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Sustainable Energy Resource Handbook

EN ERGY South Africa Volume 6 The Essential Guide

ISSN 0251-998X


770251 998807



Popular roofing material, Clean COLORBOND™ steel with Thermatech™ solar reflectance technology coating was used in the construction of “Africa’s Greenest Hotel” which is also one of the most sustainable designs in the world.


he Hotel Verde, near Cape Town International Airport, achieved Platinum certification across all categories of LEED Platinum Design and Construction Certification in May 2014. Hotel Verde is the first hotel in Africa to have achieved a Platinum certification across all categories and among only about six hotels worldwide to have achieved it for the same category. It is also a first for a South African building to receive Platinum certification for design and construction. According to engineer André Harms, of Ecolution Consulting, the lead sustainability consultant on the project since the design stage, the hotel boasts a high SRI roof which contributes in no small way to its very low heating and cooling energy usage. Harms is a trained electro-mechanical engineer who provided the expertise behind many of the high tech aspects of the building. Having spent 15 months at the South African Research Centre in Antarctica, Harms knows what it is to value everyday resources and is applying this dedication to each facet of the project. “We had the opportunity to change the status quo there,” he says. “We looked at different ways of doing everything, right from the word go.” He collaborated closely with the project architects, Heinrich Gerstner Harding Architects. The crowning glory of the Hotel Verde, its roof, consists of 1510 m2 of exposed sheet metal roofing plus a further 255 m2 which is covered by PV panels. The roofing material is Clean COLORBOND™ Ultra steel with Thermatech™ solar reflectance technology coating to specification AZ200 (TCT 0.53 mm) and colour Enduring White. The SRI of this superbly efficient product is 85. This is one of the coolest operating roofing materials available and this is complimented by an outstanding dirt resistance

property and long life which ensures the roof stays cooler for longer. The roof was installed in profile Brownbuilt KlipLok 406 by roofing contractor, Scheltema. The Solar Reflectance Index (SRI) is widely used by green building rating tools to mitigate the Urban Heat Island (UHI) effect. SRI is a value that incorporates both solar reflectance and thermal emittance in a single value to represent a material’s temperature in the sun. SRI quantifies how hot a surface would get relative to standard black and standard white surfaces. In hot tropical climates, low thermal mass materials such as steel with light coloured roofs and walls can be used to reduce energy demand for internal cooling. According to Wayne Miller, General Manager for BlueScope Steel in Southern Africa, the solar reflectance technology found in Clean COLORBOND™ steel lowers the surface temperature by absorbing less heat from the sun. “Thermatech™ optimises the thermal performance of every colour in the standard Clean COLORBOND™ steel and Clean COLORBOND™ Ultra steel palettes, without changing their appearance. This provides greater thermal comfort all year round whilst using less energy for airconditioning and hence mitigating the UHI effect” he says. “In addition our product’s outstanding dirt resistance property ensures the roof looks newer for longer. This also assists in cooling.” In a comparison between a Clean COLORBOND™ and a conventional steel roof, both uninsulated, the positive effect of dirt resistance technology is illustrated. Tests show that after two years’ exposure, assuming an irradiance of 1000W/m², exterior temperature of 36°C and a high thermal emittance value of 0.86, typical of pre-painted steels, the Clean COLORBOND™ steel roof’s temperature is almost 10° cooler than the conventional steel roof and it radiates more than 40W/m² less heat down into the building. This is a considerable easing of the HVAC load for any building, regardless of size. Contact BlueScope Steel Southern Africa (Pty) Ltd Wayne Miller T: +27 21 442 5420 E: W:





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In partnership with:

Nedbank Limited Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).



we’ve got you wired! General Cable is a global leader in the development, design, manufacture and distribution of copper, aluminium and fibre optic wire & cable products. We operate in 57 manufacturing plants within 26 different countries boasting over 14 000 associates. We pride ourselves over our on-going product innovation, regional diversification and strong customer focus. No matter where you are, we’ve got you wired!

energy • • • • •

Bare Overhead Transmission Conductors Low-Voltage Electric Utility Cables Medium-Voltage Electric Utility Cables Submarine Transmission & Distribution Cables High- & Extra-High-Voltage Transmission Cables

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Central Office Cables Data Communications Cables Fiber Optic Cables Telecommunications Cables

industrial and specialty • • • • • •

Automotive Products Cord & Cordset Products Electronic Cables Industrial Cables Specialty Wire Harnesses Transit Cables

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Professional A/V & Broadcast Cables Renewable Energy Cables Military Cables Mining Cables Nuclear Cables Offshore & Shipboard Marine Cables

For enquiries contact: 0861 1 GCSSA or 0861 1 42772 Tel: +27 11 457 8000 Fax: +27 11 457 8101 55 Angus Crescent, Longmeadow Business Estate, Modderfontein, JHB.


ONE COMPANY CONNECTING THE WORLD POWERFUL PRESENCE – PERFOMANCE – PEOPLE General Cable has been a wire and cable innovator for over 165 years, always dedicated to connecting and powering people’s lives. Today, with more than 14,000 associates and $6 billion in revenues, we are one of the largest wire and cable manufacturers in the world. Our company serves customers through a global network of 57 manufacturing facilities in 26 countries and has worldwide sales representation and distribution. We are dedicated to the production of highquality aluminium, copper and fiber optic wire and cable and systems solutions for the energy, construction, industrial, specialty and communications sectors. With a vast portfolio of products to meet thousands of diverse application requirements, we continue to invest in research and development in order to maintain and extend our technology leadership by developing new materials, designing new products, and creating new solutions to meet tomorrow’s market challenges. In addition to our strong brand recognition and strengths in technology and manufacturing, General Cable is also competitive in such areas as distribution and logistics, marketing, sales and customer service. This combination

enables us to better serve our customers as they expand into new geographic markets. General Cable offers our customers all the strengths and value of a large company, but our people give us the agility and responsiveness of a small one. We service you globally or locally. Our five Units within the Region, located in Angola, Durban, Johannesburg and Zambia manufacture, supply and distribute a wide range of wire and cable products. • General Cable South Africa, in Johannesburg, serves as the Commercial Unit for the SubSahara Africa Region • General Cable Condel, in Angola, manufactures special cables for the energy sector and application specific telecommunications cables. • General Cable Phoenix, in Durban, is a Level 3 BEE contributor that manufacturers Flexible, Low & Medium Voltage Power cables up to 33kV. • General Cable ZAMEFA, in Zambia, is listed on the Lusaka Stock Exchange and manufacturers copper rod, copper profiles, low voltage aluminium power cables. All these Units are ISO 9001 , SANS 1339, 1507, 1574 & 1576 certified - SABS approved.

For more information, please contact Cama Rebe on +2711 457 8000. SUSTAINABLE ENERGY RESOURCE HANDBOOK


Engineered Thermal Systems (ETS) is a well-established Gauteng based company that designs, builds and commissions Flares, Gasholders, Industrial Furnaces and related Process Plant. Our product range of electrically heated or gas fired furnaces and heat treatment ovens for the Aluminium and Steel Industry are specific to customer needs and designed to customer specification, utilising various lining systems to ensure minimal energy losses and adequately rated energy inputs for a specific process. Our product range of Flares, Flare Ignition Systems and Gasholders are an integral part of energy co-generation plants, where gas pressure control to gas powered engines are critical, with Flaring systems providing relief during emergency or high flow conditions. Our association with Montanwärme Peiler in Germany ETS are representative agents for Flare Industries, Austin enables us to offer our customers the latest recuperator design and technology for furnace recuperators, used Texas USA. for energy recovery from waste heat furnace flue gases. Each recuperator unit is designed and custom built for its individual application, maximising the energy benefit.

Engineered Thermal Systems are also suppliers of high quality brass condenser tubing and boiler tubes of all grades and sizes, utilised on waste heat, water tube and steam boilers. Engineered Thermal Systems have successfully converted an 80 000m3 Blast Furnace multi-lift (3 Lift) Spiral Guided Gasholder at ArcelorMittal; Newcastle Works to a Column Guided Gasholder, which is a world first conversion of a multi-lift gasholder.

Engineered Thermal Systems have since also replaced the roof on the 15 000m3 Coke Oven Gasholder at ArcelorMittal; Newcastle Works, with yet another innovative approach of not replacing the internal roof support structure, which had completely corroded away.

The re-introduction into service has resulted in substantial energy and operational benefits to the plant, such as: • Reduced flaring of Blast Furnace gas from 25% to 10% • Stability in operation at the Blast Furnace Stoves and the Boilers. • Substantial saving of SASOL gas consumed by the Rolling Mills of up to 884 GJ/day. • Additional 8.5 MW of electricity generated which amounts to 74,460 MWh per year.

Both these projects have had substantial and sustainable long term energy benefits for the local steel works by ensuring the gasholders continue to remain in operation. | | +27 100 200 292/3/4



South Africa Volume 6

EDITOR IN ABSENTIA Russell Brown - Ruach

DISTRIBUTION Edward Macdonald

CONTRIBUTORS Chisakula Kaputu, Christine King, Denis van Es, Dominic Milazi, Hemal Bhana, Ntombifuthi Ntuli, Peter Kidger, Peter Novak, Sisa Njikelana, Tobias Bischof-Niemz, Vivienne Roberts


LAYOUT & DESIGN Christine King EDITORIAL & PRODUCTION Lloyd Macfarlane Dylan Oosthuizen Christine King ADMIN MANAGER Chevonne Ismail MARKETING MANAGER Nabilah Hassen-Bardien

ADVERTISING EXECUTIVES Charity Musiyanga Tendai Jani Munyaradzi Jani CHIEF EXECUTIVE Gordon Brown DIRECTORS Gordon Brown Andrew Fehrsen Lloyd Macfarlane EDITORIAL ENQUIRIES PUBLISHER

CLIENT LIASON MANAGER Eunice Visagie The Sustainability Series of Handbooks


Sustaina REPOR South Africa 2014

PHYSICAL ADDRESS: Alive2green Cape Media House 28 Main Road Rondebosch Cape Town South Africa 7700

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.

TEL: 021 447 4733 FAX: 086 6947443 Company Registration Number: 2006/206388/23 Vat Number: 4130252432

IMAGES AND DIAGRAMS Space limitations and source format have affected the size of certain published images and/or diagrams in this publication. For larger PDF versions of these images, please contact the Publisher.

ISBN No:978 0620 45240 3


Volume 6

First Published 2010








Gordon Brown Chief Executive, Alive2Green Dear Reader, It’s hard to find the hyperbole required to express the dynamism in the South African energy market right now! For electricity consumers, exposure to blackouts and rising prices has triggered an awakening to alternative possibilities for energy supply, and this, together with the expansion of the REIPPP, is advancing the adoption of sustainable energy solutions at a rate that the sector could only have dreamed of 10 years ago. Efficiency Driven principally by a steep and steady increase in the price of electricity, households and companies are responsive to the sale of energy efficiency solutions, whether it be lighting, appliances, water heating, or more profound industrial solutions, boosting the market businesses in this sub sector. Also driving efficiency is the desire to go off grid – something that is much easier to achieve once all available efficiencies are achieved, this objective can be summed up as a desire to achieve energy security through complete or partial grid autonomy. The Handbook features chapters on energy auditing, lighting, climate control, and insulation – providing a thorough spread of the interventions and approaches to these practices and interventions. Whether you define onsite generation as efficiency because it reduces a consumer’s demand for grid energy, or as generation, the fact is small scale generation, driven by rooftop solar is growing rapidly in South Africa, and is also part of the REIPPP, we look at this important market in chapter 11. At the city scale, net metering is the key to a broad uptake of onsite generation such as roof top solar, and many municipalities, led by Nelson Mandela Bay, have created the policy framework and indeed the opportunity. A key obstacle remains the problem of municipalities forfeiting their trading margin, a major income stream. Generation We go through the REIPPP, discussing the broadened capacity and technology options, and look at geothermal options in the agricultural sector, as well as delving into some of the technical questions such as enforcing the terms of the equipment provider contract. We also discuss the tantalising new world of wheeling. Not that new actually – the advent of TRECS was about 10 years ago with energy from biomass in KZN available to users around the country, but the new wheeling framework and possibilities are significantly expanded, make sure your read chapter 3. This Handbook seeks to provide you with authoritative chapters on what we consider to be the key issues in the energy sector as they relate to sustainable energy. I thank all contributors and hope you find the publication to be of value, please send me your comments and suggestions for future columns, and please engage with us on the website and social media. We would like to thank Russell Brown for his editorial direction and this volume of the Energy Handbook is dedicated to him. Email: Web: Linkedin: SUSTAINABLE ENERGY RESOURCE HANDBOOK


CONTRIBUTORS CHISAKULA KAPUTU Chisakula graduated from University of Manchester in 1994 with a Bachelor’s Degree with honours in Electrical Engineering. A qualified Project Manager, Financial manager, Certified Energy Manager and Energy Management Systems (EnMS) Expert, he has over twenty (20) years of diverse and wide work experience having worked in the past for ZESCO Limited (Electricity Supply Industry), University of Zambia (Academia), ZCCM Limited (Industrial mining), Mantec Consulting (Electrical Consultancy) and WSP (Energy Consultancy). His areas of exposure/ experience include Electrical Distribution Network Planning, Design & Specification, Contract Development, and Tender Evaluation, Project Management (Multi-disciplinary), Installation & Commissioning, Operations & Maintenance, Research & Development, and Energy Management. He is currently Director/ Chief Energy Engineer of SEE an Energy management Consultancy, Environmental Sustainability advisory, Energy projects developer, and ESCO.

CHRISTINE KING Christine King (BA English and Media & Writing, UCT) currently works as a Content Manager at GSA Campbell Consulting in Cape Town where she assists in the production of corporate sustainability reports, journal editorial and online training courses. Not satisfied with mere written communication, she can often be found designing layouts, advertising and infographics. She is a great believer in selfeducation; there is always something new you could be learning.

DENIS VAN ES Denis van Es is a graduate mechanical engineer (UCT: BSc 1970, MSc 2010) with over 40 years technical and managerial experiences in mechanical services and energy management within South Africa, continental Africa and the UK. He has worked in many different kinds of organizations including as head of the Energy Efficiency Group at the ERC. He is currently GM of a consultancy specialising in energy efficiency assessments, including working with the Eskom DSM programme. He is accredited under a US Department of Energy programme for industrial energy audits. Denis van Es is a member of the SABS technical committee working on ISO 50 000 and is qualified at expert level in Energy Management Systems, as well as undertaking a peer review at expert level of fan system optimisation training material. He was a contributor to a recently published Global Energy Assessment, focussing on industrial energy efficiency.

DOMINIC MILAZI Dominic Milazi is a Market Design and Policy Analyst at the CSIR Energy Center where he is responsible for identifying research priority areas in South Africa and providing input on proposed policies, regulations, and legislation. He has gained experience in project development under the REIPPPP framework as part of the Karoshoek CSP Solar One team, project management with the Department of Energy looking mostly at wind, and was also part of the SWH-500 solar water heating pilot project hosted at CEF (funded by the UNDP and the Global Environmental Facility)



CONTRIBUTORS HEMAL BHANA PSEE Programme Manager Before joining PSEE, Hemal worked as a Management Consultant at Accenture and as a Senior Mechanical Engineer at Sasol Synfuels, adding up to over 12 years of experience in the energy environment. He holds an MBA from the University of Cape Town and a Mechanical Engineering degree from the University of KwaZulu-Natal.

MATTHEW TURNER Matthew holds a Bachelor degree in Mechanical Engineering and an MBA. He has worked in the energy sector since 2012, and is currently focused on Business Development - Commercial & Industrial Solar PV at juwi Renewable Energies (Pty) Ltd based in Cape Town. Matthew’s experience in the energy sector ranges from technical consulting on demand side management (DSM) and energy efficiency to customer engagement, commercial solution design and project fulfilment. As a driven individual with a passion for Renewable Energy and Sustainable Business Practices, Matthew brings a strong track record of delivering relevant, practical and commercially viable products and services to businesses from start-ups to large multinationals across a range of industry sectors. As Business Development Manager – C&I PV for juwi in SA, Matthew is driving the uptake of RE in the private sector.

NTOMBIFUTHI NTULI Ntombifuthi Ntuli’s works for the National Department of Trade and Industry as a Director: Green Industries, she is responsible for facilitating the development of the local renewable energy industry and industrial climate change response. She holds an MPhil Degree in Energy Studies (University of Johannesburg) for which she received a German Young Researchers Recognition. Before joining the dti, she spent 3 years at the Embassy of Denmark working as a Coordinator for the Business to Business Programme, where she facilitated business linkage between Danish and South African companies. Prior to that she spent 8 years in Ekurhuleni Metropolitan Municipality working on Energy and Climate Change programmes.

PETER KIDGER Peter Kidger is Director of Marketing and Exports at Corobrik and sits on the Technical and Marketing Committees of the Clay Brick Association of SA (CBA). He has had a long term passion for understanding the performance of clay brick in delivering holistically sustainable built environments. This has led Peter to engage with comparative research initiatives of Corobrik’s and the CBA, as well as review comparative research into the thermal performance of different walling envelopes to better understand the role of thermal mass and resistance and walling specifications for delivering greater thermal comfort and optimal energy efficiency.




CONTRIBUTORS PETER NOVAK Peter Novak is CEO of Sundolier, Inc.. Peter has worked and lived on three continents delivering B2B solutions to customers globally. He is passionate about assisting architects, designers and owners in their efforts to create high performance buildings. Daylight is essential to human health and wellness and has a substantial impact on business performance while reducing lighting loads and related green house gas emissions. Sundolier® daylights large open spaces (1,000-5,000ft2 (90-465m2)) through a single 2’ (0.6m) diameter roof penetration.

SISA NJIKELANA • Entrepreneur/consultant; Director-Sinakoyoli Consulting; Executive Chairperson Ingwenya; Chairperson-SAIPPA. • Member: 1. Parliament: 2004-2014 2. Portfolio Committees: Energy-Chairperson (2011 to 2014); Member of Rules Committee, Trade&Industry, Health, Parliamentary Group on International Relations; 3. Policy on International Relations Task Team; ICT Focus Group; Chair: Leadership Development Project Steering Committee; GLOBE International – SA Chapter (Deputy Secretary); APRM Socio-Economic Joint Sub-Committee; ANC Constituency Work Support Unit. • Diploma in Applied Social Studies ( Ruskin College, Oxford) • Leadership in Communications Certificate(Rhodes University)

DR. TOBIAS BISCHOF-NIEMZ Dr Tobias Bischof-Niemz is the Centre Manager: Energy at the Council for Scientific and Industrial Research (CSIR) in Pretoria, where he leads the establishment of an integrated energy research centre and a growing team of scientists and engineers. Before joining the CSIR, he was with South Africa’s electric utility Eskom in the Energy Planning Unit, where he was part of the team that developed the long-term power-capacity expansion plan (Integrated Resource Plan - IRP) for South Africa.

VIVIENNE ROBERTS Vivienne is a mechanical engineer and professional project manager who has worked on some of South Africa’s largest solar PV facilities constructed under the South African Renewable Energy Independent Power Producer Procurement Programme. She has acted as technical project manager on an owner’s engineer appointment for a 75 MW solar PV project in De Aar, Northern Cape. Vivienne has also previously worked for the City of Cape Town’s Energy and Climate Change unit, focusing on long term energy strategies.



energy Swiss Confederation


Federal Department of Economic Affairs FDEA State Secretariat for Economic Affairs SECO


Impacts of blackouts and electricity price hikes on the South African economy Ntombifuthi Ntuli


Update on the REIPPPP, clean coal, nuclear, natural gas Dominic Milazi & Dr Tobias Bischof-Niemz


IPP wheeling power to the end user Sisa Njikelana


Net metering and net feed-in tariff for embedded solar PV in South Africa Dr Tobias Bischof-Niemz & Dominic Milazi



Energy auditing and measurement Hemal Bhana



Enhancing climate resilience in Africa Christine King



Lighting and daylighting Peter Novak


2 3 4



CONTENTS 8 9 10 11 12 13 14

Keeping temperatures down as energy costs rise Denis Van Es


A transition from energy efficiency to energy security Chisakula Kaputu


EPC contracts - The owner’s level of involvement Vivienne Roberts


Small Scale Renewable Embedded Generation (SSREG) Matthew Turner


Geothermal energy in agriculture Christine King


The true thermal performance and energy efficiency of different walling envelopes Peter Kidger


The benefits of energy retrofitting buildings in South Africa Christine King




Impacts of Blackouts and Electricity Price Hikes on the South African Economy Ntombifuthi Ntuli





ositive economic growth in any country largely depends on its ability to produce goods at low costs, which is a great contributor towards its competitiveness. One of the contributing factors to this competitiveness is the availability and reliability as well as the low cost of electricity supply. At one stage South Africa used to tick all these boxes and did not struggle attracting foreign investments into its manufacturing sector. For a long time South Africa enjoyed the lowest electricity prices in the world. The increased demand for electricity due to urbanization and economic growth increase, population growth has resulted in Eskom power supply not being able to meet the demand. Over the years the demand for electricity has outstripped supply and Eskom has experienced problem with supplying electricity during peak periods when demand is highest and that has resulted in measures such as load shedding and blackouts. A decision was taken to build new power stations in order to meet the demand but that resulted in a new set of problems, which is the rise in electricity prices. This need for construction of new power stations have all contributed to the increased costs of electricity and diminishing the country’s competitive advantage.


