.

Objectives of this handbook in terms of the Social Pillar of Sustainable Energy A chapter to highlight the social aspects of electricity generation, transmission and distribution as well as how communities are currently affected by these developments has been included. Perceptions of communities could negatively affect sustainable energy projects, and possible ways to address the negative perceptions and scepticism of people towards sustainable energy, climate change and global warming in general is also addressed.

Sources of Energy in South Africa South Africa is well endowed with large resources of coal and uranium but natural gas and crude oil production is very limited and consequently the bulk of our crude oil is imported. However, sustainable energy sources are abundant and are most often regarded as including all renewable sources, such as biofuels, solar power, wind power, wave power, geothermal power and tidal power. It also includes technologies that improve energy efficiency. Opportunities therefore exist for South Africa to introduce more sustainable energy technologies. Conventional fission power is sometimes referred to as sustainable, but this is controversial due to concerns about peak uranium, radioactive waste disposal and the risks due to accident, terrorism, or natural disaster. d

IRP: a document that is produced by the Department of Energy in cooperation with Eskom and NERSA to plan future expansion of the national electricity grid.

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More work would be required to address all these different aspects of sustainability, and alive2green is encouraged to dedicate another version of the handbook to specifically address Biofuels and nuclear possibilities and solutions.

References

www.undp.org/energy/activities/wea/drafts-frame.html www.en.wikipedia.org date retrieved 23 November 2009 search criteria “sustainable energy” Term Definitions for the purposes of this document from InfoResources Focus nr 2/06 Sustainable Energy – Rural Poverty alleviation, compiled by Susanne Wymann von Dach, Hedi Feibel (entec.ag), Andrease Klay and Fani Kakridi Enz. 2006. http://en.wikipedia.org/wiki/Renewable_energy Term Definitions for the purposes of this document from InfoResources Focus nr 2/06 Sustainable Energy – Rural Poverty alleviation, compiled by Susanne Wymann von Dach, Hedi Feibel (entec.ag), Andrease Klay and Fani Kakridi Enz. 2006.

Term Definitions for the purposes of this document from InfoResources Focus nr 2/06 Sustainable Energy – Rural Poverty alleviation, compiled by Susanne Wymann von Dach, Hedi Feibel (entec.ag), Andrease Klay and Fani Kakridi Enz. 2006.

the sustainable Energy Resource HANDBOOK

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Energy efficiency opportunities in existing commercial properties Eskomâ&#x20AC;&#x2122;s energy supply is still severely constrained and future demand is predicted to exceed supply unless energy consumers reduce their consumption. With the local commercial property sector currently consuming up to 12% of Eskomâ&#x20AC;&#x2122;s energy output, commercial properties need to find ways to reduce their consumption not only in the long term but also in the immediate term. Until recently the commercial property sector has not paid much attention to reducing the energy consumption of utilities but this is changing with the Department of Energy having proposed national standards for energy efficiency in buildings. Referred to as SANS 204 (South African National Standard) a 15% target for a reduction in energy demand and annual consumption by commercial and public buildings has been set for 2015. In addition to using less energy, SANS 204 also looks at the orientation of buildings, their usage of alternative sources of energy for water heating, as well as, more efficient climate control. . Furthermore, recent and projected tariff increases in electricity has also seen property owners turning their attention to ways to reduce energy consumption and costs within existing buildings. While there are many energy efficient technologies and adaptations available to this sector, property owners often find it difficult to decide on the best approach that will continue to meet their energy requirements, especially when weighing up the initial outlay cost against cost savings achieved as a result of energy savings.

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Eskom Energy Efficiency Demand Side Management (EEDSM) department, in partnership with energy service consultants, has conducted numerous pilot projects in terms of energy efficiency retrofits. The intelligence gained from these studies has enabled EEDSM to determine which technologies produce the best results in reducing energy consumption, and ensuring favourable payback periods. Property and portfolio owners can now benefit from EEDSM’s technical advisory services for turnkey energy efficiency solutions and flexible funding models that take into account the energy requirements of the tenants. To take advantage of this offer, interested parties can contact the advisory service on 08600 ESKOM (08600 37566), and log a query for an energy advisor in your area to contact you. The following technologies and concomitant behaviour adaptations currently form part of EEDSM’s commercial sector energy efficiency focus: Commercial lighting The following steps can be taken to improve the energy efficiency of an organisation’s lighting: • Replace magnetic ballast with the more energy efficient electronic ballasts • Replace older T12 fluorescent lamps with the newer and more efficient T5 or T8 lamps, or with Light Emitting Diodes (LEDs).

profile • L abel light switches so that employees know which switches control which lighting zones. If they know where to switch off, they’ll be more inclined to do so when they leave an area unoccupied. This is especially relevant for employees working outside of normal office hours. • Light up enclosed spaces separately so that they are not left lit unnecessarily. These switches can be used in conjunction with room occupancy sensors. • Deploy daylight sensors and use programmable control systems (References: www.leonardo-energy.org, Green Building Council of South Africa’s existing buildings survival strategies)

Heating, ventilation and air conditioning (HVAC) Workers in offices and shops work most effectively and comfortably when the ambient temperature is kept in the “golden zone” - between 18°C and 22°C. In winter, when the temperature falls below this zone, the air in the building must be heated. In summer, when temperatures rise above 22°C, the air must be cooled until it drops to within the ideal zone. Variable speed drives (VSDs) A VSD is a system that controls the speed of an electric motor by controlling the frequency of the electrical power supplied to the motor. For example, in ventilation systems for large buildings, variablefrequency motors on fans save energy by allowing the volume of air moved to match the system demand. VSDs are particularly suited to electronic control systems such as programmable logic controllers (PLCs) and computers (PCs).

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Hot water management Commercial properties with facilities that have major hot water demands, such as kitchens, multiple ablutions, laundries etc, can save up to 40 – 60% of their energy costs by adopting more efficient water heating processes, and by reducing their consumption of hot water: • Heat pumps An important technology that is simple and effective in lowering electricity usage is the deployment of heat pumps. Heat pumps offer major consumers of electricity a significant opportunity to reduce costs related to water heating. A heat pump can save up to 66 % of energy consumption, and, in some circumstances even more than that. • Shower heads and water flow regulators Many large buildings include ablution facilities for workers where multiple showers consume large volumes of hot water on a daily basis. Together with solar water heating or heat pumps, one very effective way to reduce this drain on resources is to fit energy and water saving shower heads or water flow regulators. Facility managers should use the services of an accredited plumber when retrofitting showers because factors such as water pressure will influence what products are most suitable. Eskom’s technical advice could save yourbusiness a fortune- and it’s absolutely free. Just call our Contact Centre: 08600 ESKOM (08600 37566).

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Petroleum Agency SA Petroleum Agency SA is a government agency, reporting to the Department of Mineral Resources. The Agency is known to some as South Africa’s oil and gas exploration and production Regulator, Licensing Agent or Concessionaire. While these terms describe some of the responsibilities of the Agency, its role is more than this. Its role is set out in a key piece of legislation, known as the Minerals and Petroleum Resources Development Act (No 28 of 2002), as well as its accompanying regulations. This act deals with all aspects of mineral exploration and production in South Africa and has a specific chapter dealing with petroleum.

The Mineral and Petroleum Resources Development Act formalises the role and responsibilities of the Agency. The first formalised role is the promotion of exploration for and development of South Africa’s oil and gas resources. The Agency is thus expected to act as the national archive for oil and gas exploration and production data, to appraise potential for oil and gas within South Africa, to promote exploration and development of oil and gas resources, and to raise awareness of petroleum resources at national level. We also act as an advisor to government and have the mandate to acquire seismic data for reconnaissance exploration in frontier areas. The Minister has also chosen to delegate certain responsibilities to the Agency. These include: • Approval of Reconnaissance Permits and Technical Cooperation Permits • Recommendation to Ministry regarding approval of Exploration Rights • Approval of Environmental Management Programmes • Recommendation regarding amendment of work programmes • Approval of pecuniary provisions

profile In other words, we are instructed to develop, facilitate and regulate the growth of the upstream industry in South Africa. Our vision of a viable, sustainable and responsible upstream industry in South Africa, and our mission, to promote, facilitate and regulate exploration and sustainable development of oil and gas in South Africa are thus directly concerned with this mandate, and reflect our commitment to our task, as well as to serving the interests of our countryâ&#x20AC;&#x2122;s people. Oil and gas exploration in South Africa To date, South Africa has only had oil and gas production from the south coast off Mossel Bay. Gas from the F-A gas field is piped to the Mossel bay plant onshore, where it is converted to a longchain wax that is then used to manufacture synthetic diesel and other petroleum by-products. Oil has been produced from the Oribi, Oryx and Sable oil fields but this production is reaching its end. While production from the south coast is decreasing, there is new production over the horizon. In August 2009, the Agency granted a Production Right over the Ibhubesi Gas Field off the west coast to Forest Exploration International and its joint venture partners. Exploration for further oil and gas accumulations continues - there are 4 main thrusts of exploration activity in South Africa. Onshore, there are a large number of companies exploring for coal bed methane. In the central part of the country, there is a group investigating gas flowing from boreholes drilled for gold exploration, and in the south of the country, international exploration companies are about to begin assessing the southern Karoo Basin for its potential to yield shale gas. The Agency looks forward to the day when this most environmentally friendly of fossil fuels plays a major role in the energy mix sustaining the development of our nation. Offshore, there are about 14 local and international companies now involved in conventional oil and gas exploration.

Contact us: Petroleum Agency SA 7 Mispel Road Bellville Cape Town 7789 PO Box 5111 Tygervalley 7536 Switchboard: +27 21 938 3500 Fax: +27 21 938 3520 Website: www.petroleumagencysa.com

chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

the sustainable Energy Resource HANDBOOK

chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

The South African Wholesale market for electricity: requirement for renewable energy uptake F Kruger National Energy Regulator of South Africa (NERSA)

Introduction Eskom has been the biggest player in the South African electricity supply industry at a wholesale level for as long as this industry has existed, with Eskom being formed in the 1920s and the country being interconnected at 400 kV level since the early 1970s. Even though at retail level the local authorities have about 45% of the market, Eskom owns around 95% of the countryâ&#x20AC;&#x2122;s generation capacity and all transmission networks. At present the system operations function, (where, among other things, the decisions are made which generators to use) is also part of Eskom. Contracting with nonEskom generation facilities has to be done in such a way that the system operator would be willing to schedule the renewable energy independent power producer for production, and even more importantly, pay for the power. Given the size of Eskom, this is a source of doubt for private investors in power generation facilities.

Short History At present the reality is that there is no wholesale market for electricity in South Africa. The Electricity Regulation Act and the Electricity Pricing Policy clearly specify the requirement for open access to all on the national transmission network, but this has not been tested. Nobody has been able to successfully penetrate the wholesale level to compete with Eskom. Encouraging developments of the past 15 years have recently been neutralised. For instance, in 1996 Eskom implemented what was called an experimental wholesale power pool modelled on the United Kingdom wholesale market. At the time it was envisaged that the South African electricity supply industry would migrate towards a competitive market arrangement, and Eskom wanted to be ready for such a move by experimenting with the system in a less abrasive environment than real competition. It was seen as an attempt to gain experience with the skills needed to participate in a competitive environment. The internal Eskom competitive power pool was introduced on January 1, 1996, with trading rules based on the United Kingdom market. It was a day-ahead market, with hourly prices determined by a process where all generating facilities would offer their availability at prices for blocks of power determined by each facility itself. The Eskom generation division grouped its generation facilities into clusters, which competed against each other for profitability, while satisfying the needs of consumers of electricity. the sustainable Energy Resource HANDBOOK

chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

The demand side did not participate, and was represented by an hourly load forecast. Demand response was thus seen as completely price inelastic, and an hourly supply curve was constructed with the price determined by the intersection of this supply curve with the vertical load forecast demand line for that hour. A generation supply schedule was derived from this supply curve. This was called the unconstrained schedule, because it was determined by generation availability and price only, with no cognisance of the condition of the transmission network. A constrained schedule was also calculated to satisfy the needs of the network, and by 14:00 a day ahead, the contracts for supply was settled between the system operator and each relevant generation facility.

Further Developments This wholesale market model could have been a good starting platform when introducing non-Eskom generation into the mix, but events have overtaken it. In 2004 the planned move to a multi-market model in South Africa was abandoned, and Eskom was re-integrated to become one entity again. Much of the good work done to separate the different businesses inside Eskom from each other was undone and the Eskom experimental power pool slowly eroded to become a centrally planned generator scheduling tool as a result of this re-integration exercise. What South Africa now has, is in effect no market at all. A market would exist only if different suppliers could access the wholesale buyers to consider their product for purchase. At present this is not possible, even though certain initiatives appear to enable such a wholesale market. The Energy White Paper of 1998 mentions the following: To ensure the success of the electricity supply industry as a whole, various developments will have to be considered by government over time, namely: • giving customers the right to choose their electricity supplier; • introducing competition into the industry, especially the generation sector; • permitting open, non-discriminatory access to the transmission system; and • encouraging private sector participation in the industry. Such open access was still a future requirement back in 1998. The Electricity Regulation Act (Act no 4 of 2006) now prescribes the following: • A transmission or distribution licensee must, to the extent provided for in the licence, provide nondiscriminatory access to the transmission and distribution power systems to third parties. • This would indicate the ability of a producer of electricity to contract with a remote purchaser of electricity, and to transport the product by using the transmission and/or distribution networks from the producer to the purchaser. The Electricity Pricing Policy, confirms this requirement: • Fair and non-discriminatory access to and use of networks to all users of the relevant networks. The above three quotes from Government sources indicates a consistent ongoing intent for policy design support of a wholesale market with multiple providers of electricity. In practice there are problems. 32

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chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

The Current Situation As the experience in many other countries has indicated, the incumbent utility in a monopoly position does not easily give up its position of privilege. Even if no alterior motive is intended, it is easy to see that Eskom is protecting itself - as its governance and mandate effect dictates it should. The legal environment established for state-owned enterprises expects from the organisation to operate in effect in an indefinite manner very similar to privately-owned and listed companies. As a result, the open access of the electricity networks has not been shown to exist through examples of significance where non-Eskom producers are participating in the wholesale market. When NERSA approved the Renewable Energy Feed-In Tariffs (REFIT) (phase 1) it generated optimism regarding the introduction of mainly wind and solar power plants. The delays in the implementation of even the first such plant has now changed into disillusionment in many quarters, with no Power Purchase Agreement (PPA) being signed by the end of February 2010, almost a year later. The main reasons given for the lack of a PPA focus on the vagueness regarding the integrated resource plan legally required before a generation facility can be licensed, and obtaining a connection agreement to the Eskom networks in time for planned production to start. These difficulties are symptomatic of the vaguely defined local wholesale market. The Electricity Regulations on New Generation Capacity (in support of the Electricity Regulation Act, 2006) specifies that a ‘buyer’ will be appointed by the Minister of Energy, and even though the indications are that this buyer will form part of the system operator, it had not been formally appointed by end of February 2010. The system operator is a part of Eskom Transmission, and the Department of Energy has indicated that it favours the establishment of the system operator. The reason for this move is simple: if any success is to be realised in signing up renewable energy producing facilities, a buyer that is part of Eskom would face the same frustration in getting approval from the Eskom Board for these long-term contracts, while the Board is concerned with its own fiduciary duties as described in the legislation that governs Eskom as a company. This specific issue, of Eskom being in a critical position in the wholesale market, creates many of the difficulties around the establishment of a functioning wholesale market in South Africa. Eskom generates about 95% of the electricity sold here, and its transmission network is fully dominant. At present the system operations function is part of Eskom, making the choice of generator and the planning and operations of the transmission network practically Eskom’s choice, and creates conflict between generation and transmission. It puts the potential private generation facility in a position where its connection to the grid is in Eskom’s hands, with possible delays that could be critical for a private investor’s decision to proceed with a project. Once connected, the private facility will be scheduled for operations through the decision of the owner of competing generation facilities, and even if the system were completely objective and fair, perceptions of favouritism could easily arise.

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chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

An Independent System Operator? The governmentâ&#x20AC;&#x2122;s objective to create an independent system operator is thus critical for the establishment of a functioning wholesale market in South Africa. In its simplest form, this transformation of the industry would take time, since legislation has to be developed, put through a public participation process, approved and implemented, and this might take anything from 18 months (optimistic) to perhaps three years or more, depending on opposition from interested parties. Furthermore, this independent system operator would need financial backing from government to assure investors it would be able to pay termination fees specified in the supply contracts, should difficulties arise. This would assist to keep offered prices low, because private investors would price in risk if the independent system operator (with no balance sheet behind it to be able to pay any such fees) was left on its own. But setting up the system operator out of Eskom is only a part of what would be required to free the wholesale market from perceived influence of the major player. At present the planning function (transmission planning and generation capacity planning) is part of Eskomâ&#x20AC;&#x2122;s system operator, and it is not clear whether these functions should be moved with the system operator. Eskom would most probably not be in agreement with such a move, seeing the planning function as an integral part of its business. However, there are examples of independent system operators with the planning function included in their mandate, for example ENTSO-E in Europe, the NYISO in New York, EMA in Singapore, and the system operator of Alberta in Canada. If, for example, the system operator has the accountability for system reliability and energy sufficiency, it follows that planning should be part of its mandate to ensure it has the system design that would allow the required performance. The next hurdle for a private participant in the wholesale market is to gain a connection to the grid. Again, even if no favouritism exists, a delay in the connection of a privately-owned generation facility could easily be seen as discrimination against it if the transmission system is owned by Eskom. By moving the full transmission system out of the Eskom portfolio into a separate entity, a wholesale market would at least appear to be fairer for all participants involved. At this point it should already be clear that the South African Government has moved away from a market design with short-term price formation. Once independent power producers are signed up with long-term power purchase agreements, a day-ahead market with hourly (or half hourly) price determination based on offers to sell and bids to purchase would be difficult to introduce, since the owners of these private generation facilities would tend to prefer the low risk conditions of a longterm contract over the high risk profile inherent to a free market approach.

More Developments are Needed Should the system operator be successfully established, the electricity industry would look different, and a number of additional changes would be necessary to ensure an efficient wholesale market. Given the imminent introduction of independent power producers with long-term power purchase 34

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chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

agreements, the management of Eskom’s power stations would be out of line with the privately owned facilities, and allegations of unfair treatment of the differently owned power stations would be possible. The private facilities would be managed through a long term contract with the buyer (assumed to be part of the independent system operator), negotiated before the facility was built, with all construction risk in the hands of the developer. The price would also be determined beforehand, with certain escalation clauses and pass through mechanisms as appropriate. The Eskom owned facilities are presently managed with all risks in the hands of the electricity customers. Escalation in the cost of the facility is passed through to the customers, and all operations and fuel costs are passed through as well. It would thus be clear that the privately-owned facilities have to assume much more risk than the Eskom-owned facilities. To introduce the final layer of fairness in the wholesale market, it would be necessary to convert the Eskom pricing model to reflect long-term contracts with pre-determined prices and an escalation arrangement and pass through of certain parts of the cost structure, similar to the power purchase agreements signed with privately owned facilities. It would necessitate the breaking up of Eskom Generation Division into a number of clusters of power stations, or even individual power stations, to be able to introduce the required ‘level playing field’ for all generators. An alternative would be to focus on new Eskom generation facilities, with long-term power purchase agreements to manage these facilities. The existing Eskom generation facilities could remain in the current pricing mechanism. This might work, but would be less fair towards new market entrants than a full conversion to long-term contracts to manage generation pricing. Purchasing out of the wholesale market is another issue. At present the local authorities purchase in bulk from Eskom, who also supply about half of the retail users of electricity. This is obviously not the ideal system, reflected in the different price levels and quality of supply variations experienced by electricity users. The proposed solution is the introduction of six regional electricity distributors, or REDS. These REDS would cover the full retail supply, taking over from Eskom Distribution Division and all local authorities to give a consistent supply industry to all electricity consumers. The conversion to REDS has been mired in difficulties for more than 10 years now, due mainly to the right of reticulation being part of the local authority mandate as described in the Constitution of South Africa. For this discussion, to move towards an efficiently functioning wholesale market, it has to be assumed that REDS would be successfully introduced over the same period as the introduction of an independent system operator. (Note: REDs is not critical for a well functioning wholesale market – the municipalities and Eskom distribution could still buy from the Single Buyer, but REDs will make the entire process easier to manage.) The independent system operator would also be the interface with the Southern African Power Pool (SAPP), managing long-term contracts with neighbouring countries, and buying and selling shortterm energy in the regional market if and when it is operational. The SAPP rules originally required all transactions to be between national utilities, and the independent system operator, which most the sustainable Energy Resource HANDBOOK

chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

probably would include the buyerâ&#x20AC;&#x2122;s office which would be best placed to assume this role in the SAPP interface.

The Role of the Regulator The introduction of this wholesale market model would have an impact on the regulatory process. The economic regulator, NERSA, regulates prices currently through a rate of return methodology with Eskom applying for a three-year period to give some pricing certainty. Eskom includes its revenue requirements to run its Generation, Transmission and Distribution divisions for the full period to cover cost of operations, depreciation, and a return on the regulatory approved assets in its system. No electricity sales take place before the end user buys it from Eskom for about half the electricity consumed in South Africa, and for the other half it would be one transaction when the relevant local authority purchases electricity in bulk from Eskom before selling it to the end user. Local authorities also apply for price adjustments to be approved by NERSA, on an annual basis. Since it is anticipated that the wholesale market would not have a short-term pricing component, it would be regulated on the supply side through long-term contracts between generation facilities and the independent system operator, and on the demand side through the REDs buying from the independent system operator at wholesale tariffs, approved by NERSA. Retail customers, who are the end users of electricity, would purchase their electricity through regulated retail tariffs per customer category, much the same as at present, but more uniformly regulated and at much closer pricing levels countrywide. The independent system operator would be the aggregator of all costs, and the approved wholesale tariffs for purchases from the independent system operator by the REDs would include all costs as defined by the long-term power purchase contracts from all generators, as well as the cost of transmission and the cost of the system operator.

Conclusions The present electricity supply industry in South Africa is dominated by Eskom, and no wholesale market exists. The introduction of independent power producers, including renewable energy options through the recently introduced Renewable Energy Feed-In Tariffs (REFIT), are hampered by this lack of a clearly defined wholesale market. The use of long-term power purchase agreements in current negotiations for the first privately owned generation facilities, as well as the possibility of long term REFIT contracts, would indicate a future wholesale market with price formation through the long term supply contracts on the supply side. All Eskom generation facilities should ideally be converted to also sell electricity to the independent system operator through long-term power purchase agreements. Regulated wholesale tariffs would be used on the demand side, where the independent system operator would purchase electricity from generators through the application of the long-term supply contracts, apply for wholesale tariff level approval from NERSA to recover all generation and transmission costs, and sell it on to REDs at the approved wholesale tariffs. Retail tariffs would include the network and retail costs incurred by the REDs, and will be approved by NERSA. 36

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chapter 2: The South African Wholesale market for electricity: requirement for renewable energy uptake

The cost of generation, if procured through a competitive process as prescribed by the New Generation Regulations issued by the Department of Energy in 2009, will be deemed efficient by NERSA if the competitive process was followed. Eskom generation facilities would be regulated through benchmarking and other efficiency enhancing regulatory procedures, as is done at present. However, one would expect that Eskom would eventually have to participate in the prescribed competitive processes to win supply contracts only if they are efficient. A long and difficult process is still needed to move the South African supply industry from the current situation with no real wholesale market to the situation described above where an efficiently functioning wholesale market would exist. It would require the successful introduction of REDS, the move of the system operator from Eskom into an independent position, and the introduction of long term power purchase agreements for all Eskom generators, then also managed as separate business entities even if still owned by Eskom. This independent system operator would need to have substantial financial backing when signing up all generation facilities in South Africa to ensure, in the case of financial strain, the private investors would be able to receive termination payments. It is presently thought that the South African Government would be able to give such support to the independent system operator. Failure to give such guarantees would increase the cost of electricity when the risk is priced into the long term contract price offered by private investors. Even though a number of tough decisions are needed, and perseverance in the face of opposition would also be required, the benefits for South Africa would be measurable. Eskom is not in a position to expand fast enough to ensure enough electricity would be available during the next decade where economic growth is required to reduce poverty and unemployment. A functioning wholesale market for electricity is needed to entice private investors to South Africa with investment plans for electricity generating facilities, for the good of the country.

References

Electricity Regulation Act (Act No 4 of 2006) Electricity Pricing Policy Government Gazette, 19 December 2008 (No. 31741) White Paper on Energy Policy December 1998 page 42 Electricity Pricing Policy Government Gazette, 19 December 2008 (No. 31741) Policy position number 5 NERSA Renewable Energy Feed In Tariff March 2009 Electricity Regulations on New Generation Capacity Government Gazette 5 August 2009 Presidentâ&#x20AC;&#x2122;s State of the Nation Address, 11 February 2010

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BOSCH PROJECTS PROVIDES RENEWABLE ENERGY SOLUTIONS FOR THE AFRICAN CONTINENT Bosch Projects, leaders in the fields of consulting, equipment design, project management and engineering, is committed to developing and implementing renewable energy solutions in Africa. This specialist energy business unit, which comprises a team of highly skilled professionals, is making a significant contribution towards effective reductions in the volume of global CO2 emissions. Bosch Projects provides efficient solutions for cogeneration, biofuels projects, ethanol distilleries, power generation and reticulation, as well as energy from waste. The company also focuses on energy optimisation, feasibility studies, consulting services, process engineering and plant performance assessments. These processes are designed to be cost effective, through versatile ‘Energy and Mass Balance’ software that optimises: • • • • • •

plant efficiencies equipment selection and configuration co-generation of renewable electricity into the national power grid cleaner air emissions using advanced scrubber technology reduced carbon footprint sustainable energy production and job creation

The company has been involved in many renewable energy projects, offering services that extend from feasibility and consulting studies, to large construction and plant upgrade projects. These specialist services also include equipment supply, commissioning, operator training and operations management. Successes for the company include the recent launch of an international operation in Brazil’s Säo Paulo state. Bosch Projects do Brasil Ltda (BPB) and Dedini Industrias de Base, the largest supplier of equipment to the Brazilian sugar and ethanol industry, have established a solid relationship where Dedini has the South American rights to Bosch Projects’ technology. “This agreement presents an exciting opportunity for both companies. Bosch Projects has extensive consulting and project management experience in Africa and these skills, coupled

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with Dedini’s cutting edge technology and high quality equipment, positions us strongly within the booming African ethanol industry,” says Butch Carr, director, energy, Bosch Projects, which is part of the B & A Group. “With the growing concern internationally about global warming, African countries are certainly going to benefit from the increased demand for fuel ethanol produced from renewable crops.” The Bosch Projects energy team has provided Dedini with technical support at the Kenana ethanol project in the Sudan. Bosch Projects and Stemele Bosch Africa (SBA) have also been appointed managers and engineers for the Dombe Ethanol and Cogeneration Project in Mozambique. The new plant should be fully operational by 2013. Sugar cane, which is able to convert up to 2% of incident solar energy to biomass, is one of the most efficient photosynthesisers in the plant kingdom. In addition to this, sugar cane has the ingredients required for further processing for fuel and water. Bosch Projects uses advanced technology for the production of raw and refined sugar from sugar cane; bio-ethanol from sugar, molasses or sugar cane juice; steam and electricity from bagasse (sugar cane biomass) and Bio-methane from anaerobic digestion of vinasse for steam or electricity.

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This renewable resource is an ideal feedstock for a range of sugar and bio-energy refining products and by-products that include sugar, molasses, Bio-ethanol, Vinasse, Bio-methane and fuel for steam and/or electricity. Bosch Projects, which is compliant with the ISO 9001 : 2000 International Standard for Quality Management Systems, believes that internationally established quality controls are of paramount importance in the local engineering sector. This certification confirms the companyâ&#x20AC;&#x2122;s commitment to providing clients with a world class consulting, project engineering and operational management service. Bosch Projects integrates engineering and technology to provide multi-disciplinary solutions, from concept to conclusion, in diverse sectors that include the sugar industry, power utilities and materials handling, as well as commercial and industrial operations.

Butch Carr, Director â&#x20AC;&#x201C; Energy, Bosch Projects (Pty) Ltd PO Box 2009 Durban 4000 Telephone (031) 250 0576 Fax (031) 250 0503 Email carrb@bproj.co.za Website www.boschprojects.co.za

chapter 3: New more sustainable generation technologies

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chapter 3: New more sustainable generation technologies

New more sustainable generation technologies

Dr Elsa du Toit Saha International (Pty) Ltd

Introduction Even as industrial civilisation reaches into the farthest corners of the globe to extract resources such as oil, timber and fish, environmentalists are striving to mitigate its deleterious effects on the biosphere. Projects to reduce pollution, prevent climate change and protect biodiversity, however, are drawing criticism that they could drive indigenous people off their lands and destroy their livelihoods. It is clear that environmental, economic and social impacts of existing and future generations will continue, the key would be to reduce it and mitigate against its potential negative impacts as far as possible and build on the positive impacts that it might have. Technological innovation, depending on the financial resources allocated to it, has managed to grow very fast in the past century. More and more funding is being allocated to cleaner energy technologies as well and the results are extraordinary. However, cost implications, time frames and possible impacts need to be managed -as the Americans have realised. “The US House of Representatives passed the American Clean Energy and Security Act in June 2009 and sent it to the Senate. The House bill aspires in one breathtaking stroke to take on renewable energy, carbon capture and sequestration (CCS), nuclear power, electric vehicles, carbon cap and trade, power transmission, energy efficiency and climate adaptation. Yet missing from this sprawling draft is prioritisation. To accomplish a worldwide, fundamental energy overhaul, we will need to keep our eye on the big picture – the technology systems that will make a large, lasting difference – and not get mired in excruciating details.” This chapter will focus on the latest developments in more sustainable energy technology that might be possible in the longer term future.

Chlorophyll Power As nature’s own solar cells, plants convert sunlight into energy via photosynthesis. New details are emerging about how the process is able to exploit the strange behaviour of quantum systems, which could lead to entirely novel approaches to capturing usable light from the sun. A better understanding of this intersection of microbiology and quantum information, researchers say, could lead to ‘bioquantum’ solar cells that are more efficient than today’s photovoltaics. the sustainable Energy Resource HANDBOOK

chapter 3: New more sustainable generation technologies

Wind power from the stratosphere According to a Stanford University study released in July 2009, the high altitude winds that constantly blow tens of thousands of feet above the earth hold enough energy to supply all of human civilisation 100 times over. California’s Sky WindPower has proposed harvesting this energy by building fleets of giant, airborne, ground tethered windmills, while Italy’s Kite Gen proposes to accomplish the same feat using kites.

The power of garbage Trash is loaded with the energy trapped in its chemical bonds. Plasma gasification, a technology that has been in development for decades could finally be ready to extract it. In theory, the process is simple. Torches pass an electric current through a gas (often ordinary air) in a chamber to create a superheated plasma – an ionised gas with a temperature upward of 7000 degrees Celcius, hotter than the surface of the sun. When this occurs naturally we call it lightning, and plasma gasification is literally lightning in a bottle. This converts organic compounds into syngas. The slag can be processed into materials suitable for use in construction. In practice, the gasification idea has been unable to compete economically with traditional municipal waste processing. But the maturing technology has been coming down in cost, while energy prices have been on the rise. Now “the curves are finally crossing – it is becoming cheaper to take the trash to a plasma plant than it is to dump it in a landfill,” says Louis Circeo, director of Plasma Research at the Georgia Tech Research Institute.

Nuclear latest developments Despite long-standing public concern about the safety of nuclear energy, more and more people are realising that it may be the most environmentally friendly way to generate large amounts of electricity. If developed sensibly, nuclear power could be truly sustainable and essentially inexhaustible and could operate without contributing to climate change. In particular, a relatively new form of nuclear technology could overcome the principal drawbacks of current methods – namely, worries about reactor accidents, the potential for diversion of nuclear fuel into highly destructive weapons, the management of dangerous, long-lived radioactive waste, and the depletion of global reserves of economically available uranium. This nuclear fuel cycle would combine two innovations: pyrometallurgical processing (a high temperature method of recycling reactor waste into fuel) and advanced fast-neutron reactors capable of burning that fuel. With this approach, the radioactivity from the generated waste could drop to safe levels in a few hundred years, thereby eliminating the need to segregate waste for tens of thousands of years. Uranium and plutonium are not the only fuels that can power a nuclear reactor. With an initial kick from more traditional fissile materials, thorium can set up a self-sustaining ‘breeder’ reaction that produces uranium 233, which is well suited to nuclear power generation. The process has the added 44

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chapter 3: New more sustainable generation technologies

benefit of being resistant to nuclear proliferation, because its end products emit enough gamma rays to make the fuel dangerous to handle and easy to track.

Intermittency and reliability A new infrastructure must provide energy on demand at least as reliably as the existing infrastructure. WWS technologies generally suffer less downtime than traditional sources. The average US coal plant is off line 12.5% of the year for scheduled and unscheduled maintenance. Modern wind turbines have a down time of less than 2% on land and less than 5% at sea. Photovoltaic systems are also at less than 2%. Moreover when an individual solar or wave device is down, only a small fraction of production is affected; when a coal nuclear or natural gas plant goes offline, a large chunk of generation is lost. The main Wind Water and Sunlight (WWS) challenge is that the wind does not always blow and the sun does not always shine in a given location. Intermittency problems can be mitigated by a smart balance of sources, such as generating a base supply from steady geothermal or tidal power, relying on wind at night when it is often plentiful, using solar by day and turning to a reliable source such as hydroelectric that can be turned on and off quickly to smooth out supply or meet peak demand. For example, interconnecting wind farms that are only 100 to 200 miles apart can compensate for hours of zero power at any one farm should the wind not be blowing there. Also helpful is interconnecting geographically dispersed sources so they can back up one another, installing smart electric meters in homes that automatically recharge electric vehicles when demand is low and building facilities that store power for later use. Because the wind often blows during stormy conditions when the sun does not shine and the sun often shines on calm days with little wind, combining wind and solar can go a long way toward meeting demand, especially when geothermal provides a steady base and hydroelectric can be called on to fill in the gaps.

The costs of Wind Water and Sunlight (WWS) The mix of WWS sources in the US plan can reliably supply the residential, commercial, industrial and transportation sectors. The logical next question is whether the power would be affordable. For each technology, they calculated how much it would cost a producer to generate power and transmit it across the grid. They included the annualised cost of capital, land, operations, maintenance, energy storage to help offset intermittent supply and transmission. Today the cost of wind, geothermal and hydroelectric is all less than 7 cents a kilowatt hour; wave and solar are higher. But by 2020 and beyond wind, wave and hydro are expected to be 4 cents per kilowatt hour or less. For comparison the average cost in the US in 2007 of conventional power generation and transmission was about 7 c/kWh, and it is projected to be 8 c/kWh in 2020. Power from wind turbines, for example, already costs about the same or less than it does from a new coal or natural gas plant, and in the future wind power is expected to be the least costly of all options. The competitive cost of wind has made it the second largest source of new electric power generation in the US for the past three years, behind natural gas and ahead of coal. the sustainable Energy Resource HANDBOOK

chapter 3: New more sustainable generation technologies

Solar power is relatively expensive now but should be competitive as early as 2020. A careful analysis by Vasilis Fthenakis of Brookhaven National Laboratory indicates that within 10 years, photovoltaic system costs could drop to about 10 c/kWh, including long-distance transmission and the cost of compressed air storage of power for use at night. The same analysis estimates that concentrated solar power systems with enough thermal storage to generate electricity 24 hours a day in spring, summer and fall could deliver electricity at 10 c/kWh or less. When the so called externality costs (the monetary value of damages to human health, the environment and climate) of fossil fuel generation are taken into account, WWS technologies become even more cost competitive. Overall construction of a WWS system might be in the order of US$100 trillion worldwide, over 20 years, not including transmission. But this is not money handed out by governments or consumers. It is investment that is paid back through the sale of electricity and energy. And again relying on traditional sources would raise output from 12.5 to 16.9 TW, requiring thousands more of those plants, costing roughly US$10 trillion, not to mention tens of trillions of dollars more in health, environmental and security costs. The WWS plan gives the world a new, clean, efficient energy system rather than an old, dirty and inefficient one.

Photovoltaic innovative financing solutions A new innovation in financing, however, has opened up an additional possibility for homeowners who want to reduce their carbon footprint and lower their electricity bills: get the panels for free, and then pay for the power as you go. The system works similar to a mortgage. Organisations and individuals looking for a steady return on their investment, typically banks or municipal bond holders, use a pool of cash to pay for the solar panels. Directly or indirectly, homeowners buy the electricity produced by their own roof top at a rate that is less, per kilowatt-hour, than they would pay for electricity from the grid. Investors get a safe investment – the latest generation of solar panel technology works dependably for years – and homeowners get a break on their monthly bills, not to mention the satisfaction of significantly reducing their carbon footprint. While the cost from fossil fuels has increased 3% to 5% a year for the past decade, the cost of solar panels has fallen on average 20% for every doubling of its installed base. Grid parity is where these trend lines cross – after that, solar has the potential to power more than just homes.

Conclusion A large-scale wind, water and solar energy system can reliably supply the world’s needs, significantly benefiting climate, air quality, water quality, ecology and energy security. The obstacles are primarily political, not technical. A combination of feed-in tariffs plus incentives for providers to reduce costs, elimination of fossil fuel subsidies and an intelligently expanded grid could be enough to ensure rapid deployment. Of course, changes in the real-world power and transportation industries will have to overcome sunk investments in existing infrastructure. But with sensible policies, nations could set a 46

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goal of generating 25% of their new energy supply with WWS sources in 10 to 15 years almost 100% of new supply in 20 to 30 years. With extremely aggressive policies, all existing fossil-fuel capacity could theoretically be retired and replaced in the same period, but with more modest and likely policies full replacement may take 40 to 50 years. Either way, clear leadership is needed, or else nations will keep trying technologies promoted by industries rather than vetted by scientists. The utilisation of a new, much more efficient nuclear fuel cycle – one based on fast neutron reactors and the recycling of spent fuel by pyrometallurgical processing – would allow vastly more of the energy in the earth’s readily available uranium ore to be used to produce electricity. Such a cycle would greatly reduce the creation of long-lived reactor waste and could support nuclear power generation indefinitely. Technology improvements depend largely on the amount of money that is given to research by governments and lately, due to the emphasis on the environment and global warming, significant amounts of funding is flowing into new technology developments for energy. If new energy technology developments would be anything like cell phone technology or computer technology we will be in a completely different world before we know it.

References

Scientific American, September 2009, Sustainable Developments, page 16 Scientific American, September 2009, Special Issue: Understanding origins, page 10 Scientific American December 2009, Energy – More Ideas to Watch, page 30 Scientific American December 2009, Environment – The power of garbage Scientific American December 2005, Smarter Use of Fast Neutron reactors Scientific American December 2009, Hot Nukes page 30 Scientific American, December 2009, World Changing Ideas. The no-money-down solar plan

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Africa Thermal Insulations (Pty) Ltd

In February 2003 the Alububble® business was bought from Kohler FlexPak by Khanyisa Africa Development Company (Pty) Ltd (Khanyisa). In April, 2010 the company name was changed to Africa Thermal Insulations (Pty) Ltd (ATI). ATI is a private entity whose shareholders form a consortium consisting of the Buildcraft Group, RMB Corvest (a company within the Rand Merchant Bank and First Rand Group) and certain key members of the Management Team. ATI manufactures, sells, markets and distributes building insulation products throughout Southern Africa. The company operates within the stringent disciplines of the ISO 9001:2008 Quality Management System. The ongoing utilisation of a state of the art laboratory and product testing facility ensures that ATI continues to be a leader in technological research and development. ATI is a corporate member of the Thermal Insulation Association of Southern Africa (TIASA) and a member of the Green Building Council. The company operates at the highest level of business practices and ethical standards. We are committed to South Africa, our customers, our staff and our products with service excellence being our mission. Our signature product, Alububble® originated in Europe and was first introduced into South Africa in 1986 when a purpose designed and built machine was imported from Europe. Alububble® Radiant Barrier is produced locally and enjoys the enviable position of being the de facto standard and market leader in building insulation products consisting of sealed plastic bubbles laminated to an aluminium foil throughout Southern Africa. Alutherm® Thermal Roof Insulation is the latest addition to our product range thereby offering a bulk product incorporating either a polyester or fibreglass blanket with an aluminium foil facing laminated to one side and an Alububble® facing on the other side. Alububble® and Alutherm® comply with SABS 1381 Part 4 and Part 1 Standards respectively. They also carry a B1 certification to SANS 428 for Fire Performance Classification of Thermal Insulation Building Envelope Systems. Of major benefit to our customers is that ATI offers Alububble® and Alutherm® products in both standard rolls and in special lengths which ensures the most efficient usage of the material by reducing offcuts. Our experience, training and expertise in the thermal insulation marketplace, coupled with a range of product offerings over and above those of Alububble® and Alutherm® enable us to focus on the conservation of energy within the building envelope to provide our customers with the most effective solutions to their insulation needs. Contact Number 011 462 9122 Website www.alububble .co.za

Picture shows ATI Board of Directors from left Warren McNey, Nolene van den Heever and Keith Pryce-Williams

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Services within your attic space are protected from drying, cracking and degradation caused by UV and Solar heat gain

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Effective water vapour barrier under roof tiles or sheeting.

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Improves the performance of bulk insulation by effective temperatures within your attic space.

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Non Toxic

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Non Carcinogenic

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Does not attract Rodents

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Easy to Install

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In accordance with the building regulations products have a 15 year guarantee.

•

Reduces dust penetration into your building and or attic space.

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Alububble® and Alutherm® products are available in special lengths for efficient installation of material.

2010/05/27 03:54:18 PM

chapter 4: TRANSMISSION SYSTEM CONSTRAINTS and RENEWABLE ENERGY

the sustainable Energy Resource HANDBOOK

chapter 4: TRANSMISSION SYSTEM CONSTRAINTS and RENEWABLE ENERGY

TRANSMISSION SYSTEM CONSTRAINTS and RENEWABLE ENERGY F Kruger National Energy Regulator of South Africa (NERSA) and

Introduction This chapter aims to give a short and high level introduction to the local challenges that would be experienced with the introduction of renewable energy as a source to produce electricity. It is recognised that the issues will be addressed by the relevant organisations when appropriate and affordable. What follows should be read as an introduction to the issue.

REFIT When NERSA approved Renewable Energy Feed In Tariffs (REFIT) for selected technologies during 2009, the initial reaction from the renewable energy industry was positive, with even a bit of enthusiasm visible. It was quickly realised that REFIT, as the feed in tariff scheme became known, was only a part of the bigger system necessary to enable the signing of power purchase agreements between ‘the buyer’ (as defined in the New Generation Regulations of the Department of Energy) and renewable energy producers. Mainly generators can be licensed if they are included in the country’s Integrated Resource Plan (IRP) and the disappointment was quickly visible at the end of 2009 when the first IRP included limited amounts of renewable energy in the plan. These limits on capacity were most probably necessary for a variety of reasons related to the introduction of new technologies, considering the technical and cost challenges that still need to be defined in detail. In fact, the physical limitations of the transmission and distribution systems should be seen as one of the issues still to be addressed.

A Scenario If no limits were given, and for example 1 000 MW of wind generation was established on the northern part of the west coast (Northern Cape Province), the transmission system would not have been able to move the 1 000 MW from these new sources to the load centres. The distribution networks between the transmission substations and the actual generation facilities would also have suffered. That area of the sustainable Energy Resource HANDBOOK

chapter 4: TRANSMISSION SYSTEM CONSTRAINTS and RENEWABLE ENERGY

the country has a very low fault level, leading to substantial voltage variations with changes in load. Adding a generator when wind starts to blow (or removing it when the wind stops) could lead to even bigger voltage instability on both the transmission network (at 220Â kV) and even more so on the rural networks where the wind turbines would be integrated in this north western corner of South Africa. (While generating, however, the wind turbines would be able to stabilise the network voltages.) Unfortunately, most sites with sufficient natural resources to establish renewable energy generation facilities would suffer from similar transmission and distribution limitations. Strong winds and/or unrelenting sunshine do not provide conditions where the majority of people prefer to live, leading to low load density and thus weak transmission and distribution networks where renewable energy sources are to be found.

Network Design, Self Dispatch and Reserves On top of this, the transmission and distribution systems are designed to bring electricity into the region, servicing the smallish loads. The wind turbines could be generating multiples of the power currently consumed by the region. These distribution and transmission systems are just not designed for the bigger power flows it would have to move out of the area. Even further into the system problems would be experienced, when integrating all types of renewable energy which have to self-dispatch. Wind generation produces power only with strong enough wind, and solar would be influenced by sudden movements of clouds that could block the sun (solar with storage would tend to reduce this risk). Sudden reductions in output from renewable energy sources would require more short-term reserves to be available for dispatch when the renewable energy source reduces output, and the bigger the total renewable energy portfolio, the bigger the short-term reserve needs could become. (With enough distributed wind generation across a wide geographical area, the variable distribution of wind could start to complement each other, and the increase in required reserves would then be mitigated by the opposite variations of the different wind generators complementing each otherâ&#x20AC;&#x2122;s output.) Even when a self dispatching renewable energy source starts to produce, it would necessitate some other generation facility to reduce production. The traditional energy sources used in South Africa allow only for limited amounts of fast variations in output under normal system conditions. Other technologies with fast response ability used in other countries (different types of gas turbines) are not available in South Africa due to the higher fuel cost of these types of generators. The use of such technologies on a continuous basis to allow for the required rapid response to cater for renewable energy variability would add another layer of cost to the production mix. The limited amounts of contracted variable loads available in South Africa could also be used to handle the variable output levels of renewable energy, but these demand participation contracts already have a purpose and if it is used for an additional function, more of it would probably be needed.

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chapter 4: TRANSMISSION SYSTEM CONSTRAINTS and RENEWABLE ENERGY

A Phased Approach From the above high level analysis of the potential problems the network businesses would experience with increasing renewable energy in the total production mix, it should be clear that a phased approach when introducing renewable energy into South Africa would be preferable. None of the problems would be permanent, but it would require time to implement mitigation strategies to ensure a reliable system with increasing renewable energy in the mix. For instance, it could appear that intermittent renewable generation could be used with pump storage hydro schemes, but since the pumping cycle of pump storage schemes does not allow for a continuously variable pumping load with current technology, the system would still experience rather big discrete load variations when the pumping motor is switched in or out, while the renewable generators would come and go in smaller steps.

Smart Grid Solutions The use of smart grid technologies would be able to reduce some of the impact of rapid generation output variations as expected from some renewable energy sources. Substantial generation output at locations not previously planned for might lead to overloading of parallel circuits under certain conditions, and a smart grid would be able to prevent this by manipulating the parallel impedances. The dynamic response would also enable the use of certain types of load to switch in and out automatically with the variation in renewable energy outputs, for example, water heaters (both residential and industrial applications) space heating/cooling in offices or shopping centres, water distribution pumping loads where an amount of storage is available, and other electrical loads where any type of product storage is available. But again, given the cost of smart grid technology, it would take time to introduce this to the networks. The present pressure on electricity prices makes it specially difficult to introduce further cost increases while prices are already increasing at four or five times the inflation rate.

Solar with Storage Most of the challenges with the introduction of renewable energy are associated with the unpredictability of the output levels associated with mostly wind and solar energy sources. The other renewable energy sources, for example, small hydro, landfill gas, biomass and also thermal solar with storage capacity, would be more predictable and even offer limited dispatchability to the system operator. Distributed generation sources with predictable outputs are, in fact, beneficial to the distribution networks, offering improved voltage stability to networks through the control facilities that can be designed into such sources of power. Wind generation has grabbed the attention of developers because it is seen as a more mature technology worldwide, with wind available over a fairly extended area of the South African coastline (with some inland sites also being mooted). Perhaps South Africa should be focussing more on the thermal solar technologies with storage, where local the sustainable Energy Resource HANDBOOK

chapter 4: TRANSMISSION SYSTEM CONSTRAINTS and RENEWABLE ENERGY

development of such systems could lead to local manufacturing industries and some technological advantage as a result.

Conclusion The introduction of renewable energy in South Africa will be slower than in some first world countries, mainly due to the cost issues while electricity tariffs are already increasing rapidly. Network integration problems are an issue, but it can be addressed (and is being looked at from various angles) though the cost of solutions will most probably be a delaying factor. As the price of electricity approaches the true economic value of the product it might become easier to implement renewable energy in bigger volumes, also addressing the challenges associated with it while being able to absorb the cost implications. At present it is difficult to visualise the introduction of additional cost pressures in the price of electricity without resistance from consumers. Be it the cost of introducing renewable energy, or the cost of externalities such as pollution â&#x20AC;&#x201C; with electricity tariffs on a steep upward cycle and the electricity supply industry under financial pressure, there are practical limits regarding how much additional cost pressure can be added if prices cannot increase at a faster rate. Renewable energy is already priced into the tariff path, but at a slow initial rate of introduction. Affordability would be the final arbiter.

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Neosolar INTRODUCTION Over the last two years South Africans have grown accustomed to a number of electricity supply problems not previously known. This has led to a focus on solutions in the fields of alternative or green energy to relieve the pressure on Eskom to provide enough energy to fulfil the needs of both businesses and homeowners. Our engineers will create solutions tailored to your energy needs and focussing on energy management and efficiency, solar and wind turbine systems, LED and CFL lighting options and backup power systems. There has also been a steady deterioration in the supply of fresh water and the recycling of sewage. With this in mind, Neo Solar has positioned itself to be a significant supplier in the market for cost-efficient and easy to install sewage treatment plants and providing cutting edge technology in water purification and reverse osmosis systems. PRODUCTS We provide a broad range of products including the following: • Solar Geysers (both high and low pressure). • Large scale solar water heating system for commercial and industrial applications. • Solar Air Conditioners. • Solar Borehole Pumps. • Solar Lighting. • LED Lighting. • Low Energy Lighting. • Energy Management Systems. • Water purification. • Waste Water and Sewage Management. • Wind energy. • Batteries and Inverters. SOLUTIONS Our focus is on providing solutions in the following key areas: • Energy management. • Warm water supply to houses and businesses (including schools and mines). • Lighting solutions for streets, houses and business. • Water purification systems. • Sewage systems. INSTALLATION We have contracted qualified installers who will provide you with Certificates of Compliance (CoC) for both electrical and plumbing work done. They will also provide a six month guarantee on their workmanship. DISTRIBUTION FOOTPRINT Neo Solar has distributors in towns and cities all around South Africa. We also co-operate with other distributors to support them with the installation of systems. Send information requests to admin@neosolar.co.za or call: 012 345 5264

An An orchestra orchestra needs needs a a conductor conductor Projects need sound Engineering Projects need sound Engineering and and Management Management RSV RSV ENCO ENCO

â&#x20AC;&#x201C; â&#x20AC;&#x201C; Orchestrating Orchestrating the the success success of of Programme Programme and and Project Project Management Management

From the baton of the conductor flows the sweet sounds of a symphony, carefully orchestrated to From the baton of the conductor flows the sweet sounds of a symphony, carefully orchestrated to perfection. In the same way, Programme and Project Management specialists RSV ENCO (PTY) LTD perfection. In the same way, Programme and Project Management specialists RSV ENCO (PTY) LTD (ENCO) orchestrates the success of every project we are involved on. (ENCO) orchestrates the success of every project we are involved on. ENCO is committed to tackling the ever-growing need for renewable energy solutions through integrated ENCO is committed to tackling the ever-growing need for renewable energy solutions through integrated planning and engineering solutions. We have a pool of multidisciplinary skills and expertise nurtured by planning and engineering solutions. We have a pool of multidisciplinary skills and expertise nurtured by a long and successful association with mining and industrial projects across three continents. a long and successful association with mining and industrial projects across three continents. Our core business encompasses engineering, procurement, construction and management (EPCM) Our core business encompasses engineering, procurement, construction and management (EPCM) services but we are flexible and will align to client specific requirements. services but we are flexible and will align to client specific requirements.