Since the early 1900s, minerals and energy sectors have been central in the development of South African economy and were highly interdependent. The development of the mining industry and its sustained existence required a substantial amount of energy to survive. As coal was available in abundance in South Africa, production of electricity from coal became the backbone of the energy industry in South Africa. Energy was predominantly supplied through increasing coal extraction and with mining and industry absorbing a large proportion of the energy supplied. This symbiotic relationship resulted




into the formulation of the term “Mineral Energy Complex” (MEC), which was coined by Economists Fine & Rastomjee (1996) to explain the interdependence of the mining and energy sectors and related downstream beneficiation activities. According to the Truth and Reconciliation Commission (TRC) Final Report, the minerals– energy complex produced more value added per worker employed than any other economic sector, at least until the mid-1980s. It was during this period that most capital accumulation took place, where most of South Africa’s exports and a sizeable part of its gross domestic product were produced. The TRC Final Report affirms that the production of electrical energy served mainly the needs of the mining industry. During the Apartheid era, Eskom was one of the pillars of South Africa’s economy. Eskom produced extremely cheap energy, making the exploitation of the rich mineral endowment the foremost ‘comparative advantage’ in South Africa’s relations with global markets. Cheap electricity was provided to the industry and mines, which became the base for economic development and consequently a sustained boom developed in the mining and industrial sectors. This was in line with the South African government’s policy of job creation. Unfortunately the policy was short sighted as the price of electricity was often lower than the cost of producing it, resulting in South Africa being known for its very low electricity prices around the world. Eskom took the initiative in 1991 and proposed a price agreement with government to reduce the real price of electricity by 20% by 1996. According to Greenpeace (2012), this step created fictitious “low energy prices” in order to continue benefiting energyintensive customers and help them achieve international competitiveness which would boost their export revenues. During the late 1960s Eskom decided to



increase generation capacity in order to export some of cheap energy to the rest of Africa. This decision culminated in the investment programme which saw the construction of new power plants. However, the economic growth did not pan out as predicted which meant that the new power stations created excess capacity in the energy sector. Following the demise of Apartheid and the dawn of the New South Africa, Government started to intensify electrification rollout programme to previously un-electrified areas, taking advantage of the cheap electricity and excess capacity created during the apartheid era. Currently, more than 70% of the population is connected to the grid, twice the number in 1994 (reference). Another important resultant of the New South Africa was the lifting of the international sanctions against South Africa, which created new wave of economic development opportunities and increasing the energy demand even further. The Department of Minerals and Energy (1998) warned through the Energy Policy White Paper that the overcapacity of the 1980s would be fully utilized and that electricity demand would start to outstrip supply by about 2007. This warning should have triggered significant investment in new generating capacity by Eskom. By 2004, after protracted policy discussions and a failed attempt to involve private sector in the energy generation business, Government finally realized that the overcapacity was rapidly decreasing and a decision was taken to invest in new power stations. On average, the construction of a new power station would take about seven to ten years. This means that by the time the decision was taken it was too late to prevent an energy crisis. By that time, just over ten years after the new democracy, Eskom’s reserve margin had dropped to close to 10%. If the operational (working) capacity is measured rather than the installed capacity, the reserve margin was a mere 3%, 12% lower


than internationally acceptable standards of 15%, and 16% lower than South Africa’s own target of 19% (Rabobank, 2008).


As predicted, the end of 2007 beginning of 2008 was the turn of the tide for the power situation in South Africa. Eskom’s supply capacity was unable to meet the demand and they had to ask the users to reduce the amount of energy being drawn from the grid, which resulted in mechanisms such as the Buy Back Scheme. During the first half of 2012, Eskom undertook buyback contracts with energy intensive customers, whereby it paid these groups to take production capacity off line. According to Ruffini, 2013, the deal enabled Eskom to take demand off the grid and keep its system able to supply the remaining demand, and at a cost that is significantly less than having to run mid-merit and peaking power plant. The economic growth post-apartheid was cited as contributing factor to the crisis. Another contributing factor was the fact that during that period, Eskom had planned maintenance activities which required them to shut down some power stations on a rotating schedule to make preparation for a high demand during winter period. What is now known as load shedding, was a culmination of a series of unfortunate events. There was an unusually high level of equipment breakdown which led to unplanned power outages. Eskom highlighted problems such as lower than normal running capacity at most coalfired power stations, wet coal, and poor shortterm purchasing strategies at power stations, as the main causes of supply shortages. The rolling power cuts started again in November 2014 and continued into 2015. The main reason for this current bout of load shedding was initially the collapse of a coal storage silo at the Majuba power station, which was followed by diesel shortages. As

several power stations had exceeded their maintenance deadline (due to a critical need to keep the lights on) they started to experience breaking down of critical components of the system. This led to several units being shut down for planned and unplanned maintenance, decreasing the reserve margin even further. It is important for Eskom infrastructure to undergo maintenance in order to avoid a complete system collapse. If the system were to collapse, it would take weeks for the system to get back to supplying electricity to the grid. This in itself would be catastrophic for the country and result in hundreds of billions of Rands of loss in economic activity. The coincidence of the load shedding with the global economic downturn, which resulted in diminished economic activity and reduced electricity demand by industrial sector resulted in the substantial decrease in electricity demand, which was good for the then power crisis and assisted in stabilising the electricity grid. To build on that stability, Eskom took steps to maintain their plants, increase coal supplies and plant performance. A combination of all these factors led to a suspension of load shedding from May 2008 onwards. Even with all the steps taken to curb load shedding, South Africa still needed additional power generation capacity to meet future demand. In anticipation of the then looming power crisis, Eskom had made an investment decision in 2005 to build new power stations, starting with Medupi Power station in February 2007. However, both Medupi and Kusile power station have been embroiled with construction delays and budget overruns, and by May 2015 (4 years after the initially scheduled commissioning date of 2011) the power stations are yet to be completed. Currently, Eskom has installed capacity of 41,995MW of electricity across 27 plants. The utility uses coal for about 80% of generation.




GOING SOLAR Activate Architecture has been focused on green building design and high performance architecture for nearly 10 years. In this time the firm has come to see first-hand the advantages of energy efficient built environment design and the remarkable impacts and improvements on the return of investment on renewable energy sources. In short, the current South African energy crisis together with escalating price of electrical power over the last few years has made renewable energy a much more attractive investment for small and medium users. Activate Architecture is putting its money where the industry’s mouth is: Activate has installed a 5KVA solar PV system with battery backup that is the primary source of electrical energy for the office in Johannesburg. The system is sized to ensure that we remain productive regardless of the nation power grid status, delivering all the power necessary for our daily core functions; computers, server and telecoms etc, with some to spare, weather permitting! Thanks to SAR Electronic for the system installation and to Plantech for their strategic inputs.

t: 011 788 8095

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t: 012 523 9300



According to Erero (2010), the average price for electricity in South Africa was 17 c/KWh in 2007 before the price hikes and was amongst the cheapest in the world. As demand for electricity began to close in on the available supply, Eskom found itself without financial provisions to react to the need for new generation capacity. As a result, discussions between the utility and the National Energy Regulator of South Africa (NERSA) resulted in significant electricity price increases. As a means of raising capital for the expansion, Eskom was forced to seek financing from abroad as well as to push up electricity costs to very high levels through the Multi Year Price Determinations (MYPDs). The first MYPD ran from 1 April 2006 to 31 March 2009 and allowed price increases slightly above the expected CPI inflation rate for each of the three years. The MYPD determination for the third year was reopened twice, and resulted in a 27.5% annual price increase for 2008/09. In 2009/10, due to lack of clarity on the funding of the capacity expansion programme, Eskom, instead of submitting a full MYPD 2 application, applied for an interim increase to cover escalations in its primary energy and operating costs. Nersa implemented an interim price increase of 31.3% for that year. The MYPD 2 period began on 1 April 2010 and runs to 31 March 2013. NERSA granted 24.8%, 25.8% and 25.9% increases to the tariffs for the years 2010 – 2012 Subsequently the 25.9% was reduced to 16% by NERSA. Erero (2010) did a short run simulation of economic effects of a price change in the electricity sector. He found that the price increase in the electricity sector has a relatively large impact on the GDP and employment. The Real GDP from the expenditure side decreased by 1.53 % from the baseline economy, while employment decreased even more by 2.99%. This can be explained in terms of decrease

in export volumes by 4.88% that resulted from the decreased demand inherent to the increase in price. As the demand for export decreases, economic activity in the electricity sector decreases as well, since this sector plays a major role in the economy. (Cameron and Rossouw) argue that the increased tariffs will weigh heavily on Key Industrial Customers (KICs), who constitute more than 50% of total energy sold by Eskom on an annual basis and account for more than 40% of revenue (2010 financial year). The Key industrial customers alluded to above, are in sectors that directly account for a major share of economic output (21% of 2010 GDP at constant 2005 prices) as well as employment (15% of 2010 formal employment) of the South African economy. The significance of these companies’ contribution to the economy signify that economy-wide output and employment will also significantly be affected due to changes in these sectors The National Treasury estimates that the impact of the price increase on the CPI could be between 0.7 and 1 percentage points. Further, the contribution of electricity to the inflation basket will be reweighted and, as a result, electricity price increases will probably have a greater effect on inflation than they have in the past. Electricity price increases will also have a pronounced knock-on effect on inflation. Businesses that can pass on price increases to customers will do so, resulting in “second-round” effects that could well be more severe than the direct impact. (Eskom, 2012) The increased electricity tariffs increases the industries input costs and erodes their profit margins. Industries could therefore struggle to maintain profitability levels required by shareholders and may result in lower price competitiveness. Investors were previously attracted to the electricity intensive sectors as a result of their price competitiveness. Low electricity prices compensated for other disadvantages such as volatile exchange rates




and non-flexible labour. Competitiveness generally has been defined as the productivity with which a nation or firm utilises its human, capital and natural resources. Productivity is related to the value of a nation or firm’s products and services in terms of prices achievable in the market and by the efficiency with which they can be produced. Electricity costs and availability are but one of a number of factors that affect the competitiveness of firms in mining and linked manufacturing industries. (TIPS, 2015) The 24.8 percent electricity hike in 2010 was estimated to bear a potential negative impact on employment opportunities, affecting both employers and employees, especially at the time when businesses were recovering from a global recession and fuel prices were on the rise and the increase of the fuel levy to 32 percent. The increase of electricity would have a big impact in terms of pushing up inflation. SACCI (South Africa Chamber of Commerce and Industry) estimated at the time that approximately 250 000 jobs would be lost as a consequence, and it would be a factor in CPI [consumer price index] remaining outside the target range. The electricity price hikes have hit small to medium enterprises the hardest, these are the enterprises that are responsible for a lot of job creation and they were also hit hardest by the recession Based on the fact that changes in electricity prices impact on basically each and every person in South Africa, the impact is already being felt right to the bottom of the pyramid. The poor, just like every other consumer, will have to dig deeper into their pockets. While the poorest in our communities are marginally subsidized in electricity through the indigent policy, it is pretty clear that everything else will be affected, for example food prices and other goods. On the other hand, the poor have not yet recovered from the impact of the recession, and now the electricity hike adds to their burden.




The inability of South Africa to service its electricity needs has led to downward revisions of economic growth and investor confidence in the economy. These structural constraints were initially thought to be temporary is slowly becoming a permanent feature of the South African economy. This is not good for economic growth and international competitiveness of the country as access to electricity is one of the key drivers of economic activity. Electricity is an essential input to production and to economic activity in general. As explained above, electricity has played a big role in the history of SA industrial development and mining, which were the pillars of SA economy. The resulting lack of electricity supply / interruption of supply is increasingly recognised as a potentially serious constraint on sustained economic growth, the more so given the wide consensus on the important links between electricity and economic development. Load shedding can have a devastating effect on the economy. For instance when there are blackouts a lot of productive time is wasted, be it in mining, smelters and refineries or any industrial activities, when they have to shut down operations during power outages. It take hours to restart industrial operations after a break in power supply. With mining operations it’s even worse because it takes several hours for miners to be evacuated from the mines. Outages in traffic management systems and traffic lights cause considerable congestion and a drop in productivity, offices reliant on internet services and technology have no option but to close, hospitals have come under increased pressure and many government administration services such as home affairs simply close as a result of load shedding. The cumulative effects of the above on the economic capacity and outlook of the country is significantly negative. Chris Yelland, an energy expert, estimated


the cost of controlled blackouts in South Africa and highlighted the serious negative economic impact thereof. Stage 1 load shedding resulting in 10 hours of blackouts per day for 20 days a month results in losses of R20 billion per month. Using the same time parameters, Stage 2 load shedding costs the economy R40 billion per month and Stage 3 is estimated to cost the South African economy R80 billion per month. These costs, according to Yelland, to the productive economy are based on a cost of unserved energy of R100 per kWh. When one considers that the approximate GDP of South Africa in 2014 was R4 trillion approximately 1-2% of GDP could potentially be wiped out per month of load shedding. (van der Nest; 2015). The effect of load shedding on the economy is already being felt. As South Africa relies strongly on the exports of its precious metals to finance its current account deficit the impact of load shedding on mining operations (which are energy intensive) has led to a strong depreciation of the rand as well as a stalling of economic growth and downward revisions in growth forecasts. Several ratings agencies have also downgraded the country’s credit rating, which has had a negative impact on the outlook of the country as an investment destination (van der Nest, 2015). While Eskom has said load-shedding will be with the country for a few years, many energy experts – as well as the main political opposition parties – warn this is an extremely optimistic forecast. They are warning that the current situation of rolling blackouts could be a reality for much longer than that, a factor that could scare off international investors, hamper business development and stifle job creation efforts. According to the International Monitory Fund, South Africa needs an economic growth rate of at least 3 per cent annually to create jobs, but even this will only facilitate a reduction in the official unemployment rate of around 23 per cent if the labour force

remains stagnant, however this would not be possible if investor confidence is shaken due to load shedding. South Africa has estimated that GDP for the first nine months of 2014 increased by just 1.5 percent compared with the corresponding period in 2013, and this was before load-shedding had even been reintroduced.


Medupi and Kusile are only expected to be delivering commercial power into the grid by 2019 and 2020 which is years behind schedule. What is clear is that further investment in and regular maintenance of the system needs to occur with a strong emphasis on alternative sources of energy. In the short to medium term it may well pay off to invest in renewable energy such as solar and wind could form the basis of a new energy mix (as outlined in the Integrated Resource Plan) and take considerably less time than new coalfired power stations to come online and be integrated with the system. This at least could provide for some certainty and stability in the medium term and could allay some of the supply constraints. In light of the impacts discussed above, it seems that the efficient use of energy is another important issue that consumers will need to embrace in order to constrain future price increases, which in turn, will require a change in consumption behaviour by consumers. South Africa has progressively used more energy to produce a US$ of GDP and also more energy per capita in the time period 1971 to 2001. This was one of the negative effects of South Africa’s abundant and low-priced coal-based electricity. The trebling of electricity prices since 2007 prompted adoption of energy saving measures by all consumer segments. Of course the only positive spin off of load shedding is the emergence of green industries that support the transition towards a low carbon economy. Companies are seriously




LED Z SHINE Economic Reasons to Change to LED Lighting! As we all know, Eskom is undertaking maintenance on its electricity generators. Load shedding is in part due to this fact, as well as Medupi not coming on stream in Mid2014, and the collapsed coal silo at Majuba. As industry we can help Eskom and in turn ourselves by reducing our power needs. The easiest, quickest and with known guaranteed savings is to convert your energy inefficient lighting to LED. It is the low hanging fruit that most industry ignores. LEDzShine offers three industrial LED lights that will help Eskom and you save a substantial amount of money. The graphs below are based on actual numbers acquired since 2007.

High Bays. The graph compares the cost of a New installation running 400W Mercury Vapour/ Metal Halide/ or High Pressure Sodium lamps to a 90W LEDzShine High Bay. The calculation takes into account the cost of maintaining Lux levels by changing Bulbs, LEDs, Ballasts and Drivers. Eskom increases are at 10% per year, (inflation plus required costs to fund new builds and maintenance) Break-even is less than one year, with an accumulated savings of R2.8m after five years.

Flood Lights The LEDzShine 50W LED Batwing Flood Light effectively replaces 400W HID lamps for the simple reason that it spreads its light evenly in a 20 x 30m rectangle. The even spread of light means security cameras and security personnel do not have to contend with shadow areas. The savings are even more dramatic. Calculations are based on a 12 hour burn period and a new



installation. Break-even is less six months and accumulated savings after five years R1.6m.

LED Panel Lights Due to efficiency The LEDzShine 54W LED Panel Light effectively replaces 176W 4*4ft Fluorescent Troffer lamps Breakeven on cost is less eight months and accumulated savings after five years accrues to R620k!

Carbon Credits Apart from saving electricity the conversion to a 100 LEDzShine 90W High Bay from a 100x450W HID lamps, saves 7.5 million Liters of water and five Tons of CO2 over the 20 year life time of the light.


looking into energy efficiency solutions and alternative energy sources like solar and bioenergy to support themselves in times of blackouts. Eskom in this MYPD3 application stated that if the South African economy is inefficient in its electricity use, there will be scope for firms to adapt to higher prices by investing in energy-efficient processes, and the economics of doing so would be attractive. If the economy is already fairly efficient in its

energy use, however, then there is little room for firms to reduce electricity demand without also reducing their output. Electricity price is more effective at promoting investment into energy-efficiency technologies than incentive schemes or other factors. And if price levels provide the correct signals, consumers will respond by limiting electricity use and employing more energy-efficient technologies, reducing demand on the grid and create investments in green industries.