RSV ENCO CONSULTING (PTY) LTD RSV ENCO CONSULTING (PTY) LTD

20 Anderson Street, Marshalltown Johannesburg 20 Anderson Street, Marshalltown Johannesburg PO Box 61511 Marshalltown Johannesburg 2107 PO Box 61511 Marshalltown Johannesburg 2107 Tel: +27 11 498 6010 | Fax: +27 11 498 6210 | Email: enco@rsvenco.com Tel: +27 11 498 6010 | Fax: +27 11 498 6210 | Email: enco@rsvenco.com

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RSV ENCO Consulting RSV ENCO Consulting (Pty) Ltd (ENCO) is an internationally recognised engineering and project management consultancy firm focusing on the energy - in particular coal and uranium mine development - and infrastructure sector. Through parent company Read, Swatman & Voigt (Pty) Ltd, ENCO has a pool of multidisciplinary skills and expertise nurtured by a long and successful association with mining and industrial projects across three continents. Servicing both the junior and major end of the resources market, we fully understand the processes associated with holistic project pipelines from initial scoping through pre feasibility and bankable feasibility to detail design, commissioning and hand over. Our professionals have expert engineering capabilities supported by sound and proven engineering and project management systems. Our core areas of excellence include: technical evaluations & reports; prospecting & mining rights applications; conceptual, pre-feasibility and feasibility studies; consulting engineering & detailed design; project management; planning & scheduling; procurement and contract management. ENCO most often works on an EPCM (Engineer, Procure, Construction and Management) basis but we are open to other contract models. We believe the relationship between client and supplier is paramount to achieving project success and we continually strive to develop the critical elements of trust, respect and tolerance between the parties. Our current client base includes Riversdale Mining, Sasol Mining, Total Coal SA and Xstrata Coal South Africa. Backed by a strong human resources team, rich in skills and experience, we will deliver every step of the way to ensure client satisfaction and delivery of a successful outcome. Contact Us: RSV ENCO CONSULTING (PTY) LTD 20 Anderson Street, Marshalltown Johannesburg, South Africa PO Box 61511 Marshalltown Johannesburg 2107 Tel: +27 11 498 6010 Fax: +27 11 498 6210 Email: enco@rsvenco.com www.rsvenco.com

chapter 5: New technologoes in demand side management

the sustainable Energy Resource HANDBOOK

chapter 5: New technologoes in demand side management

New technologoes in demand side management

Steve Apps Managing Consultant EON Consulting

Raj Chetty Senior Engineer Sustainability and Innovation Eskom Research

Utility Load Manager The concept of sustainable energy is to use and implement solutions that will ensure that the energy requirements of the present can be realised while simultaneously ensuring that the energy requirements for future generations will be met. Sustainable energy is typically realised with either renewable energy for power generation or by employing methods and mechanisms for reducing the amount of energy required. To create a sustainable environment for reducing energy consumption, energy conservation and energy efficiency need to be applied. Energy efficiency is considered to be related to the power required by electrical appliances to perform their designed functions. The more efficient an appliance is, the less energy will be required. Energy conservation is the efficient use of the appliance in question. Essentially, electrical appliances should only be powered on when they are in use. The Utility Load Manager (ULM) is a smart system that has been developed by Eskom Research as a mechanism to asist in reducing local and national energy consumption by encouraging both energy efficiency and energy conservation. In the National Energy Strategy of the Republic of South Africa (NERSA), drafted by the Department of Minerals and Energy (2009) the consumption of energy in the low voltage and residential sectors is 17.9% of the total national consumption and this sectors demand for electricity is expected to grow to almost one-fifth of national demand by 2010 (Nersa, 2006). The ULM has been designed to encourage behaviour change of consumers in the low voltage residential base, as well as providing Eskom System Operations with the capability to deterministically reduce the residential load as required. Residential customers typically see electricity as an always-available and limitless commodity. As such, there has been no incentive for these customers to use their household appliances in a conservative manner or to make informed purchasing decisions for new appliances based on energy

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chapter 5: New technologoes in demand side management

efficiency. Electricity prices have been kept low, providing little financial impact to consumers if they use excessive amounts of electricity. Load shedding appeared beyond the control of the individual consumer and, as such, the change in electricity use was limited and returned to previous levels soon after the outages were stopped. Typically, consumers receive an electricity bill once a month providing a single energy reading. This level of information does not provide sufficient detail for the consumer to evaluate his/her overall energy consumption and take a more conservative approach. Previous studies have shown that home energy monitors can provide savings within the household of between 5% and 15% (Roth and Broderick, 2008). The research has found that greater savings are realised if there is a greater interest and motivation to save electricity. Figure 5.1 shows the type of information that smart systems, such as the ULM, can provide to consumers for analysis of their overall power consumption. This is a 24hour view of the power consumption aggregated over 5 minute periods and represents a typical residential load profile, characterised by morning and evening peak demand periods.

Figure 5.1: Typical Household Energy Profile

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chapter 5: New technologoes in demand side management

As shown in Figure 5.2, the ULM provides an in-house display unit. The display returns a realtime feedback of the power consumption for the household. In addition, the display unit provides information pertinent to each consumer as well as the ability to receive broadcast information from the utility.

Figure 5.2: ULM System Overview

Typically, utilities have taken the approach of remotely managing consumer appliances, such as geysers. Although this provides the utilities with direct and effective energy savings, it does not encourage the consumers to take responsibility for their own energy consumption. When electricity needs to be saved from the network, the utilities have, up until now, disconnected the geysers in the households, using solutions such as ripple control, or performed load shedding. The ULM provides an additional option â&#x20AC;&#x201C; instead of disconnecting the power to an entire area, each household is provided with a lower power level (limit) that needs to be adhered to. For example, if the level is set to 3kW, then the household can use up to 3kW of power and if this is exceeded then the power to the household is tripped. Figure 5.3 shows the energy that was saved during a morning peak period compared to the reference. ULM has the facility to add devices that can automatically monitor and switch geysers, as per the current ripple control, and any other appliances, but these are expected to be options that are installed by the consumers.

the sustainable Energy Resource HANDBOOK

chapter 5: New technologoes in demand side management

Figure 5.3: Load Limiting Results

ULM gives System Operations the ability to deterministically achieve the required power savings, leaving household residents with sufficient electricity to run the majority of their appliances. In order for the system to work for the consumers, they will need to learn and understand their power consumption â&#x20AC;&#x201C; without this knowledge it will be difficult to maintain energy use below the levels set by Eskom. The in-house display unit provides this information to enable the consumers to maintain the required energy levels. Every 150 seconds, System Operations receives an updated view of the entire energy consumption of the areas where ULM has been implemented. This near real-time view of the energy consumption is vital information required to aid the management of the grid and provides a clear view of the amount of electricity that can be saved from the network at any time. The ULM solution actually provides System Operations with a Virtual Power Station, that is, ULM can reduce the power on the network by an amount equivalent to the power that could be added to the network by an additional power station.

Implementing ULM To realise the desired sustainable energy savings from the base load as well as provide System Operations with the capability of managing and controlling all low-voltage residential areas (including all street furniture such as traffic lights and street lighting) ULM requires a blanket roll out. To access the energy savings required to maintain the stability of the electricity grid, ULM will need to be rolled out to 3 million Eskom customers, and potentially to another 5 million municipal customers. This roll out should ideally be completed before the end of 2012. It is a significant exercise to roll out in excess of 100 000 units per month. Commitment, clear direction and support from Eskom and the industry at large is required to achieve these goals. A significant number of devices have been implemented as part of a research project. The field trial was designed with already identified challenges in mind and also encountered new ones as follows. 64

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chapter 5: New technologoes in demand side management

The ULM has been designed so that no access is required onto any residential property. The installations of the field devices are on the utility side of the network. To obtain access to 100 000 residential properties each month would require a significant investment in logistical and technical resources. This is due, in part, to crime levels in South Africa, which make organising access to each premises incredibly difficult. This â&#x20AC;&#x2DC;no-residential-accessâ&#x20AC;&#x2122; policy proved to be effective in the field trial. It became clear that the wiring in houses is likely to be an issue. The initial ULM research trial found that much of the householdsâ&#x20AC;&#x2122; wiring was sub-standard. The wiring on the residential premises is not controlled by the utilities and, as such, the quality can be poor. Poor wiring can, in addition to being dangerous, render the household unable to actually control their consumption. In the cases identified during the field trials, an experienced electrician was required to enter each affected household and render the location both safe and manageable with a valid Certification of Compliance. This process was time consuming and expensive and would be more so for a full roll out. The primary location for the ULM field devices is within the 400V distribution boards (DBs) and the mini-substations (outside the residential properties as per the design and as previously stated). This is convenient as the speed of the roll out can become extremely fast. The installation skills required are less than might be required for wiring load management devices into a household. However, the installation artisans still have to obtain certification to allow them to work on the distribution networks. A review of the process presently undertaken for certification may need to be considered as the current process is slow and may not provide enough artisans to support the roll out. In addition, the 400V DBs have been designed to house breakers, and not the inclusion of the ULM devices. On many of the field trial DBs it was found that the required space is not available. Therefore, in many of the sites modifications or replacement DBs were required and will be required for a larger roll out. The task is further complicated by the fact that the 400V DBs are not standardised, resulting in the need for the development of several different design modifications. This may slow down the roll out and require the re-training of the field technicians performing the installations. Based on the results from the present ULM implementation, there is little or no documentation of the low-voltage network below mini-substation level. Much of the knowledge is held by the field technicians that have been maintaining the networks for several years. To overcome this obstacle, before a roll out is commenced in any given area, a thorough survey needs to be performed that documents and records the status and location of each and every install point for ULM devices on each mini-substation ring. Although this will require additional manpower, there will then be an accurate record of the low-voltage network, which could be used to promote the proactive maintenance of the distribution networks. The ULM solution has been designed as a national solution providing the necessary control of the residential sector to System Operations. ULM needs to be accepted by Eskom and all of the targeted municipalities that distribute electricity. It will be a complex task to secure funding from each and every municipality, as will coordinating such a large roll out in a piecemeal fashion. The preferred the sustainable Energy Resource HANDBOOK

chapter 5: New technologoes in demand side management

approach is to create a single national project for the roll out of ULM. This should ease funding issues and encourage buy-in from many of the municipalities. This approach of creating a single national project will improve the probability that the roll out of the solution can be met within the defined timescales, along with the ability to generate a partnership between each of the stakeholders involved with the project. During the load limiting trials it was found that providing the residents with the in-house display units does not in itself create a behaviour change or an ability to reduce load when requested by System Operations. There needs to be an effective communications campaign that will create customer acceptance. This campaign has to educate the consumers on how to effectively and efficiently manage their power consumption. The concept of having to learn and understand how much power is consumed by the household requires varying levels of intervention based on the consumers’ understanding. The research project was targeted at a reasonably small audience – the communications strategy used will therefore have to be upgraded to a comprehensive one using many of the available national communications channels to provide the necessary level of education for consumers on a national level. The ULM solution is, to a certain extent, a departure from more traditional approaches to measuring, monitoring and controlling electricity to low voltage households. ULM is essentially a smart system that has been designed from the ground up to meet the unique needs of the South African environment. As with the introduction of any new or modified system, there needs to be general acceptance within the utility industry to allow for the inclusion of smart systems. To further this, the current industry standards and gatekeepers should be reviewed and targeted.

Benefits and Cost of rolling out ULM It is understood that there will be a shortfall of available power generated by Eskom until the latest power stations are commissioned later this decade. Until this time, South Africa will suffer from potential shortages of electricity. It is very important, therefore, that mechanisms are constantly developed and investigated to ensure that the reserve margins remain manageable. Presently, much of the power management involves Demand Market Participation from industry or the use of high cost peaking power stations. It is necessary in the longer term to consider effective approaches to reducing the overall power use, which will cost the utilities less capital and reduce the overall impact on industry and the nation’s economy. When developing the ULM solution, it was understood that the cost of implementation had to be extremely low. Taking the full ULM solution system into consideration – the back office environment, the field installation, planning, manufacturing and communications – the typical ULM implementation for each household should not exceed the costs presently experienced for the implementation of ripple controllers for household geysers. This low cost ensures that the ULM solution remains affordable and the return on investment is kept to a short duration. 66

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chapter 5: New technologoes in demand side management

One of the primary aspects of ULM is to provide a mechanism to reduce overall peak load and, to a certain extent, base load. ULM has the potential to reduce the national energy consumption by an amount similar to that of a coal power station. Looking at the implementation, construction and commissioning costs of one of these power stations, the ULM solution will be at least an order of magnitude less expensive, with far shorter timescales. It should also be noted that once the roll out of the ULM solution has started, it will be possible for the benefits to be realised almost immediately with a rapidly growing base to manage and control over time. Not only are the implementation costs of the ULM solution significantly less than those for the construction of a new power station, the running costs are also lower. ULM will typically cost a similar amount to run as that for an existing base load generation plant, which in financial terms is many orders of magnitude cheaper than the cost of running a peaking power station, due to the inherent cost of the fuel required. ULM provides other benefits such as supporting revenue protection activities and monitoring of the low-voltage network. From a revenue protection viewpoint, ULM can perform Time of Use billing, or any other flavour of billing such as block tariffs and incline tariffs. Time of Use is an important tool for the management of consumer energy use patterns. There are primarily two peaks to the daily power profile for South Africa. These two peaks are generated by the residential sector and it is the management of these peaks â&#x20AC;&#x201C; early in the morning and in the evening â&#x20AC;&#x201C; that will reduce the need to use the peaking power stations. Time of Use tariff works on the principle of increasing the cost of electricity during peak periods, this increase in cost will persuade the consumers to reduce their use of electricity over this period (Singh and Dekanah, 2006). ULM provides real-time feedback on numerous areas of the low voltage network. Real-time alarming ensures that the health of ULM and the distribution network can be constantly monitored. This leads to the ability to perform active asset management of the network. Energy balancing is performed at the mini-substations and ratified against the measured consumption for each Service Point. Using this information it will be possible to analyse and understand the technical and non-technical losses for the distribution networks and plan effective maintenance activities accordingly. This information can be used to support network planning, so that there is a clear visibility of the loading on each and every one of the components on the network. It should then be possible to pro-actively upgrade the networks before failures due to continued overuse occur. The ULM network can effectively function as a communications backbone for the entire low-voltage network and it is possible to add additional monitoring devices to the ULM system. The devices considered to date include voltage measurement, transformer vibration sensors and capacitance devices to reduce reactive energy.

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chapter 5: New technologoes in demand side management

Conclusion It is necessary for South Africa as a whole to understand that there will be constraints on the availability of electricity for several years to come. Although there is a significant drive to construct the required power generation going forward, the ability to meet the national demand is not possible. Since the load shedding of early 2008, Demand Market Participation has been employed to reduce demand. However, making industry take the leading role in reducing demand is not sustainable in the longterm and may have a negative impact on the economy. The residential sector is a significant source of readily available energy. ULM provides the ability to help make the consumers take a more conservative approach to energy consumption, and provides long-term sustainability that has the potential to consistently reduce the overall national demand. ULM can also reduce the residential demand during peak periods without disconnecting the power to the households, thus protecting industry and commerce along with maintaining power to householdsâ&#x20AC;&#x2122; essential appliances. The general public, in partnership with the utilities, needs to accept mechanisms for reducing residential demand. ULM, in conjunction with other initiatives such as the Solar Water Heating programme and Time of Use tariffs, should be able to ensure that much of the savings can be realised. There is still, however, a significant amount of work required to persuade the general public to accept the responsibility for reducing the demand, along with setting up an effective working relationship with all of the municipalities that will allow for the implementation of a single national residential load management solution.

References

Department of Minerals and Energy (2009) National Energy Strategy of the Republic of South Africa. Notice 908 in Government Gazette 32342. 26 June. South African Government: Pretoria. National Energy Regulator of South Africa (2006), Stage 2 Report Electricity Consumption and Demand Forecast for Development of Third National Integrated Resource Plan for South Africa,Nersa: Johannesburg. Roth, K. and Broderick, J. (2008) Home Energy Displays. American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), July: 136-138. Singh, V. and Dekenah, M. (2006) The Pilot Testing and Findings of the Residential Time-Of-Use Tariff (Homeflex) Project From an Eskom Perspective. Eskom: Johannesburg.

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ENGINEERING & PROJECTS COMPANY LTD E+PC Engineering & Projects Company Limited is a Business Unit within The Aveng Group of Companies and thus enjoys the strong capital base and broad contracting expertise provided by such a large South African Group. E+PC has access to various sources of funding for bankable feasibility studies and export credit financing for foreign capital projects in Africa. The company is ISO 9001:2008 certified and employs a broad range of skills within six business divisions located across South Africa. E+PC serves the mining, chemical, petro-chemical, power and energy industries providing comprehensive project management, engineering design, technology sourcing, procurement and construction management services for large-scale multi-disciplinary projects. Its Power & Energy Division focuses on supplying services, in conjunction with technology supply parties, to the power and energy industry and share synergies with the other E+PC business divisions. Power projects are undertaken on an EPC or EPCM basis and our Clients benefit from our experience in optimising and selecting the most suitable power island technology to fulfil the specific project needs. The materials handling and balance of plant systems are engineered and procured in-house. E+PCâ&#x20AC;&#x2122;s Operations Division operates and maintains various types of plants, with major international companies, on a Build, Own & Operate basis in compliance with OHSA 18001.

www.e-pc.co.za johan.groenewald@e-pc.co.za Tel: (021) 912 3740 99 Jip de Jager Avenue, Vineyards Office Estate Vineyards Square South, East wing, 1st Floor, Bellville 7530

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PowerSmart There is a lot of material in the media that discusses energy efficiency, reducing greenhouse gas emissions and protecting the climate. The byword is to reduce energy demand. Practically though few people have any idea of their energy usage or the effect of any savings achieved. In order to evaluate the efforts of different industries to improve energy efficiency and to quantify the benefits it is necessary to carry out measurements both before and after implementation. Energy can only be managed or controlled if it can be measured. Generally, energy usage is metered using standard billing meters. Even with the measurements provided by the meters, it is difficult to visualize the actual energy usage if the data provided is not analysed appropriately. For large industries, there are complex tariffs, some encourage energy usage in off peak periods and penalise excessive demand. The main aim of any energy management system is to minimise the costs. Energy meters log data in kWh used and kVA demand. PowerSmart extracts the information from the stored metering data to provide information in Rands and Cents. It also provides graphical information in usage trends. PowerSmart is a suite of software products that can be used by industry, municipalities and building management companies to monitor and control the usage of energy, water and gas. PowerSmart Web PowerSmart Web is a web based application that makes use of metered data to provide comprehensive tariff and billing reports. The metering data can be captured by Automatic Meter Reading systems, imported from standard text files or entered manually. The application allows for users to securely access their account and billing information using a standard internet browser. In addition a number of graphical reports can also be used to assist in visualisation of the current energy usage. Up to date reports can be accessed at any time.

profile Target Baseline settings can be used to provide a graphical indication of current energy usage exceeding the limits set.

Typical Usage Profile, Maximum Demand and Baseline Charts

PowerSmart OPC Server PowerSmart OPC Server is a device driver that communicates with leading brand energy billing meters. The Server provides for AMR â&#x20AC;&#x201C; Automatic Meter Reading, the metering profile data read from the meters can be stored in most standard databases. The Server is unique in that it also provides the Instantaneous Meter measurements - Voltage, Current and Power - as OPC Tags which can be linked directly into complimentary software such as SCADA - Supervisory Control and Data Acquisition and BMS - Building Management Systems. NC Automation Engineering has been providing Plant Automation, Energy Management and Management Information solutions for over 21 years. Contact: NC Automation Engineering CC 50 Blanca Avenue, Berario 2195 South Africa Phone: +27 11 431 0392 Fax: +27 11 431 0390 ncauto@global.co.za Mark Burek Vitesh Panday

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Leading the way to Sustainability The coming decades will bring massive change to how companies, corporations, even entire continents respond to the mounting environmental crises that face our planet. As business leaders strive to understand new options and develop new strategies, they know they must maintain their focus on the company’s bottom line. They must balance environmental goals with economic realities. At Honeywell we have been at the forefront of energy conservation for decades. We have long understood that protecting the environment and preserving the bottom line are not mutually exclusive ideas. We have helped companies around the globe realise that when they save energy, they also save money. Since the 1980’s, Honeywell Building Solutions has completed more than 5000 energy projects in facilities around the globe, minimising costs and maximising system performance. We’ve conserved enough energy to power three nuclear power plants for one year - real-worl, bottom-line savings. Good for the Environment and Good For Your Bottom Line Each company needs to take a hard look at their business goals and their environmental goals. Where do they overlap? How can they complement each other? What options and initiatives will match your budget and timelines? If a plan is not realistic or economically feasible, it’s not going to be a “sustainable” strategy for your business. At Honeywell, we try to balance the nature of business with the very important business of nature.

profile Efficiency is the Key It’s all about maximizing efficiency. Minimizing the amount of energy to get the job done, because wasted energy benefits no one. It costs your company money and it impacts our planet in numerable ways. Nearly 50 percent of Honeywell’s extensive portfolio of products is linked to energy efficiency. It’s about introducing better products and integrating better systems that allow energy to work smarter. This is not just a strategy, it’s a mindset. Investing in Energy Savings Makes Good Cents Our customers have learned first-hand that investing in upgrades and system improvements doesn’t cost money in the long run – it saves money. Their energy bills drop 15-25% on average. And it reduces emergency repair services by more than 75%. Customers continue to experience these bottom-line benefits – as well as improved functionality and reduced environmental impact – year after year. Service Sets Honeywell Significantly Apart Honeywell has also developed an unmatched reputation for stellar service. Leveraging advanced technology, such as the Global Service Response Center (GSRC) and Field Automation Service Technology™ (FAST), we’re able to provide real-time data to keep your systems running at peak efficiency, while reducing the need for on-site labor. By optimizing building performance, Honeywell’s GSRC and service organization have enabled more than 25,000 customer sites in North America to become more sustainable. Our proactive preventative maintenance helps keep your equipment operating at peak performance, which results in energy savings. And our remote monitoring helps prevent problems from occurring, reducing costs. Honeywell – Clean and Green From the Start Honeywell has been committed to sustainability as a real-world issue and goal for more than 100 years – far before “green” thinking came to the forefront. It is this historical perspective and expansive experience that uniquely qualifies Honeywell to help lead the world’s companies – large and small – toward the best energy and environmental solutions. A Recognized Leader In Environmental Stewardship Our energy conservation and management work is being heralded throughout the world. Honeywell was one of the first energy services companies involved in the prominent Clinton Climate Initiative. Honeywell is also a member of the EPA’s Climate Leaders Program and a supporter of the American College & University Presidents Climate Commitment. And Honeywell recently won the distinguished “Green Innovation of the Year” award from Frost & Sullivan. Renewable Energy Alternatives Bring Real-World Rewards Energy sources and strategies, such as solar power, wind energy and biomass energy, are now becoming powerful components in our quest to become less oil-dependent and more environmentally responsible. And the momentum continues throughout this year. But which of these sustainable solutions are right for your business?

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To help you decide, Honeywell has developed the Renewable Energy Scorecard™, whereby we analyze the full spectrum of renewable technologies available in your area, as well as local utility rates and your particular heating and cooling loads. This gives your business a powerful snapshot of the renewable energy solutions that make the most economic sense for your enterprise. Making Upgrades Easy – and Affordable At Honeywell, we want to make your decision to “go green” easy by giving you the data to make the best decision – and then giving you the funding options to make it affordable. These include Energy Savings Performance Contracts (ESPCs), which offset the costs of upgrading HVAC mechanical, lighting and building automation systems against future savings guaranteed by Honeywell. Your operating budget is untouched. And your facilities receive needed upgrades and improvements today, without risk. Building Awareness and Changing Behavior Through Energy Education Many companies express the commitment to change their energy policies and practices, but they’re not sure where to start. That’s why we offer energy education services designed to give companies a more thorough understanding of every facet of energy usage. Honeywell offers energy awareness and public relations programs, as well as customized, people-driven conservation programs. Honeywell uses a leading edge sustainability information system, which provides access to real-time data, and enables environmental program management and interactive education.

profile Lead the Way With LEED® Certification Honeywell helps organizations achieve Leadership in Energy and Environmental Design (LEED) certification and ENERGY STAR® recognition. Honeywell has nearly 100 LEED-accredited professionals on staff. No one is better suited to help you achieve LEED status. Greenhouse Gas Emissions Management Program Honeywell offers a comprehensive Greenhouse Gas Emissions Management Program, beginning with an inventory to establish your baseline carbon equivalent (eCO2) footprint. We can help your organization launch a successful energy and carbon management reduction program. Alternatively, if you’d prefer to manage the process internally, Honeywell offers a hands-on, one-day workshop, designed to provide you with the knowledge and tools to launch your own greenhouse gas emissions initiative. On-Site Sustainability Directors Honeywell’s Sustainability Directors bring specialized, sustainable management and technical consulting expertise right to your building operation. This valuable on-site resource will develop programs, advocate for sustainability practices and facilitate interaction and collaboration among various groups in your organization. The Sustainability Director will identify, prioritize, plan, coordinate and promote sustainability and conservation initiatives in the areas of water, energy, transportation and Procurement. Make the Best Green Decisions With Honeywell There are countless providers championing a variety of new initiatives in every shade of “green.” The challenge is to find the solutions that make the best sense for your company. Whether you manage a single facility or oversee multiple, geographically-dispersed locations, learn how Honeywell’s Sustainable Services can help you improve energy efficiency, ensure comfort and realize substantial savings at the same time. Honeywell Sustainable Services Can Help You: • Fund improvements within existing budgets • Ensure comfort while reducing energy use • Dramatically reduce energy costs • Reduce emissions and environmental impact • Meet environmental regulations You can trust the dedicated energy experts at Honeywell to work with you and your staff to find the optimal mix of technology and services to support your environmental and business goals. We have the talent, expertise and experience to develop solutions that will help your company “go green” while keeping your business in the black. For further information on Honeywell’s Green Solutions, contact Cedric Greeves on +27 11 695800 or email cedric.greeves@honeywell.com

chapter 6: community perception of renewable energy

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chapter 6: community perception of renewable energy

community perception of renewable energy

Marlett Balmer Institute for Technological Innovation, Faculty of Engineering, Built Environment and Information Technology, University of Pretoria

Introduction The issue of sustainable energy supply and consumption was strongly pushed to the fore since the electricity supply problems of early 2009. Renewed interest and debate has surfaced in the wake of the announcement on February 24 2010 of an estimated 25% increase per annum over the next three years in the price of electricity. Although the impact of higher electricity prices on the economy and the mines, not to mention embattled, recession-weary consumer cannot be denied, proponents of renewable energy and energy efficiency are most likely secretly very pleased - the potentially positive impact that higher electricity prices may have on the adoption of renewable and sustainable energy interventions cannot be ignored. The climate for sustainable energy may have become more favourable and consumers may find it finally makes economic as well as common sense to adopt these technologies. Renewable energy and efficiency measures in South Africa currently address a variety of energy consumers, from industries and mines through the Demand-side Management (DSM) Programme of Eskom, to middle class energy consumers through the solar water heating programme of Eskom and the Central Energy Fund. However, a number of years ago, many renewable - and energy efficient interventions focussed on low-income consumers, for example the solar cooker programme of GTZ and the then Department of Minerals and Energy (DME), the rural electrification programme through solar home systems and the International Institute for Energy Conservationâ&#x20AC;&#x2122;s Eco Home Advisors programme focussing on introducing energy efficiency in low-income housing in South Africa. The objective with most of the projects was to alleviate poverty, increase energy access of the poor and effect monetary savings for low-income consumers. These approaches lead many development practitioners to question why the most expensive energy technologies were being pushed on the poorest consumers. Furthermore, target recipients felt that the renewable energy interventions offered a second-rate solution to their energy problems, as the solution could not deliver all the advantages of grid electricity or other more convenient fuels. This was, for example, the case with solar home systems and solar cookers. Lastly, the politicisation of electricity prior to 1994 as part of the the sustainable Energy Resource HANDBOOK

chapter 6: community perception of renewable energy

struggle contributed to the general perception that settling for anything less that grid electricity was a compromise (see for example Barchiesi, 2005). Most of these programmes mentioned above, yielded mixed results. The chapter will explore the results and lessons learned from the implementation of two renewable energy programmes and one energy efficient programme in South Africa. The problems and constraints impacting on project implementation will be highlighted and specific attention paid to recommendations to improve sustainability of interventions. Reference will be made throughout the chapter to the role of end-user perceptions towards renewable energy and energy efficient interventions and the potential change in use perceptions, brought on by a variety of converging, positive factors.