References • Eskom (2012) Overview of Multi-Year Price Determination 2013/14–2017/18 (MYPD 3) Page 85 of 144 • Cameron M & Rossouw R (2012), Modelling the economic impact of electricity tariff increases on Eskom’s Top Customer Segment, Paper developed for the South African Economic Regulators Conference (saerc), 21-22 August 2012 • TIPS (2014), The impact of electricity price increases on the competitiveness of selected mining sector and smelting value chains in South Africa, Policy Paper prepared for the Economic Development Department and the Department of Trade and Industry, Pretoria • Altman M, 2008, The Impact Of Electricity Price Increases And Rationing On The South African Economy: Final Report To The National Electricity Response Team (NERT) • TRC (1996); TRC Fial Report: Report Of The Reparation & Rehabilitation Committee; Volume 6, Section 2, Chapter 1. Pg 148 • Greenpeace (2012), The Eskom factor: Power politics and the electricity sector in South Africa • Ruffini A. (2013), Editor, ESI Africa magazine SA’s energy intensive users helping protect against blackouts • Van der Nest (2015), The economic consequences of load shedding in South Africa and the state of the electrical grid • Calldo F. (2008), Eskom’s power crisis: Reasons, impact & possible solutions, Solidarity, Centurion




HellermannTyton Providing innovative solutions with customer satisfaction in mind Generation of Electricity, the theory of which many of us only know a little about and are fascinated by, but don’t really understand and even take for granted. Most of us know something about the most conventional method of generating electricity using electromechanical generators which are driven by heat turbines. We also know that these heat turbines need to be fuelled by an external source of heat strong enough to generate the massive levels of electrical energy needed to power our country. About 77% of South Africa’s electricity is derived directly from the firing of coal which, unfortunately, also leads to the production of highly toxic combustion wastes like arsenic, cadmium, chromium and lead, to name but a few. These are all elements that have a very negative impact on both the environment and human health. Coal is also called a finite resource, or a nonrenewable resource, and this is another important reason why South Africa is moving to generating electricity using renewable energy, or green energy technologies. The future is undoubtedly in generating clean and safe electricity using the “free” energy offered to us every day as the sun shines down upon us. Despite receiving very high comparative levels of sunshine annually, South Africa is lagging behind many counties in the deployment of renewable electricity generation. This is changing however as the country enters a new era of electrical capacity growth, in which renewable technologies will feature strongly. To HellermannTyton, a global leader in the field of providing products and solutions that add value to electrical networks, providing renewable energy solutions is not a new challenge. With



world-class sales, product development and manufacturing operations in thirty six countries worldwide, our businesses can offer costeffective, high quality solutions for a wide range of applications, including wind and solar energy technologies. As the group strives to achieve its mission of being the “customer’s partner of choice”, so too is the South African operation, with an offering of over 6 000 products that cover every facet of identifying, routing, protecting, securing, connecting, terminating and testing of electrical networks. To enhance this offering to the local industry, we have added a number of products to our already comprehensive product portfolio, aimed at meeting the requirements of renewable energy installations. Of great importance in this new product line-up is our alliance with Hensel Electric, manufacturers and suppliers of a comprehensive range of high quality electrical enclosures and junction boxes. Not only has Hensel supplied into the renewable energy industry for many decades, but they are also a leader in cable junction boxes and combinable enclosure systems for many other industries, especially those that operate in extremely harsh environments. With the addition of the Hensel enclosure range, HellermannTyton is thus able to offer high quality, industryapproved components and system solutions to a broad spectrum of industries. The partnering of these two highly acclaimed companies offers a combined experience of almost one hundred and seventy years, providing extensive knowhow and peace-of-mind to existing customers and prospective clients For renewable energy applications, HellermannTyton offers the ENYSUN product


solution from Hensel. This product range is a world class locally assembled combiner box that complies with the new IEC 60 364-7-712 standard. It also provides a number of advantages when selecting and installing photovoltaic systems for on grid and off grid systems up to 1000VDC. The pre-fabricated PV string combiner boxes and control circuits are designed as per the customer’s specifications to perfectly fit each application and then locally assembled at HellermannTyton’s facility in Johannesburg. The populated PV string combiner boxes are delivered to site complete with male and female PV cable connectors, PV fuses, surge protection, switchgear, together with all other necessary HellermannTyton network and cable management products. The boxes can then be installed and tested as a “plug & play” system. There is no need for any PV cable connector adaptors as all connectors used are MC4 compatible. With regard to harsh environments, the ENYSUN enclosures are manufactured using very high quality Polycarbonate material offering a class II total insulation, impact resistance and IP65 ingress protection, UV resistance and also resistance to rain, ice and snow. Apart from the PV string combiner units, HellermannTyton also offers the following components for photovoltaic (PV) systems:

• PV and branch cable connectors • PV cable • Weather stabilised PV edge clips for fast and effective PV cable securing

• Weather stabilised cable ties • All PV system labelling requirements

• PV cable stripping and crimping tools • PV test instrumentation • Electronic string controllers to improve renewable energy data management technology with intelligent acquisition, calculation, recording and transmission of data. HellermannTyton South Africa is thus able to provide a high percentage of “local content” in its various locally designed, configured and pre-populated PV combiner boxes. This is all supported by trained sales and technical staff based at our four well established branches, strategically located throughout South Africa and a fully active Exports division servicing the Sub-Saharan Africa region.

Johannesburg Head Office 34 Milky Way Avenue Linbro Business Park 2065 Johannesburg, South Africa Private bag x 158 Rivonia 2128 Contact Details Tel: +27 (011) 879 6620 Fax: +27 (011) 879 6603 Alternate Number Tel: + 27 (0)10 492 4481 GPS coordinates: S26° 04.128 E28° 06.980




Activate Architecture CASE STUDY 5.1 kW gried-tied Photovoltaic System with Battery Backup Designing high performance buildings with integrated intelligent and sustainable solutions for their client base inspired the Johannesburg based Architectural Firm Activate Architects to investigate the feasibility to install a Photovoltaic System on roof-top of the companies’ office building in Rosebank. Green Building Philosophy, has always been the main driver of each architectural design, saving scarce resources combined with insufficient power station capacity in South Africa accelerated the process in the second half of 2014 leading to a list of main system requirements:

Figure 1: Vector Diagram

Based on the above requirements, SAR Electronic SA kick-started the design and planning phase by first conducting a 7-day energy monitoring to fully understand the clients energy usage and needs.

Figure 2: Energy Usage Wednesday – Tuesday

Besides the unbalanced phases (balanced during installation phase), the result showed a load profile perfectly matching the PV-Power generation curve for a sunny, cloudless day. Based on the results and the clients’ requirements, SAR decided on a 5.1 kW PV-System with an initial battery backup of 200 Ah which can be easily upgraded at any later stage. The roof space allows for an additional 5.1 kW of PV-Modules to be added at a later stage summing up to a maximum of 10.2 kW. Entering all conditions, such as geographic location of the building, possible shading of nearby buildings, trees or other objects, angle, inclination and make of PV-Panels into the simulation program PV Sol (internally adding data such as irradiation, historic weather data etc.), a simulation report was generated and discussed with the client.


1. priority to critical load such as IT Server and Personal Computers 2. additional backup to existing UPS 3. maximum energy availability throughout scheduled load shedding periods 4. reduction of electricity purchased from the national grid 5. system monitoring via web browser and smart phone Application 6. energy management


• • • •

Figure 3: Energy Usage Wednesday

PV Generator Output Used area Energy from PV System Specific annual yield

5.1 kW 33.2 m² 9.296 kWh 1823 kWh/kWp


The System at a glance

The Hardware installed • 17 PV-Modules Yingli YL300P-35b, 300 W • Schletter Framing (A-frames with an angle of 30 degrees, off-setting a 5 degrees roof fall to the South adding up to an effective PV Module angle of 25 degrees) • 4 x Hoppecke 12V 3 OPzS sbloc solar.power 200

• SMA Sunny Boy Inverter SB 5000TL-21 with speedwire interface • SMA Island 6.0H with speedwire interface and remote control • SMA Home Manager • SMA bi-directional Energy Meter

Performance The system currently delivers an average of 28 kWh per day (May 2015) supplying 60 – 70 % of the clients total energy needs. This means that the system is already exceeding the forecasted daily yield of 25,5 kWh by approximately 10 %. During the day the PV panels power the load directly as well as charge the batteries, during the night or in inclement weather the batteries power the load until reaching their pre-set state of charge limit. When this occurs the grid takes over the load and charges the batteries. During an average sunny day in Johannesburg, the system can supply the critical load specified even during the event of a grid-failure – in such instance, the Island will generate the grid for the inverter and by doing so ensure a smooth system run. Should the grid failure carry on or occur during the time of no PV-Power generation (evening or bad weather conditions), the batteries will take over the load until their pre-set state of charge is reached (controlled by the Island). Only then does the UPS kick in and supply the IT-System with the necessary power. All data can be accessed via the SMA Sunny Portal either with the SMA Smartphone App or the Internet using an Internet browser. The system allows different user levels, from viewing only to system administrator rights. The Sunny Home Manager manages all data, even uses the local weather forecast to calculate how much solar power is expected and recommends

actions thereof. The status screen shows the current energy flow as an animated, live graphic and in numerical values allowing the user to act on certain conditions immediately, e.g. switching unnecessary load of during the event of a grid failure to prevent a faster drainage of the battery bank. Going Solar In Conclusion to case study Activate Architecture has been focused on green building design and high performance architecture for nearly 10 years. In this time the firm has come to see first-hand the advantages of energy efficient built environment design and the remarkable impacts and improvements on the return of investment on renewable energy sources. In short, the current South African energy crisis together with escalating price of electricity has made renewable energy a more attractive investment. We have put our money where the industry’s mouth is and have installed the 5KVA solar PV system as described in the above case study. We estimate that we will get the full return on investment within 7 years based on an assumption that power will escalate by 10% per annum. Thanks to SAR electronic for the system installation and to Plantech for their strategic inputs.

t: 011 788 8095



ISO 50001 as a tool for energy sustainability Hemant Grover (CEM), Technical manager, National Cleaner Production Centre of South Africa


nergy has always been a critical resource for any globally competing economy. For many countries Energy is the primary source of their economic GDP, sustaining most of the economy. All industries and mines across the world are reliant on energy for their day to day operations. However, energy management was not considered important until the early 1970s. In 1973 the Organisation of Arab Petroleum Exporting Countries (OPAEC) imposed their first oil embargo on the western world; the result was a 400% increase in oil price, the stock markets crashed and major political and economic changes, globally. Energy intensive economies realised the criticality of energy supply and security and thus energy management was born. Managing energy generally involves identifying areas of energy waste that can be reduced through efficient technology or through behavioural change. Saving maximum amount of energy is the goal. Every unit of energy saved results in cost savings through a reduced energy bill. Energy management aims to reduce as much energy as possible, save as much money as possible without jeopardising normal operations and production of the organisation. The International Energy Agency (IEA) defines energy management the “First Fuel� for any country. In other words energy management reduces the need to develop new power plants and energy infrastructure. South Africa is the largest energy producer and consumer of energy in the African Continent.



Since the turn of the century, electricity demand has steadily increased to a point in 2008 when demand had equalled supply which resulted in the first planned load shedding in the country. Energy management has helped South Africa mitigate a lot of its energy crisis. Many engineers have developed their own strategies and techniques to manage energy. A myriad of energy efficient technology products exist in the market. Most of these strategies and products, if applied properly, will save energy. However organisations and governments felt a need to standardise the manner in which these strategies and technologies are applied to save energy. The United Nations Industrial Development Organisation (UNIDO) spearheaded the development of an international standard that could be applicable to all organisations and all countries. Thus in 2011 the International energy management standard ISO 50001 was published. South Africa was one of the first countries to adopt ISO 50001, in its entirety, as a national standard. Implementation of ISO 50001 ISO 50001 is developed based on the Plan-DoCheck-Act model of a management system

standard. The standard allows organisations to manage their energy along with their quality, environment impact and any other challenge that can be addressed through a management system. ISO 50001 is neatly developed in that it does not prescribe a present standard of energy management; it provides an overarching guideline to manage energy in a sustainable and continual manner. ISO 50001 can be implemented by any organisation, private or public sector based, regardless of where they are located and what they manufacture. ISO 50001, if implemented successfully integrates energy management into the company culture such that energy management becomes a responsibility of every individual within the organisation. Reach and scope of ISO 50001 Since its publication, ISO 50001 has been the fastest adopted standard in the history of the ISO body. The number of ISO 50001 certifications, globally, are in excess of 10,000. In South Africa there are less than 10 certifications, but the interesting is growing rapidly. To certify or not is usually a question, however, the recommended practice would be to certify, as renewal of ISO 50001 in South Africa In South Africa, the ISO 50001 standard is championed by the work of the Industrial Energy Efficiency Project (IEE Project), jointly implemented by UNIDO and the National Cleaner Production Centre of South Africa (NCPC-SA). The IEE Project promotes the implementation of Energy Management Systems (EnMS) aligned to ISO 50001 and has supported numerous industry plants to implement EnMS, some of them with a view to becoming ISO 50001 certified, but all following the clear and effective methodologies outlined in ISO 50001 and supporting standards. The NCPC-SA also presents EnMS training aligned to ISO 50001 and EnMS experts trained through the IEE Project have supported most of the ISO 50001 certified plants in South Africa.

certification is based on demonstrating energy improvement against a set baseline. The ISO body has also developed supporting standards to ISO 50001, all of which have been published internationally: • ISO 50002: Energy audits -- Requirements with guidance for use • ISO 50003: Requirements for bodies providing audit and certification of energy management systems • ISO 50004: Guidance for the implementation, maintenance and improvement of an energy management system • ISO 50006: Measuring energy performance using energy baselines (EnB) and energy performance indicators (EnPI) -- General principles and guidance • ISO 50015: Measurement and verification of energy performance of organizations -- General principles and guidance. There is also a local standard, SANS 50010: Measurement and verification of energy savings

In the energy fraternity, ISO 50001 and its suit of supporting standards is seen as the game changer and is recommended for any organisation which wants to manage its energy continually and sustainably. In 2013, Tenneco Automotive in Port Elizabeth became the first ISO 50001 certified company in South Africa with certification in two plants. Both plants were training sites (candidate plants) of the IEE Project with EnMS implementation by project experts. Tenneco were closely followed by another automotive component manufacturer and IEE Project plant, Johnson Matthey South Africa, also in early 2013. Other IEE Project supported ISO certifications include St Gobain, VW South Africa and ABI’s Valpre water plant. The NCPC-SA is the resource efficiency programme of the Department of Trade and Industry (the dti) and is hosted at the Council for Scientific and Industrial Research (CSIR) in Pretoria, Durban and Cape Town.

Companies wishing to get practical implementation support or training in energy management systems can contact the NCPC-SA on: / SUSTAINABLE ENERGY RESOURCE HANDBOOK



Dominic Milazi & Dr Tobias Bischof-Niemz







ince its release in 2011, the Integrated Resource Plan (IRP 2010-2030), or IRP 2010, has been the authoritative text setting out South Africa’s electricity plan over the next 20 years. The document indicates timelines on the roll out of key supply side options such as renewable energy, the nuclear, natural gas and coal build programmes, as well as peaking plants typically powered by diesel or natural gas. The much anticipated promulgation of the first IRP update was due in 2014 and, at present, looks set for 2015. Since initial promulgation of the IRP 2010, major developments have occurred which already give pointers for what the energy landscape will look like in the medium-to-long term despite no formal declarations from an officially updated IRP document.


Growth of the renewable energy sector in South Africa has been remarkable for both its speed as well as for the level investment it has attracted. The table and figures below give an overview of the key metrics demonstrating how the flagship Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has engendered sector localization, driven down technology

Table 1: Procured capacities and average tariffs for all technologies



deployment costs, lowered tariff on electricity sold, while providing job opportunities especially during the construction phase of projects. The Department of Energy initially made a determination in 2010 for 3 725 MW, and then an additional determination in 2012 for 3 200 MW, of new renewable power to be procured before 2016. Since the launch of the REIPPPP, approximately 5 200 MW have been allocated to 79 Preferred Bidders in 4 bid windows. The Energy Minister has furthermore indicated allocation of Preferred Bidder status to additional projects from bid window 4, and an expedited procurement process of 1 800 MW to target previously unsuccessful projects from bid windows 1-4. She has also indicated that an additional determination for 6 300 MW will be submitted to the National Energy Regulator of South Africa (NERSA) to maintain the momentum of the renewables procurement programme. The Power Purchase Agreements (PPAs) for the first 4 000 MW are signed between the IPPs and Eskom, South Africa’s state-owned power company, as the off-taker/buyer. By end 2014, approx. 1 600 MW of wind and


solar photovoltaic (PV) projects had been commissioned and are now feeding energy into the grid. Wind made up approx. 600 MW of commissioned capacity by end of 2014, while solar PV stood for approx. 1 000 MW. Figure 1 shows the average fully indexed tariffs (i.e. the tariffs that are fully inflated according

to the Consumer Price Index over the lifetime of the PPA of 20 years; or, in other words, the tariffs that are constant in real terms) for solar PV and wind in bid windows 1-4 in April-2014Rand. The average solar PV tariff reduced by more than 75% from bid window 1 to bid window 4. The average wind tariff reduced by more than 50%.

Figure 1: Bidding tariff progression over Rounds 1-4 by technology (for Solar PV and Wind) Source: South African Department of Energy (adapted from presentation on REIPPPP Window 4 announcement)

Two of the key drivers for decreased tariffs are: strong competition among companies submitting bids as well as decreased technology costs at the global level. This is highlighted in Table 2 and Figure 2. While Table 2 indicates the increased level of

oversubscription in the four bid windows of the REIPPPP, Figure 2 shows how at the same time the feed-in tariff for PV in the for many years leading market Germany, and inferred from that the technology cost for solar PV at the global level, has decreased.

Table 2: Submitted and allocated number of bids and total capacities in the first four bid windows of the REIPPPP



With our prices you cannot afford not to go solar! With satisfied clients countrywide Green Built Energy Solutions is the obvious choice when going solar We do residential and commercial installations - no project is too big or too small Cut or completely eliminate your electricity bill Protect yourself against future energy price increases Commercial clients can finance their systems at a cheaper rate than their current utility rates Rebates and tax incentives available for commercial clients

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Figure 2: Decrease of Feed-in Tariff for different PV categories in Germany since 2001

Figure 3 shows how local content has increased (in relative terms) has increased for solar PV , reaching more than 60% in bid window 4. Local content for wind has also increased from bid window 1 to 2, but has now more or less stabilised around 45%. To increase local content significantly more than that, investments into blade manufacturing in South Africa will have to be made as a first step. The figure also shows a number that is relevant for the trade balance, which is the monetary value of the imported goods and

services related to the PV and wind projects. That number has decreased significantly for PV from 16.7 million R per installed MW in bid window 1 to 5.7 million R per installed MW in bid window 4. For wind, this number has also decreased, but to a lesser extent and stabilised around 9-9.5 million R per MW installed. Considering that wind turbines generate significantly more MWh per installed MW per year than solar PV farms, the amount of money leaving the country per MWh produced is now (in bid window 4) approximately the same for both wind and solar PV.

Figure 3: REIPPPP Local content for bid windows 1-4 by technology and money spent abroad per capacity Source: South African Department of Energy (adapted from presentation on REIPPPP Window 4 announcement)






In addition to the pure financial benefits, the renewables projects also brought significant jobs into a broad number of provinces. Table 3 shows the jobs measured in person-months

of employment during both construction and operation phase of all renewables projects of bid window 3 and 4.

Table 3: Job creation in bid windows 3 and 4 during construction and operation of the renewables projects

Thanks to their specific endowment with renewables resources sun and wind, certain provinces have emerged as “winners” in terms of receiving a large share of the projects developed. The Northern Cape has seen an explosion of activity especially in terms of solar projects with the Western Cape and Eastern Cape hosting most of the onshore wind projects as shown in Figure 4.

Figure 4: Geographical distribution of renewable energy projects in South Africa Source: South African Department of Energy IPP Office; map created by Sustainable Energy Society of Southern Africa

The location of these projects, as well as those that are still under development, brings about the need to provide adequate local human resources for operations and maintenance. The education and training sectors within the

relevant provinces have responded to this need by establishing vocational and training centers as seen at: • The South African Renewable Energy Technology Centre (SARETEC) at the Cape Peninsula University of Technology • Renewable Energy Centre of Excellence (RECE) in Upington • Port Elizabeth College which offers various training and vocational courses As the REIPPPP and the overall sector matures, more nuanced objectives and needs are coming to the forefront such as maintaining momentum of the programme in the face of grid constraints, keeping investment sentiment upbeat despite some delays on project closing, ensuring transfer of more high-end specialized skills and knowledge, ensuring delivery on socio-economic plans presented at REIPPPP bid submission stage, gender mainstreaming, support for small scale projects, as well as integration of renewable energy as grid penetration levels increase. The world-class and highly acclaimed programme that the REIPPPP already is, evolutionary improvements are expected and will take the programme into the next gear.




As successful as the cost reduction specifically for wind and solar PV were in the first four bid windows of the REIPPPP, it is expected that global technology costs on the solar PV side will decrease by another 40-50% compared to today’s levels by 2030 and therefore further tariff reduction especially on the solar PV side is expected. In order to create a conducive environment for smaller project developers in the sector, the small scale IPP programme was launched in 2014 for projects smaller than 5 MW. An overall allocation of 200 MW was set aside for the small scale programme with no price caps for individual technologies and no set megawatt quantum for any single technology. This approach has meant that the inherent economic attributes of each project, particularly those attributes dependent on choice of technology, have determined the mix of projects seen successfully coming through the programme. The dominance of solar PV suggests the need for adjustments in terms of programme design if the objective is to facilitate growth of all technologies implemented via small scale projects. Of particular importance are the transaction costs which pose a challenge for small projects which do not benefit from economies of scale like the projects under the large scale IPP programme. Reduction of transaction costs will require simplified project documentation that is more standardized. Further support for small scale IPP projects has come in the form of a fund capitalized by the German development bank KfW, providing a range of support measures to qualifying small developers. Support measures range from direct financial support to funding basic advisory services. The Facility for Investment in Renewable Small Transactions (FIRST) was set up as an additional support mechanism to provide debt finance for bankable small scale IPP projects.



The fact that small solar PV projects can achieve very favourable cost is shown by an example that the CSIR is about to implement on its main campus in Pretoria. A lifetime cost of 0.83 R/kWh was achieved for a groundmounted, single-axis-tracker PV installation of 558 kW in size. This was made possible through a rigorous, lifetime-cost-focused procurement process. The methodology will be made available to other public entities in form of a guideline. As we approach the fifth year since launch of the REIPPPP, renewables look set to consolidate their position as an indispensable part of the South African supply mix. The pricing for deployment, especially on large scale projects, has reached sustainable levels and the understanding regarding variability of South Africa’s wind and solar resource is constantly improving. This understanding is recorded in studies examining primary resource aggregation, generation fleet flexibility, and adequacy of grid operations. There is much to be optimistic about heading into the 20162020 period and the renewables sector is set to continue its valuable contribution.

CSIR quantified financial cost and benefits of renewables in South Africa in 2014

A CSIR study found that renewable energy from South Africa’s first wind and solar photovoltaic (PV) projects created R0.8 billion more financial benefits to the country than they cost during 2014. The benefits earned were two-fold. The first benefit, derived from diesel and coal fuel cost savings, is pinned at R3.64 billion. This is because 2.2 TWh (terawatt-hours) of wind and solar energy replaced the electricity that would have otherwise been generated from diesel and coal (1.05 TWh from diesel-fired open-cycled gas turbines and 1.12 TWh from coal power stations).


The second benefit of R1.67 billion is a saving to the economy derived from 117 hours of so-called “unserved energy” that were avoided thanks to the contribution of the wind and solar projects. During these hours the supply situation was so tight that some customers’ energy supply would have had to be curtailed (“unserved”) if it had not been for the renewables. Therefore, renewables contributed benefits of R5.3 billion in total (or R2.42 per kWh of renewable energy), while the tariff payments to independent power producers of the first wind and photovoltaic (PV) projects were only R4.5 billion (or R2.07 per kWh of renewable energy), leaving a net benefit of R0.8 billion. The CSIR Energy Centre developed a methodology to quantify these financial benefits. The methodology was fed with cost data from publicly available sources, such as Eskom’s interim financial results 2014 for coal and diesel costs, or the Department of Energy’s publications on the average tariffs of the first renewables projects, or the Integrated Resource Plan on the cost of unserved energy.

Because the study is an “outside-in” analysis of the system operations, conservative assumptions for the system effects and for the costs of coal were chosen. The actual cost savings that renewable energy sources brought during 2014 are therefore presumably higher than shown by the study. Generally speaking, the pure fuel-saver effect of renewables that was quantified in this study always grossly underestimates the total financial value of renewable energy. The fuelsaver logic purely applies in the short-term and measures the effect of renewables on the already existing conventional fleet. In the medium- to long-term, renewables together with relatively speaking inexpensive flexible new-build options need to be compared with alternative non-renewables new-build scenarios. Hence, this study underestimates the financial value of renewables not only because the methodology and the cost assumptions were chosen conservatively, but more importantly because of the neglected long-term effects

Figure 5: Financial benefits and cost of renewables in South Africa in 2014

Link to the related press release and the full report: REL?MEDIA_RELEASE_NO=7526622







of renewables on the power mix. This was however done on purpose, as the study was meant to be based purely on actual data, without making assumptions on future developments. What the study therefore does is it establishes the floor below which the combined short- and long-term value of renewables in South Africa in 2014 will certainly not lie.

have been signed with China, France, Russia, South Korea and the United States of America. These framework agreements build on existing bilateral cooperation between the two countries that are party to the agreement, and in the case of these specific framework agreements, cooperation in the field of nuclear energy is central.

In 2014, this floor of minimum renewables value is the above-mentioned R5.3 billion, and it was higher than the costs of the first renewables projects in form of the tariff payments to the Inde-pendent Power Producers that own the projects, which was pinned at R4.5 billion, leaving a mini-mum net financial benefit of R0.8 billion1.

Environmental Impact Assessments are at an advanced stage for nuclear plants at the sites listed below. The capacities indicated do not denote the size of the planned power plants, but rather the capacity which would be allowed given the scope of the Environmental Impact Assessments conducted: • 4 000 MW: Thyspunt (Eastern Cape, located West of Port Elizabeth near Cape St Francis)

Nuclear Energy

• 4 000 MW: Bantamsklip (Western Cape, located 10 km south-east of Pearly Beach)

Nuclear Energy features prominently in South Africa’s current plans (IRP 2010). The IRP is the end product of a detailed modelling exercise that finds an optimal mix from given costs, constraints, and other inherent attributes of available technology options. The carbon emission constraint that South Africa has committed itself to is also a key driver. Among the current mix of supply options, nuclear is one of the technologies which can provide low carbon electricity. The IRP 2010 points to deployment of 9 600 MW by 2030. The draft updated IRP (not approved yet) lowered that target due to lower demand expectations and uncertainties about the cost of nuclear. Deliberations with several potential vendor countries are at an advanced stage for potential procurement of an entire build programme from any combination of the countries. These engagements have included senior officials from the Department of Energy touring the potential vendor countries to assess and understand the suitability of technologies offered. Framework Agreements for cooperation on the build programme

• 4 000 MW: Duynefontein, within the existing Koeberg Power Station site (Western Cape, located adjacent to the existing Koeberg Power Station, Cape Town) The Brazil and Schulpfontein areas shown in the national map below are not the priority sites, as Eskom has now prioritised the Thyspunt site for the first nuclear power plant. The grid integration requirements for the 3 potential nuclear sites are a matter of public record with Thyspunt being a stand-alone site that would inject its power into the Southern Eskom Grid (Eastern Cape) – a network which will consist primarily of the Coega, Port Elizabeth, and East London loads. The integration of this nuclear plant would link into the existing power corridor C3 and C1 as shown in the Figure 9 below. The Bantamsklip and Duynefontein sites would inject into the Greater Cape Peninsula area of the Western Grid which consists of loads from Saldahna Bay, Cape Town and Mossel Bay. The integration of these two sites would link into the existing Cape power corridors C2 and C1.




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According to the Environment Impact Assessments on the potential sites for South Africa’s second Nuclear Plant (after Koeberg), the Bantamsklip alternative would be the least preferable from a grid integration point of view requiring roughly 900 km of combined 765 kV and 400 kV transmission lines versus 500 km and 190 km of 400 kV lines at Thyspunt and Duynefontein respectively. Within the Environmental Impact Report, Thyspunt is considered the most preferable location and may be the site hosting the first construction phase of the nuclear build programme.

Coal Powered Generation

South Africa’s national utility Eskom is currently construction two new coal-fired power stations with a combined capacity of almost 10 GW: Medupi and Kusile. After several years of delays, the first unit of Medupi is now in the phase of commissioning, and it is likely that within the next 5-6 years most units from Medupi and Kusile will come online. In addition to Eskom’s new-build programme and to further accelerate construction of generation capacity, the Department of Energy has launched the Coal IPP programme which is structured in a similar manner to the Renewable Energy IPP Programme with bid windows opening annually until 1000MW has been approved from domestic projects and 600MW from so-called cross border projects.

The deadline for submission of proposals is 8 June 2015 with completion by end of 2021 being one of the conditions for selection as Preferred Bidder. An interim deadline of 11 May 2015 has also been introduced for alerting the Department of Energy on intent to submit a bid in June. The Department of Energy has announced the likelihood of delays in the programme given the complexities that are being encountered. These complexities mainly stem from the fact that coal-fired power generation is dispatchable. Hence, the new power stations will be dispatched by the System Operator and they will also provide ancillary services (e.g. reserves and frequency control). Therefore, the contracting and cost-compensation structure is more complex. This challenge did not arise in the REIPPPP, because renewables are selfdispatched (i.e. not dispatched by the System Operator). This stems from the nature of solar and wind projects, whose maximum output at any given point in time is determined by the weather conditions and not by pricing or other technical signals. Another key feature for all eligible projects under the coal IPP programme is the tariff price cap set at 82 c/kWh, which is virtually on par with Solar PV (79 c/kWh) and higher than utility scale wind which looks to be able to generate electricity at 62 c/kWh. This comparison is, of course, not entirely fair given the firm capacity




that coal powered generation units offer. Project developers will have to contend with challenges related to grid connection, coal supply, water availability, as well as caps on tariff escalation over a 30-year Power Purchase Agreement. Another interesting element is the introduction of the Preferred Bidder PD Undertaking which must be delivered to the Department of Energy together with its Preferred Bidder Guarantee. This PD Undertaking demonstrates how the Department of Energy is willing to accommodate project developers who may not yet have all required permits and licenses. In the PD Undertaking, the bidder undertakes to develop and reach financial close on its project within stipulated timeframes. This approach also highlights the importance of timely delivery of these megawatts. The minimum South African shareholding and Black Empowerment shareholding are set at 51% and 30% respectively to be eligible for selection as Preferred Bidder. In the evaluation, there is a 90% weighting on tariff within the Baseload Coal IPP Project (and 10% to socioeconomic development) as opposed to a 70% tariff weighting seen in the Renewable Energy IPP Programme. The increased minimum level for South African equity and South African BEE equity participation may be the mechanism that allows for a greater weighting on tariff while not comprising meaningful contribution to socio-economic broad-based change. These new coal projects are also significant as they are being implemented virtually in parallel to a major renewable energy program within the same national energy market. This means that the two electricity supply options (i.e. coal and renewables) may be compared side-by-side in terms of expected completion times, construction and delay risks, financing costs, and levelised cost of electricity.



Clean Coal Technology

In May of 2012, the South African Cabinet approved the national Carbon Capture and Sequestration (CCS) Roadmap which comprises 5 major phases: quantifying CCS Potential (2004), developing a national Carbon Atlas (2010); conducting test injections at identified sites (2016), constructing a demonstration plant (2020); and then achieving commercial operations (2025). With only the first two stages of the roadmap complete, it is unclear how much potential there is for commercial scale CCS operations in the short-to-medium term. Over the long term, the economic prospects for CCS seem limited given the locational mismatch between inland sources of carbon emissions in the Limpopo and Mpumalanga regions versus the large sequestration sites which are found mostly in coastal areas as shown in the figures below. Where site specific factors allow for a compelling business case, CCS should be pursued but there is still much work to be done to demonstrate the value of CCS in curbing overall carbon emissions at the national level.


Clean Coal also encompasses Underground Coal Gasification where unmined coal is converted in-situ to synthetic gas and then drawn from the coal seam via pipeline for combustion in the electricity generation process. Gasification has the potential to extend economically recoverable coal reserves by accessing seams that cannot be mined by conventional underground or open cast mining. For this reason, the South African government is taking interest. Despite meaningful groundwork and demonstration projects in coal gasification as is found at the Majuba Power Plant (contributing 3 MW of the overall capacity), the Sasol UCG Demonstration Plant near Secunda, and the Exxaro/Linc Energy joint venture for exploration of UCG in sub-Saharan Africa, several hurdles still exist that hinder wider use of this technology. According to the South African Underground Coal Gasification Association or SAUCGA (which counts Eskom, Exxaro, Wits University, North-West University and Sasol among its members), these hurdles to deployment include: • Lack of clear framework/standards for monitoring impact on underground water resources • Lack of standardized approach for quantifying UCG resource for bankable projects • Lack of regulatory framework or focus in the MPRDA on promoting UCG and ensuring safe design and operation of wells practices

The listing above points to a need for multiple interventions before UCG may develop fully into a mature commercial technology. The coal reserves within South Africa make a compelling case for investigating UCG further and seeing how UCG can contribute to the national electricity supply mix. Engagements are already under way between the Department of Energy and Department of Mineral Resources where preliminary discussions indicate a potential split of responsibilities. The Energy Department looks set to regulate the use of the gas while the Mineral Resources Department regulates the drilling and extraction of the gas. The third major Clean Coal option for South Africa would be Coal Bed Methane (CBM) where reserves are estimated to be between 10 and 20 trillion cubic feet (Tcf ) potentially ranking South Africa among the top 20 countries globally in terms of reserves. More importantly, a conservative estimate of 10 Tcf in reserves would be a substantial contribution to the South African supply mix where annual national consumption of natural gas is approximately 200-250 billion cubic feet (Bcf ). This consumption level implies a 40-50 year lifespan on those reserves. As one would expect, Coal Bed Methane is concentrated around the coal mining regions in the Limpopo and Mpumalanga provinces with several Joint-Ventures now established for CBM exploration. Major corporates such as Anglo-American, Shell, Sunbird Energy (Australia), and Kinetico Energy Limited (Australia) have already established a footprint in this area and are continuing with further applications for exploration rights. This ramp up of activity indicates the potential for this energy resource in supplementing, complimenting, or substituting natural gas supply in South Africa.




Natural Gas (and unconventional gas) Natural Gas today is the missing link in South

Africa’s energy mix. The country today satisfies only very little quantities of its primary energy demand from natural gas. Some is imported from Mozambique, some is domestic. A Gasto-Liquid plant at Mossel Bay is one of the prominent features of the gas utilisation in the South Africa of today. Apart from a gas-fired power plant based on gas engines owned by Sasol, there is no natural-gas-based power generation of significant size in the country. In principle, South Africa has three options for increasing its natural-gas share in its primary energy mix: First, increase imports through pipelines from neighbouring countries. Second, import Liquefied Natural Gas (LNG) via tankers and yet-to-be-built LNG landing terminals. That generally comes at a higher price than piped gas, but has the advantage of providing relatively speaking higher flexibility from a contracting perspective, because LNG can in principle be sourced from many suppliers globally. Third, own domestic gas, either conventional or unconventional.



The Department of Energy is currently developing a Gas Utilization Master Plan in order to give guidance on how these different options shall be developed in the next decades. It has been developed parallel to the Gas-to-Power Procurement Programme for an allocation of 3 126 MW. A recent media statement from the Department of Energy indicates a potential Requests for Proposals (RFP) to the Gas-to-Power IPP Programme could be released to the market before the end of 2015. Such an RFP would be informed by a Request for Information (RFI) which has already been published. For the Gas-toPower IPP Programme, key considerations are required regarding the current lack of import and pipeline distribution infrastructure as well as the gas reserves in South Africa that have not yet been accurately quantified. The Department also notes, correctly, that there must be clarity on where the fuel feedstock will be sourced from. The RFI will likely shed light on this. On the unconventional / shale gas side, the Department of Mineral Resources has gazetted the draft Regulations on Shale Gas Exploration. Acceptance of these regulations will clear the way for exploratory drilling and eventually the issuing of exploration licenses. The market has welcomed these regulatory developments given the uncertainty cause by the prolonged wait for licenses since the 2012 lifting of a moratorium on fracking in the Karoo. The market now, however, faces additional challenges within a low crude oil price environment that has seen at least one license applicant remove the Karoo from its list of priority exploration areas. The Department of Mineral Resources has committed to complete processing license applications lodged before 2011. This places Challenger Energy, Shell, and Falcon Oil among the contenders for being awarded a license this year. The Department of Mineral Resources has, however, requested that fracking be removed from the work plans


submitted as part of the license application. Instead, each licensee will only be allowed to drill for the purposes of taking core samples. No fracking will be allowed given the absence of regulations regarding shale gas fracking. Looking at the timelines in the work programmes submitted by the candidate licensees, there should be much better clarity on the levels of gas resource in the Karoo by middle of 2016. This would be a key part of the energy puzzle in South Africa and make for better planning over the medium-to-long term knowing the expected lifespan of the Karoo reserves.

Wherever the resource eventually comes from: introduction of natural gas into the South African power and energy system will open vast opportunities for different energy mixes. Gas-fired power stations are generally speaking more flexible than coal (both technically and economically, because they are less capital and more fuel-cost intensive). They can hence be seen as an enabler for a higher penetration with low-kWh-cost fluctuating renewables. Spain is a real-world example for this logic. The country has a similarly sized power system to the South African one. With an installed capacity of 23 GW of wind power generators, the fluctuations from this fleet are absorbed by the conventional fleet, mainly by the gasfired power generators.



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his chapter articulates issues that address independent power production in the context of South African power generation. Whilst it very briefly describes the status quo on power generation, it also focuses on the Renewable Energy Independent Power Production Procurement Programme (REIPPPP) and its current and likely impact on the current electricity crisis including load shedding. This is an attempt to explore whether Independent Power Producers (IPP’s) are part of the short and medium term solution on load shedding, specifically, and current electricity crisis, generally – in view of the arduous path IPP’s have journeyed ever since their debut in South Africa. What will be also examined is whether IPP’s provide a silver bullet solution to our current crisis?


According to the Creamers Research Centre “From 1970 to 1990, South Africa built 31 000 MW of new electricity capacity, but power was in oversupply the following decade and little was invested. The supply balance started to shift in the mid-2000’s, when the economy expanded at a yearly average of 4.5% – the country’s fastest growth since becoming a democracy in 1994.” But Goldman Sachs reported recently that South Africa’s gross domestic product jumped by nearly 2.8 times in that period. By 2008, an electricity shortage plunged Africa’s leading economy into the dark, accentuating the underinvestment in this crucial industry.” Currently the Eskom generation unit’s total installed capacity is 44 084 MW. However, on the overall, Eskom’s 27 power stations have a




total nominal capacity of 41 995 MW. The Eskom capacity expansion programme started in 2005 and is supposed to be completed by 2020/21. It is supposed to increase generation capacity by 17 384 MW, transmission lines by 9 756 km and substation capacity by 42 470 MVA. Eskom used to cite a capacity expansion increase of 17 100 MW, but in the 2013/14 financial year, the utility included its 100 MW concentrated solar power project, the 150 MV photovoltaic (PV) project and 34 MW of existing plant enhancements to its expansion estimates. The 1998 Energy White Paper outlines the restructuring framework of the Energy Sector. According to the Energy White Paper, the success of the electricity supply industry as a whole will be ensured by the following developments: • Affording customers the right to choose their electricity supplier • Introduction of competition, especially in the generation sector • Open and non-discriminatory access to the transmission network • Encouraging private sector participation in the industry. As part of repealing the Electricity Act, in 2003, a multi-market model was proposed to allow for competition in electricity generation and this implied the need for alignment of the new legislation with the Energy White Paper. Undoubtedly restructuring of Eskom to allow for competition in electricity generation was and is still logical. Since there was resistance for such proposal the multi market model was removed from the Bill because it was dependent on the restructuring of Eskom. Key developments range from February



2014 when Eskom declared its first power emergency of 2014 and urged key industrial customers to reduce their load by a minimum of 10% to the recent announcements by the Minister of Energy that 5423 MW has been committed and another 6300 MW is on the pipeline. In between load shedding became an accepted occurrence, ESKOM experiences enormous challenges, especially financial constraints and effects of maintenance backlogs, and goes through major reshuffling of management, a Stabilisation Plan and a War Room are introduced, to list a few. At the same time independent power production gets better recognition as it was factored in the Stabilisation Plan over and above REIPPPP. Challenges of transmission grid The transmission network forms an integral part of the country’s electricity infrastructure, delivering power to major customers and load centres, from where it gets distributed to end-users. Eskom is the licensed transmission network service provider and thus the sole transmitter of electricity through its highvoltage transmission network. The possibility of transferring the transmission assets from Eskom and incorporate them into the yetto-be-established Independent System and Market Operator or establishing a transmission System Operator has been a topic under spotlight. In 2013, Eskom had 154 substations and 29 297 km of transmission lines. In its current ten-year Transmission Development Plan (TDP) for 2013 to 2022, which was published in October 2012, Eskom outlined a R149-billion investment plan to increase its grid capacity. R121-billion was earmarked for projects designed to improve the reliability of the network, R25-billion for programmes aimed at integrating new power


generation projects and about R3-billion for customer-related projects.

identified as “the most binding constraint” to production and investment.

The organisation plans to add 12 700 km of new transmission lines to the existing network by 2022, of which more than 8 600 km will be in the form of new 400 kV capacity and the balance comprising 3 700 km of 765 kV lines and 400 km of 275 kV lines. REIPPPP inadvertently prompts Eskom to expand the transmission network given that some of the solar and wind farms are distant from the grid. The only challenge is the current financial constraints that the utility is experiencing. Such a challenge presents a disquieting risk of inability to get power from installed projects that will be ready to generate. Alternative funding of grid connection is an option that is being considered as well.


Eskom has confirmed that it is becoming increasingly difficult and expensive to integrate IPP projects, with the easy-to-connect projects having been selected during the first two bid windows.