Background No discussion of energy in South Africa can take place without highlighting a few contextualising issues. In South Africa, like other developing countries, energy poverty remains a challenge impacting on the environment, health, security and well-being of people. In practical terms, energy poverty means poor households do not have access to adequate and appropriate energy sources to service their most basic energy needs. These households meet most of their energy needs through biomass energy sources while small amounts of commercial energy is used mainly when it is accessible and affordable. In South Africa, over 80% of rural households depend on fuel wood as their primary source of energy (Damm & Triebel, 2008). Total demand for fuel wood is estimated at 11.2 million tons per annum, which is equivalent to 40% of residential energy demand. The number of households that depend on fuel wood as their main energy source is estimated at 2.3 â&#x20AC;&#x201C; 2.8 million, the majority of which are located in rural areas. This represents some 12 â&#x20AC;&#x201C; 15 million people or 25% â&#x20AC;&#x201C; 30% of the South African population (Damm & Triebel, 2008). Fuel wood use is concentrated in the poorer provinces with large rural populations, ie Limpopo, KwaZulu Natal, Eastern Cape, and North West. It is also in these provinces that electrification rates lag behind national averages (DME, 2008). Eskom has been lauded for its impressive electrification expansion programme that increased the level of household electrification to about 72% in 2008 (DME, 2008). The number of rural households electrified countrywide has risen from 12% in 1994 to 52% in 2005. However, many low-income households display a specific pattern of energy use where thermal energy requirements (such as cooking, space heating and water heating) are traditionally met with biomass sources while small quantities of electricity are used to supply energy for lighting, cell phone charging, radio and television. This pattern of energy use is also referred to as multiple fuel use, meaning that households use a range of appliances and fuels at the same time or interchangeably. According to Prasad (2006) some households are complete multiple fuel users and they use different fuels for different energy end-uses, while other households switch from one fuel to another for the same end-use, for example from gas to paraffin or gas to fuel wood for cooking. Prasad (2006) outlined that the multiple fuel use model 78

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emphasises the fact that households do not drop one fuel when they start using a more efficient one, but rather retain a number of fuels over a wide range of income levels. A number of energy research projects analysed the impact of poverty on energy use and concluded that multiple fuel use are not necessarily out of choice but out of necessity. Due to the prevailing circumstances of poverty among the target group, renewable energy programmes assumed that the potential monetary savings of renewable- and energy efficient technologies would make them very attractive to beneficiaries. This was not always the case, as renewable energy technologies are not always easy to use and may come with an increased ‘hassle factor’, not associated with ‘modern’ forms of energy. The abovementioned background influenced the thinking around renewable energy implementation. During the 1990s, many of the renewable energy projects focussed on addressing energy poverty of low-income users. The argument was that in the absence of grid-electricity, renewable energy sources could be utilised to supply energy to users who would have either been without the service -as in the case of the solar home system programme- or that would have to rely on a bad energy source like fuel wood, in the case of the solar cooker programme. The effect was that renewable energy came to be seen as an ‘instead of’ solution – instead of grid electricity, users had to settle for renewable energy which was viewed as inferior and second-rate. One resident in the solar home progamme even said that they were being punished for being poor. In the case of the solar home programme, the photovoltaics were offered as an interim solution to allay users’ fears that if users sign up for solar, they will deliberately be excluded from future grid expansion. The arrangement caused all sorts of havoc with service providers having to remove systems that were installed less than a month before, due to unplanned grid expansion now being implemented because either new donor money became available or political pressure from an MP that had his village electrified caused an unplanned extension line to go in. Solar energy was seen as a potential solution to provide electricity in appropriate quantities to low-income consumers. Studies showed that on average, lowincome households consume 50 kilowatt (KWh) or less electricity per month (see for example Louw et al, 2008). Solar was therefore considered the ideal solution and most solar home system packages supplied either a 30 or 60 Watt photovoltaic panel – enough to power a few lights, a radio, a black and white TV and some cell phone battery charging. Moreover, the energy was considered ‘free’ and therefore suitable to consumers interested in monetary savings. Although the technologies seemed like a perfect solution, various problems associated with the technology itself, user perception of the service as well as the process in which the technology was supplied, limited the success of the programmes. The following section will describe the various programmes in more detail and provide an analysis of problems, pitfalls and constraints.

The programmes The DME/GTZ solar cooker field test programme From 1996 to 2000, the German Organisation for Technology Cooperation (GTZ) and South African the sustainable Energy Resource HANDBOOK

chapter 6: community perception of renewable energy

Department of Minerals and Energy (DME) supported a solar cooker field test in selected areas of South Africa. The objectives of the field test was firstly to establish solar cooker use rates amongst participating households, secondly, on the basis of user preference, to select solar cooker models for local manufacturing and thirdly, to support efforts to establish a local manufacturing base of solar cookers in South Africa. Solar cookers were seen as a logical solution to the problems associated with household fuel use. Traditionally, fuel wood has been regarded as a free good, harvested from the natural vegetation. Over-exploitation of the resource results in denudation, environmental degradation and scarcities for households. Wilson and Ramphele (1989) provide a thorough overview of area reports dealing with the difficulties of collecting adequate fuel wood â&#x20AC;&#x201C; average walking distances was between 5.6 and 9.6 kilometres with head loads weighing on average 30 kg. The implication of travelling long distances to collect firewood is that women and girls, who are mostly responsible for fuel wood collection, have less time to spend on other activities and are exposed to various dangers associated with fuel wood collection, for example animal attacks, rape and abduction. Apart from the benefits that can be realised for fuel wood users, solar cookers can also benefit commercial fuel users in terms of monetary savings. The DME/GTZ solar cooker programme emphasised that solar cookers should not be promoted as a single solution to the problem of cooking energy, but that a solar cooker should be viewed as an add-on appliance in a suite of cooking options available as part of the multiple fuel use pattern in low-income households. Various solar cooker prototypes, selected based on their performance in a technical test in Almeria, Spain in 1994, as well as one locally produced solar cooker, the Sunstove, were tested in three areas in South Africa. The test areas were Onseepkans (deep rural, un-electrified area in the Northern Cape); Pniel (a rural area but with reasonable access to commercial centres, un-electrified in the Northern Cape) and Huhudi (a peri-urban area with access to electricity) in the Northwest province. A total of 100 families participated in the test, 70 used the solar cookers on a rotating basis while 30 non-using families served as a control group. To determine if solar cookers are acceptable, the rate at which the cookers are used, have to be investigated. Solar cooker use rate is defined as the number of times a household opts to use a solar cooker (either on its own or in conjunction with other fuels) to cook food, therefore, the use rate percentage refers to the number of times a solar cooker was used out of all the household cooking incidences. It should be noted that households do not necessarily cook three times per day, but rely on pre-prepared food such as bread and left-overs from some meals. A number of different studies investigated solar cooker use rates during the course of the field test and after, and these studies reported varying use rates, ranging from 38% to 31%. If the average reported use rates for the various studies are accepted, an average use rate of 31% is indicated. The standard deviation was 5.6%. Therefore, if it is accepted that solar cooker use rates are over-reported as is often suspected, rather than under reported, solar cooker use rates can be accepted to be between 31% and 25% (Wentzel 80

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and Pouris, 2007). Four of the studies yielded information on the percentage of users who were no longer using their solar stoves. Available data indicated that on average, 17% of purchasers/owners of solar stoves stop using them after about 1.5 years after purchase. In terms of monetary savings during the field test, results were not homogenous. Savings were the highest in the electrified township of Huhudi and lowest in the un-electrified village of Onseepkans were fuel wood was collected free of charge and the use of commercial fuels extremely low. On average, users reported saving R68 (1997 value). This may not seem like much, but for a household earning R600 per month, savings were considered significant and the main reason cited for purchasing a solar cooker after the field test (Synopis and Palmer Development Consulting, 2000). Additional research conducted by Market Research Africa (2003) among a small group of users who purchased their solar cookers independently of the field test showed that users were motivated by cost savings/ energy savings, and considered free energy, cost savings and no fuel costs as the most important perceived advantages of solar cookers. Time savings were also reported by women, relating to time savings resulting from the reduction in time spent gathering wood and potential time saved by being freed-up during the cooking process. Unlike a fire, a solar cooker does not require constant attention and the cook only needs to check the orientation of the cookers once every hour (if a box cooker). Opening the cooker to stir food is strongly discouraged as heat is lost through the action, which prolongs the cooking process. Based on the high levels of use and good acceptance of the field tested cookers, the programme embarked on phase 2, namely, supporting the establishment of local manufacture of selected solar cookers and to establish a sustainable supply channel for the cookers. At the end of the phase, conclusions were that attempts to establish local manufacture failed and that solar cooker sales were disappointingly low. Reasons for the low sales were varied. Firstly, a number of production problems were experienced. The programme failed to attract a well-established, stable producers interested in manufacturing solar cookers. The producers that were involved saw it more as an opportunity to gain access to donor funding and only viewed the cookers as a peripheral product, still having to prove that it has a market. The quality of locally produced cookers was low and erratic, producers were unreliable, and material was difficult to obtain and the manufacturing process was extremely complex â&#x20AC;&#x201C; for example, in one cooker, more than five types of material had to be used (steel, glass, fibre glass, aluminium and rubber). Secondly, and very importantly, the price of the solar cookers was high and unable to compete with established, well-known and trusted alternative cooking appliances on the market. A paraffin stove which could be bought for a tenth of the price of a solar stove was available in a variety of outlets and could be repaired if necessary. Apart from price, solar stoves were not widely available since the commercial outlets such as shops, discount retailers and furniture stores which traditionally sell cooking appliances were unwilling to stock and sell solar stoves. This meant that traditional sales channels with additional â&#x20AC;&#x2DC;perksâ&#x20AC;&#x2122; such as end-user credit, mass marketing, the sustainable Energy Resource HANDBOOK

chapter 6: community perception of renewable energy

warranties and an established distribution network were closed to the solar cookers. It was realised that the incredible difficult task of creating a market for a new product required a different approach and the third and last phase of the programme called on the expertise of business, marketing and distribution experts with the realisation that to commercialise solar cookers, an entire industry needs to be created to service the proven existing demand, as illustrated by Market Research Africa (2003). It should be noted that the conclusion did not question the viability of the technology nor end-user acceptance thereof: it was the inability of the market to deliver products at the right price, place and time that was the deemed to be the cause for failure. This is an important distinction: solar cooker sales were low, mainly because they were expensive and not widely available but where people did cross the hurdle and actually made a purchase, the solar cooker was well used (on average 31% of the household’s cooking incidences).

The solar home system programme In 1997, DME has established a concession process for off-grid rural electrification in South Africa. Six concession areas were identified and concessionaires were awarded concessions in five of these. These were: Nuon-RAPS (NuRa), Solar Vision, Renewable Energy Africa, Shell/Eskom JV and EDF/Total. The concession process was intended to deliver roughly 50 000 systems per concession area over the next 10 years. The German Government, through the German Development Bank, Kreditanstalt für Wiederaufbau (KfW) elected to finance the 6th concession area and the process of appointing a service provider commenced in 2002. The section will not attempt a detailed analysis of the experience in the solar home system programme, but will focus on the narrow experience of the author in the KfW concession area through a marketing contracted awarded to Palmer Developing Consulting. A preparatory study was carried out in the North West province, one of the areas that were included in the KfW concession area (RAPS Consulting, 2005). A socio-economic survey questionnaire was developed and administered in chosen villages of the North West Province. About 214 households were surveyed. Two community forums were held in two different municipalities. Raps Consulting (2005) stated that through meetings and discussions held with councillors, traditional leaders and community representatives, they managed to gain considerable insights into their attitudes towards and perceptions of the off-grid programme: “It should be noted that there are high expectations regarding grid electrification in the rural regions of the North West Province. Electricity, particularly in and around election periods, is a popular tool within the arsenal of electioneers. These promises have not been lost of the communities that we visited in the province. Most communities reacted with some indignation that we were suggesting an electricity supply option other than Eskom, the continual promise of the politicians. Even representatives from remote villages with extremely low – or indeed, no – prospects for electrification had been convinced that grid electricity was on its way. This is a very important issue that the future service provider will have to engage with” (RAPS consulting, 2005). 82

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The following were some questions raised at the community forums and other discussions: • Some councillors raised concerns about whether this off-grid electricity service will be available 24 hours. They argued that their constituencies would like to have uninterrupted electricity services. • What would the non-grid service provider do with the problem of theft in the villages? • Would the non-grid service provider install another solar panel if it gets stolen? • Will solar panels be available for water pumping as access to water in the village is inadequate • Whether bringing off grid electricity is a government strategy for upcoming national elections. • Can we cook, iron and run refrigerators with this off-grid electricity? • Service Fee- the amounts charged by existing concessionaires is too expensive for them. • What would happen to this off-grid electricity when the grid electricity reaches their villages. It is clear from the issues raised at these meetings that people were not adequately informed of the concession process and attendant services. General awareness raising and information dissemination should be a priority in areas destined for solar. While there was a palpable preference for grid electricity, there was also an underlying acceptance that grid will not reach some of these communities or at least take a long time to do so. As a result, the communities were pleased that some level of electricity service will be offered in these remote rural areas.

The Eco Home Advisors (EHA) programme of the International Institute for Energy Conservation (IIEC) The IIEC embarked on the ‘Healthy Homes Initiative’ in 1996. As part of the Initiative, IIEC, PEER Africa and the Minerals and Energy Training Institute developed the Eco Home Advisors Programme. The aim of the programme was to train representatives of community housing organisations in the basics of energy efficiency in the home and the benefits of urban greening, water conservation and other environmentally sound activities related to housing, ultimately contributing to sustainable energy practices in South Africa. An evaluation of the EHA programme was commissioned in 2000, investigating among other issues, the realisation of the intended project benefits, ie contributing to a reduction in household energy consumption and expenditure, improvement in air quality, greater household comfort and the promotion of local emerging construction contractors providing Eco Homes (Wentzel, et al 2001). In the process, the potential sustainability and value-adding potential of the programme was examined as well as community perceptions of perceived benefits of the programme. Data was collected from participating organisations as well as communities served by the organisations. From the communities, 62% of respondents were aware of the EHA, 94% thought they were doing a good job and 95% associated the work of the EHA network with energy efficient activities. Community perceptions of the programme were therefore good and contributed to the uptake of the advice offered. Respondents following the advice of the eco home advisor differed from area to the sustainable Energy Resource HANDBOOK

chapter 6: community perception of renewable energy

area: in two areas (Kimberley and Welkom, 100% of respondents interviewed implemented the advice received, while in other areas it was only 10% to 20% of respondents who implemented the advice. The evaluation concluded that where a demonstration house was available, the uptake rates of the advice was higher- without a show house, the advisors felt that the potential was not maximised and it was recommended that the inclusion of a show house in future projects must be a priority (Wentzel, et al, 2001). The impact of the EHA programme was studied in more detail in Kimberley where the programme was running for the longest period and reportedly high levels of advice implementation where practiced. The majority of respondents in Kimberley reported noticeable energy savings (90%), with also less money spent on water (70%). Respondents also perceived their houses to be cooler in summer and warmer in winter (100%) while 70% reported their children did not get sick as often as they did before implementing the efficiency advice.

Constraints to the success of renewable energy and energy efficiency programmes (practical coal-face constraints) that make the implementation challenging Based on the experiences in the abovementioned programmes, constraints to the success of renewable energy and energy efficiency programmes can be categorised in three broad factors: External-, internal- and technological factors.

External factors External factors refer to all issues related to the environment and circumstances of users. External conditions influencing use rates of renewable energy technologies such as solar cookers and solar home systems are, for example, weather conditions such strong wind, rain, cloud cover, general lack of sunshine and dust. Weather conditions have less of an impact where the energy can be stored as in the case of a solar home system as opposed to a system making direct use of the energy like in a solar cooker. For example, users reported cookers being blown over by strong winds and one cooker was destroyed by a hail storm. Although these technologies can operate in some negative weather conditions, user perceptions need to be managed through adequate information dissemination to ensure users that the PV system will still generate electricity and that a bit of cloud cover does not mean you have to abandon your solar cooked meal. Lack of security and security concerns are other important external factors impacting on the acceptance of renewable energy technologies. Theft has been an ongoing problem in the solar home system programme, as illustrated by the concerns discussed at the various community forums (RAPS Consulting, 2005). Anecdotal information from the solar electrification of schools project was that one headmaster described the solar lights as â&#x20AC;&#x2DC;lighting for security guardsâ&#x20AC;&#x2122; because once a school received a solar system, they had to employ a security guard to safe guard the system. Security is an even bigger concern with regard to solar cookers where not only the cooker is vulnerable to theft but also the food 84

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being cooked in it. Households also feared food tampering and poisoning. This perception was never substantiated in the four years of the field test as not a single cooker was ever stolen nor food spoiled by animals or poisoned by jealous neighbours as is often the fear. The physical lay-out of the house or homestead plays an important part in the acceptance potential of the technology. Most low-income houses have very limited space to use a solar stove in, and even less space to store the cooker securely. Yards are often not fenced, making it a security risk to store a cooker outside. In one example, a school that was testing the stove reported zero use, because the cooker was locked away in a storage hut for security reasons and the person carrying the key was never available when the cooks wanted to use the stove. Users viewed solar cookers as investments and the lack of safe and protected storage space, influenced users to opt for smaller cookers which could be easily stored while schools without adequate storage space decided not to purchase a cooker at all. In the case of the EHA programme, external factors seemed to have little impact on the acceptance of the advice as most of it could be applied despite weather and security conditions. The most important external factor seemed to be the availability of a demonstration house to demonstrate the concepts clearly. The importance of demonstrations was echoed in the solar cooker programme where physical demonstrations of the solar cookers had a clear impact on stove sales – shops which demonstrated the cookers clearly sold more stoves than those just having the cookers on their shelves. Cooking demonstrations were identified as the most successful marketing tool and a key activity to promote the use of improved stoves.

Internal factors Internal factors refer to all aspects concerning the user of the specific technology. Important aspects concerned with the user of a solar cooker were identified: • There must be adequate motivation to use the cookers. Potential savings were the most important motivation mentioned by users to purchase and use their solar cookers while an element of curiosity was also found to be conducive to encourage the purchase of a solar cooker. Male buyers reported curiosity as the most important motivational aspect while women reported potential savings (Palmer Development Consulting, 2002). • Successful solar cooking requires a basic a form of training and being exposed to a solar cooking demonstration was rated highly by users to ensure cooking success and therefore on-going use. A variety of instruments were used to inform users how to use their solar cookers successfully, for example, pamphlets, user instructions, brochures and recipe books were distributed with the cookers (GTZ and DME, 2002) while approximately 500 wet demonstrations were carried out throughout the implementation period (GTZ and DME, 2002). • Using solar cookers requires adaptation mostly in terms of kitchen management. Planning ahead and preparing food becomes important – you cannot decide to solar cook a chicken stew one hour before mealtime. the sustainable Energy Resource HANDBOOK

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• Respondents cited the fact that they became too lazy to use the stove, they became bored with it (in line with a novelty purchase), a change in cooking patters or habits made them stop using the stove and that they found the process too cumbersome. Other cases were found where people had bought a solar cooker but have not started using it because they forgot about it, are unsure how to use it but report that they will try to use it in future. The adoption of a renewable energy technology generally requires some form of behaviour change or modification. Users must be willing to make the required changes and importantly, the changes or effort associated with the use of the technology must not be seen to be exceeding the benefits of the use of the technology – in other words, the user must experience more advantages than disadvantages through the use of the technology. In the solar cooker field test, researchers coined the phrase ‘hassle-factor’ to refer to the effort associated with the use of the stove. For many users, the hassle-factor was more than the benefits realised through the stove and this lead to the stove not being used after the novelty has worn off. However, it should be pointed out that benefits, in the form of savings could now be higher with higher electricity prices, so benefits may outweigh the hassle and motivate people to use the technology.

Technical factors Technical factors refer to all issues pertaining to the physical technology, for example, power output, ease of handling, using and operating the system, the price of the technology and the level of training required to be able to use the technology properly. Although it may seem superfluous, it is important to state that for solar cookers to be used successfully, the cooker must be functional, efficient, durable, attractive and user friendly. This of course is true for all renewable energy technologies. Too often, solar cookers looked as if they were assembled in a back yard by an unskilled labourer. Even poor consumers demand high quality products and rightly so – they have to spend scarce and hard earned money on an unknown product and the purchase therefore represents some risk to them. Solar cookers and other renewable energy products need to move beyond the image of an appropriate technology product, towards a highly desirable product. Attention therefore, needs to be paid to product design, finish, packaging and marketing. The rise of the green leisure market as a target group for these technologies may push product development into the right direction. The price of these technologies was found to be one of, if not the most important issue in promoting their use. Solar cookers were expensive in the field test for a number of reasons such as low production numbers, no critical mass, purchasing of small quantities of material due to low production runs, high material prices, and the high cost of distribution and transport. Solar cookers as well as energy efficient cooking appliances have to compete with well-known and cheap cooking appliance alternatives in the market. A solar cooker is a largely unknown device to a consumer, and therefore, represents an 86

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investment risk – I am not sure if this thing will actually work, therefore it is difficult for me to invest 10 times as much as I would have spent on replacing my existing cooking appliance. The project did not introduce any form of end-user finance but instead, in keeping with the commercialisation focus of the project, attempted to convince established banks and credit organisations to extend end-user credit for the solar cookers. This was a failure because of low confidence in the device as well as the difficulties of financing a small, moveable object. Lastly, users cited problems with their solar stoves as an important reason for reduced use or stopping to use them entirely – the stove is too slow, the break is faulty, there is only one pot, there is no baking tray, etc. A Kenyan study (United Nations High Commission for Refugees, 2004) noted the fact that badly assembled stoves, lost and unavailable spare parts such as wing nuts and reflector blades also hampered acceptance. Most importantly though, is that the stove capacity is often inadequate (meals have to be prepared for a large number of people and the pot or pots are too small). The Kenyan study (United Nations High Commission for Refugees, 2004) also adequately shows that if a solar cooker cannot be used to prepare traditional staple dishes, use will be limited.

Conclusions and recommendations Perceptions of renewable energy technologies have changed on many fronts. Firstly, renewable energy technologies are no longer viewed by policy makers as being aimed at low-income consumers, but rather at more wealthy consumers that can afford the technology and can realise significant savings through continued use. This may have a positive spin-off in that the technologies may become aspirational products, once proven in the mainstream market. At another level, user perceptions about the appropriateness of renewable energy technologies are also changing. During the field test, many people on seeing a solar cooker demonstration exclaimed: ‘Now that is perfect for the people in rural areas/my domestic worker/my mother living in a rural area’ – ie it was a good idea for someone else, but never for themselves. Increased awareness about environmental issues, coupled with continued electricity price increases may change user perceptions and make renewable energy technologies something to be considered for themselves. The increased awareness about environmental issues also gave rise to a specific consumer group demanding ‘green’ and sustainable products for the outdoor, leisure and camping market. Restio Energy, the imported and distributer of an energy efficient wood stove reported this market segment as the one with the most impressive growth, while the peri-urban and urban market segment displayed sluggish growth because of entrenched mind-sets of resistance to change and easy access to modern fuels (Restio Energy, presentation made at Swaziland Entrepreneurial workshop, 5 February 2010). Although higher energy costs and increased environmental awareness may impact positively on the adoption rate of renewable energy technologies, it should also be said that these technologies are often still viewed as being expensive and not readily accessible to consumers. The price and affordability issue could be solved with innovative financing and credit schemes but care must be the sustainable Energy Resource HANDBOOK

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taken that such schemes should in principle be available to all consumers. A higher electricity price will further contribute to shorter pay-back periods and may convince consumers to make the upfront investment in the technology. Accessibility and availability of the products remain problematic as many consumers do not know where to try and find these types of products because they are stocked by specialist retailers. This links closely to the issue of balanced advice and consumer information. Consumers require supplier details with general product information about the technology. Some form of quality assurance of guarantee of workmanship may also go a long way to allay consumer fears of buying from fly-by-night companies that may not be around to provide essential after sales service. In closing, much has changed since the solar cooker field test and the inception of the solar home programme. Some technological advances have been made in the products concerned and external factors, such as the increase in electricity prices will enable consumers to have shorter pay-back periods when investing in renewable energy technology. Some technologies such as solar water heaters are greatly benefitting from government programmes, making them more affordable for end-users and easier to purchase. Energy efficient housing design principles are making a mainstream appearance in housing policy, although implementation is still lacking on many fronts. In the case of solar cookers, unfortunately they are still a bit on the lunatic fringe â&#x20AC;&#x201C; one product the Sunstove is being locally manufactured but the supplier reports that increasing material price hikes and lack of other material make it difficult to keep prices at an affordable level. They did however report record sales during the electricity blackouts of 2009, which goes to show, we may still have to thank Eskom one day for the breakthrough in the acceptance of renewable energy technologies.

References

Barchiesi, F. 2005. Electricity and the politics of struggle for peopleâ&#x20AC;&#x2122;s needs on Tembisa. Article published on libcom.org. Damm, O and Triebel, R. 2008. A synthesis report on biomass energy consumption and availability in South Africa. ProBEC:Johannesburg. Department of Minerals and Energy. 2008. Strategic Plan 2006/7 â&#x20AC;&#x201C; 2010/11. DME:Pretoria. Everatt, D. 2003. The politics of poverty. South African Poverty Network. GTZ and DME. 2002. Solar cooker compendium Volume 4. Marketing solar stoves in South Africa. GTZ:Pretoria Kitzinger, X. 2004. Solar cooker usage and lifetime of solar cookers in the three pilot regions Huhudi, Pniel and Onseepkans. Field report. Internal report. GTZ:Pretoria. Louw, K; Conradie, B; Howells, M and Dekenah, M. 2008. Determinants of electricity demand for newly electrified low-income African households. Energy Policy. Volume 36, Issue 8, August 2008. Pp 2812-2818 Market Research Africa. (2003). Profile of solar cooker purchasers. Management report. GTZ:Pretoria. Palmer Development Group. 1997. Solar Cooker Field Test in South Africa. End-user acceptance. Phase 1, Main Report, Volume 1. GTZ:Pretoria. Palmer Development Consulting. 2002. End-user monitoring report. DME/GTZ solar cooker field test in South Africa. Department of Minerals and Energy Pretoria.