Eskom generates about 95% of the power used in South Africa. Eskom operates 27 power stations with a nominal capacity of 41 919 MW, comprising 35 650 MW of coal-fired stations, 1 860 MW of nuclear, 2 409 MW of gas-fired and 2 000 MW of hydro and pumped storage stations. In 2003 the Government decided that 30% of all new power generation would be derived from independent power production. Such was expected to take the form of base load measures, renewable-energy projects, waste energy projects and cogeneration plants.

However, ESKOM is concerned about finding a viable financial model to deal with the connection costs of projects arising from window three onwards. As such Eskom has indicated that it will consider “self-build” solutions on a case-by-case basis, although the cost sharing and ownership framework remains vague.

Unfortunately the Pilot National Cogeneration Programme (PNCP) – which was a response to the policy change - was not successfully launched. Furthermore there was introduction of Medium Term Power Purchase Programme (MTPPP) – focused for 2012 to 2018, with a target of 6 GW but ended up with 273 MW as well as Short Term Power Purchase Programme (STPPP) where recently contracts amounting to 827 MW instead of (NERSA approved) 1505 MW were renewed.

Energy is no longer regarded as lower priority as found in a reply to a question from Parliament whereby Minister Nene replied it was “structural and competitiveness challenges that hold back production and investment in our economy”, of course referring to the 2015 Budget Review – presented at the time of the February Budget. He said in that review, “the lack of sufficient electricity” had been

Government has recently taken a few bolder steps in accommodating additional power through Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) whereby IPP’s have been allocated 6600 MW, are currently generating about 1500 MW and will be generating around 19 000 MW of power by 2022 if all goes according to plan.





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At the time of launching the Renewable Energy Independent Power Producers Procurement Programme jointly by the Department of Energy, NERSA and Eskom in 2011 the target was to generate 3 725 MW of renewable energy by 2016. However further determinations were provided by the Department of Energy and such resulted in an total allocation of 6600 MW. Currently 13 Preferred Bidders for the fourth bid will contribute an additional 1121 MW’s to the national grid. This brings a total of 79 projects with a total capacity of 5243 MW across all Renewable Energy Bid Windows and a massive investment of R168 billion in economic infrastructure in our country, which will contribute to economic growth. The Department of Energy and the IPP Office have been instructed to accelerate and expand the REIPPP through utilising the enabling provisions in the current RFP to allocate additional power from round 4 procurement process and issuing a Request for Further Proposals for an expedited procurement process of 1800 MW from all technologies and such will be open to inter alia all unsuccessful Bidders from all previous rounds (Bid Windows 1 to 4). The Minister of Energy also intends to submit to NERSA, for concurrence, a new determination for an additional 6300 MW for the REIPPPP in accordance with the IRP 2010-2030 and to maintain the momentum of the programme, especially for future phases. This obviously is another indication of confidence on REIPPPP as a process. Of course the current electricity crisis lends some pressure for responsive determination. 29 bids, totalling 139 MW, on the Small Projects Programme have been received to procure renewable energy for Small-Scale IPP’s, with projects that are between 1 and 5 MW in size is underway. However this procurement process

is seeking to procure 50 MW of the 200 MW determined for small projects. Parallel and aligned with the release and consultation on the Gas Utilisation Master Plan for South Africa, the Department has been designing a Gas to Power procurement programme for a combined 3126 MW power allocation. A Gas to Power Request for Information (RFI) will be released to the market by end of April 2015. Responses to this RFI will be used in designing the Gas to Power Procurement Programme. This programme is expected to stimulate a gas sector which could contribute to the growth of the economy. The announcement of the preferred bidders of the first coal IPP procurement – which will generate 1600 MW - is expected before the end of the year. The Cogeneration RFP 800 MW will be released within April 2015 and depending on responses from the market, this determination may be increased at a later stage. Whilst the REIPPPP is a flagship programme of the Department through which a total of 5243 MW have been procured in less than four years, the predominance of wind energy, followed by solar, biomass and hydro respectively triggers interest on the criteria used for selection of technologies. Does the evolution of REIPPPP, the rate of its expansion lend confidence to its ability to contribute to mitigation in the medium term? In terms of the Integrated Resource Plan (IRP) 2010, about 42% of the new electricity generated in South Africa by 2030 is required to come from renewable sources. This translates to a total share of 9% from renewable energy by 2030, or 17 GW renewable energy capacity. An initial encouraging step, in August 2011, the




Department of Energy (DoE) issued its RFP for the REIPPPP, calling for 3 725 MW of renewable power in five different rounds. It allocated 1 850 MW to onshore wind, 200 MW to CSP, 1 450 MW to solar PV, 12.5 MW to biomass, 12.5 MW to landfill gas, 75 MW to small hydro and 100 MW to small projects. In August 2013, the DoE formally invited bids for the small-scale renewable-energy projects. More than 100 small-scale projects – with a combined generating capacity of 450 MW – have applied, with 78 of these projects – with a combined capacity of 345 MW – prequalified and submitted bids by November 1, 2014. By February 2015, 32 projects, with a collective capacity of 1 500 MW, were already generated. If this were to be used, in a simplistic manner, to make projections it means the same amount of power may be commissioned by 2019 - of course excluding power from Medupe, Kusile and Ingula. What should be noted is that ESKOM has been public about the need for additional 3000 MW in the next 3 years to avoid load shedding.


The significance of what I regard as an IPP emerging market has a number of implications and such includes sustained appetite to invest in the industry, price, accessibility and sustainability. However the evolving character of the IPP market does have an influence on the prospects of REIPPPP as well as the impact of independent power production, in general. However the diverse views about the reality of the IPP market in SA is quite interesting. In preparation for this chapter I sourced views and opinions of a few practitioners in the IPP industry. Whilst representativity of the views may end up being under tight scrutiny I doubt if an appropriate survey will have markedly different outcomes.



There are those who claim that true market does not exist because there is a “single buyer market” which is not really a market. The argument goes as far as saying current legislation and regulation on the whole don’t support a real market. Eskom cannot create a market as it only gets a very tight mandate to purchase power from non-Eskom generators. Some claim the REIPPPP, and now the recent coal-based power procurement programme, creates a “pseudo-market” through the bidding. Many would in fact call this a market. There are those who claim a market exists but is an extremely confined and regulated market, which is today limited only to the REIPPPP - a programme where time for generation, amount of power, the technology, etc., are all specified by government. To some even the semblance of an IPP market in SA, given that the industry is still hugely regulated and constrained by government-led power procurement programmes, may only be viewed as ‘small pockets of IPP markets within a regulated industry’. Another interesting argument is about having an immediate ‘completely free market’ evolving from a situation of relying on a sole Government-Owned Utility Model as a huge leap and one in which, on the other hand, SA Inc. would be at risk should the model conversion not be executed. However having a largely regulated IPP market may be viewed as a means to support the introduction of IPP’s in a gradual and controlled manner within a market where IPP’s are competing against relatively extremely low tariffs charged by Eskom’s ageing coal fleet. Comparatively most developed nations have adopted an open IPP market – for example in the US consumers can choose whichever


IPP/Power Company to buy their power from. In Europe, Brazil, Australia, etc., IPP’s sell their power to an independent operator in the ‘dayahead’ with either energy or ancillary services. In this structure, the IPP market assumes the supply/demand risk themselves (unlike in SA, where IPP’s are awarded 20-year PPA’s thus negating their demand risk). Currently Government provides directives on the amount and time of power production, which is appropriate only if Government plans properly and ensures an efficient REIPPPP rollout which is currently not the case (considering delays in all IPP procurement and finalising reviewal of an outdated IRP). Interestingly manufacturers of renewable-energy inputs have expressed anxiety about the delay in the third round, as the timeous and successful financial closure could represent a R10-billion opportunity for the local supply industry.

Current projections, based on the commitments by the Department of Energy, are 12 900 MW will be generated through REIPPPP by 2019. This obviously puts a good test on the potential that REIPPPP has to not only provide power, but to also assist in the mitigation of the current electricity crisis. The National Development Plan sets targets and outlines actions to ensure the country’s development challenges are addressed aims to change the South African energy system to reduce greenhouse emissions and alter the country’s heavy reliance on fossil fuel. A target has been set to procure 20 000 MW of electricity from renewable energy and establish an economy-wide carbon price by 2030.

A public debate about the introduction of Independent Systems and Market Operator (ISMO) legislation as the enabler for the development of a truly open IPP market still has to be driven intensively and properly structured.

Whilst Creamer Media’s Research claims that South Africa is estimated to have up to 2 000 MW of cogeneration potential, the recent joint study by DoE and GIZ claims a potential of 5500 MW. Such is specifically highlighted due to the short turnaround time by cogeneration projects given their agility compared to other technologies.

Notwithstanding all of the above, there is an emerging but imperfect IPP market which has germinated particularly due to the introduction of the REIPPPP.



The DoE, in its display of growing confidence on independent power production, has expanded its IPP scope to include 2 500 MW of coal projects. In December 2014, the Department of Energy (DoE) issued a request for proposals (RFP) to procure 1 600 MW of coal baseload power.

If the definition of independent power production is simply confined to those who want to engage in generation of electricity for commercial purposes, that invites the limitations as articulated in REIPPPP. However the inclusion of small scale (especially household-based) embedded generation will change the landscape quite notably given that NERSA itself speculates that such would yield around 17 000 MW by 2022. There are quite a number factors that compromise the role and contribution of the




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Independent Power Producers thus potentially compromising REIPPPP viz.: • The Electricity Regulation Act Amendment 2 is IPP and NERSA unfriendly. SAIPPA’s view is that it potentially takes away much of NERSA’s independence, as a regulator, and put it in the hands of the Minister of Energy. • Whilst there were concerns from certain business quarters that the ISMO Bill was vague, lacked clarity and certainty of purpose what seemed to be the primary challenge is a slow and uncertain way to reform the electricity supply industry. • SAIPPA does not view it as sensible to legislate the detailed workings of the electricity regulation system without first finalizing the design of the electricity market structure that is to be regulated. • Another major concern relates to the proposed centralization of a number of key functions in the person of the Minister • Generation Licences for bi-lateral PPA’s have proven very difficult to obtain due to interpretations of the Generation Regulations. The charges associated with wheeling power from a private generator to a private load, in a bilateral PPA are prohibitively expensive, resulting in there being very few “wheeling” deals. • Clarity on the New Generation Regulations has to be provided to specifically allow bilateral Power Purchase Agreements. • The section 12i subsidy specifically excludes power generation projects and also does not provide a suitable subsidy for Energy Recovery Projects (ERP’s). • The charges associated with wheeling power from a private generator to a private load, in a bilateral PPA are prohibitively expensive, resulting in there being very few “wheeling” deals.

There is lack of grid capacity for transmission and distribution. High prices are required of IPP’s in some Cost Estimate Letters (CELs) and Budget Quotations in order to connect an IPP project to the grid. Compliance with Generation Codes for smaller IPP’s may be too expensive and the provisions may be too onerous for smaller IPP’s. Municipalities have to partner with IPP’s to provide electricity through a number of options i.e. solar, waste-to-energy, biomass, wind, cogeneration, etc. Such engagements may take the form of public private partnerships, bidding to provide power to the municipalities through power purchase agreements. The Municipal Finance Management Act makes it very difficult for PPA’s (Power Purchase Agreements) longer than 3 years, and NERSA will not grant a license to an IPP which sells power to an “organ of state” (which includes Municipalities) unless the provisions of the New Generation Regulations are satisfied, or Ministerial Exemption is obtained. It has to be noted that the New Generation Regulations have yet to be adopted. REIPPPP will not be the only limiting factor because investment backlogs, with regards to rehabilitation of the electricity infrastructure are estimated at ~R68Bn and painfully growing without any indication of how such backlogs are going to be addressed. Unreliable distribution systems are amongst the primary causes of poor security of supply to consumers despite the myopic public understanding that ESKOM is to blame for every fault in power supply. Load shedding, in the South African context, is a result of ESKOM’s inability to supply adequate electricity due to pressures such as maintenance of power stations, whether planned or unplanned. According to ESKOM load shedding may stay with us for the next 3 years.




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According to the Government’s 5-point Stabilisation Plan mitigation of the electricity will be addressed as follows: 1. Interventions by Eskom over a period of 30 days [within January 2015] to stabilise the system, with a focus on raising the availability of its coal-fired plant to above 80%, from 72% currently. 2. Harnessing short-term independent power producer (IPP) and cogeneration opportunities. 3. Accelerating programmes to substitute diesel with gas at the open cycle gas turbines (OCGT’s), in the Western Cape. 4. Launching coal and cogeneration IPP procurement programmes by the end of January. 5. And managing demand through energy efficiency projects within households, municipalities and commercial buildings. Eskom had also been requested to provide a detailed finance plan of its cash-flow requirements for the continued purchase of diesel beyond the end of January 2015 and three-year extension of short-term IPP (STPPP) and cogeneration power purchase agreements (PPA’s) – the PPA’s covering around 1 000 MW are due to expire in March. ESKOM has recently indicated it needs “a minimum of 3000 MW and maximum of 5000 MW buffer either through supply-side or demand-side options in order to close the backlog within 3 – 5 years and avoid loadshedding”. Currently the existing STPPP contracts have been extended but unfortunately the MTPPP (medium term) contracts have yet to be addressed. The coal-based RFP was issued in December 2014. Future rounds on REIPPPP have just been announced and the amounts coupled with additions display confidence on the programme.

As another confirmation of commitment and display of confidence by IPP’s South African Photovoltaic Industry Association (Sapvia) CEO Moeketsi Thobela recently told African Energy the solar photovoltaic (PV) industry was “able to respond to an increased and accelerated programme and SAPVIA has recently signed an memorandum of understanding with the South African Property Association to facilitate the installation of solar PV systems on the roofs of shopping malls, offices and industrial parks across the country. With regards to other pillars of the Stabilisation Plan progress has been rather slow and any prospects of a visible impact on the current challenge are quite slim. The recent loan of R2Bn by kFw, from Germany, to ESKOM to modernise the grid, whilst it is miniscule in terms finance needed for infrastructure build and rehabilitation, is a signal of prospects of future funding that is desperately needed. The cogeneration RFP is just imminent notwithstanding the short turnaround for construction, installation and commission of power. The Gas-to-Power initiative coupled with conversions for the open cycle gas turbines in Western Cape are still yet to be driven intensively of course. SALGA, buttressed by the imminent regulations, is also committing to small-scale embedded generation, with an initial focus on solar PV, landfill gas and wastewater gas electricity generation where appropriate and micro-hydro generation where feasible. However clarity is required with regard to IPP access to municipal “assets”, such as municipal waste streams, landfill gas, etc. The drive for energy efficiency demand side management has yet to display its visibility in both business sector and households except for current initiatives by the CSIR’s South African




Industrial Energy Efficiency (IEE) Project and the National Business Initiative’s Private Sector Energy Efficiency (PSEE) Project. The IEE Project has facilitated the implementation of energy savings totalling 571 GWh in 54 industry plants since 2011, with savings currently valued at R344 million. In addition, R111 million’s worth of potential energy savings have been identified through energy audits in 230 SME plants. The National Business Initiative’s and Energy Efficiency Leadership Network (a partnership between SA Government and 50 companies) launched of Private Sector Energy Efficiency (PSEE) Project on the 4th December 2013 based on the award of £8.6 million by the United Kingdom (UK) Government. The PSEE Project aims to improve energy efficiency in commercial and industrial companies in South Africa with a clear target to reach more than 60 large, 1 000 medium sized and at least 2 500 small companies. The National Energy Efficiency Strategy [NEES] of 2004 provided specific targets for reduction in energy demand within given demand sectors, with an overall target of 12% reduction in consumption by 2014 – a target that was not achieved. The fact that the revised strategy has not been adopted signals a dire need for a dramatic effort for the NEES to make any meaningful impact against the current crisis. SALGA, assisted by Sustainable Energy Africa developed a Local Government Energy Efficiency and Renewable Energy Strategy which, inter alia, contained: 1. Strategy on municipal ‘own’ energy efficiency viz.: Internally municipalities are supposed to ensure that efficient institutions are able to manage energy consumption in their own facilities and operations and transform local waste to energy where viable through: • Implementing building and lighting efficiency;



• Implementing water service efficiency;



• Developing an efficient vehicle fleet; • Supporting waste management.



2. Strategy on energy efficiency in the residential, commercial and industrial sectors municipalities are supposed to ensure there are effective institutions which able to support the efficient use of electricity throughout the built environment and economy by: • Encouraging and enforcing efficiency through building and development approval processes; • Promoting efficiency (and localisation, where appropriate) through information provision and product/systems/supplier endorsement programmes; • Encouraging and enforcing efficiency through electricity services and technical interventions. Unfortunately municipalities have not made any visible and meaningful advancement on energy efficiency for understandable reasons which may not be supported nevertheless. However National Treasury Director General Lungisa Fuzile reported that interventions such as the solar water hearing initiative and the energy efficiency and demand side management grant to municipalities “will encourage households to use energy more efficiently”. The following table expresses an opportunity that has been missed in using energy efficiency as an additional tool to IPP’s role thus displaying the crucial need to embark on a comprehensive and integrated approach mitigation. Once again a testimony that IPP’s cannot provide a silver bullet solution but only a collective approach shall be meaningful in our situation.




1. Industry




Commercial and Public Buildings

3. Residential


4. Transport



Source: DME, 2004b

Independent power production, through the REIPPPP, has also a huge potential at local government level especially through wasteto-energy and bio-energy technologies because according to the third national waste baseline assessment, South Africa generated approximately 108 million tonnes of waste in 2011 of which 59 million tonnes were general waste. Only 10% of the general waste was recycled and the remaining 53.5 million tonnes landfilled. The emergence of the Stabilisation Plan, its character and potential, its prospects of success also signifies the importance of REIPPPP as one of the strategic tools for mitigation. Both the achievements and non-achievements above portray such attributes. It can also be argued, however, that REIPPPP as the only limiting factor for fully-fledged independent power production impact against the current crisis is relative and other factors indicated above must to be taken into account as well. A host of other measures including, inter alia, energy efficiency and demand side management are expected to contribute to mitigation of the crisis. The question of viewing IPP’s as possibly providing a silver bullet solution has to come under scrutiny as well. Whilst there is fastgrowing interest and widespread acceptance of IPP’s there is a need to examine a few factors that may either promote or compromise

the the role of IPP’s on this crisis. Whilst the regulatory framework for the REIPPPP has proven to be successful on the overall, however there are minor changes required going forward. As learnt from the REIPPPP, there is a need to have a transparent and well defined structure with a certain level of flexibility in the procurement programme in order to encourage vibrant competition which should hopefully result in lowering of tariffs. Some of the major differences between the REIPPPP and the base-load conventional power programme will be the dispatch aspect, higher financial requirements and higher risk of rent-seeking (i.e. spending resources on political lobbying to increase one’s share without creating more value). Therefore the structuring of the power purchase agreements (PPA’s) will be critical and key to the viability of the programme. The fact that the Municipal Finance Management Act severely restricts prospects of IPP’s playing a meaningful role at local Government level, due to the 3 year restriction, is another indication that IPP’s cannot provide any silver bullet solution. It is therefore an intersectoral and comprehensive strategy and drive, obviously including REIPPPP, that will make a visible mitigation of the current electricity crisis. For IPP’s to meaningfully wheel power to the end user a sizeable restructuring of the electricity sector has to occur. Not only has the IPP market to evolve to maturity but




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other changes demand as well. For REIPPPP to contribute in addressing mitigation of the current electricity crisis especially load shedding, in the medium term, the current commitments by Government will have to be implemented without fail.

appropriate to ascribe a balance between the two attributes in which case the REIPPPP may be described as an enabler with an unfortunate set of limiting factors that need considerable attention.

Rather than characterising REIPPPP as a limiting versus enabling factor it may be more

References •


1998 Energy White Paper

A review of South Africa’s electricity sector - Creamer Media’s Electricity Report - March 2015 - compiled by Mariaan Webb and the Research Unit of Creamer Media (Pty) Ltd

Electricity sales : challenges experienced by IPP’s by Sue Röhrs 17 March 2015


Local Government Energy Efficiency and Renewable Energy Strategy - STRATEGY GUIDE FOR LOCAL GOVERNMENT; Prepared by Sustainable Energy Africa (a public benefit organisation) on behalf of the South African Local Government Association (SALGA) - 2014

State of Energy in South African Cities 2006 Setting a Baseline Compiled by Sustainable Energy Africa in partnership with cities and city stakeholders.

African Energy - Issue 299, 30 April 2015; Issue 2998, 16 April 2015



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Due to drastically reduced prices for Photovoltaic (PV) systems and significantly increased electricity tariffs in the last five years, embedded PV generators are now attractive for many electricity customers in South Africa as a supplement to their main electricity supply. But embedded PV is not only attractive for individual electricity customers; it is also a cost-competitive new-build option in South Africa for the power system as a whole and a supplement to the fleet of new large, central power generators. At the same time, the South African power system is currently under severe constraints, with several controlled load shedding events in late 2014 and during the first months of 2015. Embedded PV fulfils the requirements to address the electricity crisis that South Africa is currently facing in three dimensions: First, it is cheap with effective tariff payments of 0.80.9 R/kWh required to stimulate the market; second, it can be implemented fast, because of the distributed nature many thousands of projects can start implementing at the same time; third, it can be significant, with estimated 500-1,000 MW of annual new-build capacity that could be ramped up quickly. That is a system view. A large uptake though without any countermeasures will put the financial stability of electricity distributors (municipalities and Eskom)1 at risk, because self-consumed PV energy reduces the sales and therefore gross-margins of distributors, which they need to cover their fixed cost of building, operating and maintaining the distribution grid, as well as cost of metering and billing. The CSIR Energy Centre therefore developed a Net Feed-in Tariff (NETFIT) concept in which electricity distributors are made financially indifferent to embedded PV, and in which the Whenever the term “electricity distributor� is used in this document, it refers to the holder of an electricity distribution license, which can be either a municipality or Eskom Distribution




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business case for the PV owner is de-risked at the same time. The concept differs from the also widely known “net metering” approach in the sense that it stimulates embedded PV as part of the overall power-generation fleet, regardless of what the specific load at the customer’s site is, and it compensates municipalities financially for the portion of the fixed grid cost of electricity distributors that they cannot recover from electricity sales anymore due to self-consumed PV electricity.

Historically, on production (i.e. electricity generation) side generators are only located at maximum voltage level, whereas on consumption side loads can be found on all voltage levels. International exchange typically happens at maximum voltage, large industries are connected at high voltage, smaller industry and commercial/trade businesses typically tap into the medium voltage level, whereas households and smaller business are connected at low voltage.

The NETFIT concept is estimated to lead to no net costs to the system compared to alternative new-build options.

This was and still is the power-system architecture for most large power systems globally. Because generators are located on highest voltage level only, the power flow is one directional from maximum voltage to low voltage. Balancing of supply and demand typically happens on central system level and is done by the power-generation fleet. On end-consumer level, there are generally speaking no generation, storage/balancing capabilities and no manageable loads.

Introduction What is embedded PV? In Figure 1, the principle architecture of today’s power system is shown. The different voltage levels comprise of maximum and high voltage, medium voltage and low voltage.

Figure 1: Today’s power-system architecture




In the future power system however, the production side will be more diverse, with power generators being distributed across the interconnected electricity grid on all different voltage levels, from high to low voltage (refer to Figure 2). That is due to the nature of renewable power generators (in this example focus lies on solar PV and wind power

generators), because they are inherently smaller in size than conventional power generators and they follow the resource (sun and wind), which is generally wider spread across the country than fossil fuels are (which are more point-resources as opposed to renewables, which are area-resources).

Figure 2: Power-system architecture with a high solar PV and wind penetration

From a technical perspective, this distributed nature of renewables implies that the power grid has to cope with bi-directional power flows, because generators are now located at low- and medium-voltage levels, pushing power back into the grid, potentially even back from low-voltage to medium-voltage, or even up to high-voltage level . With relatively small investments into the distribution grid, these changes are manageable. Protection systems in substations that potentially prevent reverse power flows need to be revisited, and the voltage level along lowvoltage distribution lines needs to be carefully managed, for example by mandating lowvoltage connected solar PV generators to produce reactive power if otherwise the voltage level cannot be controlled. These technical challenges however have all been



solved and can be managed, as the example Germany has shown, where approx. 2.5 solar PV modules are installed per inhabitant across the country, most of them embedded and on low-voltage level. In this future power-system architecture, energy storage (which essentially is a technology that is at times a load and at other times a power generator) will play a role in balancing supply and demand instantaneously and managing imbalances on different voltage levels. It is important to note though that the inherent volatility of solar PV and wind supply is most cost-efficiently managed in the following sequencing of events: 1) Widespread spatial aggregation of both solar PV and wind leads to significant


reduction of short- and medium-term volatility of both power sources (i.e. spatial distribution of solar PV and wind generators across the country and region, all connected to the same interconnected grid). This is generally speaking the easiest and cheapest way of reducing fluctuations of solar- and wind-based power generation. 2) Remaining fluctuations can be managed by flexible conventional power generators (e.g. gas-fired engines, gas turbines, combinedcycle gas turbines, pumped storage). These generators are both technically flexible (fast ramp rates, good grey- and black-start capability, low min-load requirements), as well as economically flexible in the sense that their cost structure is capital-light and more fuelheavy. 3) In the next stage of absorbing volatility from solar PV and wind, one would bring flexible, non-essential (i.e. dispatchable / shiftable) loads into the picture. 4) As an additional mean to manage fluctuations or in cases with very high penetration of renewables and related “overshoots” of supply, energy storage in form of batteries will be a viable option. At the moment however, it is still the most expensive of all the mentioned means to manage volatility from renewables power supply. The business case for batteries today lies in provision of system services, for example balancing power to deal with shortterm imbalances of supply and demand, or for managing local grid congestion problems, or for peak-shaving for commercial/industrial customers. Batteries will also play a role in the residential market; however the market forces to drive this segment are different from those of a pure system-optimising central planner. In short, the technical solutions to integrate embedded generators into the system are in principle existing. The commercial / accounting perspective seems to be more

challenging than the pure technical one. Because embedded generators are per definition installed behind a customer’s meter, and because the operation of the distribution grid (the wires) is done by the same entity that sales electricity to the end customers (the “electricity distributor”), any kWh of electricity from an embedded PV installation that is self-consumed behind a customer’s meter reduces the sales volume of the electricity distributor, therefore reduces its gross margin and therefore reduces its ability to cover the fixed costs of running the distribution grid and selling electricity to its customers. This is a challenge for any integrated electricity distributor anywhere in the world, regardless of its efficiency, its business model, its approach to marketing and sales. What is important to note however is that from a power-system perspective, embedded generators (like solar PV) play exactly the same role as any other power generator: they feed electricity into the “electricity pool”, which is the interconnected power system. The facts that they happen to be connected at low-voltage level and behind a meter are immaterial for their ability to form part of the power-generation fleet in the country. Grid parity: Embedded PV generators in South Africa are cost competitive today Massive cost reductions in Photovoltaic (PV) module and system prices during the last five years combined with increasing electricity tariffs make residential and commercial PV systems cost competitive to grid power in South Africa today. Residential PV systems of an installed module capacity of a few kWp (kilowatt peak) in size cost less than R 100,000 for the turnkey installation of the system and thus became affordable for many residential customers. The lifetime energy costs of such systems are in the order of R 0.8-0.9 per kWh. That compared to residential electricity tariffs (without VAT) reaching 1.2-1.4 R/kWh creates



PIESA is a voluntary regional power utility association established on 28 February 1998. It aims to improve electrification in East and Southern Africa through sharing information, research, technology, skills and experiences for the benefit of customers and suppliers in the electricity distribution industry. The main focus is on technical rationalisation to achieve economies of scale with local manufacturers in an effort to enhance electrification in the region. Membership is open to electric power utilities in East and Southern Africa, manufacturers, suppliers of equipment, researchers, academic institutions, investors, financiers and other associations who wish to participate in the delivery of electric power to the people of the region. The core activities are conducted through its four Advisory Committees: • Electrification • Revenue Protection • Environmental and Safety Management and • Standardization PIESA is a legal entity with the capacity to enter into contracts and to perform in a manner that is necessary to attain its objectives. PIESA is governed by a Board of Directors with representatives from each participating utility. The prime responsibility of the Board is to determine the objectives and direction of PIESA. PIESA aims to be the catalyst for sustainable regional technological cooperation in expanding the electricity distribution industry for regional growth and development by encouraging participation by all regional electricity distributors and supporting industries, and fostering a culture of technology transfer and skills development among the members. PIESA will be hosting their annual conference in Victoria Falls at The Kingdom Hotel from 15 – 18 September 2015. “Innovative Electrical Power Supplies” will be the vehicle to showcase our case studies in the format of interactive sessions where members will explore opportunities for electrification to reach many consumers.

For further information on PIESA’s upcoming events and conferences please visit the link below: EventsandNetworking.aspx SUSTAINABLE ENERGY RESOURCE HANDBOOK


Power Institute for East and Southern Africa (PIESA) Telephone: (011) 061 5000 Fax: (086) 688 7005 E-Mail: Website:


a huge incentive for residential customers to install PV systems on their roofs and supplementing their grid supply. The main reason for a still slow uptake from the residential and commercial customers

despite the attractive cost base of PV is the uncertainty of the business case “selfconsumption� of PV energy. This is illustrated in Figure 3, where the residential load does not match instantaneously the PV supply.

Figure 3: Typical daily load profile of a residential household in winter, overlaid with a typical generation profile of a simulated 6 kWp PV installation

The PV systems have a lifetime of 25 years and more, while certainty about the own energy demand, load profile and electricity tariffs for most electricity customers only exists for the next few years. But certainty about both the off-take and the tariff paid for PV-generated energy is required for a business case that is purely capital; PV systems are high in upfront costs and have very low running costs. In this sense, PV systems are comparable to a fixed-deposit savings account, where the money invested is locked away for many years and the benefits are reaped in form of interest (here: energy production from the PV asset). For any fixed-deposit-type of investment, high investment security is a necessary condition in order to bring the investor-

acceptable return down. In the case of the fixed-deposit savings account this means certainty about the interest rate, in the case of a PV investment this means certainty about off-take and about the payable tariff (in other words: the achievable revenues). From a power-system perspective, small PV installations are not only in the same lifetime cost range per kWh as large-scale groundmounted PV installations in the multi-MWprange, they are also cost competitive to conventional new-build options (e.g. coal and gas) and can therefore, if stimulated correctly, cost-efficiently contribute to the new capacities that are required in the South African power system in the short- , mediumand long-term.




Business case considerations for different stakeholders Concern: municipalities’ financial stability is at risk with an uncoordinated uptake of PV Electricity distributors (municipalities and Eskom Distribution) fund the fixed costs associated with expanding, operating and maintaining the distribution grid through their electricity sales. The tariff that is charged on the (variable) energy consumption (R/kWh) contains a certain portion to cover these fixed grid costs. At the same time, the residential tariff structure is typically such that highconsuming customers pay more per kWh than lower-consuming customers. This is a form of electricity-internal subsidisation. Because PV is most attractive for those customers that pay the highest tariffs and consume the highest amounts of energy, which are generally well-paying premium customers from municipalities’/Eskom’s perspective, there is a huge risk for municipalities/Eskom to lose out on electricity revenues due to selfconsumption of PV-generated energy on the site of the electricity customer.

Figure 4: Power-system architecture with a high solar PV and wind penetration



This is illustratively demonstrated in Figure 4, where an assumed PV system of 6 kWp in size is installed at a customer’s premise, where the customer has a load of 12,000 kWh/yr. The residential customer in this case is able to consume 40% of the annually produced PV energy of 10,000 kWh/yr directly on site (PV self-consumption). These 4,000 kWh/yr supply the residential load as an alternative supplier to the municipality and therefore municipality sales are reduced by this amount (down from 12,000 kWh/yr to now 8,000 kWh/ yr). This effects the municipality’s revenues (sales volume times average tariff ), but, more importantly, it reduces the municipality’s gross margin. The gross margin is the difference between revenues from electricity sales minus the costs of goods sold, which is the amount of money the municipality has to pay to Eskom in order to buy the re-distributed electricity in the first place. This gross margin on the assumed individual customer was R8,400 per year, and it has to cover all municipality fixed costs (building, maintaining, operating the distribution grid, metering and billing, etc.). With self-consumed PV energy reducing the sales volume by 4,000 kWh/yr, the municipality now makes


only R4,800 per year in gross margin on that specific customer. The loss of R2,400 per year in gross margin must be compensated from somewhere – without external intervention it will have to be compensated through increasing the general tariffs for all customers. This loss in gross margin due to self-consumed PV energy is a threat to the electricity distributors.

Solar PV business case As mentioned before, the nature of a solar PV investment is similar to a fixed-deposit savings account. The business case has three fundamental drivers: First, the cost of capital; second, the capital spent to install the PV system; third, the annual energy yield. The operational costs to maintain the PV system are, compared to the upfront capital investment, relatively small and not a significant cost driver. This is shown in Figure 5.

Figure 5: Cost drivers for a solar PV system

In other words, once the decision for the investment is made and implemented, there is almost nothing that the investor can do to improve the business case: • Location: determines the amount of solar radiation > fixed • Technology choice: determines the efficiency of converting sunlight into electricity > fixed • Design of the installation: determines losses > fixed • Capital investment: is done > therefore fixed • Cost of capital: unlikely to be re-negotiable > fixed

Any uncertainty about the future off-take (ability to monetise the energy produced from the PV system) and/or the future value of the energy produced, i.e. the tariff, will therefore inevitably lead to a higher required initial compensation to the PV investor than theoretically necessary. This is illustrated in Figures 6 and 7. Uncertainty about future level of the effective tariff (or better: the effective future value of the PV energy per energy unit) will increase the required initial tariff level at the time of the investment decision. Similarly will uncertainty about the off-take (can the PV energy be utilised fully or not?) increase the




Levelised Cost of Energy (LCOE) in R/kWh and therefore additionally increase the required initial tariff level at the time of investment decision. The problem here is that this higher-

than-necessary initial compensation will create future windfall profits for the PV owner and therefore increase the total cost to the power system (and thus to all electricity consumers).

Figure 6: Effect of uncertainty about the tariff (or better: effective value of PV energy) to the required initial tariff level

Figure 7: Effect of uncertainty about the off-take (can all PV energy be monetised or not?) to the required initial tariff level

This logic of required certainty about both tariff and off-take in order to bring the costs down is always true, whether the PV system is in front or behind a customer’s meter. In case of an embedded PV system however (i.e. behind a customer’s meter), it becomes a bit more tricky, because the PV owner will look at two revenue streams with different risk profile: One is the value that is generated by feeding excess PV energy (energy A) back into the grid,



the second one is the value from reducing the own electricity bill by self-consuming the other part of the PV energy (energy B). Figure 8 illustrates the current situation in which the PV owner faces a two-revenuestream business case with two uncertain revenue streams, while the municipality loses gross margins without any mean to compensate for it.


Figure 8: Two-revenue-stream business case for the owner of an embedded PV generator

The effective tariff for the PV owner is the weighted average of the value of energy A (per unit) and of energy B (per unit). Whether explicitly (actually having calculated this effective tariff ) or implicitly (having a “feeling” about the effective tariff ), the PV owner will always base the investment decision on this effective tariff. Revenue stream B here is always uncertain, because first, the PV owner does not know what the load profile will be over the lifetime of the PV asset of 25 years. The load profile however determines how much PV energy can actually be self-consumed. Second, the PV owner does not know what the own electricity tariff will be over the lifetime of the PV asset. The avoided electricity tariff however determines the value per self-consumed PV unit. Thus, from a perspective of the power system, one needs to reduce the uncertainty of revenue stream A in order to give the mixed calculation of the PV owner an acceptable risk-return profile. In a net metering approach however, revenue stream A is just as uncertain as revenue stream B. Hence, only PV systems

with a very high effective tariff will be implemented, which in return means that the power system overcompensates these systems, and the total system costs increase unnecessarily.

Current situation and approach to embedded PV An “under-the-radar” uptake of the embedded PV market must be avoided – pro-active stimulation of this market is the better approach Doing nothing or trying to avoid embedded generators is not an option! Because of the financial attractiveness, even if not all PV energy can be consumed directly on site, some commercial and residential customers will install PV regardless of any regulatory scheme. The problem with this is that highestvalue customers with high consumption and highest tariffs will do it first. They will therefore opt out of the cross-subsidisation mechanism. That will lead as a mathematical reality directly to increasing electricity tariffs for poorer customers.






From a system perspective, the biggest concern about such an “under-the-radar” embedded PV market is that there is no control over the magnitude of the development, and, even worse, no knowledge about the magnitude of the development. An assumed 1 million high-income households that install 6 kWp of PV each “under the radar”, and another 20,000 commercial properties that install 200 kWp each, would already make a total of 10 GWp of installed PV capacity (or two Medupis). The system operator cannot safely manage the system with such large amounts of embedded PV installed “under the radar”, the grid operators would have to fear large numbers of technically non-compliant PV installations, which pose safety risks to their workers, and the municipalities would go bankrupt. It is therefore advisable to embrace the development, stimulate the embedded PV market such that the South African power system and economy get the most benefits out of it. Net metering: the current approach of municipalities and Eskom to deal with the situation Many municipalities have realised this threat and the South African Local Government Association (SALGA) has taken on the task to develop a so called net metering proposal for municipalities’ customers in order to give some structure to the embedded PV market. A number of individual municipalities are quite advanced in their planning or have already implemented net metering schemes (Cape Town, CityPower, eThekwini, etc.). Similarly, Eskom has started working on tariffs that allow customers to feed energy back into the grid and get compensated for it – which in essence is also a net metering approach. However, the fundamental problem of the funding source for the embedded PV market is not addressed in net metering schemes. The costs of embedded PV generators in form of

lost revenues (better: lost gross margins) in a net metering scheme affect the municipalities’ / Eskom’s bottom line. This can only be fully avoided if the net metering scheme is designed financially unattractive for the PV owner – which in return might lead again to an “under-the-radar” development. Many municipalities design their net metering scheme with the introduction of a fixed monthly charge for customers that want to connect an embedded PV system. This fixed charge is meant to compensate for lost gross margins. The problem however remains: a fixed charge makes the business case from the perspective of the PV owner unattractive. NERSA’s consultation paper on embedded generators The National Energy Regulator of South Africa (NERSA) has seen the need for action in the embedded generators space and has published a consultation paper on “Small Scale Embedded Generation Regulatory Rules”. NERSA has held a public hearing and the final results of the process are expected to be published soon. It is applaudable that NERSA has taken on the lead to give structure to the embedded PV market. That will give guidance to municipalities and Eskom in terms of what tariffs they can and should charge / pay to embedded generators. A much needed financial compensation for electricity distributors for lost gross margins is however outside of the mandate of the regulator and would have to be addressed on policymaking level. Technical requirements and enablers Small-scale embedded generators are not new to Distribution System Operators (DSOs) globally. Bayernwerk, a DSO that owns and operates most parts of Bavaria’s distribution grid in Germany, has 250,000 embedded generators connected to its grid, most of which are solar PV. That makes Bayernwerk the DSO globally with by far the highest




penetration with embedded PV globally. Bidirectional power flow and power flowing from low-voltage backwards to mediumvoltage level are common practice. In South Africa however, not all norms and standards are in place yet to allow the same level of penetration with embedded PV – which technically is similarly possible as it is in Germany. Of particular interest in the wiring code for embedded generators (South African National Standards, SANS 10142-3), which is currently in the drafting and approval process with the South African Bureau of Standards (SABS). This wiring code will inform electricians on how to install an embedded generator and what safety practices to follow. It is important to have this document approved and published as soon as possible. However, since the approval process for such a standard takes some time, it would be advisable to draft and finalise a nonbinding Implementation Guide as an interim measure that can be used by electricians and electricity distributors to design, install and accept PV installations. This Implementation Guide should be along the lines of the current draft of SANS 10142-3 and it should be stated clearly that if SANS 10142-3, once final, is more stringent in certain dimensions than the Implementation Guide, that then SANS 101423 will prevail and existing installations might have to be upgraded accordingly. Fixed charges for embedded PV generators Many municipalities propose the introduction of fixed charges for embedded generators in order to protect themselves against the losses in gross margins. The downsides of a fixed charge however are: • The associated reduction of energy charge in R/kWh disincentivises energy efficiency



• It pushes customers faster into off-grid, because a) a fixed charge is a guaranteed “payment” from an off-grid business case perspective, and b) the associated lower energy charges make the on-grid PV business case worse • The business case for embedded PV gets worse and therefore the power system as a whole cannot reap the full benefits of inexpensive energy from embedded PV From a power-system perspective, it is therefore advisable not to introduce an additional fixed charge for embedded generators, but rather support electricity distributors centrally to cover their lost margins. Size limitations for embedded generators The current regulatory approach to embedded generators is to limit their size in such a way that the behind-the-meter generator does not produce more energy during a year than what the related electricity customer consumes. Customers with embedded generators should be able to become net energy producers over an annual cycle, as well as net cash receivers. If that is not implemented and the size of the PV installation is limited to the onsite load / annual electricity bill, this will • disincentivise energy efficiency, once the embedded generator is operational (because energy efficiency would reduce the electricity bill and thus the maximum achievable revenues from the embedded generator) and • inevitably exclude all low-income households from participation in the scheme (because they do not have enough demand / sufficient electricity bill to justify a PV installation.