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Solarzone Solarzone (Pty) Ltd is a company based in Cape Town, which specializes in planning and selling of high quality solar water heating and photovoltaic systems (solar electric). Solarzone (Pty) Ltd was established in 2006. The Southern African market offers a great business opportunity for solar energy technology by having the obvious advantage of abundant solar radiation and a complete underdeveloped and underestimated consumer potential. There has been a very positive response to the new standard of technology that we are bringing to Southern Africa since Solarzone (Pty) Ltd was established and passed the ESKOM rebate certification. The vision of Solarzone is to establish partnerships with companies from a wide variety of business sectors in Southern Africa in order to realize solar projects together. Our target market is very wide, but the main focus is large scale applications in the commercial, industrial and hospitality sector. The focus is to supply solar installations to hotels, schools, hospitals, stadiums, residential buildings and housing developments. Our team continues to grow and we now have built up our distribution network in Durban and Johannesburg. The clients are trained by us to install and maintain our products. We intend to work very closely together with local government on realizing key projects. Solarzone (Pty) Ltd aims to supply the whole range of solar systems, but also to increase and to transfer the knowledge of solar energy and its benefits to all people in Southern Africa. One of our future plans is to establish a local solar water heater manufacturing line with German manufacturing technology. We are continuously searching for suppliers locally, who can meet the same quality standards here in Southern Africa. As a result Solarzone (Pty) Ltd will create local employment opportunities and also contribute to the development of skills in solar technology. For more information about our company â&#x20AC;&#x201C; please visit our website www.solarzone.co.za Solarzone (Pty) Ltd, 34 Chilwan Crescent, Helderberg Industrial Park, Strand, 7140 Phone: +27 21 845 4440, Fax: +27 86 667 3629, E-mail: info@solarzone.co.za Import & Export No: 205 577 94 Registration No: 2006/024758/07, VAT No: 4280235732 www.solarzone.co.za

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Palmer Development Consulting. 2002. Internal report prepared for GTZ evaluation mission. Additional inquiries into use rates. Internal GTZ report. Prasad, G. 2006. Energy Sector Reform and the Pattern of the Poor: Energy Use and Supply. A Four Country Study: Botswana, Ghana, Honduras and Senegal. The World Bank: Washington, D.C. RAPS Consulting. 2005. North West Province socio-economic survey. Report prepared for SAD-ELC. SAD-ELEC:Johannesburg. Restio Energy. 2010. Market penetration strategies for Swaziland. Presentation delivered by Wikus Kruger at the retailer workshop for mass produced stoves, Mbabane Swaziland, Friday 5 February 2010. Synopsis and Palmer Development Consulting. (2000). Long-term household acceptance of solar cookers. Ex-post purchase evaluation Study. May 2000 United Nations High Commission for Refugees (UNHCR). 2004. Solar cooker evaluation in Kakuma and Dadaab. UNHCR Technical Support Centre, Dadaab. Viljoen, R. 1994. Analysis of backlogs in energy provision in the developing areas and scenarios for their reduction by the year 2004. Department of Minerals and Energy Affairs:Pretoria. Report number EO9314, Ward, S. 1994. Biomass Assessment. Review of rural household energy use research in South Africa. Department of Minerals and Energy Affairs:Pretoria. Biomasss assessment report. PFL – ASS-0. Wentzel, M and Pouris, A. 2007.The development impact of solar cookers: A review of solar cooker impact research in South Africa. Energy Policy. 35 (2007):1909-1919. Wentzel, M; de Lange. E and Nkambule, T. 2001. Energy Efficiency in South African Housing – Community perceptions of the success of the IIEC’s Eco-Home Advisors Programme. Journal of Energy in Southern Africa, Vo,ume 12, No. 4, November 2001. Wilson, F and Ramphele, M. 1989. Uprooting poverty: The South African challenge. Report for the second Carnegie Inquiry into Poverty and Development in South Africa. David Philip: Cape Town.

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SCIENCE FOR SOUTH AFRICA’S FUTURE Tomorrow’s scientists, engineers and technologists face many challenges. Biotechnologists will have to find ways to grow more food on less land and with less water, pesticides and fertilisers. Engineers will have to recycle waste more effectively and help the world switch to clean energy, while delivering sustainable infrastructure development. Environmental scientists will have to work towards restoring the Earth’s life-supporting ecosystems and to protect what is left of its precious biodiversity. The South African Agency for Science and Technology Advancement (SAASTA) helps to develop and nurture such a forward-thinking science base in South Africa. SAASTA’s educational programmes are designed to expand the pool of quality learners who will become the scientists and innovators of tomorrow. Included are programmes such as National Science Week which SAASTA manages on behalf of the Department of Science and Technology (DST), the National Science Olympiad, Primary Science Day, and role-modelling campaigns. SAASTA’s science awareness platform creates opportunities where South Africans can experience hands-on science. The SAASTA Johannesburg Observatory site is a being developed as a science hub which offers science-based holiday programmes and is the home base of a science teachers’ forum. A range of training workshops are offered to science centre staff from around the country. SAASTA’s science communication activities are geared towards making people more aware of how science affects their everyday lives. SAASTA invests in regular science media roundtables where experts and journalists meet to discuss topical issues; and it presents media skills courses to equip scientists to share their work effectively in the media. Other activities include science photography and communication competitions; and a biennial African Science Communication Conference. SAASTA is also responsible for targeted communication initiatives around the science platforms of DST, including science related to Antarctica, African origins, marine biosciences, astronomy and space sciences. The DST has identified biotechnology, nanotechnology as well as hydrogen and fuel cell technologies as priority areas for public science engagement. SAASTA is tasked with the responsibility to plan, implement and manage programmes dedicated to making these topics accessible and relevant to the public of South Africa. SAASTA is a business unit of South Africa’s National Research Foundation, funded by the DST. Visit www.saasta.ac.za for more information. “We are passionate about making South Africans enthusiastic about the wonders of science, engineering and technology, and building a representative scientific workforce that will drive sustainable development in South Africa.” Beverley Damonse, Executive Director of SAASTA.

HYDROGEN and Fuel Cell Technologies In line with the global trend, South Africa is researching alternative energy sources to fossil fuel, to both reduce the level of dependency on these diminishing resources, and to find cleaner, more sustainable alternatives. The hydrogen economy is one approach undergoing serious consideration in South Africa. This involves the use of hydrogen as a carrier of energy – to store and distribute energy, combined with the use of fuel cell technologies to produce electricity. Fuel cells were invented about 150 years ago and directly convert chemical energy into electrical energy in a clean, environmentally friendly way, with no harmful CO2 emissions at the point of use. Converting hydrogen gas to electricity in fuel cells does not “destroy” the hydrogen, but transforms it into water. Although hydrogen can be produced from energy from any hydrocarbons, including fossil fuels, the emphasis in South Africa is upon developing hydrogen from renewable energy sources. South Africa possesses several competitive advantages in the field of hydrogen and fuel cell technologies: u

Platinum group metals (PGM) are the key catalytic materials used in most fuel cells. With 75% of the worlds known PGM reserves found in South Africa, this is a significant driver towards the hydrogen economy, due to the immense socio-economic potential benefit to be obtained from adding value to natural resources, such as platinum, as well as increased demands for PGMs with the global uptake of such an economy.

The extensive expertise in catalysis required for research and development of this type has been developed in South Africa through industry investment.

The pebble bed modular reactor (PBMR) could also provide a “clean” method (non-GHG emissions) to produce hydrogen.

In May 2007, the Department of Science and Technology (DST) approved the National Hydrogen and Fuel Cell Technologies Research, Development and Innovation strategy. Branded as Hydrogen South Africa (HySA) in 2008, the strategy stimulates and guides innovation along the value chain of hydrogen and fuel cell technologies in South Africa. It also aims to position the country to drive and optimize local benefits from supplying high value-added products (indigenous metals) to the potentially large international markets expected to arise in the medium to longer term. These local benefits should include economic benefit, through job and wealth creation, the development of appropriate skills and human resources capital, and an improved quality of life for all South Africans. A specific goal (of HySA) is for South Africa to supply 25% of the future global fuel cell market with novel, locally developed and fabricated PGM by 2020. Three Centres of Competence (CoC) have been established by DST to implement the HySA strategy, and are charged with unique responsibilities to develop future industries in the field of hydrogen and fuel cell technologies.

Concept for a hydrogen fuel cell battery

Hydrogen fueling station for vehicles

Lab work

The three CoC are: u

HySA Systems for systems integration and technology validation, hosted by the University of the Western Cape.

A biogas plant

M f

HySA Catalysis, co-hosted by the University of Cape Town and MINTEK.

HySA Infrastructure, co-hosted by the North West University and the Council for Scientific and Industrial Research (CSIR).

Each CoC has a unique responsibility, but all three are complementary within the common vision of fostering proactive innovation and developing the human resources required to undertake competitive research and development activities in the field of hydrogen and fuel cell technologies. The first five years of funding focus on developing infrastructure at each CoC and there is also a major emphasis upon human capacity development (HCD), with 30% of the total funds for this flagship HySA programme going towards HCD. Relevant international expertise has also been recruited by each CoC to access detailed technical support and well-established implementation networks, and also to ensure the programme and its deliverables remain market related and world class. To date these include Dr Oystein Ulleberg from Norway, Director of HySA Systems and Dr Dmitri Bessabarov, from Canada, Director of HySA Infrastructure.

HySA Systems HySA Systems mainly focus on the development of membrane electrode assemblies (MEAs) and fuel cell stacks for high temperature polymer electrolyte membrane fuel cells (HTPEMs), and solid state hydrogen storage systems. HySA Systems has the overall responsibility for technology validation (e.g. validation of complete fuel cell systems) and system Moisture-free glove box for fabrication of components integration involving end-users (e.g. testing of integrated CHP-systems). HySA Systems and cells HCD-programme includes the education of post graduate science students in the area of materials for hydrogen and fuel cells technology, and training of engineers.

HySA Catalysis

Fabrication of components in glove box

HySA Catalysis focus mainly on the development of fuel cell catalysts, membrane electrode assembles (MEAs) for low temperature polymer electrolyte membranes (PEM) fuel cells, and fuel processors. The mandate of the Centre is to focus on catalysis and catalytic devices associated with the other CoCs. The Catalysis CoC takes particularly responsibility for the establishment of a national competency in hydrocarbon fuel processors for the production of hydrogen as well as catalytic fuel cell components, viz. electrocatalysts, (MEA) and fuel cell stacks. Given the need for compact fuel processor technologies, substantial focus will be on PGM catalysts and reactors, as well as MEAâ&#x20AC;&#x2122;s.

HySA Infrastructure

Fabrication of fuel cell

Solar and wind energy

HySA Infrastructure mainly focus on small to medium scale hydrogen production technologies (e.g. water electrolysis and thermo-chemical processes), hydrogen distribution, and hydrogen storage technologies (except solid state hydrogen storage). Research will focus on the production of hydrogen from renewable energy sources such as biomass, solar and wind. The mission of the Infrastructure CoC is to deliver technologies for hydrogen generation, storage and distribution infrastructure that meet the set cost targets and provide the best balance of safety, reliability, robustness, quality and functionality.

The South African Agency for Science and Technology Advancement (SAASTA) has been appointed by DST to implement a public awareness, demonstration and education platform, and to develop information channels to keep the public informed about hydrogen and fuel cell technologies. More information on HySA and the CoCs can be found at www.hydrogen.org.za.

chapter 7: COMMUNITIES perception of energy efficiency

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chapter 7: COMMUNITIES perception of energy efficiency

COMMUNITIES perception of energy efficiency Barry Bredenkamp General Operations Manager, (Acting) National Energy Efficiency Agency (NEEA)

INTRODUCTION South Africa’s current electricity constraints are not unique in the global energy context. However, after many years of relatively cheap, reliable and ‘Electricity for All’ policies, the South African public’s perception of ‘Service Delivery’ in this area, has become increasingly negative. The way and the speed in which we overcome these challenges could very well put South Africa at the forefront of addressing social and economic change through the acceleration of energy efficiency implementation. At their Gleneagles Summit in July 2005, G8 leaders identified climate change and securing clean energy and sustainable development as key global challenges and globally, developed and developing countries are grappling with the following three key issues relating to energy: • Energy Security • Economic Development • Environmental Protection To address this, governments all over the world are setting stringent targets for reductions in energy consumption. 1These include: • China: -20% energy/GDP by 2010, (-4% per annum) • Japan: -30% energy/GDP by 2020, (-2.9% per annum) • EU: -20% by 2020, (-1.8% per annum) The G8 agreed that we must transform the way we use energy and that we must start now! Improved energy efficiency is essential to meeting this goal. South Africa is no different and government, the National Energy Regulator of South Africa (NERSA), and various other key roleplayers are in the process of proposing a range of policy interventions to address the current energy situation in the country. However, we do need to contextualise the problem and the proposed solutions in a broader scope than just ‘temporarily’ trying to ‘balance’ the current supply and demand for electricity. This in itself is a utility ‘responsibility’ towards its customers, shareholders and government and is generally referred to as Demand-Side Management (DSM). The word ‘management’ says it all: the Utility should and inevitably will ‘manage’ the supply and demand for electricity to optimise profits, ie, in times of surplus capacity, consumers are urged to use more electricity (increased sales), and in times of limited reserve margin consumers are urged to save electricity or be punished with punitive tariffs as proposed in draft legislation. This is certainly no different for any company selling a commodity and is backed by 1

Information supplied by the International Energy Agency, (IEA), Jan 2009 the sustainable Energy Resource HANDBOOK

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the most common and basic economic principles relating to ‘supply and demand’, which in itself has led to a negative perception among predominantly urban customers, as to the reasoning and motives behind the current energy crisis in South Africa. Furthermore, it is clearly evident that a high degree of political support is required to make energy efficiency work in certain sectors of society. However, something which is unfortunately often overlooked is the critically important ‘needs’ of the most crucial stakeholder in the value chain, ie, the customer - who also happens to be the ‘voter’ in a political context! Inevitably, customers rich-andpoor, want to know that they are receiving ‘value-for-money’. This includes receiving a consistent, reliable, affordable and accessible supply of energy. One may argue that these are all ‘relevant’ terms and that general human nature dictates that customers will almost always want to pay cheaper prices for energy, but we as a society need to do our bit and show commitment to the longer-term sustainability and conservation of our resources – not only for ourselves, but for many generations to come. This is not easy, because the concepts of Greenhouse Gas Emissions (GHG), and energy efficiency are not always easily visible to us as individuals. We therefore need to ‘package’ or ‘clothe’ energy efficiency in a customer-friendly manner and this can be done in various ways. The most common of these is ‘Energy Efficient Appliance Labeling’, whereby potential buyers can visibly experience and understand what the life-cycle energy consumption and financial impacts will be when making a purchasing decision on a new appliance or other energy-consuming technologies. Appropriate policies could also be seen as ‘clothing’ the concept of energy efficiency, but to make effective energy policy that will ultimately overcome the negative perceptions surrounding energy in the country, we need reliable and accurate data on both the supply and demand-side of energy.

AN EXAMPLE OF PERCEPTION VS REALITY A practical example of a concept that is not always easily understood is the energy lost during the conversion and transmission of energy to light a single incandescent light bulb. Imagine that the coal needed to illuminate an incandescent light bulb contains 100 units of energy when it enters the power plant. Only two units of energy eventually light the bulb. The remaining 98 units are lost along the way primarily as heat. Here, policy is needed to phase the incandescent lamp technology out of the market completely, as opposed to relying on consumers to invest additional money to purchase more energy efficient light bulbs which save money over the life cycle of all the lamps needed to provide the same quantity and quality of illumination. The perception is that these energy saving Compact Fluorescent Lamps (CFLs) and Light Emitting Diodes (LEDs) are just far too expensive! Some additional barriers associated with the achievement of overcoming negative perceptions associated with energy and energy efficiency in general, includes the following: • Missing and/ or lack of understandable information on energy efficiency – it is not always visible to end users; • Low levels of awareness re cost-effective savings potentials; • Split incentives, eg, ‘Landlord-Tenant’ issues; division of capital acquisition vs operation and 96

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maintenance budgets; energy capital lifespan often longer than ownership period, etc; • Fragmented supply chains and shortage of necessary skills to deliver higher efficiency; • Energy budgets generally have a low priority – energy efficiency is usually bundled-in with more important capital decision factors; and • All the above result in an emphasis being placed on first-time capital and not life-cycle costs. The following are also important from a government/ policy point-of-view: • Early implementation is key • National energy efficiency strategies and energy efficiency goals must be revisited as a matter of urgency • The (updated) 2National Energy Efficiency Strategy is important for: o Encouraging greater effort in energy efficiency o Placing energy efficiency policy within the broader national policy context o Prioritising resource allocation for the energy efficiency portfolio o Capturing synergies between policies and avoiding duplication of efforts o Allocating responsibility for implementation, monitoring and evaluation o Ensuring compliance monitoring, enforcement and evaluation of interventions. (Compliance monitoring is unfortunately often overlooked and leads to lost energy saving opportunities) This publication will therefore hopefully play a significant role in overcoming the current dilemmas facing the South African energy industry and will hopefully contribute in overcoming the negative perceptions associated with the current energy crisis and at the same time, offer practical solutions that will make energy efficiency (not only electricity efficiency) ‘a way of life’ for all South Africans. The same principles apply to our use of other finite resources normally taken for granted in our everyday lives, eg, water consumption. If we change our behaviour to comply with legislation, switch off appliances not in use and work together, we will succeed in our endeavors to create a prosperous and more sustainable future for generations to come.

PERCEPTION VS REALITY Too often, and unfortunately when dealing with predominantly inconvenience-situations, ‘perceptions’ become ‘reality’. No amount of scientific jargon, theory-based explanations and socially-engineered propaganda will convince struggling urban (and other) consumers to understand and have a sense of empathy towards load-shedding, astronomical rises in electricity tariffs and general perceptions relating to the cause of this particular crisis, whether towards Eskom, government or anyone else. We need to be pragmatic in our approach to convince consumers to convert to more modern, reliable and even in some cases, more affordable technologies, which in-turn will lead to monetary, environmental and even security of energy supply benefits for the individual consumers and the country in general. We have to overcome the sense of ‘entitlement’ which most consumers perceive is their ‘right’, after many years of stable, cheap and reliable electricity supply. 2

The South African Department of Minerals and Energy (DME) are currently updating this strategy the sustainable Energy Resource HANDBOOK

chapter 7: COMMUNITIES perception of energy efficiency

HOW CAN THIS BE ACHIEVED? The big stick Eskom threatened to wield through a punitive Power Conservation Programme (PCP) after it ran out of electricity generation capacity in 2009 will be held back for the time being. Instead, the revised National Energy Efficiency Strategy will be rolled out with higher energy savings targets for different sectors of the economy, ranging from 9% to 20%. This Strategy has recommended incentives in the form of tax breaks for investments in energy efficient capital equipment and for verified energy savings. Arguably the biggest incentive though, is rapidly rising electricity tariffs introduced to fund Eskom’s continued operations which require new coal-fired generation capacity. However, government is leaving little to chance by promoting not only energy efficiency’s economic benefits but its positive impact on the environment, such as reducing South Africa’s excessively high carbon emissions, combating climate change, and conserving over-extended water resources. On the economic front, energy efficiency is being promoted as the most immediate and cost effective way to conserve as much as possible of Eskom’s current capacity. The required Reserve Margin or ‘safety net’ has plummeted to a perilous 7% against the international norm of at least a 17% to 20% reserve margin for coal-based electricity generators. It’s far cheaper to save energy than it is to build new power stations. In addition, government will use energy efficiency and renewable energy programmes to attract investors on the basis that they will be operating in an increasingly ‘green’ economy, enabling them to penetrate markets that give preference to environmentally-friendly products. The scope for saving energy is also considerably greater than in most other countries because hitherto cheap electricity has turned South Africa into one of the planet’s great energy guzzlers. This is reflected in the country’s high carbon emissions’ intensity. With only the world’s 32nd largest GDP, South Africa holds the number 11 spot on the top 20 greenhouse gas emitters’ list, contributing 1,8% of global emissions. This is more-or-less the same as the United Kingdom, which is six times more industrialised than South Africa. Eskom estimates that for every kilowatt hour of electricity generation saved at a power station, the environment benefits through one kilogram less of carbon dioxide being released into the atmosphere. Eskom also uses 292 cubic metres of water a year - 1,5% of South Africa’s total water consumption - in its coal-fired power stations, with every kilowatt hour of electricity generated using up 1,29 litres of water. The Strategy proposes a final energy demand reduction of 12% by 2015, with industry and mining contributing 15%, the commercial and public building sector 20%, households 10% and the transport sector 9%. This target is expressed as a percentage reduction against projected national energy usage in 2015. Projected demand is based on a growth rate of 2,8% a year. Targets are voluntary but sectoral targets may become mandatory, according to the Strategy. The Strategy will be augmented by further initiatives such as new energy efficient building standards and appliance labeling. The challenge is to make energy efficiency a way of life for all our 98

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people, rather than the relatively easy and readily available option of building more power stations. We must embark on a mass-based, community-centred programme that would see the critical matter of energy efficiency being part of the daily life of all communities and individuals alike. We therefore need to focus on creating awareness, monitoring progress towards energy savings and expanding this industry to create much-needed new jobs. However, it is the ‘human factor’ that is of real concern. To get people to switch off lights which they have left burning for the past 20 or 30 years is very, very difficult. You cannot drive down a highway without seeing an HIV/Aids billboard. Energy efficiency has to become equally high profile in the minds of consumers in order to realistically overcome the current perceptions associated with energy consumption in the country right now. With government planning to phase out conventional light bulbs, the first factory in southern Africa to produce energy efficient Compact Fluorescent Lamps (CFLs) is now up-and-running. Based in the Lesotho capital of Maseru, the venture between Philips and South Africa’s Central Energy Fund (CEF) aims to produce some 30 million CFLs a year and to undercut prices of imports (mainly from China) through a streamlined production system. CFLs are four times more efficient and use about 20% of the energy required by incandescent lights. They have a five times longer lifespan and a single CFL will save half a ton of Carbon dioxide emissions over its lifespan.

ENERGISING COMMUNITIES In addition to the urban and more established energy consumers, Government aims to draw what it calls ‘the poorest of the poor’ into the brave new world of energy efficiency and renewable energy. It plans to work in partnership with private developers in a range of initiatives in rural areas and to use carbon credits to pay much of the bill. One such initiative to address the sector of the market is the new ‘Working for Energy’ programme, which envisages a sweeping ‘win-win’ outcome, including training of poor people in new and transferable skills; job creation; poverty alleviation; providing energy access to people too remote from the grid to receive a grid-connected supply of electricity; energy and environmental conservation; and combating climate change. ‘Working for Energy’ is based on the hugely successful ‘Working for Water’ programme and in some cases even complements it with potentially profitable outcomes. ‘Working for Water’, for example, includes a R3 billion state-funded programme to clear invasive species in order to allow choked-up rivers and streams to flow again. ‘Working for Energy’ aims to offset this cost by using the collected biomass to generate electricity for local communities. ‘Working for Energy’ is being co-ordinated by the Department of Energy and will be implemented by the National Energy Efficiency Agency (NEEA), though it also includes a strong renewable energy generation component. In essence, ‘Working for Energy’ consists of labour-intensive energy supply-side and demand-side initiatives, based entirely on energy efficiency and renewable energy interventions. Supply-side initiatives include the collection of biomass from invasive alien plants and bush encroachment, production of biogas generation from farm waste, municipal solid waste and waste water and household waste, provision of solar-heated water and even ‘run-of-river’ generation of the sustainable Energy Resource HANDBOOK

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electricity. Establishing wind farms and solar energy plants on communal land is also a possibility, with communities deriving income from co-operative ventures. Some of the larger projects could be made more cost-effective through Renewable Energy Feed-In Tariffs (REFIT) for supplying electricity to the national grid and by deriving revenue from carbon credits. Demand-side initiatives focus on energy efficiency measures such as improving thermal conditions in homes through installation of ceilings, conducting energy audits, etc.‘ Working for Energy’ estimates that some renewable energy generation and energy efficiency measures are more than ten times cheaper and have far larger co-benefits for the national economy than the cost of building new coalbased electricity generation capacity. By saving coal-based electricity and avoiding greenhouse gas emissions, ‘Working for Energy’ projects will combat climate change and be eligible for carbon credits under the Clean Development Mechanism (CDM) of the Kyoto Protocol. Projects will make a high social contribution by benefiting poor communities and could therefore achieve a Gold Standard rating, enabling them to command a premium price on the carbon market. Carbon credits could ultimately provide a sustainable hard currency revenue stream and create a substantial number of new jobs for the economy. Additional major benefits associated with these projects are that people can be trained relatively easily to undertake them, and that their operation and maintenance costs are exceptionally low.

THE CASE FOR ENERGY EFFICIENCY Real progress is reflected in the form of some useful policy, development of the Energy Efficiency (EE) market/ business, momentum building up from various public and private sector initiatives, success stories, and support from development agencies and financiers. But there are also still barriers to implementation, like institutional disincentives and under-funding which need to be addressed. • Large potential savings still to be made at a cost cheaper than new power supply. South Africa is a traditionally energy-intensive country with great potential for savings in physical and financial terms. It is clear that large unexploited potential to be more energy efficient still exists, and that as a country we could fairly easily achieve 20% overall efficiency - 10% of this within the next three to five years. Figures from August 2008 indicate that households are saving about 4% while industrial and mining customers are saving about 6%. There is a way to go to cover the 10% saving which is needed. Research behind the 2005 national EE strategy found that over half of EE measures are ‘no cost’ or ‘low cost’ strategies with a payback of less than three years. With electricity tariffs set to more than double over three years, paybacks will improve. • Electrical EE is by far the cheapest, quickest, most environmentally-friendly way to help relieve the current power supply shortage South Africa is facing. Investment in EE savings would be cheaper than building new power plants - in the order of 20% of the cost of the least expensive new build options. Eskom estimates that EE and Desmond Side Management (DSM) measures cost in the order of R3.5 million/MW saved, whereas generation costs about R18 million/Mega Watt (MW) for conventional coal-fired stations, and R26 million/ MW for conventional nuclear stations. EE is faster to implement than building new power stations and results in a reduction of carbon dioxide emissions (which helps mitigate climate change), toxic pollutants and use of our scarce water resources. There are also job-creation benefits from some energy efficiency interventions. 100

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• C urrently EE is seriously under-prioritised in terms of national resource allocation and institutional focus given its economic benefits for South Africa. The economic advantage of EE has been apparent for several years now, yet we continue to focus resources and institutional efforts on the supply side (ie ‘build more 6-packs’). This raises the question as to why EE has not been more seriously pursued, particularly as we knowingly approached our supply limits leading to the recent power crises. Is the nature of our key institutions such that we can effectively engage only in supply-side interventions? Our national planning and resource allocation process, namely the National Integrated Resource Plan, should be able to steer the electricity sector on an economically sensible path which includes appropriate focus on EE to save the country billions of Rands. • If there were ever a time to accelerate EE practices, it is now. The power shortage is a reality for the next five to eight years. Using less energy to do the same or more, is one of the ways to ‘keep the lights on’ and allow for economic growth and quality-oflife improvements for everyone. Other countries have shown that this is possible, and there are a growing number of positive examples from South African EE projects.