Proposed regulatory approach: Net Feed-in Tariff (NETFIT) The CSIR has developed the concept for a regulatory framework that would promote embedded PV generators in South Africa, a Net Feed-in Tariff (NETFIT) concept. It builds on and takes the net metering concept further in several dimensions. The NETFIT concept makes the electricity distributors (municipalities and Eskom Distribution) financially indifferent to embedded PV, while establishing a business case for the PV owner that has the right risk/return profile to enable large-scale uptake of embedded PV at very low effective costs to the power system. The details of the concept are as follows. It is proposed to create a “Central Power Purchasing Agency (CPPA)”, a legal entity that is either state-owned or fully regulated, that is the nation-wide sole off-taker of all energy fed back into the grid from embedded PV generators. The CPPA has two roles: 1)Feed-in Tariff for not self-consumed energy (energy B): CPPA buys the energy from embedded PV generators that is not selfconsumed and thus fed back into the grid from the PV owner at a guaranteed tariff 2)Financial compensation for self-consumed energy (energy B): CPPA compensates the electricity distributor (municipality or Eskom Distribution) financially for lost gross margins due to energy from embedded PV generators that is self-consumed on site and therefore reduces the sales of the distributor The CPPA makes two standard offers: One to the electricity distributor, and once the distributor has subscribed to the standard offer by CPPA,

then to PV owners in the distributor’s supply area. It is within the electricity distributor’s discretion whether or not to accept CPPA’s standard offer. If a distributor does not subscribe to the CPPA offer, then CPPA will consequently not make any offer to PV owners in the respective distributor’s supply area. Funding requirements for CPPA The CPPA will have a total funding requirement of approx. R 530 million per year for every 500 MWp of embedded PV that are built under the scheme. This is shown in the Figure 9 below, assuming preliminary assumptions on tariff levels and costs for illustration purposes. CPPA will have two sources of funding: 1) Onward sales of the PV energy that CPPA buys from the PV owners to the Eskom Wholesaler. 2) Residual funding to come from either tax money or from a mark-up on all kWh’s sold in the electricity system (similar to the funding of large-scale Independent Power Producers). The net funding requirements are estimated to be R 290 million per year for every 500 MWp of PV capacity installed under the scheme, which translates into an increase of the average tariff of approx. 0.15 R-ct/kWh (for every 500 MWp of PV under this regime). This value will very likely go down over time with reduced PV system costs and increasing fuel costs on the conventional fleet (and therefore increasing wholesale value of the PV energy bought by the CPPA from the PV owners). The net funding requirements can potentially even reach zero in the future. It should be mentioned that any new power generator will inevitably increase the average tariff (because the current average tariff is below the cost of any new power generator). The question is therefore not whether the average tariff will increase with new




Businesses can no longer ignore the fact that energy constrains and electricity price increases have developed into a threat that affects the profitability and operations of companies and the development of strategies to cut down on operating expenses could mean the difference between growth and liquidation. Owners of commercial office buildings today face energy costs that continue to rise, creating very difficult challenges managing the facility budget. Ancillary costs of building maintenance products and services are also rising proportional to energy as vendors pass on high fuel costs to the consumer. Hence, executives of owner-occupied and tenant- occupied buildings must take new and creative steps that put energy costs in check to maintain a healthy and sustainable business.

DITALA ENERGY SOLUTIONS is a privately owned company that aims to perfectly poise itself as a leader in: • Installing Polycrystalline (PV) solar panels • Designing photovoltaic solar energy processes • Energy Management • Offering workable solutions on energy efficiency as a means of helping developers and tenants save on energy bills and decrease on their carbon footprint.




generators, the question is by how much and how to keep the increase as low as possible. Embedded PV will have one of the smallest

effects on the average tariff, being cost neutral to any alternative new-build option.

Figure 9: Monetary streams under the proposed NETFIT concept

Standard offer from CPPA to the electricity distributor The CPPA makes a standard offer to all holders of an electricity distribution license (municipalities and Eskom) that will make the electricity distributor indifferent to embedded PV generators from a pure financial perspective. Offer • CPPA guarantees the distributor financial compensation for lost gross-margins due to energy from embedded PV generators that is self-consumed on the customer’s site (behind the distributor’s meter). The level of financial compensation in R/kWh will be determined in a transparent manner and will be the same for all distributors • Meter reading »» CPPA reads the feed-in meter and in addition reads the consumption meter

on behalf of the electricity distributor OR »» The electricity distributor reads the consumption meter and in addition reads the feed-in meter on behalf of CPPA Terms and conditions CPPA attaches Terms and Conditions to this offer, which will include: • Requirement on the distributor to have safe practices in place for embedded generators • Requirement on the distributor to not impose a different tariff / tariff structure to their customers whether they have a PV system or not • Requirement on the distributor to ensure that the consumption meter is not counting (neither upwards nor downwards) in case of power flowing in reverse direction through the consumption meter (i.e. from the customer’s premise to the grid) in case a






second feed-in meter is installed OR • The distributor has to install a new, bidirectional, two-register meter Standard offer from CPPA to the PV owner The CPPA makes a standard offer to all customers that are in supply areas of distributors that have signed up to the “standard offer from CPPA to the electricity distributor”. This standard offer will provide very high investment security to the PV owner. The financial return for the PV owner will be relatively low if all PV energy is sold to CPPA (no self-consumption). The CPPA essentially provides the safety-net for the business case of the PV owner and makes it bankable. Offer • CPPA guarantees to off-take any percentage (between 0% to 100%) of the energy from the embedded PV generator that the PV owner decides to feed back into the grid • CPPA guarantees the PV owner a predefined tariff at a predefined annual escalation rate for the energy that is fed back into the grid for a period of 20 years. This “Net Feed-in

Tariff” will be substantially below today’s residential end-customer electricity tariffs Terms and conditions CPPA attaches Terms and Conditions to this offer, which will include: • Requirement on the PV owner to only use PV inverters that are compliant to the grid requirements (CPPA could publish a shortlist on its website of allowed PV inverters) • Requirement on the PV owner to have a Certificate of Compliance by a certified electrician that certifies the correct installation and grid connection of the PV system according to all relevant norms and standards The conceptual set up and the roles of the distributor, CPPA, PV owner and electricity customer with indicative values for energy consumption and production, selfconsumption ratio, electricity tariff and NETFIT levels for illustration purposes only is shown in the figure below. Metering would in most cases work through one bi-directional, two register meter.

Figure 10: Mechanism of the proposed NETFIT concept




Key logic for the business case of the PV owner is that CPPA de-risks the revenue stream to the PV owner. Hypothetically the PV owner could build the PV system purely based on selfconsumption or even direct sales to the Eskom Wholesaler. Both tariff levels however of these off-takers are uncertain over the lifetime of the PV system. The NETFIT is the stable, ACTOR Municipality or Eskom Distribution Central Power Purchasing Agency (CPPA)

ROLE Distribution grid operator & electricity distributor

guaranteed tariff that it requires to bring cost of financing down for PV. CPPA essentially takes the risk and volatility of the wholesale tariff away from the PV owner and replaces it with a stable tariff, the NETFIT. The roles and responsibilities of the different actors are described in the table below. RESPONSIBILITY

• Physical delivery of electricity to match the residential load at all times • Billing & revenue collection from the electricity customer • Timely approval of grid connection of PV generators • Physical off-take of energy leaving customer’s premise


• Buys all energy that flows through the NETFIT meter at a pre-defined tariff (the NETFIT) • Billing and payment to the PV owner (potentially administered as a feedthrough cost item by the municipality) • Gross-margin compensation to the electricity distributor (municipality or Eskom Distribution) • Consolidate all registration data for embedded PV generators and give status reports to NERSA, Department of Energy, System Operator

Electricity customer


• Pay the electricity distributor for electricity metered on the consumption meter • Pay the PV owner for “self-consumption” electricity flowing directly from the PV installations to the residential load (not applicable in case electricity customer and PV owner are the same entity)

PV owner


• Install the PV installation according to all relevant norms and regulations after formal approval by distributor • Pay for both PV installation, NETFIT meter (or bi-directional meter and/or replacement of consumption meter) and electrical reticulation up to the grid connection point • Register the PV installation with the CPPA • Supply the residential load with electricity from the PV installation and feed the residual into the distribution grid • Get compensated by the CPPA for energy fed into the grid via the NETFIT • Get compensated by the electricity customer for energy directly supplied to the residential load (not applicable in case electricity customer and PV owner are the same entity) – this might require another meter between PV installation and residential load, but is governed by a bi-lateral arrangement between two private parties (PV owner and electricity customer)

It is anticipated that the NETFIT will be substantially below the consumption tariff, therefore incentivising the electricity customer to maximise the self-consumption of the PV energy. In the shortr term, this will lead to shifting of non-essential loads (like pool pumps, geysers, etc.) away from traditional peak hours into daytime hours, when the PV system produces. In the medium term,



investments into different load structures might be triggered through this differential in import and export tariff. For example, customers might consider investing into electrical space heating including thermal storage. They would charge the thermal storage during daytime, when the PV system produces, and discharge the thermal storage during evening and night hours. In the long


term, electricity customers will likely consider electrical storage in form of batteries in order to maximise self-consumption of the PV energy. All these anticipated effects of the price differential between import tariff (consumption – high) and export tariff (feedin – lower) have immense benefits for the

broader electricity system, as they help to “flatten” the residual load from electricity customers that have deployed PV systems. Difference between net metering and proposed NETFIT The differences between a net metering scheme and the proposed “NETFIT” are highlighted in the figure below.

Figure 11: Difference between net metering and the proposed NETFIT concept

Both net metering and NETFIT attach a certain value to the excess PV energy (part “A” of the total PV energy production) and both allow self-consumption (part “B” of the total PV energy production). The fundamental differences between net metering and net feed-in tariff however are: • In net metering, the level of the tariff for the excess energy fed back into the grid is not guaranteed over the lifetime of the PV asset (20-25 years). In the NETFIT concept it is • Net metering limits the amount of excess energy fed back into the grid to the energy consumption on site (not instantaneously, but over an annual balancing cycle). NETFIT doesn’t do that. No limits on the energy fed

back into the grid • Net metering limits the amount of money that can be accrued on the “excess/fed-in energy” account in a year to the value of the customer’s annual electricity bill, because the financial compensation of excess energy works through a reduction/rebate of/on the electricity bill. NETFIT doesn’t do that. The compensation of excess energy is completely separate from the electricity bill (real cash payments into the bank account of the PV Owner that are not related with the electricity bill). NETFIT in that sense separates generation from consumption These three aspects might sound small, but




they make all the difference for the PV investor. They will push the required effective tariff compensation for the PV investment up (in the net metering case), and therefore increase the total system cost of PV. Limiting the maximum revenues of the PV business case to the electricity bill, one disincentivises energy efficiency. Any energy efficiency measure introduced after the installation of the PV system would reduce the revenues achievable by that PV system and therefore cannibalise the PV business case. Limiting the amount of energy produced by the PV system to the amount of energy consumed on site has the following negative effects: • The PV system size is determined by the load and not by the roof size and the grid-connection capacity. That artificially limits the PV system size without technical justification and therefore increases the specific system cost in R/kWp and therefore the LCOE in R/kWh • Low-income households with low electricity consumption are per design excluded from participation in the scheme The NETFIT concept enables the creation of “micro utility” businesses, because it allows selling all of the produced PV energy into the grid, if the PV owner decides to do so, and it allows producing more PV energy than actual energy consumption on site – i.e. the customer can become a net energy producer. This gives a business opportunity to everybody wherever there is an electricity grid. From a municipality/Eskom perspective, the NETFIT scheme makes them profit-neutral and therefore financially indifferent to embedded PV generators, because the funding of the



NETFIT concept does not come from their bottom-line. That is different in net metering. Transition phase and immediate implementation Net metering (which some municipalities have already introduced) should work as the immediate solution, relatively easy to implement, while in parallel the NETFIT concept should be prepared for implementation. Once NETFIT is available, all then existing net metering-based PV installations should then be migrated under the NETFIT concept. Additional aspects of the NETFIT concept As part of this concept, the level of the NETFIT can be adjusted periodically for new PV installations under the scheme to steer the size of the embedded PV market towards a set government target of new PV installations per year (i.e. adjust the NETFIT downwards for new installations if the embedded PV market is higher than the government target, or upwards if it is below). The NETFIT concept can also be utilised to stimulate local manufacturing, by giving a NETFIT premium for PV installations that use locally assembled/manufactured modules and/or inverters. Benefits of pro-actively stimulating the embedded PV market There are a number of advantages of incentivising embedded PV in several dimensions. The list below highlights the most important ones and is not comprehensive. 1. Job creation and local content a. Tens of thousands of small PV installations per year will be supplied through wholesaler/installer channels, which is an ideal steady market for local manufacturers to supply and to give them security about their investment into manufacturing capacities


b. Potential for rural enterprises to run a “micro-utility business” with small PV generators  wherever there is a grid, there is a PV business opportunity c. Huge potential for SMMEs in PV design, installation and verification for residential and commercial customers 2. Reduced grid losses and system costs a. Embedded PV is close to the load, i.e. grid losses are low (saves add. up to 5% of costs) b. Only little grid strengthening and no grid extension required (PV follows the grid) c. Aggregated supply profile of spatially distributed embedded PV generators is very smooth and highly predictable, which reduces costs on system operator side for balancing power and reserves 3. Funding is easier due to granularity (small project size, starting from R100,000 to a few millions) a. With a guaranteed NETFIT, rooftop PV installation would become bankable b. Banks could put the asset into the home loan for easy, standardised financing c. Installing several GW of capacity through the NETFIT scheme is like crowd-funding of power-generation assets d. That reduces the costs to the power system. Partially because of low financing costs, residential PV systems can be installed for R 0.8-0.9 per kWh lifetime costs today 4. Eskom’s and municipalities’ financial stability that is at risk due to “under the radar” embedded PV will remain unchanged under the NETFIT concept 5. A consolidated, nationwide approach to stimulate embedded PV will lead to an up-todate nationwide registry of all embedded PV

generators, which is essential for safe system and grid operations

Next steps As next steps, the following sequencing is proposed: 1. Connection rules and wiring codes must be put in place as soon as possible a. NRS097 suite of documents that governs the relationship between the utility and the embedded generator need to be finalised b. The current draft of SANS 10142-3, which is the AC wiring code for embedded generators, needs to be finalised and a wiring code for the DC side of embedded PV generators needs to be drafted c. As an interim solution, an Implementation Guide for installers and municipalities needs to be finalised for immediate implementation 2. The proposed NETFIT concept needs to be tested along technical, regulatory, legal and tax implications and an implementation plan (timeline, stakeholder plan, budget requirements, etc.) needs to be developed. That development must start immediately in order to allow for an implementation in 1-1.5 years 3. Municipalities should put net metering in place for immediate implementation in order to avoid a large under-the-radar market. Fixed charges however should not be imposed on the PV owner 4. The Minister of Energy should make a determination which exempts all PV generators up to a certain size from the requirement to apply for a power generation license. Only a registration requirement should be imposed



ENERGY AUDITING AND MEASUREMENT The value of an audit, establishing the baseline and the opportunities Hemal Bhana







he current threats to energy security, the annual electricity tariff increases and the fluctuating fuel price are all adding to the cost of doing business in South Africa, and are taking their toll on the operational productivity, profitability and sustainability of companies. Conducting an energy audit is the first crucial step in improving energy management and reducing energy costs within your business. The key benefits of energy auditing and measurement which will be expanded upon in this chapter are: • Compliance to standards, regulations and incentives • Better understanding and tracking of energy costs • Baseline and target setting • Identification of sustainable cost reduction opportunities

Saving energy, saving costs – the power is in your hands

Nersa has approved an annual average electricity price increase of 12.69% for 2015/16, which is made up of the 8% annual price increase each year up to 2019 approved in the original MYPD 3 decision and an additional 4.69% as allowed through the revenue clearing account (RCA) mechanism which forms part of the Nersa regulatory methodology. Fuel prices also continue to fluctuate, thus further impacting on a company’s total energy cost. Monitoring energy consumption and spend should therefore be a growing imperative for companies. However, the management of energy is often neglected, despite its considerable potential to reduce costs. According to Private Sector Energy Efficiency (PSEE) head Dr Peter Mukoma, many companies are either still not aware of or are not proactive in identifying the opportunities they could pursue immediately to increase energy efficiency, alleviate the pressure of



energy price hikes and supply constraints and redirect savings back into the business. Based on the experience of the PSEE programme which has conducted over 350 energy audits across South Africa since June 2014, conducting and implementing opportunities identified from an energy efficiency audit typically yield energy cost savings of between 5% - 20% with typical payback periods of under 3 years. Renewable or alternative energy opportunities are also identified during an energy audit; these opportunities typically have longer payback periods (5-10 years) but will lower reliance on the electricity grid.

Energy Management Framework

The diagram below illustrates the key elements for delivering successful energy management. An energy audit is the first step in the continuous journey to better energy management, which is then delivered through a formal energy policy and a supporting energy strategy with a clear action plan. Senior management commitment is critical to the success of this process.


An energy audit involves an evaluation of the current energy management practices within the company and identifying tangible opportunities to reduce energy costs. Typical elements of an energy audit will comprise of an analysis of historic energy data (electricity bills, tariff etc), understanding the energy profile and main users of energy, identifying and quantifying energy saving opportunities (what the potential savings will be per year, how much it will cost to implement) and then defining the next steps or plan in order to ENERGY MANAGEMENT POOR PRACTICE

• There is no structured management approach to energy issues

• Energy costs are treated as an overhead and there is no clear accountability

• The only energy monitoring is simple financial control in the accounts department

• Procurement of equipment/products does not include evaluating energy performance

• There is no planning to address carbon or energy regulatory or compliance issues

• There is a general lack of awareness about

realise these potential savings. Energy audits can and should be done by skilled personnel within a company, as well as by independent energy auditors. It is important to note that energy management is not only the responsibility of a facilities or operations manager; it is a continuous process impacted upon by all levels within the business. The following table illustrates key indicators of energy management practices or energy maturity. ENERGY MANAGEMENT GOOD PRACTICE • Energy is a strategic issue actively support-

ed by senior leadership • Adequate resources (financial and human)

are allocated to energy management • There is an effective system for monitoring

and reporting energy performance • Energy procurement is an integrated,

proactive process • There is planning to address existing and

upcoming regulations regarding energy • There is an organisational culture of

proactive energy management and energy awareness

energy issues amongst employees

Compliance to Standards, Regulations and Incentives

In line with global trends, there are an

increasing number of standards, regulations and incentives regarding energy and carbon management which energy intensive companies in particular must be aware of and adapt to. Voluntary standards such as ISO 50001 on Energy Management Systems, provides a framework and enables a systematic approach for a company to continuously improve its energy usage. SANS 50001 on Energy Management Systems and SANS

50010 on Measurement and Verification of energy savings also provide guidance on the methodology of an energy audit. Draft regulations regarding registration, reporting on energy management and submission of energy management plans were published in the Government Gazette on 27 March 2015. This will require companies consuming over 400 Terajoules per annum to submit energy management plans every five years. For companies consuming over 180 Terajoules per annum, measurement and collection of energy consumption data per energy carrier will be required.



Clean Power The largest global meeting place for African utilities

SAVE THE DATES 17 – 19 May 2016 Cape Town, South Africa


The proposed Carbon Tax due in 2016 will also place emphasis on energy usage and ways to minimize consumption. The Section 12L of Income Tax Act provides a tax rebate of 92 cents per kilowatt-hour of verified energy savings within the tax year. This incentive should be leveraged to encourage implementation of energy efficient projects, and requires sign off on the baseline and the post implementation reports by a SANAS accredited measurement and verification professional.