EXAMPLES OF SAVINGS MADE ACROSS DIFFERENT SECTORS IN SOUTH AFRICA As confirmed by specialists and documented case studies, energy saving potential remains unexploited, and examples such as those listed below are a small sample of evidence to this end. • A total of 36 companies and eight industry associations have joined the NBI’s EE Accord since 2005. The draft findings of a recent study are that over 1 441 GWh of electricity was saved by 14 of the Accord signatories who reported for 2007. This is over 5 190 TJ and is equivalent to more than two days of average national electricity demand, or average annual consumption of over 440 000 households. To date Accord signatories have shown savings of up to 38% of consumption. Their EE investment in 2007 has been over R9,9 billion (of which approx 90% for electrical EE), and earmarked for the next three years is over R13,5 billion. • Sasol’s feedgas compressor bundle replacement project in 2005-7 (which included a microgeneration element) has reduced consumption by 259 086 MWh per year, and an average of 29,5 MW, which is 3.2% of their Eskom power. Their investment of R56,6 million was paid back in about one year, and has reduced carbon dioxide emissions by 233 177 tonnes. • Cases of ‘retrofits’ of public sector buildings include: the City of Cape Town’s Parow municipal office building achieving a 22% saving (144 000 kWh per year - 8% of which was behaviour change) with a payback time of less than two years; and three main Ekurhuleni Metro buildings retrofitted in 2005-6 saving 53% of annual consumption (328 988 kWh/yr), and R307 531 per year (at 2005 tariffs) with a 1,2 year payback. • Dimension Data installed an occupancy sensor-based lighting control system at their head office campus which resulted in an 85% saving on monthly electrical consumption (614 MWh per month), with a payback of less than three years. Other companies such as Pick n Pay have done lighting retrofits country-wide. the sustainable Energy Resource HANDBOOK

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• A udits done on seven Western Cape hotels in 2005 found 15% savings were possible, mainly linked to low-cost interventions in lighting, geyser optimisation, low-flow shower heads and efficient laundry policies. • Modernisation of the Holcim Dudfield cement kiln achieved a saving of 15%. • Anglo Coal has made EE in all sites part of their business improvement drive. One set of interventions included EE lighting and insulation for hot water systems, which resulted in a saving of 18 GWh per year at a cost of R9,2 million. • Lifestyle Garden Centre in Johannesburg has doubled its building footprint from 38 000 m2 to 76 000 m2 without using any more than the 600 kW used originally (because Johannesburg’s City Power could not provide additional capacity). • Honingklip Dryflowers in Botriver, Cape Town, made thermal improvements to the drying rooms and installed more efficient lighting and they have shaved off 6,605 MWh per year and almost R1 million off their annual power bills.

THERE IS MUCH TO GAIN AND TOO MUCH TO LOOSE BY NOT DOING IT EE needs to be scaled up to avoid the kind of productivity losses and social disruption recently experienced in the electricity crisis. The national regulator estimates the cost of load-shedding so far as R50 billion just for the power which Eskom could not supply and for which users had to find alternative solutions. This does not include the secondary impact on the economy, eg, loss of income and productivity, small businesses closing, and existing and future job losses. Since the electricity crisis in early 2008, GDP growth has fallen to its lowest rate in more than six years, and business confidence has reached a 24-year low. (CDE 2008)

SOME GOOD PROGRESS HAS ALREADY BEEN MADE • Some laudable national policies, legislation and state-led programmes encouraging EE are in place already. Notably, the 2005 National EE Strategy; (relatively) larger EE programmes such as those run by Eskom DSM and NEEA (efficient lighting, industrial motors, building retrofits, and solar water heaters); and other projects such as DEAT’s low-cost housing pilot - a multi-department skills training project and DTI’s support for growing the local EE market. • Some cities are taking a leading role. Johannesburg’s City Power is set to save 3 500 MW of power through the creation of a ‘virtual power station’. The plan includes installing 210 000 solar water heaters (SWH) at a cost of R3 billion, recouped through a special tariff which is already in place. City Power’s 3 500 MW target within the next few years is higher than Eskom’s Accelerated DSM target of 3 000 MW by 2012. Nelson Mandela Bay Metro is also doing the groundwork for 60 000 SWH over five years to save approx 50 MW, working with CEF Sustainability and using a ‘hire-purchase’ model. Solar water heater bylaws and other ‘green’ building standards are being investigated by the likes of the City of Cape Town. (About 3 000 geysers are replaced through insurance claims each year, which is an opportunity to upgrade to SWH). Cities can draw from some Treasury grant funding and there is capacity-building support and funding from development agency initiatives such as the Danida-funded ‘Urban Environmental Management Programme’ (UEMP), ICLEI (local 102

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government for sustainability) and Renewable Energy & Energy Efficiency Programme’ (REEEP). • T he private sector and NGOs are also pioneering, such as the ‘Green Stay’ hospitality programme, and the Cape Town Central City EE initiative. Innovative financing options are available (eg. performance contracting/ ‘shared savings’ models) Overall, it appears that after a period of ‘groundwork’ EE momentum is slowly building.

UNDERSTANDING THE BARRIERS TO IMPLEMENTATION EE makes sense at many levels, but it has been held back by several obstacles. • The historically low cost of electricity is the greatest of these. For many it just has not been a priority, as electricity costs have been such a small part of overall operating costs. Higher tariffs will make investment in EE more viable but the impact of this is still to be felt. • Supply-side thinking and practice still appear to be the dominant paradigm. The three National Integrated Resource Plan processes so far have tended to be conservative and biased towards conventional options, and to date have under-prioritised EE. • Public sector resource allocation remains low, is not commensurate with the scale of the potential that could be achieved nor the obstacles that need to be overcome (eg, EE information, energy audits, skills training, etc). Annual spending on EE from Eskom DSM and various government department is estimated at about R1billion - R2 billion, which is a fraction of the hundreds of billions of Rands being spent on the ‘new build’ programme over the next few years, and is low compared to the almost R10 billion investment from only 14 large power users in 2007. The major publicsector initiative, Eskom’s EE-DSM, has been hamstrung by bureaucracy and a lack of resources. • Institutional disincentives and vested interests are curbing EE and uptake. Historically, electricity suppliers (such as Eskom and municipalities) may have had no direct incentive to support EE, which is seen to reduce their sales revenues. It has been pointed out that there is an apparent conflict of interest for Eskom to house the country’s biggest EE programme (called DSM), which for several reasons has not achieved its potential. At another level, disincentives exist in the system of property ownership and management. For example: if owners of multi-tenanted buildings invest in EE measures, it may not be easy to recoup their costs from tenants who are the ones getting the financial saving benefits of reduced electricity bills. Many building owner/managers are currently making a profit margin on electricity charges to tenants, so there is a financial disincentive to support EE which would reduce their income from this source. At a very ‘ground-floor’ level, building mangers do not want to be shown up for running buildings inefficiently so they may resist EE audits and interventions. • Enabling policy, standards and legislation aren’t far enough yet in terms of providing guidelines and ultimately making efficiency mandatory. The forthcoming SANS 204-1 & 2 standards for EE in buildings will help in this regard. • There is some complexity surrounding the different spheres of government and/or departments which are responsible for aspects of EE and the regulation thereof, and different levels of capacity among them. the sustainable Energy Resource HANDBOOK

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KEY RECOMMENDATIONS FOR THE WAY FORWARD • A ppropriate tariffs to send the right signal. Electricity tariffs are set to at least double over the next three years, and the ‘Consumption Reduction Scheme’ (CRS) penalties due for the largest users from early 2009 will significantly escalate costs for those who do not save 10% against a baseline from Oct 2006- Sept 2007. In addition, a 2c/kWh levy is to be introduced from July 2009 for all nonrenewable generated electricity (and for other large carbon-producing enterprises) as a first step towards a more comprehensive emissions-based carbon tax. The combination of these is likely to be a powerful incentive for particularly large consumers to become more efficient. Price/ cost would start ‘telling the truth’ about the energy situation that we are in. • Significant increase in resource allocations to public EE-DSM programmes. Particularly while the effect of tariff increases over the next 3 years takes time to galvanise EE action, the recommendation is to significantly scale up co-financing and capacity-building programmes led by the public sector (and NGOs). Treasury should significantly increase the allocation for EE to go to valuable programmes which have been suspended due to lack of funds, and a range of beneficial programmes being developed. For example, the ‘waiting list’ of applications for the Eskom DSM subsidy clearly demonstrate ‘demand’ for this kind of co-funding support, and scope for much higher levels of EE activity. Effort went into establishing the governance structure of Eskom DSM. The system needs improvement, and applicants should be accommodated at this time of crisis when EE is a solution that we can ill afford to lose out on. Cities are emerging as key players and they require further resources/ capacity. • Increased institutional incentives and capacity. Commitment is needed from those institutions which have capacity, or where capacity can easily be scaled up, eg, NEEA and CEF. More specialist positions to achieve EE should be funded for local authorities, provinces and responsible government departments. The financial disincentive for power suppliers can be remedied by shifting from the current ‘rate of return’ system to a performance-oriented system that includes incentives for EE. We can learn from American power utilities which are rewarded in different ways for promoting more efficient end-use. Other fiscal and monetary incentive schemes should be explored, eg, tax breaks, ‘fee-bates’, differentiated tariffs and low-cost finance and revolving funds (as done in Thailand). • Specialist assistance with promoting lasting behaviour change. The crisis of early 2008 highlighted that much can be done to improve communication between key players and with end-consumer groups. Lasting change of consumer behaviour requires more than ‘once-off’ awareness. Technical organisations such as power suppliers and public sector organisations can get more help from ‘social marketing’ specialists. Resource allocations for communication should match the scale of the problem to gain an appropriate ‘share of voice’ in the media and in the commercial marketplace. The current total national communication spend on EE will find it hard to compete with the big marketing and advertising budgets (and skill) of private companies which fill media space and influence consumers. • Scale up support for job creation potential in the EE industry. Eskom and the City of Johannesburg both have training programmes for auditing and retrofitting buildings. 1 000 young South Africans 104

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profile

Green Network Champions Renewable Energy Green Network is a membership network of more than forty-five community based organisations. The network engages in activities, events and research to build environmentally friendly and healthy communities. Green Network is based in KwaZulu-Natal but has developed linkages locally, nationally, regionally and globally. One of the networkâ&#x20AC;&#x2122;s primary focus areas is Gender and Renewable Energy. Energy, whether derived from wood, coal or electricity, has become an increasingly expensive resource. Women tend to bear the brunt of energy deficits as they are generally responsible for the cooking, cleaning, washing, homemaking and educative operations of the home, all of which are facilitated by easy access to energy. Electricity is denied to many in poor and rural areas and even when it is accessible it is often too expensive to use. Green Network has been concentrating on raising awareness of both Renewable Energy Technologies and Energy Efficiency. The network has assembled a Mobile Renewable Energy Technology Demonstration Unit (RETMDU) which consists of a trailer with a solar water heater, solar panel, convector, battery and globe to help in this process of education. A solar water heating unit has recently been installed in Roundavel. Recently a biogas digester, which uses freely available resources such as manure and agricultural waste, was installed at Willowfountain. Biogas Digesters use organic matter to create a clean, carbon-neutral gas which can be used for cooking and lighting. Green Network believes that by raising awareness of energy alternatives the current energy poverty experienced by poor people in South Africa can be alleviated and their lives greatly improved. Contact Us: Green Network PO Box 3515 34 Perks Building, Perks Arcade Langalibalele Street Pietermaritzburg 3200/1

Tel:(27) 33 3452045 Office Fax No: 0866965914 Direct fax No: 0865857507 Cell: 0749632340/0795497964 Skype:sandile.ndawonde Email:sandile@greennetwork.org.za website:www.greennetwork.org.za

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are currently being trained in a joint initiative of DME, DEAT, the Umsubomvu Youth Fund and Indaloyethu (a government environmental project). These kinds of programmes to train energy auditors, installers of improvements (geyser blankets AND insulation, low-flow shower heads, lighting and solar water heating) can be intensified so that the benefits of a growing EE industry can be felt broadly.

CONCLUSION Integration of the above elements in a coordinated and transparent manner will lead to greater efficiencies, a better sense of trust and a ‘win-win’ situation for all the stakeholders involved. Appropriate and reasonable legislation will encourage (force) consumers to conform, thereby using less energy. Less energy consumption will allow the utility to spread capital for new generating (and distribution) capacity over a longer investment period, thereby limiting the quantum (and frequency) of tariff increases to consumers. Consumers then have more disposable income to invest in additional energy efficient technologies to comply with legislation and so the circle continues. This may seem like a very simplistic explanation to support the case for energy efficiency. One of the main pitfalls in successfully implementing energy efficiency as opposed to building new generation capacity can be directly attributed to the way we communicate this concept. Utilities inevitably use (and understand) the technical jargon associated with energy in general. The lawmakers tend to use legal and politically-correct jargon to try and convey the message to stakeholders. And unfortunately, the consumer who is ultimately expected to ‘solve the problem’ by curbing energy consumption, does not necessarily understand terms such as kWh (energy consumption), maximum peak demand (MW), Load Factor, etc.

REFERENCES

The National Energy Efficiency Strategy (second version, 2009), from the DoE. Published interview with African Energy Journal, (2010). International Energy Agency (IEA) Statistical Review, (2009). National Business Initiative (NBI) Progress Report on the Energy Efficiency Accord, (2008).

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Are you a professional who wishes to study further within the field of sustainability? Or do you simply wish to learn about how sustainability can improve the products and services that your business offers? Alive2green E-learning now offers reasonably priced online learning modules within the field of Eco-Construction. Currently learners can study any of the following courses from the comfort of their office or home: • Individual Eco-Building Modules (1-5) R350 each 1 x Half Category 1 CPD Credit per Module (SACAP) • Eco-Building Certiﬁcate R1700 7,5 Category 1 CPD Credits (SACAP) Benefits of Alive2green Eco-Building E-Learning Modules: • The best course content currently available in South Africa – Modules make use of the Green Building Handbook as the textbook (edited by Llewellyn) and have been compiled by Prof Andre de Villiers. South Africa’s top Eco-Building authors contribute to the Green Building Handbook which is now peer-reviewed from Volume 3. • Very accessible – registration, payment, text downloads, study and testing can all take place from the comfort of your home or office. • No study time limit and no time limit for the online multiple choice tests for each module (break in mid test and then pick the test up in the same place when next convenient) • Open-book reading and questions format allows learners to go back and re-study incorrect answers • Reasonable – Starting from R350 with no additional charge for study material which can be downloaded in pdf format. • Hard copy text book available for all Modules if required – excellent for reference purposes. • CPD Credits available for modules from SACAP • Modules passed can be used as credits towards the Eco-Building Diploma (Diploma details to be announced soon) Modules available soon within the following sectors: • Sustainable Energy • Sustainable Waste Management • Sustainable Transport and Mobility • Sustainable Water Resource Management

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Energy efficiency and cost savings potential of heat pump water heaters for residential energy Dr Pieter Rousseau

Chief Executive Officer M‑Tech Industrial (Pty) Ltd www.mtechindustrial.com

Introduction Renewable energy is rightly regarded as the only really sustainable long-term source of primary energy supply. However, relying on solar, wind and hydro alone for electricity generation is clearly not realistic due to a combination of low availability and high capital cost. Also, one should not underestimate the potential social and political implications of trying to move away from coal, that will result in changes in established employment patterns in the country. Therefore, for the foreseeable future, electricity generation technology employed in South Africa will probably consist of a mixture of coal-fired power stations together with new nuclear and renewable energy power plants - most probably in the form of solar energy. In the short term the most promising and practically attainable step towards sustainability is by improving energy efficiency. In recognising this, the Department of Energy has outlined a 12% overall target for demand reduction by 2015 (Department of Energy, 2009) and believes targets should be made mandatory since it can generally be achieved through low cost initiatives. In this regard, heat pump technology provides excellent opportunities for obtaining significant energy efficiency improvements in the heating of sanitary hot water for residential use, with a high return on capital invested.

Heat pump water heaters A heat pump is a device that extracts energy from a source at low temperature, thereby cooling it down and transferring it to a sink at high temperature, thereby heating it up. This is done with the aid of a so‑called vapour compression refrigeration cycle that requires electrical power as input.

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Figure 8.1 Schematic of the major components in a heat pump cycle

This concept is not new and its most well known application is in the form of water chillers and air conditioners used in buildings. In these cases the objective is to obtain cooling and the heat that must be rejected from the cycle is purely a by-product. In heat pumps the heating effect is the primary objective and the cooling effect is the by-product. With this definition in mind, heat pumps can be applied to replace direct electrical resistance heaters for sanitary water heating. It can be applied in large residential buildings as well as in individual homes where heat pumps provide an equally efficient but more cost-effective solution than solar water heaters (Rankin & Van Eldik, 2009).

Figure 8.2 Direct electrical resistance heaters versus heat pumps

Direct electrical resistance heaters versus heat pumps illustrates the fundamental difference between electrical resistance heaters and heat pumps. The resistance heater provides roughly one 110

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unit of heating energy for each unit of electrical input. For each unit of electrical energy input into the heat pump it withdraws two additional units of energy from the environment and therefore supplies three units of heating energy. This ratio of three units of heat to one unit of electrical energy is referred to as the ‘coefficient of performance’, or COP, of the heat pump. A COP of three implies that heat pumps can save two-thirds of the energy normally required for water heating. Since sanitary water heating can contribute as much as 40% of household consumption, heat pumps present an opportunity to reduce typical household energy costs by more than 25%. A general comparison can also be made between resistance heaters and heat pumps with regard to the impact on the environment. As shown in Figure 2, approximately 60 kWh of electrical energy would be required to heat 1000 litres of water with the aid of resistance heaters. The largest portion of the electricity supplied in South Africa is generated at coal-fired power stations. Therefore, the production of each 60 kWh of electrical energy results in the consumption of 30 kg of coal, 120 litres of water and the release of 60 kg of CO2 into the atmosphere. If the energy consumption is reduced by 67%, the environmental impact can be reduced by the same margin. Direct electrical resistance 60 kg C O

6 0 k W h e le c tr .

3 0 k g c o a l , 1 2 0 l w a te r

Heat Pump

20 kg C O

1 0 0 0 l h o t w a te r

2 0 k W h e le c tr .

1 0 k g c o a l, 4 0 l w a te r

1 0 0 0 l h o t w a te r

Figure 8.3 Comparison between direct electrical resistance heaters and heat pumps with regard to the impact on the environment

Sanitary water heating also makes a significant contribution to the total operating cost of hotels, hospitals, holiday resorts, correctional facilities and other large residential buildings such as mine residences. In these buildings energy consumption is not the only concern, but also the peak electrical load that is billed as a separate additional cost component. In order to address this, a novel heat pump system integration design methodology was developed by Rousseau and Greyvenstein (2000) which will be illustrated briefly below.

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Design methodology In most SouthÂ African buildings electrical heating elements are installed inside the storage reservoirs of the water heating plant, usually close to the bottom. Several large reservoirs are usually connected in parallel as illustrated in Figure 8.4.

Figure 8.4 Conventional design methodology

In the configuration shown, the heaters are simply switched on or off by the control thermostat that is situated in the lower part of the reservoir. In this configuration the water is actually heated gradually at the bottom of the reservoir and the supply water is taken from the top. This means that whenever hot water is drawn from a â&#x20AC;&#x2DC;fully hot loadedâ&#x20AC;&#x2122; reservoir, the cold water entering at the bottom of the reservoir will almost immediately lower the temperature at the thermostat. The thermostat will then call for the full heating capacity to be activated. This will result in the direct correlation found between the morning and evening water consumption peaks with the twin peaks in the electrical load, which makes such an undesirable contribution to the national electricity demand profile. The fact that the heating is done at the bottom of the reservoir also implies that if it gets filled with colder water after a period of high take-off, practically all the water in the reservoir must be reheated to the desired temperature before any water is available at that temperature. This design philosophy therefore requires that the heaters must be able to reheat the total content of the storage reservoir within a short period - typically four hours. Since the reservoir is usually sized to hold about half of the daily hot water consumption it means that the heater is sized to heat the total daily hot water consumption within eight hours. However, if the full storage capacity of the reservoir could be used efficiently so that the total daily consumption of hot water could be heated gradually over 24 hours instead of eight hours, the installed heating capacity could be reduced by two thirds. If this were possible, the full heating capacity will be activated throughout the day with theoretically no peaks occurring in the morning and afternoon. 112

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This would result in a perfect load factor of one. Furthermore, the initial capital cost of the heater could be reduced significantly as a result of the reduced installed heating capacity. Although the ideal situation described above cannot be fully achieved in practice, the in-line water heater concept was developed to enable practical designs approaching the ideal. The improved design methodology is illustrated in Figure 8.5.

Figure 8.5 Improved design methodology

As shown in the Figure 8.5 the heater or heat pump is now situated outside of the reservoir and hot water is returned to the top of the storage reservoir instead of to the bottom, as is the case in present practice. The circulation system also includes control valves that regulate the flow rate through the heat pump in such a way that the temperature of the water leaving it is maintained at the set-point hot water temperature. This means that if the reservoir has just been filled with cold water, the hot water supplied by the heat pump back to the top of the storage reservoir is always at the desired temperature. Since the water is added to the top of the reservoir, a well-defined temperature gradient will always be maintained. This ensures that even though the average water temperature in the reservoir may be much less than the set-point value, a certain volume of water at the top of the reservoir will always be ready for use. By selecting the correct combination of reservoir size and heating capacity for a specific application, the heating load may now be spread evenly over a much longer period throughout the day with a load factor approaching one. The fact that the heat pump always produces water at the set-point temperature eliminates the requirement for short reheating periods for the reservoir as a whole. The successful application of this design approach depends, however, on whether the heat pump is able to supply the water at the desired hot water temperature over a wide range of inlet water temperatures and accompanying flow rates. This has also been addressed successfully and a range of heat pumps has been developed locally that are ideally suited for this application. the sustainable Energy Resource HANDBOOK

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Figure 8.6 shows photographs of locally designed and manufactured heat pumps installed at a large mine residence and Figure 8.7 shows a heat pump installed out of sight on the roof of a hotel building.

Figure 8.6 A typical heat pump installation at a large mine residence

Figure 8.7 A heat pump installed on the roof of a hotel building

Case studies In order to illustrate what savings can be typically achieved in practice, we will review the results of three case studies initially presented by Rankin et. al. (2004). In all three cases the original water heating installations were retrofitted with heat pumps according to the new design methodology and then monitored over an extended period of time. Table 5.1 shows the specifications of the three installations. Note that it was possible to reduce the installed heating capacity of all three systems drastically. This is due mainly to the new design methodology that was applied.

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Table 8.1 Characteristics of three installations

Case 1 Case 2 Case 3

Maximum occupancy

Storage capacity (liters)

Installed heating Installed heating Typical ambient capacity before (kW) capacity after (kW) conditions

84 220 242

5000 8000 16000

54 (Resistance heater) 192 (Resistance heater) 168 (Resistance heater)

16 (Heat pump) 40 (Heat pump) 40 (Heat pump)

-4 to 32 °C -4 to 32 °C -1 to 29 °C

Table 8.2 provides a summary of the measured average monthly energy consumption for the three case studies before and after the retrofits. Note that in all cases the energy consumption was reduced by more than 60%. Table 8.2 Summary of energy consumption before and after the retrofits

Case 1 Case 2 Case 3

Monthly kWh consumption before

Monthly kWh consumption after

KWh reduction

% reduction

11300 53600 28200

4400 15400 10200

6900 38200 18000

61% 71% 64%

Table 8.3 provides a summary of the measured peak electrical demand before and after the retrofits. Table 8.3 Summary of peak electrical demand before and after the retrofits

Case 1 Case 2 Case 3

Measured kVA contribution before

Measured kVA contribution after kVA demand reduction

49 128 104

7 18 17

42 (86%) 110 (86%) 87 (84%)

Note that the peak demand reductions that were obtained range between 84% and 86%. This is quite an impressive result, but it can be easily explained. The first contributing factor is the fact that the new design methodology allows for the installed heating capacity to be reduced by around two thirds, irrespective of whether a heat pump is installed or whether an in‑line direct electrical resistance heater is used. If on top of this the heating is now done by a heat pump, that uses only one third of the electrical energy of a resistance heater, the peak demand after the retrofit can be expected to be one third of what it was before. This results in peak demand reductions in excess of 80%. Of course, the proof of successful application lies in the overall life cycle cost reduction resulting from the balance between the running cost and the capital cost required to do the retrofit. Table 8.4 provides a summary of the straight payback periods and Internal Rates of Return (IRR) obtained in the three case studies.

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Table 8.4 Summary of payback periods and IRR obtained in the case studies

Case 1 Case 2 Case 3

Straight payback

IRR

15.7 months 12.2 months 24 months

76.5 % 98.2 % 49.3 %

From the results presented in Table 8.4 it is clear that exceptional returns were achieved throughout. If one keeps in mind that these case studies were done in 2004 and we are now facing substantial increases in electricity prices, it is difficult to imagine that there will be any cases of sanitary water heating applications that will not now provide exceptional returns when retrofitted with heat pumps. However, in doing so it is extremely important to employ the correct design methodology and to have the ability to optimise the combination of reservoir size and installed heat pump capacity. Furthermore, as in any engineering project, there are numerous practical design and implementation issues that directly influence the reliability and durability of the system in the longer term. These issues require skill and experience on the part of the system designer and installer.

Conclusions Heat pump technology provides enormous opportunity for energy efficiency improvements of all sanitary water heating installations. By retrofitting plants with locally designed and manufactured heat pumps, significant cost savings can be achieved by commercial building owners and homeowners alike, while contributing to a more sustainable energy future.

References

Department of Energy. (2009). National energy efficiency strategy of the republic of South Africa. Government Gazette. (Vol. 528, No. 32342). Rankin, R., Rousseau, P.G. & Van Eldik, M. (2004). Demand side management for commercial buildings using an inline heat pump water heating methodology. Energy Conversion & Management. 45:1553-1563. Rankin, R. & Van Eldik, M. (2009). An investigation into the energy savings and economic viability of heat pump water heaters applied in the residential and commercial sectors – a comparison with solar water heaters. (Available from M‑Tech Industrial, PO Box 19855, Noordbrug, 2522, South Africa) Rousseau, P.G. & Greyvenstein, G.P. (2000). Enhancing the impact of heat pump water heaters in the South African commercial sector. Energy - The International Journal. 25(1):51‑70.

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Leading Energy System Solutions M-Tech Industrial is a leading energy systems solution provider, closely associated with the engineering faculty of the North-West University in Potchefstroom. M-Tech is a registered Energy Services Company (ESCo), with a proven track record of more than a decade of successful energy efficiency and demand side management projects. M-Tech developed, manufactures and distributes the Enerflow range of specialised heat pumps for sanitary water heating and deep-mine cooling. Our heat pumps have been awarded the prestigious Eskom eta award for energy efficiency in 2002. Heat pumps can save up to 70% of the energy normally required for water heating. Since sanitary water heating can contribute as much as 40% of household energy consumption, installing a heat pump presents significant opportunities for energy cost reduction. It therefore provides an equally efficient and even more cost-effective solution than solar water heaters. Water heating is also a significant part of the total operating cost of hotels, hospitals, holiday resorts, correctional facilities and other large residential buildings. In this regard M-Tech has installed several megawatts of water heating capacity for major hotel chains, hospital groups and mining houses. ISO9001:2008 accredited Level 4 BBBEE contributor Contact information: M-Tech Industrial (Pty) Ltd. Tel: +27 18 297 0326 E-mail: info@mtechindustrial.com www.mtechindustrial.com

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chapter 9: Policies required assisting the poor in becoming more sustainable

Policies required assisting the poor in becoming more sustainable

(Excerpt from the book “Cleaner Energy Cooler Climate, Chapter 8”)

Professor Harald Winkler Energy Research Centre University of Cape Town

Introduction To answer the overall research question whether there are energy policies to make the development in South Africa’s electricity sectors more sustainable, policies need to be formulated and consideration given to what is required to implement them. This chapter elaborates on how a policy focus on energy for sustainable development can be implemented to provide a sound basis for climate policy in South Africa. The chapter addresses the implementation of policies that have greater potential for making energy development more sustainable. Efficient houses and cleaner, more efficient water heating stood out in the evaluation of residential policies against indicators of sustainable development. Renewable energy had multiple benefits among electricity supply options, but the trade-offs with the lower costs of imports require consideration. The chapter discusses factors that promote the implementation of these energy policies, including institutional capacity, access to finance and demonstration of innovative technologies. The second part of the research question related to whether sustainable energy policies also reduce Green House Gas (GHG) emissions. Placing climate change squarely in the broader context of development, the policies elaborated in this chapter can provide the core for national climate change policy. What factors are needed to implement policies that make development more sustainable? In general terms, one could say that policy implementation requires enough money, good people/ effective institutions and inspiring demonstrations (Global Environmental Facility 2004). Policies in the sense of regulation may include legislation, standards and certificates. Effective institutions are needed to implement policy – both organs of government and good business infrastructure. Access to adequate financing is a factor that is necessary for all successful policies. In many cases, financial instruments and mechanisms need to be designed to increase access to finance. Practical demonstration of innovative technologies and successful projects can provide inspiration for higher levels of implementation. This chapter explores concrete examples of what is needed to implement sustainable residential and electricity policies. How could more efficient housing be financed? What can Government do to promote the uptake of Renewable Energy Technology (RET)?

Implementing sustainable residential energy policies The evaluation of residential energy policies concluded that efficient housing and cleaner and more efficient water heating through Solar Water Heaters (SWH) /Geyser Blankets (GB) ranked highly in all the sustainable Energy Resource HANDBOOK

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dimensions of sustainable development. The finding does not suggest GB have priority for policy interventions. Compact Fluorescent Lamps (CFLs) certainly have important benefits, but not only is the consumption of energy for lighting smaller than for water heating and cooking, but substantial progress has already been made in disseminating CFLs. Increased penetration rates were seen, that is, under least-cost optimisation, particularly in higher-income households. Further dissemination can be expected to occur through the market. Other policy cases may need more intervention for social and environmental benefits. Policies to promote Liquefied Petroleum Gas (LPG) for cooking require a more detailed study of relative price changes, and possibly some form of subsidy or means of making the fuel more accessible. Among a good set of residential policies, efficient housing and SWH/GB stand out with highest energy savings, greatest reduction of the electricity burden, uptake of cleaner fuels and improvement in local environmental quality. Policy makers should give priority to these policies or to a set of combined residential policies.

Inspiring demonstrations for residential policies Demonstration projects exist for residential policies for efficient housing, SWHs and lighting. The Efficient Lighting Initiative aimed to install some 18 million CFLs and brought down the price through a subsidy programme. An LPG challenge has given initial consideration to means of making the fuel more accessible (IES & AGAMA 2004). A number of housing projects have sought to include energyefficiency measures, particularly in low-cost (Reconstruction and Development Programme (RDP)) housing (SEED 2002). There have been several successful projects –such as the Lwandle hostels-tohomes, the Shayamoya social housing scheme in Cato Manor, the Midrand Eco-City project in Ivory Park, the Missionvale project in Nelson Mandela City, the Moshoeshoe eco-village and Eco-Homes project in Kimberley and the All Africa Games village in Alexandra (PEER Africa 1997; SEED 2002; Spalding-Fecher, Williams et al. 2000; Van Gass 1999) – but there are very few large-scale efforts at improving housing. South Africa’s first registered Clean Development Mechanism (CDM) project at Kuyasa in Khayelitsha, Cape Town, has combined efficient design, SWHs and CFLs (SSN 2004). Some 2 300 low-cost houses are to be built more efficiently, increasing the scale of implementation to some extent. Yet the challenge remains to scale up good demonstration projects through implementation of a broader policy – one that could apply to the 2 or 3 million new houses that need to be built. The results of the research demonstrated energy cost savings for households as well as the energy system as a whole, accompanied by reduced local and global pollution. The policy question is how to turn the economic theory into practical adoption. A first step is to set standards.

Mandatory standards for efficient housing Political will is required to increase the share of housing that is built efficiently. The general subsidy to build low-cost housing is subject to detailed and intense negotiations. Money for efficiency measures in this context is not easily obtained from the general housing subsidy of R17 500 per household (EDRC 2003b). An important signal from government would be to make housing guidelines mandatory. Voluntary guidelines for efficient housing have existed for some time in the form of the South African Energy and Demand Efficiency Guidelines (DME 1999). 120

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Guidelines could be made mandatory for new housing, in particular some measures that require no expenditure but simply better planning and design. These include both the orientation of the house with the longer axis oriented east/west, positioning windows on the north to allow solar heat to penetrate the glazing during the winter months, and designing roof overhang for shade in summer. A further set of measures has a modest upfront cost, such as installing ceilings of long-lasting material (for example, gypsum board) and adding a layer of low-cost insulation above the ceiling and on the walls (see Holm 2000; Winkler, Spalding-Fecher, Tyani & Matibe 2000; Winkler, Spalding-Fecher, Tyani & Matibe 2002). Both zero- and low-cost measures could be made mandatory for all new subsidy supported housing. In addition, separate codes would be needed for middle-upper-income housing. The latter could be expected to pay for these measures themselves upfront and reap the benefits of energy savings in future years. For poorer households, financing will be required and the upfront costs need to be made affordable for households.

Subsidies for efficient houses While energy efficiency makes sense from a societal perspective for low-cost housing, poor households cannot afford the upfront costs of better thermal design or more efficient lighting and water heating (Winkler, Spalding-Fecher, Tyani & Matibe 2002). The modelling work showed that a relatively small additional investment in housing for poor communities creates more comfort, reduces household energy costs, and cuts emissions from the residential sector. An extension of this policy could improve the energy efficiency and save households money. Energy efficiency in RDP housing is an area where a policy of direct state financial support to promote energy efficiency seems warranted. In practice, instead of changing the discount rate itself, a financial mechanism would be used to make available the necessary upfront capital to poorer households. Municipal government could play an important role in administering a subsidy scheme.

Affordability and household types The question of where subsidies might be targeted can be further illuminated in relation to SWHs and GBs. The context for the example is the finding that energy savings are largest for Urban Higher Income Electrified (UHE) households. The water-heating policy was a clear example, where SWH/GB reduced expenditure on other fuels overwhelmingly in the UHE household category. The model showed that largest savings are made by those who least need to spend less, while the poorest households consume little energy and cannot save large amounts. A quandary for policy makers arises â&#x20AC;&#x201C; should the policy focus be on the households where the greatest energy saving can be made, or on those who have the greatest need? The inclusion of GBs was intended as an option that might work better in lower income electrified households. The much lower investment cost of GBs means that total investment is smaller than for SWHs. GBs account for a good part of the energy savings. The cost of saved energy for GB is below 1c per kWh, while it is 9c per kWh for SWH. The lower cost â&#x20AC;&#x201C; both upfront and per unit of energy saved â&#x20AC;&#x201C; suggests that GBs are more affordable for poorer electrified households. The greater energy and cost savings in UHE households reflect one perspective only. The analysis of the electricity burden showed that, in relative terms, Urban Lower Income Electrified (ULE) households benefit the most from SWH/GB (at 5.6% reduction below base case, compared to 2.0% to 2.3% for other household types). Policies that seek to address affordability have a major aim of alleviating poverty. From this perspective, it would be most beneficial to prioritise poorer urban households. the sustainable Energy Resource HANDBOOK

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Some limitations of the analysis of energy burden by household type should be noted at this point. The innovation of including six household types extended the boundaries of previous national energy modelling, but still simplifies the complexity of residential energy use. Not only would a large research effort be needed to model 60 household types (for example, with geographic disaggregation or more income groups), but some of the data are not available. Energy-use patterns for rich rural households, for example, are poorly understood. Even if these can be surveyed, some data will remain unknown – for example, the split of fuels used for different end uses. Markal (modelling software) as a tool is limited in its representation of households, which can be only represented directly (rather than as energy demands or units), with loss of resolution on the time of use. Yet affordability is a critical policy issue. Hence the quantitative results from modelling and the analysis against indicators must be supplemented by policy analysis. Of course, the discussion assumes that the policy needs to be targeted. If sufficient funds were available, all households should be targeted. With limits to government budgets, different financing mechanisms could be considered. Donor funding for subsidies for SWH/GB in poorer households would be an option, at least in the process of establishing a viable local SWH manufacturing sector. For higher-income households, SWHs could be made mandatory but the financing spread out through green bonds (EEU 2000). Effectively, policy could provide direct financial support for poorer households, but offer only bridging finance for those who can afford to invest upfront for future energy savings.

Poverty tariff: Making electricity use more affordable Policy to directly address the affordability of electricity has begun to be implemented through the poverty tariff. From 2004, government committed itself to implementing a free supply of electricity for basic needs (DME 2004c). The affordability of using electricity is a problem of poverty. Policy solutions limited to the electricity sector – for example, the poverty tariff and weak grid – can address the problem only partially. An overall solution must be part of a broader, cross-sectoral approach to poverty eradication. Changes in the economy at large, such as job creation and higher incomes, will be important in addressing affordability in its wider sense. An analysis found that policies could reduce the electricity burden between 2% and 6%, depending on policy and household type. This is similar to the relative reduction found by analysing the impact of the poverty tariff – which saw a reduction of 6 percentage points – for poor households (Prasad & Ranninger 2003). A recent study in poor areas of Cape Town showed that electricity consumption rose by 30 to 35 kWh per month per customer after the introduction of the poverty tariff, a substantial rise against an average consumption ranging from 100 to 150 kWh per month (Borchers et al. 2001). This rise is less than the full 50 kWh allocated per month, suggesting that households make greater use of electricity but also value some saving on their energy bills (Cowan & Mohlakoana 2005). A combination of the poverty tariff (aimed at social sustainability) and the residential policies could improve affordability for poor households in two ways. The residential policies reduce the consumption of energy needed to deliver the same service, while the poverty tariff makes the price of electricity cheaper. Together, the policies have the potential to address the difficult issue of affordability. Instruments and mechanisms to finance such policies will be needed. 122

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Financial instruments and mechanisms to support residential policies Addressing the affordability of energy services requires setting up financial instruments and mechanisms. Support for individual policies can be differentiated, as suggested with bridging finance for SWHs in richer households, but direct subsidies for poorer ones. Financing can help to promote efficiency in two major ways: firstly, by funding the costs of efficiency programmes, and secondly, by helping to finance the upfront costs for those who cannot afford them. Specific funding for end-use energy efficiency could be drawn from the general fiscus or raised through a charge. To sustain investment in socially beneficial efficiency programmes – even under power sector reform – the regulator could introduce a charge on all electricity sales. This nonbypassable charge, sometimes called a ‘wires charge’, would be dedicated to funding public benefits including energy efficiency (Clark & Mavhungu 2000; Winkler & Mavhungu 2001, 2002). Financing is an essential element of promoting greater efficiency in the use of electricity. Direct financial support, such as subsidising efficient housing, is one means of contributing to efficiency. Tariff structures that appropriately reflect costs in the price of electricity are equally important.

Business capacity to manufacture locally Institutional capacity to implement policies is required in both the public and private sectors. The need for Government to set mandatory standards was outlined earlier but, as noted, government can also assist with setting up financing mechanisms for residential policies more broadly. Institutional capacity is also needed in the business sector, however, as the example of SWHs illustrates. Adequate business infrastructure is needed for introducing vacuum tube technology, which should reduce costs of SWH systems by almost half. It is assumed that some cost reductions will occur, but in practice a step-change is needed to import technologies. Import of vacuum tubes becomes economical at a certain scale. Aggregation among suppliers of SWH systems would help, as might assistance from government with establishing trade. The local component of SWHs would benefit from the development of a local manufacturing industry. If using imported vacuum tubes, locally manufactured components could be combined in assembly with the imported tubes. The policy case of SWH/GB requires a public–private partnership. Much as business capacity needs to be built to grow markets, institutional capacity is needed in government for residential policies.

Government capacity to administer residential policies Institutional capacity could be established to benefit all residential policies. Capacity is needed not only to develop and enforce codes and standards, but also to promote policies. A national energy efficiency agency has been researched in a feasibility study but has not been established. Cooperation between agencies (DME, NERSA, Eskom) has many advantages, but a dedicated agency might provide clearer leadership if it had sufficient authority and adequate, consistent streams of funding. In short, an institutional home for public-benefit energy efficiency needs to be found.

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Conclusions An approach to sustainable development that emphasises durability would require growth (for example, in terms of access). Rather than insisting on strict economic optimality, however, more flexibility can be shown in making some trade-offs. In the residential sector, this approach has been implemented by building the key development objective of increased access into all cases. The optimising framework ensures that goals are reached cost-effectively. Considering a durability approach, some trade-off of economic optimality might provide greater social benefits. An equitable distribution of energy services is important for social sustainability, adding a further dimension to the priority often given to economically efficient delivery. The residential policy cases illustrate that there is potential for policy-makers to achieve benefits in all dimensions. More could be achieved if some measure of economic optimality is traded off for other benefits – for example, in the case of LPG for cooking. The largest absolute energy savings (and associated emission reductions) will not occur in the residential sector. Levels of energy consumption are relatively low, not only in unelectrified households but also in newly electrified households. However, the residential sector is critical for social development. Changing development paths in this sector will need to focus on multiple issues, including more efficient use of electricity and switching to other fuels. Increasing access to finance is critical for implementing policies. Several supportive policies are needed. Subsidies of less than R1 000 per household should be sufficient to promote an individual policy such as efficiency in the housing shell. Judging from a case with reduced interest rates, it appears that such subsidies would make efficient housing attractive. The household type with the largest savings need not always be the target group for policy intervention. Policy analysis of water heating showed that while UHE have larger absolute energy savings, the reduction in the electricity burden is proportionately greater for ULE. Low-cost measures such as GBs can be aimed at poorer household types – and have a lower cost of saved energy than SWHs. A combination of the poverty tariff and residential policies could work together to reduce the consumption of energy needed to deliver the same service, while at the same time making the price of electricity cheaper. Financing instruments, from the general fiscus to funding for residential policies from systems charges, should be examined. Institutional capacity is needed in business to develop local manufacturing and to reduce costs. Capacity in government is needed to enforce policy and a dedicated energy agency might provide an important focal point.

Choosing electricity supply options for sustainability T he policy challenge for electricity supply includes the need to: • increase diversity of supply and lessen dependency on coal; • reduce emissions of local and global air pollutants; and • increase access to affordable energy services (DME 1998a). • The comparative analysis of electricity policies against sustainable development indicators did not show clear ‘winners’ in economic, social and environmental terms, unlike the residential sector. The policy questions for electricity options relate to trade-offs of different aspects, as well as specific requirements for implementation. 124

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The Southern African Bio-energy Association is a non-government, non-proďŹ t organisation to support the private and institutional sector to get involved in the Bio-energy market in South Africa. It becomes more and more known that bio-energy has one of the largest potentials for electricity generation and fuel supply in Southern Africa on sustainable bases and hold a huge positive social impact.

If you are interested contact info@saba.za.org or visit www.saba.za.org

chapter 9: Policies required assisting the poor in becoming more sustainable

References

IES and AGAMA (Integrated Energy Solutions & Agama Energy) (2004) LPGas rural energy challenge workshop: Workshop background briefing paper. Report for Department of Minerals and Energy and the United Nations Development Programme. Pretoria: Department of Minerals and Energy SEED (2002) Innovative housing projects pave the way for others. Urban SEED Update 1(2): 1-10 PEER Africa (1997) Housing as if people mattered. The story of Kutlwanong, South Africa. A no regrets case study. United Nations Framework Convention on Climate Change, Third Conference of the Parties, Kyoto, November. Spalding-Fecher R, Williams A and van Horen C (2000) Energy and environment in South Africa: Charting a course to sustainability. Energy for Sustainable Development December 4(4): 8-17 Van Gass I (1999) All Africa Games village: Showcase for water and energy efficiency. Energy Management News June 5(2):1,6,9 South South North (2004) Project design document for the Kuyasa project. Submitted to the Executive Board of the Clean Development Mechanism. Cape Town: SouthSouthNorth Project. Available at http://www.southsouthnorth.org/ EDRC (2003b) The potential for increased use of LPG for cooking in South Africa: A rural case study. By B Cowan. Cape Town: University of Cape Town, Energy and Development Research Centre Holm D (2000) Performance assessment of baseline energy efficiency interventions and improved designs. In DK Irurah (ed.) Environmentally sound energy efficient low cost housing for healthier brighter and wealthier households, municipalities and nation. Final report. Pretoria: Environmentally Sound Low cost Housing Task Team / USAID Winkler H, Spalding Fecher R, Tyani L and Matibe K (2000) Cost benefit analysis of energy efficiency in low cost housing. Cape Town: University of Cape Town, Energy and Development Research Centre Winkler H, Spalding-Fecher R, Tyani L and Matibe K (2002) Cost benefit analysis of energy efficiency in urban low-cost housing. Development Southern Africa December 19(5): 593-614 EEU (Environmental Evaluation Unit) (2000) Green financing feasibility study for low income housing in South Africa. Cape Town: University of Cape Town. DME (2004c) Free basic energy policy guidelines. Low income household energy support programme. Pretoria. Department of Minerals and Energy Prasad G and Ranninger H (2003) The social impact of the basic electricity support tariff (BEST). Domestic Use of Energy Conference, Cape Town, Cape Technikon, 31 March -3 April. Available at http://active.cput.ac.za/energy/web/due/papers/2003/04_G_Prasad.doc.Accessed May 2008 Borchers M, Qase N, Gaunt T, Mavhungu J, Winkler H, Afrane-Okese Y and Thom C (2001) National electrification programme evaluation: Summary report. Evaluation commissioned by the Department of Minerals and Energy and the Development Bank of Southern Africa. Cape Town: University of Cape Town, Energy and Development Research Centre Cowan B and Mohlakoana N (2005) Barriers to access modern fuels in low income households Khayelitsha, Cape Town: University of Cape Town, Energy Research Centre Clark A and Mavhungu J (2000) Promoting public benefit energy efficiency investment in new power contexts in South Africa. Cape Town: University of Cape Town. Energy and Development Research Centre. Winkler H and Mavhungu J (2002) Potential impacts of electricity industry restructuring on renewable energy and energy efficiency. Journal of Energy in Southern Africa 13(2): 43-49 DME (Department of Minerals and Energy, South Africa) (1998a) White Paper on Energy Policy for South Africa. Pretoria: Department of Minerals and Energy. Available at http://www.dme.gov.za/pdfs/energy/planning/wp_energy_policy_1998.pdf. Accessed May 2008.

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APS SOLAR

As a division of Accredited Property Solutions (Pty) Ltd, APS Solar consists of a multi-dimensional team of professionals with extensive experience in the fields of the construction industry, provision of affordable housing, property development and the upliftment of communities. Its mission is to help reduce the earth’s excessive CO² levels and to contribute to poverty alleviation. It believes it can accomplish this mission by developing niche, robust solar solutions and thereby create awareness of the benefits of using renewable energy. In early 2009 the company decided to research the possibilities in supplying renewable energy products. The decision was based on the current electricity supply problem in South Africa, the cost implication thereof and the vast amount of citizens who will not be reached by the current infrastructure or grid. In Africa specifically, there are a multitude of renewable energy sources through sunlight and wind, which are virtually limitless in supply. Betta Lights (Pty) Ltd is the Original Equipment Manufacturer (OEM) for all APS Solar’s products and solutions. The OEM was founded in 2006 in RSA and established a footprint in China to manage partners, test new components and to ensure the highest quality control for APS products via their own South African Engineers. It’s product range offers solutions for residential, commercial and industrial use. APS Solar, as distributor, appoints and trains Resellers in the typical uses and the installation of its standard products. It also facilitates the design, development and roll-out of specialised renewable energy applications.

Contact Us: APS SOLAR www.apssolar.co.za A Division of Accredited Property Solutions (Pty) Ltd PO Box 75073, Lynwood Ridge, 0040 Managing Director - Jan Visser m) 082 447 9089 f ) 086 691 4233 jan@apssolar.co.za

A brief history of electricity Just 1% of the earth's surface could supply enough electricity to power the entire world. Right now, the single greatest revolution in solar photovoltaic research is happening at the University of Johannesburg. Professor Alberts and his postgraduate team are writing the next chapter of energy generation. If you'd like to put your brain to work in a postgraduate envir onment that is changing the world in which we live,visit uj.ac.za/postgrad.

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Solar cells take stellar leap South Africa has always branded itself as â&#x20AC;&#x2DC;Sunny South Africaâ&#x20AC;&#x2122; - so itâ&#x20AC;&#x2122;s little shock that the country has emerged as a world leader in inventing and fine tuning solar power generating technology. A research team led by Professor Vivian Alberts of the University of Johannesburg (UJ) has developed an advanced photo voltaic system that is providing the final push needed to make solar power an accessible energy option. Conventional solar panels use silicon based photo voltaic cells. These cells each consist of two layers of silicon crystals doped with a very small number of phosphorous atoms in one layer and boron in the other. The phosphorous doped layer in sunlight will generate a surplus of electrons which will flow, via an external circuit, to the boron doped surface where a shortage of electrons exists. The electrons in the circuit can then be use in various ways - such as charging a battery or powering. Unlike these standard solar panels that contain a 350 micron thick silicon layer, the new advanced solar panels make use of copper, indium, gallium, sulphur and selenium. The result is a revolutionary thin panel, approximately five microns thick - a human hair is 20 microns thick - that converts light into energy at a fraction of the cost. The elements used in the panels are all semiconductors making this technology far more effective in attracting heat. Recently Prof Alberts formed the company Photovoltaic Technology Intellectual Property. The company has since entered into agreements with a solar energy investor in Germany known as Johanna Solar Technology. Shareholders in the project include petrochemicals giant Sasol, the Central Energy Fund, the National Empowerment Fund and the University. Currently work is underway on the establishment of a purpose-built plant, in the Western Cape, to produce the thin film solar modules. Furthermore, the Sustainable Energy Technology and Research (SeTAR) Centre, a multidisciplinary energy research facility that accommodate the technical activities of an air emission testing lab, was recently launched at the University. The SeTAR Centre was initiated by the UJ EnerKey programme, a German-South African Research Initiative, with the aim to use energy as a key element for the sustainable development of the urban region of the Gauteng Province. The SeTAR Centre functions in partnership with the SADC Region Programme for Basic Energy and Conservation (ProBEC), affiliated with the South African based initiative by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).

Contact details: 0861 00 00 UJ or for more info www.uj.ac.za

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CONSERVING ENERGY FOR LIFE Global warming, rising energy costs and power supply issues are driving the construction industry to more energy efficient building product solutions. Expanded Polystyrene (EPS) consists of 98% air and has long been used as a-efficient, cost effective thermal insulator. INTRODUCTION ABP Building Products (ABP) have a range of practical solutions to address the energy and labour issues in South Africa. With ever increasing building costs, the requirement for rapid building and greater awareness of energy conservation as an important aspect of building design, expanded polystyrene (EPS) is becoming increasingly used in modern day construction. The ABP products comply with the requirements of environmentally friendly building practices and SANS codes. ABP together with the above range of products offers a consultancy service for the construction of green and energy efficient buildings. ATTRIBUTES EPS is the ideal material for energy efficient building products, it’s a wonderful thermal and sound insulator and it is also moisture, fire and rodent resistant. EPS also offers the fantastic benefits of not only being lightweight but it is safe to use, long lasting and best of all cost competitive and versatile. Some of the products we have to offer: TASS – Thermal Acoustic Slab System TASS is a combination of a moulded EPS block and cold rolled steel channel to form a coffer slab system for multi storey buildings. The system comprises a priority high strength galvanised steel rib which supports the high density TASS EPS void formers. The system is completed by the placement of reinforcing bars between the TASS blocks in both directions, reinforcing mesh above the blocks and concrete to fill the channels, encapsulate the rebar and mesh thereby creating an insitu monolithic floor structure.

2000m² Rustenburg Office Block spanning a clear 10m

Retirement Centre - 1110m²

TUFS – Thermal Under Floor System Thermal insulation of buildings is becoming increasingly relevant as energy costs rise and climate change a reality. One area that acts as a thermal heat soak is the under floor area of any building drawing heat generated inside buildings into the ground. The TUFS under floor insulating system acts as an easy to install under floor insulation system as well as having a number of other functions and benefits.

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TUFS Installation process

HULK WALLING HULK WALLING is an innovative construction system, generically known as SIPS (Structurally Insulated Panel System) created for the successful development of projects in which time and logistical issues are key. In the term coined â&#x20AC;&#x153;Humane Tilt upâ&#x20AC;? Hulk Walls can be easily installed using ordinary manual labour (no Hulks required). Once erected these walls are fire resistant, waterproof, intruder proof and vermine proof and extremely cost effective. The concept of the system is to negate all wet trades during construction but to still provide a thermally insulated and robust structure.

Residential Exterior and Interior Walls Democratic Republic of Congo Hotel

POLYBLOCK ABPPolyblock is a hollow ICF (insulated concrete formwork) building block which acts as permanent formwork for reinforced concrete infill and is used for building houses, perimeter and retaining walls, infill panels for steel frame construction, agricultural buildings and high rise developments. The block stays in place acting as a thermal insulator for the building. The system is finished by using a propriety EPS plaster namely Polyplast.

Limpopo Governmental Education Head Offices built entirely of Polyblock and TASS slab system For more information on our complete range of exciting products please contact us below: Tel: 011 450 2139 Fax: 011 450 3231 Email: info@abptass.co.za Website: www.abpbuildingproducts.co.za

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chapter 10: Hybrid Renewable Energy Systems

Hybrid Renewable Energy Systems Gary D. Burch Hybrid Power Systems Manager US Department of Energy

Introduction Renewable energy is often ignored purely because of its possible intermittent nature. The sun does not always shine and the wind does not always blow. In order to address this potential hurdle, hybrid power systems combine two or more energy conversion devices, or two or more fuels for the same device, that when integrated, overcome the limitations inherent in either. Hybrid solutions can also address limitations in terms of fuel flexibility, efficiency, reliability, emissions and or economics.

Characteristics of Distributed Energy Resources

• It is located at or near point of use. • It has a locational value. • It works at distribution voltage levels.

Benefits of a successful hybrid system

• New

Hybrid Systems Initiatives: A hybrids programme can create market opportunities for

emerging technologies before they are fully mature. Hybrid systems could be applied in power quality, village power and power parks.

• Hybrid Systems Premise: The whole is worth more than the parts. • Value Propositions: The hybrid systems value propositions lie in the fact that it must have high efficiency, high reliability, low emissions and acceptable costs.

• Main driver: Value is the driver for distributed generation – not absolute cost. The following section addresses the value propositions of the hybrid system and provides case studies to affirm the views:

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High efficiency Incorporating heat, power and highly efficient devices (fuel cells, advanced materials, cooling systems, etc) can increase overall efficiency and conserve energy for a hybrid system when compared with individual technologies.

Case Study: Combining heat and power systems, such as those at the University of Maryland test bed, can greatly improve overall energy efficiency. Project Overview: A public private partnership was formed by the Maryland Economic Development Company (MEDCO) and Trigen-Cinergy Solutions to (TCS) to shift business risk away from the school, and provide operating guarantees to ensure that the renewal could be funded from existing annual allocations for utility and energy services. The total cost of the upgrades was US$71 million. The project included installing a 25MW dual-fuel Combined Heat and Power plant; upgrades of the steam, electricity and chilled water distribution systems; new steam turbine chillers in satellite central utility buildings (SCUBs); a low NOx retrofit of existing oil-fired steam boilers (which now serve as backup boilers); and other improvements that reduced energy consumption by 32%. Projected savings of US$120 million will be used to fund other school improvements and debt service. Trigen (now Suez, NA) has been contracted to operate and maintain the power plant, new chillers, and the electricity, stem, and chilled water distribution systems.

Reasons for installing CHP In 1996, the University of Maryland faced an aged utility infrastructure that was unable to provide adequate and reliable service to existing buildings and could not accommodate planned expansion. The steam, electric distribution systems, and multiple chilled water loops needed to be upgraded. In addition, there was a desire to replace old boilers (coal boilers that had been converted to fuel oil) to reduce emissions and help alleviate periodic regional air quality problems. The systems obviously needed to be upgraded, but the University was hesitant to take on the financial burden that replacement would entail.

Additional facts:

• This

facility is not permitted to export electricity, so several hundred kW are purchased

continuously.

• Emissions reductions: 9,800 tons/year NOx, 175,000 tons/year CO2. • HRSG’s replaced high emissions boilers burning fuel oil. • System is capable of operation independent of local electric energy emergencies.

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Enhanced reliability Achieving higher reliability can be accomplished with redundant technologies and / or energy storage. Some hybrid systems typically include both, which can simultaneously improve the quality and availability of power.

Case Study: The PV panel / propane gas / battery hybrid at Dangling Rope Marina significantly increased the reliability of the power system. The National Park Service has operated a large photovoltaic (PV) hybrid power system at the Dangling Rope Marina since August 1996. Performance and economic analyses for this system based on its first year of operation have been published. As the system enters its third year of operation, recent changes to the site electrical load and impending additions to the PV array raise new interest in this site as the subject of analysis and evaluation. In 1998, energy conservation measures reduced the site electrical load by 10% to 12%. At the same time, funding has been allocated to expand the PV array by 40% in 1999. From the beginning the Dangling Rope Marina PV hybrid power system project has been a collaboration among several Federal agencies, the National Labs, the State of Utah and private industry. All of the participants have shared the common goals of promoting renewable energy and providing reliable power to the marinaâ&#x20AC;&#x2122;s visitors and residents. As originally configures, the 20 year life cycle cost of the hybrid power system at Dangling Rope Marina was less than for a conventional propane fueld generator system and more than for a diesel fueled system. In 1998, energy efficiency improvements were taken that will result in reduced site load, generator run time, fuel consumption and maintenance costs. These improvements in energy efficiency are calculated to lower the LCC for the hybrid system by more than US$100 000. Lastly, plans call for the PV array to be expanded by 40% in 1999. This expansion of the array will have operational benefits for the life of the system including less fuel consumption, fuel barge deliveries, and regular maintenance for the generators. The economics of PV hybrid power systems are competitive today with full-time fossil fuel burning generators in off grid applications. The hybrid power system at Dangling Rope Marina is serving as a model and example of a practical renewable energy power system to the National Park Service and other Federal agencies.

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Lower Emissions Hybrid systems can be designed to maximize the use of renewable, resulting in a system with lower emissions than traditional fossil-fueled technologies.

Case Study: The SEGS solar thermal power plants in Southern California produce far fewer emissions than traditional electricity generation technologies. In 1984, the first of the concentrating solar power plants (known as the Solar Electric Generating System or SEGS) began converting solar energy into electricity in California’s Mojave desert. Using technology developed by the US Department of Energy (DOE), private industry ultimately built nine SEGS power plants. With a combined rated capacity of 354 MW, the nine plants generate enough power to meet the needs of about 500 000 people. The SEGS plants range in capacity from 13.8 to 80MW, and they were constructed to meet Southern California Edison Company’s periods of peak power demand.

Highlights Nine solar power plants provide 354 MW total capacity, the largest solar thermal generating capacity in the world; third generation designs of trough plants produce power for US$0/08 to 0.1 per kWh; and operating throughout the year helps the SEGS meet periods of peak demand. From 1992 to 1997, the US Department of Energy helped KJC reduce operation and maintenance costs, improve plant efficiency, and reduce the cost of energy produced. Many plants attained record solar performance during summer 1997. The plants operate for 80% of the summer mid peak hours and 66% of the winter mid peak hours. A natural gas backup system supplements the solar capacity and contributes 25% of the plants annual output. The SEGS plants use parabolic trough solar collectors to capture the sun’s energy and convert it to heat. In the SEGS design, the curved solar collectors focus sunlight onto a receiver pipe. Mechanical controls slowly rotate the collectors during the day, keeping them aimed at the sun as it travels across the sky. Synthetic oil flowing through the receiver pipe serves as the heat transfer medium. The collectors concentrate sunlight 30 to 60 times the normal intensity to the receiver, heating the oil as high as 390 degrees Celsius. The heated oil is routed through a heat exchanger to generate steam that drives an electricity producing turbine. In a programme that ran from 1992 to 1997, DOE’s Office of Power Technologies helped the KJC Operating Company of Kramer Junction, California, to reduce operation and maintenance (O&M) costs, improve plant efficiency and reduce the cost of energy produced. KJC operates the SEGS III – IV plants, with a combined capacity of 150MW. Working with DOE’s Sandia National Laboratories in Albuquerque, New Mexico, KJC engineers developed cost reduction strategies 136

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for O&M planning optimization, subsystem automation, collector alignment and cleaning, reliability improvement of components subjected to cyclic operation, and subsystem efficiency improvement. Many of the cost reduction strategies developed for the SEGS plants can now be applied to other concentrating solar power technologies, such as dish/ engine systems and solar power towers. KJC estimated the cost savings resulting from a group of specific cost effective O&M improvements. The net present value of these improvements is more than US$42million and represents a 30% reduction in O&M costs. Many of the cost reduction activities also improve performance of the plants. In the summer of 1997, KJC reported record power output for a single day – 2 071 000 kWh – enough to power more than 75 000 homes daily. This single day electrical output also established world record solar thermal to electric efficiency of 18%. KJC credited the O&M cost reduction programme as a key contributing factor.

Acceptable Cost Hybrid systems can be designed to achieve desired attributes at the lost acceptable cost which is the key to market acceptance.

Case Study: By cutting diesel fuel consumption, the King Cove, Alaska run-ofthe-river hydroelectric plant and battery system reduced electricity costs for the town’s residents. Hydropower projects use the kinetic energy of flowing water to produce electricity. Most hydropower projects use a dam or diversion structure to retain or channel water from a river or stream. When the stored water is released, it passes through and rotates turbines, which spin generators to produce electricity. The King Cove 800kw micro-hydro facility in King Cove, Alaska went on line in December 1994 to service the remote 700 resident town. Communities in Alaska find that their electricity is expensive. Before 1994, King Cove, a remote mountain village, paid 21 cents per kWh for its electricity. That is because the village had depended on diesel fuel to generate its electricity. A less expensive source of power for these areas may be small-scale hydropower plants. It is this fact that led King Cove to turn to locally available hydro electricity.

Other Hybrid Activities in the Office of Power Technologies (OPT) The US DOE has been involved in a number of hybrid system demonstration projects.

Examples: Salt River Project which was a demonstration of the Thermal Hybrid Electric (THE) SunDish: A 25 kW Concentrating Solar Power (CSP) dish combined with a Stirling engine system, which provides the sustainable Energy Resource HANDBOOK

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power during low insulation by burning liquid or gaseous fuel. This could be natural gas, hydrogen or landfill gas. A demonstration project is underway called the Salt River Project at Pima-Maricopa Indian Community land fill (Phoenix, AZ) since October 1999. The benefits of the system include reliable, continuous power maximising renewable usage. NRELâ&#x20AC;&#x2122;s Wales, AK high-penetration wind / diesel system: NREL demonstration project is underway in Wales, AK (population 160). High penetration 130kW wind turbine technology was added to the existing 365kW diesel generator technology. The benefits of the system included reduced fuel consumption of between 50% and 60%, requiring less diesel storage. The diesel generator provides continuous power in the absence of wind.

Pieces of the puzzle All the following technologies can be used in different combinations. The key is to find the optimal solution for the specific application. Fossil Fuel Engines IC Engine Stirling Engine Rankine Engine Cycle Brayton Turbine Microturbine Renewables PV, Concentrating PV Solar hot water Concentrating Solar Power Trough Dish Wind Geothermal Hydro CHP

Fuel Cells Solid Oxide PEM Phosphoric Acid Molten Carbonate Storage Lead acid batteries Flow batteries Reversible fuel cells Ultra Capacitors SMES Flywheels Thermal CAES

The Hybrid Technologies Matrix gives an indication of the research that was conducted at the time. The green blocks indicating those technologies that are at commercial or pre-commercial stage, blue at R&D stage and purple those that are plausible. White blocks indicate that it is not applicable.

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Hybrid Technologies Matrix

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Applications for hybrid solutions Hybrid solutions work very well in the following applications: • Village power. • Commercial power parks. • Industrial Power Quality improvements. • Integrated Building Efficiency (CHP+) and could even lead to Zero Net Energy Buildings. • Remote (Off-grid) power. • Distribution (Grid) support. • Water Resource Management. • Green Power. • Brownfields (to Brightfields). • Power Price stabilisation.

The Hybrid Power Systems Report of the Office of Power Technologies (OPT) of the US DOE

The report has the following key objectives • To define the thrust of a new programme by:

- Compiling a set of activities that may tap into existing technology programmes to ‘fill the gaps’. - Coordinating but not overlapping with technology programmes. - Stimulating innovative thinking that leads to creative business opportunities. - Encourage cross – programmatic interactions and benefits. • Define how a hybrid power programme will accelerate the introduction of all technologies that include renewable • Make the case of the need for an integrated distributed hybrid power programme

The Programme Strategy The strategy of the programme is to focus on the designing, testing, validating and promoting optimised DER Hybrid power systems for identified market applications. To have a ‘market focus’ in contract with the ‘technology focus’ of existing technology programmes. • To coordinate with technology programmes to: • Determine best available technology. • Communicate with customers (users) to understand their needs. • Conduct systems analyses and produce software tools to optimize performance. • Partner with system integrators to design these features into products. • Test and validate system performance. • Promote regional partnerships to encourage deployment.

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The content of the programme Management and Systems Analysis – the software component of the programme to manage and implement efforts including planning and analytical functions Systems Integration – the “hardware” aspect of the programme to work with national laboratories and system integrators to design, test and validate early hybrid power systems Regional partnerships – the “outreach” effort within the programme to work with customers, state/ regional governments and the private sector to deploy hybrid power systems as rapidly as possible.

Conclusions • H ybrid power systems can offer solutions and value to customers that individual technologies cannot match. • Hybrids offer market entry strategies for technologies that cannot currently compete with the lowest-cost traditional options. • Some renewable hybrid power systems are commercially available today. • OPT /DOE is evaluating a new hybrid power systems initiative with an emphasis on distributed applications. • The OPT hybrid power initiative included substantial private public partnership (PPP) effort.

The conclusions for the South African situation The following key points should be noted for South Africa in 2010: • The myth that renewable energy must not be implemented because of its intermittent nature is busted, it can work perfectly well alongside fossil fuel applications – it should not be an ‘all or nothing’ approach. • Hybrid solutions have provided opportunities for sustainable energy and have been ongoing for a very long time. • Public Private Partnerships (PPP’s) can work and makes a lot of sense in the development of hybrid renewable energy projects. • Research and Development, Renewable Energy and Energy Efficiency must work hand in hand to ensure successful pilot programmes which could become demonstration facilities and ultimately fully commercially viable. • Distributed generation is an option to consider and develop. • Government should consider establishing a programme specifically designed to develop distributed generation and hybrid solutions for South Africa.

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Solar panel production facility established A factory that produces solar thermal panels has been established by African Emissions Trading in Silverton, Pretoria. The factory will mass produce high quality, efficient panels for local and export markets. The new panel was developed in-house and is called Sun-on-call. The Sun-on-call is available in two series, one with an aluminium frame and one in a galvanised steel frame. The galvanised frame can be painted. The panel is a horizontally orientated panel and vary in width according to the size of the geyser and the location of the installation. African Emissions Trading (AET) was established in 2004 and is an Alternative energy company that helps other companies and individuals become energy efficient and less dependent on electricity. The Sun-on-call is the first of the products to come out of the AET project pipeline. Soon to follow is a low pressure geyser (100kPa) with other products under development. AET is also the holding company of EasyenergyIQ, an alternative energy supply and install company. EasyenergyIQ is a “total solution, alternative energy company”. They offer advice on the best solution for the circumstance and will then supply, install and commission the equipment. They specialise in solar, wind and gas appliances. They also supply and install generators and heat pumps. The company is not bound to specific products or suppliers. They analyse the market and find products to fill the need. They only supply products that are from reputable origin and can be serviced in the country. All their products and services help the customer become more environmentally friendly and less dependent on electricity. “The Sun-on call is unique in quite a few aspects,” says Factory Manager, Jozua de la Harpe. The fact that it is horizontal makes it easier to thermo siphon on existing geysers and makes it possible to have the same design but just vary the amount of risers from 8 to 16. “We can therefore cater for most 100 litre geysers to most 200 litre geysers in one panel making installation simpler.”

profile

Specifications of the Sun-on-call System

Sun-on-call 8

Sun-on-call 13

Sun-on-call 16

System Application

Pumped/thermosiphon

Aperture area m

0.95

1.63

1.2

1.9

2.33

Pipe connections

22mm

Nr of ports

Collector size m

Freeze protection

yes

Dimensions

1.15X1.06X0.09

1.15X1.65X0.09

1.15X2.03X0.09

Working pressure

400KPa

Cover

Poly Carbonate

Insulation material

Polyurethane

Fin

Fin coating

Selective

Frame material

AL/Galv

Riser material

Copper 10mm

Header material

Copper 22mm

Dry weight

16,4 Al 18,6 GalvÂ

23.7 Al

29.2 Al

1.4

2.2

2.7

100l

150l

200l

Pending

Water capacity litre Recommended size Q factor*

geyser

*Test conducted by Evergreen consultancy

The construction of the riser is one of the competitive advantages of the panel. It has the selective coating and the contact to the copper riser through acoustic welding. The relative sizes and distances have experimentally been determined to give optimal thermo siphon capabilities. The polycarbonate cover gives an excellent compromise between mechanical strength, light transmission and thermal insulation. African Emissions Trading can be contacted through their website: www.africanemissionstrading.co.za or on 012 804 4983

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CONCLUDING REMARKS FROM THE EDITOR Dr Elsa du Toit Associate Director of Saha International SA (Pty) Ltd

INTRODUCTION The aim of the Sustainable Energy Handbook was to give the reader a snapshot of the entire electricity supply chain (from the supply side through to distribution and consumption) highlighting the practical challenges that are being faced at every level that inhibit the implementation of energy efficiency and renewable energy. This chapter summarises all the chapters of the handbook and indicates that challenges can be small but difficult - such as changing human perception - or more significant and easier to change, such as technology improvements. In choosing electricity supply options for sustainability, the policy challenge for electricity supply includes the need to: • increase diversity of supply and lessen dependency on coal. • improve energy efficiency to reduce emissions of local and global air pollutants. • increase access to affordable energy services. The first chapter dealing with the supply side issues mentions that for this to be done efficiently and sustainably, the electricity supply industry in South Africa has to change from one that is dominated by a few players, to one that would allow for some sort of wholesale market. The introduction of independent power producers, including renewable energy options through the recently introduced Renewable Energy Feed-In Tariffs (REFIT), are hampered by the current lack of a clearly defined wholesale market vision for 2020. Even though a number of tough decisions are needed - and perseverance in the face of opposition is required - the benefits for South Africa would be measurable. Eskom is not in a position to expand fast enough to ensure that enough electricity is made available over the next decade when economic growth will be required to reduce poverty and unemployment. A functioning wholesale market for electricity is needed to entice private investors to South Africa with investment plans for electricity generating facilities for the good of the country. The following chapter dealt with the Transmission Constraints in implementing renewable energy in South Africa indicating that the introduction of renewable energy in South Africa will be slower than in some first world countries. This is because of the cost of extending the grid to reach areas where renewable energy projects will be located, while electricity tariffs continue to increase rapidly. Network integration problems are an issue, but it can be addressed. In time it might become easier to implement renewable energy in greater volumes, while simultaneously addressing the challenges associated with it, and absorbing the cost implications. The next chapter addressed the introduction of renewable energy technologies into the market. Once the wholesale market and transmissions are sorted out, Renewable Energy could then be introduced. It has been proven on a global scale that this could be possible, but it will take time. It the sustainable Energy Resource HANDBOOK

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was concluded that a large-scale wind, water and solar energy system can reliably supply the world’s needs, significantly benefiting climate, air quality, water quality, ecology and energy security. As we have shown, the obstacles are primarily political, not technical. With the implementation of sustainable energy come the new technologies associated with it and the following chapter continued to indicate that the energy industry will have to stay abreast of the latest developments and advances. For example, the utilisation of a new, more efficient nuclear fuel cycle – one based on fast neutron reactors and the recycling of spent fuel by pyrometallurgical processing – would allow much more of the energy in the earth’s readily available uranium ore to be used to produce electricity. Such a cycle would greatly reduce the creation of long-lived reactor waste and could support nuclear power generation indefinitely. Technology improvements depend largely on the amount of money that is given to research by governments and lately, due to the emphasis on the environment and global warming, significant funding is flowing into new technology developments for energy. The next chapter then moves to the demand side of the electricity supply chain, where it becomes clear that it is necessary for South Africa as a whole to understand that there will be constraints on the availability of electricity for several years to come. The next two chapters addressed examples of some of the new demand side technologies currently being developed. Essentially, the residential sector is a significant source of readily available energy, with household appliances that could be managed remotely. Utility Load Management (ULM) provides the ability to help make the consumers take a more conservative approach to energy consumption, and provides long-term sustainability that has the potential to consistently reduce the overall national demand. There is still, however, a significant amount of work required to persuade the general public to accept responsibility for reducing the demand, along with setting up an effective working relationship with all of the municipalities that will allow for the implementation of a single national residential load management solution. Another demand side technology that has been known for some time is the heat pump technology that provides enormous opportunity for energy efficiency improvements of all sanitary water heating installations. The following chapter addressed the consumers and mentions that perceptions of renewable energy technologies have to change in order for renewable energy and energy efficiency to be implemented. Fortunately this has started already. Firstly, renewable energy technologies are no longer viewed by policymakers as being aimed at low-income consumers, but rather at more wealthy consumers that can afford the technology and who can realise significant savings through continued use. This may have a positive spin-off in that the technologies may become aspirational products, once proven in the mainstream market. At another level, user perceptions about the appropriateness of renewable energy technologies are also changing. Increased awareness about environmental issues, coupled with continued electricity price increases may change users’ perceptions and make renewable energy technologies something to be considered for themselves. The increased awareness about environmental issues also gave rise to a specific consumer group demanding ‘green’ and sustainable products for the outdoor, leisure and camping market. Although higher energy costs and increased environmental awareness may impact positively on the adoption rate of renewable energy technologies, it should also be said that these technologies 146

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are often still viewed as being expensive and not readily accessible to consumers. The price and affordability issue could be solved with innovative financing and credit schemes but care must be taken that such schemes should, in principle, be available to all consumers. A higher electricity price will further contribute to shorter pay-back periods and may convince consumers to make the upfront investment in the technology. Accessibility and availability of the products remain problematic as many consumers do not know where to find specialist retailers who stock these products. This links closely to the issue of balanced advice and consumer information. Consumers require supplier details with general product information about the technology. Some form of quality assurance (guarantee of workmanship) may also go a long way to allay consumer fears of buying from fly-by-night companies that may not be around to provide essential after sales service. The next chapter addressed the perceptions of urban communities in implementing energy efficiency and indicated that the integration of the five elements (listed below) in a coordinated and transparent manner, will lead to greater efficiencies, a better sense of trust and a ‘win-win’ situation for all the stakeholders involved. The Five Elements: • Appropriate tariffs to send the right signal. Electricity tariffs are set to at least double over the next three years, and the ‘Consumption Reduction Scheme’ (CRS) penalties due for the largest users from early 2009 will significantly escalate costs for those who do not save 10% against a baseline from October 2006- September 2007. In addition, a 2c/kWh levy is to be introduced from July 2009 for all non-renewable generated electricity (and for other large carbon-producing enterprises) as a first step towards a more comprehensive emissions-based carbon tax. The combination of these is likely to be a powerful incentive for large consumers to become more efficient. Price/ cost would start ‘telling the truth’ about the energy situation that we are in. • Significant increase in resource allocations to public Energy Efficiency Demand Side Management (EE-DSM) programmes. Particularly while the effect of tariff increases over the next three years takes time to galvanise energy efficiency action, the recommendation is to significantly scale up co-financing and capacity-building programmes led by the public sector (and Non-Governmental Organisations). Treasury should significantly increase the financial allocation for energy efficiency programmes that have been suspended because of lack of funding, and towards a range of beneficial programmes that are being developed. Cities are emerging as key players and they require further resources/ capacity. • Increased institutional incentives and capacity. Commitment is needed from those institutions which have capacity, or where capacity can easily be scaled up, e.g., the National Energy Efficiency Agency (NEEA) and the Central Energy Fund (CEF). More specialist positions to achieve energy efficiency should be funded for local authorities, provinces and responsible government departments. The financial disincentive for power suppliers can be remedied by shifting from the current ‘rate of return’ system to a performance-oriented system that includes incentives for energy efficiency. • Specialist assistance with promoting lasting behaviour change. The crisis of early 2008 highlighted that much can be done to improve communication between key players and with end consumer groups. Lasting change of consumer behaviour requires more than ‘once-off’ awareness. Technical organisations such as power suppliers and public sector organisations can get more help from ‘social marketing’ specialists. the sustainable Energy Resource HANDBOOK

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• S cale up support for job creation potential in the energy efficiency industry. Eskom and the City of Johannesburg both have training programmes for auditing and retrofitting buildings. In a joint initiative by the departments of Energy (DoE), Environment and Water (DWEA), the Umsubomvu Youth Fund and Indaloyethu (a government environmental project), 1 000 young South Africans are currently being. These kinds of programmes to train energy auditors and installers of improvements can be intensified so that the benefits of a growing energy efficiency industry can be felt broadly. Finally, the last chapter provides examples of hybrid renewable energy applications and indicates a need to change perceptions that renewable energy cannot provide bulk electricity, that it is intermittent in nature and that it has variable loads and therefore should not be used. There is no rule that says renewable energy must become a stand alone energy source. Hybrid solutions have long provided opportunities for sustainable energy and the South African government should request research entities to investigate the specific technology combinations possible for South Africa.

SUMMARY Although change is a difficult process, it is always better to undertake it in a proactive manner during a period when there is no real pressure to do so. South Africa has a wonderful window of opportunity now to do a complete overhaul of the electricity industry and in so doing, make it more sustainable going forward. As seen in this handbook there are a number of challenges to overcome, but if we all change our mindset and start to believe what David R Brower says: “I believe that the average guy in the street will give up a great deal, if he really understands the cost of not giving it up. In fact, we may find that, while we’re drastically cutting our energy consumption, we’re actually raising our standard of living.”

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DURBAN LANDFILL GAS TO ELECTRICITY PROJECT The idea of managing the greenhouse gas emissions from the landfills was first considered as early as 1994. However, at that time it was not financially viable. Only with the advent of the Kyoto Protocol and the introduction of Clean Development Mechanisms has this become a viable project. The project commenced in July 2003 in co-operation with the World Bank. However, after some slow progress encountered with the Environment Impact Assessment process the World Bank withdrew from the Bisasar Road project, but continued with Mariannhill and La Mercy Landfills. Generation Compound at Bisasar Road Landfill The Mariannhill project was commissioned in November 2006 and registered with the UNFCCC in December 2006. The Bisasar Road Project was commissioned in March 2008 and was eventually registered in March 2009. Mariannhill has a 1 MW generating capacity and Bisasar Road is currently at 6,5 MW capacity with potential for a further 1 MW. The project is a Clean Development Mechanism and the income has three revenue streams from the sale of electricity, the sale of carbon credits from the destruction of methane and the sale of carbon credits from the electricity saved from generation via coal fired power station. Durban Solid Waste(DSW) deliberately chose a straight forward technology which is well tested in developed countries. Wells are sunk into the compacted refuse on a landfill. The gas is drawn off and used as a fuel in a spark ignition engine which in turn drives a generator to produce electricity which is fed into the local grid. This project is a first for Africa and is currently still the only landfill gas to electricity project operating in Africa. As a first this project has attracted much interest from around the world and has placed Durban firmly on the world map. DSW has signed an ERPA with Trading Emissions Plc of UK for the first period of the Kyoto Protocol i.e. until 31 December 2012 for the purchase of all Certified Emission Reductions CER) generated by the project. Once the guide lines for the second period up to 2019 have been negotiated DSW will go back out to tender for the sale of CERâ&#x20AC;&#x2122;s for this period. John Parkin: Pr Eng ,NScEng,BScEng, Ossiwm(SA),MSAICE Deputy Head: Durban Solid Waste eThekwini Municipality www.durban.gov.za

Index of advertisers

Index of Advertisers COMPANY

PAGE

ABP Building Products Africa Thermal Insulations (Pty) Ltd (ATI) African Emissions Trading Alive2green Education APS Solar Barloworld Power Bosch Projects (Pty) Ltd Chemical & Allied Industriesâ&#x20AC;&#x2122; Association E+PC Engineering & Projects Company Limited Eskom Ethekwini Municipality Green Network Honeywell Automation and Control Solutions SA Ingersoll Rand South Africa IQuad Verification Services (Pty) Ltd M-Tech Industrial (Pty) Ltd. NC Automation Engineering CC NeoSolar cc ORE Energy Product Solutions (Pty) Ltd Petroleum Agency SA RSV ENCO Consulting (Pty) Ltd SAHA International (South Africa) (Pty) Ltd Saint-Gobain Construction Products Schneider Electric Solarzone (Pty) Ltd South African Agency for Science& Technology(SAASTA) South African Biofuels Association (SABA) The Sustainability Series The Sustainable Energy Seminar University of Johannesburg

130 649 47, 142 107 127 Inside back cover 39 151 69 10, 24 149 105 72 Inside front cover 14 117 6, 70 57 37 28 58 13 8 Back cover 89 91 35 4 2 128

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