Better understanding and tracking of energy costs

Understanding energy performance and its effective reporting relies on the availability of good data and sound analysis. An energy audit will typically reveal the gaps in the current metering and monitoring systems. Some measurement or logging of key energy users during the audit can be very helpful in estimating an energy usage profile. This profile highlights the key areas/equipment to focus on and manage going forward. Metering and monitoring systems (submeters, logging, building management systems, online monitoring tools etc) are a tool for decision making and not a guarantee of energy savings without active analysis. They will provide the responsible person in the company (eg. Energy manager) with: • Timely, relevant information on energy usage, • The ability to verify whether electricity billing is accurate, • The ability to investigate the energy performance of buildings and processes, • The ability to take action to rectify exceptions in energy performance, • Energy reports to support accountability for energy use, and • The ability to verify savings made following project implementation.

Baseline and Target Setting

In order to verify savings, an accurate baseline

needs to be established when conducting an energy audit. The baseline states the energy consumption and costs for a given period, usually 12 months aligned to the financial year of the business. The baseline would take into account all sources of energy and take production into account through suitable energy intensity metric eg. Kwh per ton of product, in the case of a manufacturing business. Realistic target setting based on the findings of the energy audit can then be set and plans put in place to achieve these targets. Case Study – Afrisam improves energy efficiency in products and facilities Afrisam is a leading construction materials group with over 2 000 employees across 6 production centres and 17 quarries, producing 5.8 million tons of cement annually. Afrisam’s energy management programme saved R60 million in 2013 compared to the year 2000 base year. Ongoing energy audits identified quick wins as well as technology solutions such as installing vertical roller mills which consume 24% less energy than the traditional ball mills used.

Identification of Sustainable Cost Reduction Opportunities

The energy audit should provide guidance regarding future energy saving opportunities. Using the data analysed and through measurements and inspection on site, feasible opportunities which enhance business productivity should be recommended. These opportunities can be grouped into four categories, namely: 1.Operational Efficiency & Behavioural Change Low/no cost savings through measuring and




monitoring energy use, staff engagement and appropriate improvements to the use and maintenance of existing equipment 2.Industrial/Process Energy Efficiency Investment in new industrial technologies and processes including motors & drives, compressed air, process controls, refrigeration, process heating 3.Building Energy Efficiency Investment in new building technologies including: Controls, lighting, heating, air conditioning, ventilation

4.Renewable Energy Investment in equipment to generate local renewable heat or electricity: Biomass, heat pumps, wind, solar (thermal/PV), CHP, waste to energy The energy audit should therefore make a plausible case for investment in energy management. A typical example of implementing identified opportunities from an energy audit conducted for a citrus farm is shown below:

The cost of inaction by not implementing energy management above represents a cost of R 10 million over a 10 year period.

such as the Voluntary Energy Efficiency Accord, the Carbon Disclosure Project and Energy Efficiency Leadership Network.

PSEE Programme

In June 2013, the NBI was awarded £8.6-million (more than R150-million) by the UK Government through its Department for International Development (DFID) to implement the PSEE as a countrywide programme of support for energy efficiency improvement to the private sector. The programme is supported by the Department of Energy as a significant mechanism for meeting the country’s objectives in terms of energy saving targets, reduced carbon emissions and enhanced energy security. Technical support is provided by the Carbon Trust, leveraging its

The PSEE is a programme of the National Business Initiative (NBI), a voluntary group of leading national and multi-national companies working together towards sustainable growth and development in South Africa through partnerships, practical programmes and policy engagement. Over the past 8 years, the NBI has participated in and implemented a number of projects to assist South African businesses to improve their levels of energy efficiency through initiatives




experience of similar programmes in the UK. The main aim of the PSEE is to assist commercial and industrial companies in South Africa in improving their levels of energy efficiency through the provision of three levels of service: Telephonic and web-based advice and tools for smaller companies, with future training programmes to follow; technical faceto-face support for medium-sized companies; and longer term energy management and strategy development support for large companies. These services are provided by experienced consultancies with competencies in energy strategy, green buildings, HVAC, pumps, motors, lighting, compressed air and industrial processes, contracted by the PSEE and overseen by a team of professional energy managers. The PSEE will provide direct support to about 45 large companies and 1000 medium sized companies, while at least 2500 small companies will be assisted. In addition, an expanding library of publications and other resources is also accessible free of charge through the PSEE website to assist companies of all sizes in their journey towards energy efficiency and cost savings. Small companies with energy spend of less than R750 000 have the opportunity to benefit from free advice offered by technical experts

over a toll free phone line, referrals to tools, publications and other relevant information on the PSEE website, and attendance of free workshops in the various regions. Medium-sized companies (total annual energy spend: R750 000 - R45 million) will receive up to four days of fully subsidized direct support including site surveys, energy audits, and face-to-face engagement to identify energy saving opportunities and develop an implementation plan. Additional possibilities include follow-up support to prioritise and develop a business case for energy efficiency projects for implementation, and exploring the finance and technology options available. Large companies (total annual energy spend: more than R45 million) have greater energy consumption and more complex structures, policies, and procedures. The PSEE’s services to such companies are 60% subsidized and involve holistic strategic energy management engagements to help improve operational energy efficiency and support the development of a comprehensive energy and carbon strategy. In addition, specific programmes of support can be tailored in accordance with organisational requirements. Visit the PSEE website ( for further information.

References •

PSEE Guides on Energy Management,

Eskom Tariff Increase 2015/16,

NBI Energy Efficiency Leadership Network Case Studies 2014,




BEVERATECH ENGINEERING Beveratech Engineering has grown from an Engineering company serving the wine-,food and beverage, fishing- effluent industries to more recently Bio Gas, Bio Diesel, Solar and Wind Energy Sectors. We are currently involved in Bio Gas and Bio Diesel Projects and planning



our own solar system, which will be marketed to business to cost effectively, changeover to Renewable Energy. Beveratech Engineering has extremely dedicated personnel to meet our clientele needs and deadlines. No challenge is too big for us to handle.


WIND TOWERS We are proud to be part of South Africa’s movement to creating a greener country for us all. With more than 100 years of cumulative experience in various sectors of manufacturing,which include boiler and large tank manufacturing, rigging, fishmeal/ stick water plant, canning equipment, pressure vessels, steam dryers, winemaking equipment and large range of other engineering products. The move towards building wind towers sections comes as a natural transgression for us and fits in with our core business.

BIO GAS Teaming with an international Bio Gas company, Bereratech Engineering is now part of building bio gas plants in South Africa. Six plants are planned for manufacturing in 2014 and a further 10 plants in 2015. With our engineering background and manufacturing capabilities we are set to enter this market with our whole team involved.

BIO DIESEL Beveratech Engineering is involved with the completion and commissioning of a prototype Bio Diesel plant for the Western Cape with commissioning and completion planned for early 2014. More plants are planned for 2014 and 2015. These plants are set to run on nearly any oil by-product, plastic, rubber and other Bio matter.



ENHANCING CLIMATE RESILIENCE IN AFRICA Understanding and addressing the effects of climate change on energy systems Christine King


his chapter is a summary of a preliminary report by Cervigni et al on Enhancing the Climate Resilience of Africa’s Infrastructure: The Power and Water Sectors. Resilience of any kind is about withstanding stressors while maintaining functionality and adapting to minimise stress in the future. Climate resilience is about taking measures to minimise the potential impact of climate change on society and its systems. Energy systems, in particular, need to become more resilient to shifts in climate; hydropower being more vulnerable to change than most sustainable energy sources. While climate change impacts are considered to be a problem for the distant future, long term infrastructure planning needs to take this future into account as many systems need to be built to last several decades.

The study

According to Cervigni et al, in order “to sustain Africa’s growth, and accelerate the eradication of extreme poverty, investment in infrastructure is fundamental.” The report states that the Program for Infrastructure Development in Africa (PIDA)



recommends major increases in hydroelectric power generation and water storage capacity to close Africa’s infrastructure gap. However, the potential impact of climate change on hydropower is too great to invest in long-term infrastructure without any idea of what changes the climate may face in the future. Climate change has the potential to cause drying (dry scenario) in certain areas while causing an increase in rainfall (wet scenario) in others, affecting the sustainability of hydropower and the physical infrastructure requirements involved. The report investigates the potential affect of climate change on the West African Power Pool (WAPP), Central Africa Power Pool (CAPP), East Africa Power Pool (EAPP) and Southern African Power Pool (SAPP). This was done using a single, consistent methodology and a wide range of state-of-the-art future climate scenarios. According to the report, regarding hydropower, “dry scenarios lead to revenue losses on the order of 10–60 percent of baseline values, with the Nile (Equatorial Lakes region), Senegal, and Zambezi basins most affected. Wet scenarios result in potential revenue increases on the order of 20–140


percent (with the Eastern Nile, Niger, and Volta basins having the largest gains).” In a wet climate future scenario, hydroelectric facilities will generate larger amounts of electric power without any additional investment (more water spinning the same turbines faster), which in turn allows hydro to replace fossil fuel–based energy generation and reduces overall prices. But in dry climates, less hydropower than planned is produced, and the difference would need to be balanced by more expensive power sources, such as diesel generators.

2. Promoting an open-data knowledge repository for climate-resilient infrastructure development. To bring down the cost of the analysis needed to integrate climate considerations into infrastructure development, there is a need to establish common data sources (on climate scenarios, hydrology, standard construction costs, etc.), which could be made available to the public on open-data platforms and hosted by African institutions (such as UNECA’s African Climate Policy Center).

Cervigni et al found that the potential effects on individual countries tend to be much greater than the power pool average. The dry scenario expenditure in Burundi, Malawi, and Sierra Leone, is estimated to be two, three, and one and onehalf times larger, respectively, than the no-climatechange baseline. According to the report, other vulnerable countries include, Ethiopia, with a 40 percent increase, and Guinea and Mali, which are in the 40–60 percent range of increase. In countries with large fossil “backstop” options—such as South Africa and Nigeria— Cervigni et al. suggest that the expenditure increase under the dry climate scenario is less noticeable. Climate change has a greater effect on consumer prices in the SAPP than in other power pools because of transmission limitations and the relatively high percentage of hydropower usage in most parts of the SAPP outside South Africa.

3. Establishing an Africa climate resilience project preparation facility. The facility, which would be adequately financed with grant or concessional resources, could have different windows to cater to the specific needs of different sectors or for different stages of the infrastructure development cycle. For example, the facility could provide support to climate-resilient infrastructure master plans or to the integration of climate resilience into individual projects.

Adapting to climate change

5. Setting up an observatory on climate-resilient infrastructure development in Africa. An observatory on climate-resilient infrastructure development could be established to make sure that the work at the technical level and training remains visible and the clarity of linkages to the policy level of decision making is maintained.

Cervigni et al suggest that adapting planning to take climate change into consideration will require a change in mindset. This would mean seeking out the expertise of people in relevant professions, such as climate scientists and design engineers on top of traditional collected knowledge associated with infrastructure planning. They also suggest this shift may take some time, making it all the more imperative that the change begins as soon as possible. According to Cervigni et al, priority should be given to the following areas of interventions: 1. Developing technical guidelines on the integration of climate change in the planning and design of infrastructure in climate-sensitive sectors. A multi-stakeholder technical working group could be established to develop voluntary technical guidelines on how to apply the notions of climate resilience to real-life infrastructure planning and design.

4. Launching training programs for climate-resilient infrastructure professionals. To ensure adequate strengthening of the technical skills that are required to enhance the climate resilience of infrastructure, one or more training programs could be established for professionals involved in the planning, design, and operation of climatesensitive infrastructures.

Integrating climate change into project design The report suggests what modelling components would be required for a project-level climate change analysis: • A set of downscaled climate projections for the project’s relevant geographic region. • A hydrologic model of the relevant region, calibrated to local observational records and linked to climate projections that can estimate project inflows and operations for alternative design specifications. • A simple project design and cost model that can




reproduce any existing cost estimates from a pre-feasibility study and can estimate how costs would vary with alternative design specifications.

Robust adaptation

A robust adaptation analysis is used to identify potential water and power infrastructure investment plans that perform well over a wide range of potential future climates—acknowledging that “well” can be defined in different ways, by different decision makers. The robust adaptation analysis does not necessarily aim to provide a strict ordering of investment strategies, but rather to identify a few potentially robust strategies and to identify for decision makers the key trade-offs among the robust strategies. Robust adaptation also has the potential to reduce consumer costs of electricity. Overall, according to Cervigni et al, compared with the no-adaptation case, electricity expenditure in dry scenarios decreases in virtually all countries. However, the effects are more noticeable in the SAPP than in Eastern Africa and Western Africa. According to the report, “costs without adaptation for the driest and wettest scenarios vary widely at the country level. But in each of the variants for the robust adaptation scenario, the costs of power are reduced relative to the no-adaptation driest scenario, in the vast majority of cases. The reduction in costs is further evidence of the value of robust strategies in the face of climate change. In addition, countries with the lowest vulnerability to climate change have the ability to turn internally to fossil backstop technologies if hydropower performs below expectations, but other countries do not possess this flexibility”. The report suggests that, at the power pool level, there are key countries that have potential alternatives to hydro that allow adaptation at lower costs. In SAPP, South Africa has the potential to switch to coal to adapt to lower levels of hydro imports from Grand Inga. In WAPP and the EAPP, Egypt and Nigeria have potential gas alternatives. In other instances, such as in EAPP, other low-cost, abundant renewables, such as geothermal power, can make up the shortfall in supply and trade in the region. Economic cost of ignoring climate change Estimating economic impacts involves putting a value on the infrastructure performance shortfalls or windfalls that result from the full range of plausible climate futures. The report suggests that



the prices used for hydropower revenues reflect market adjustments in the power pool to respond to underperformance or over performance of hydropower relative to the historical case. Cervigni et al. explain that “the estimates account for the most basic, autonomous, and reactive market adaptations to climate impacts, in which power planners would react to changes in hydropower by adjusting the fuel mix for electric power (mainly by turning on or off fossil resources). Prices for irrigation infrastructure underperformance or over performance are based on fixed cropping patterns (at historical levels) and a fixed price forecast.” According to the report, “the resulting economic impacts of infrastructure performance range from a decline in present value (PV) of 18 percent to an increase of just under 6 percent, and are dominated by hydropower value for the Zambezi and Congo basins, where irrigation infrastructure investments are a much smaller portion of the total than in other basins. In absolute terms, the total PV varies between US$230 billion and US$290 billion, with US$200 billion to US$260 billion accounted for by the new Program for Infrastructure Development in Africa plus irrigation investment (PIDA+) investments, including the performance of Inga 3 and portions of the Grand Inga project built during this study’s time frame. The Inga investments account for roughly half the present value revenues. In addition, more than three-quarters of the climate scenarios examined show a negative outcome relative to historical performance in SAPP—confirming that SAPP investments may be highly vulnerable to climate change impacts, absent adaptation”. According to Cervigni et al, with no climate change, new infrastructure investments have the potential to generate more than US$600 billion in revenues over the period from 2015 to 2050 over the seven basins involved in their research. With climate change, there is potential for almost US$60 billion in losses relative to the reference no-climate-change scenario, and also almost US$60 billion in “windfall” gains from climate change. The potential costs of inaction, according to the report, are greatest in the Zambezi basin, with cumulative costs as large as US$45.0 billion in the driest scenarios. Losses could also be large in the Nile (US$26.8 billion) and Congo (US$16.6 billion) basins.


Recommendations from the report

According to the report, while climate change impacts in the mid-21st century may seem far away, they are going to be very real during the life span of the infrastructure that is planned now and will be built within the coming decade. If these impacts are not taken into account now, there is a considerable risk to lock the next generation of power and water infrastructure in Africa into designs that could turn out to be inadequate for the climate of the future and costly or impossible to modify later. To avoid that risk, Cervigni et al. suggest that actively promoting integration of climate change in infrastructure development is important at the planning and project levels. But in parallel to further testing the approach in a wider range of locations, there is a need to fully integrate climate change consideration into regular planning and project design processes.

And this is likely to require a change in mindset, away from consolidated behaviour and practices, with the goal of better integrating the expertise of the relevant professions, such as climate scientists and design engineers. From this report we can tell that climate change data can be incorporated in a systematic way into the technical design of water infrastructure projects with likely net economic benefits for the developer and customers as the end result. According to Cervigni et al. many challenges remain to make such integration possible on a regular basis, considering data access and time and budget constraints, but these could be overcome if practitioners work across sector and disciplinary boundaries, and support is given from policy makers to raise the awareness and requirements of taking climate change into account in infrastructure planning.

References •

Cervigni, Raffaello, Rikard Liden, James E. Neumann, and Kenneth M. Strzepek. 2015. Enhancing the Climate Resilience of Africa’s Infrastructure: The Power and Water Sectors. Overview booklet. World Bank, Washington, DC. Retrieved from: Feature%20Story/Africa/Conference%20 Edition%20Enhancing%20Africas%20Infrastructure.pdf












LIGHTING AND DAYLIGHTING Understanding the value Daylighting when lighting commercial buildings Peter Novak



“Look deep into nature and then you will understand everything better” - Albert Einstein

“Architecture is an Expression of Values” - Norman Foster - Norman Foster “Architecture is an Expression of Values”




Defining Daylight Excellence in New and Retrofit Construction

For a high performance sustainable design impacting those inside and outside the space, all routinely occupied spaces should have uncompromised high quality daylight on sunny days meeting objectives to turn off the electric lights when-ever the sun shines. For 10s of 1,000s of years man-kind’s primary source of light was the sun and fire. Life sustaining functions are biologically linked to the Sun in circadian cycles. Only in the last 100 years has electric light become our dominant source of light dynamically changing how and where we work and live. In the last 20 years, electronics have become a major part of life. The cell phone is the most ubiquitous tool available to young, old, rich and poor. How many have not used the screen as a flash light? With the advent of, TV, PC, the smart phone and the global internet, 24 hours a day, seven days a week, we can have light in our lives. With the flip of a switch or when an electronic eye sees us coming, the lights come on. The access, ease of use, and impact for those that do not experience brown/black outs or lack of coverage is fantastic. There is a dark side to

this access to artificial light anytime, anywhere that impacts our ability to work productively, learn and heal. These negative impacts can be addressed without major sacrifices and bringing daylight back into our lives has significant benefits.

Why Daylight?

Daylight is essential for a healthy & productive life! The natural cycle of night to day and day to night are calls to action and calls for regenerative sleep respectively. Light is the primary trigger for these circadian rhythms. If we disrupt these cycles, we create the opportunity for depression, obesity, cardiovascular disease and diabetes. In our modern world, with abundant and inexpensive electricity, for the majority of our days, we are completely disconnected from the circadian illumination “triggers” that drive very important biological functions. Awareness of these important functions and how they work combined with delivery of quality natural light to our work, education, healing, retail, civic and living spaces is essential for a healthy productive life. 

What is Circadian Rhythm?




The Suprachiasmatic Nucleus (SCN) was discovered in 1972. It is responsible for controlling our Circadian Rhythm. It receives signals from the Retina. The signals impacts key functions in how we wake up, eat, sleep and generally function on a day to day basis. Only in the last 10 years with deep research into this natural function have we begun to understand the impact of light in our everyday lives, daily productivity and long term health and wellness.

The very real Human Impact of Light on our lives!

Artificial Lighting Poses Health Risks, American

Medical Association Asserts – 6/2012 Artificial light is strongly linked to sleep deprivation, a common condition in our society with risk factors for pathological conditions that are epidemic: cardiovascular disease, depression, obesity, diabetes, & stroke. “The natural 24-hour cycle of light and dark helps maintain alignment of circadian biological rhythms along with basic processes that help our bodies to function normally.” - Dr. Alexander Ding “Even dim light can interfere with a person’s circadian rhythm and melatonin secretion. A mere eight lux—a level of brightness exceeded by most table lamps and about twice that of a night light—has an effect.” - Stephen Lockley, Ph.D. “There is no question that lighting suppresses circadian rhythms.“ - Richard Stevens Ph.D. Purpose Driven Design .vs. Prescriptive Design “You have to go whole heartedly into anything in order to achieve anything worth having”

“Study nature, love nature, stay close to nature. It will never fail you” - Frank Lloyd Wright The building(s) that house your work or business are one of the key assets to achieve excellence. If you value your work or business, you will require that the building be designed for excellence in purpose and require a change from mediocre prescriptive design to a Purpose Driven Design. A building designed with intent for its purpose: to teach/learn, to be a productive place to work/learn, to heal, to serve, to shop…will assist the people involved to achieve excellence. Sadly, Architects that work passionately to achieve excellence for the owners that are striving to achieve great results in the spaces where they work and live often fall short. Design prescriptions, budgets, and the past drive us forward to more and more mediocrity and the most valuable assets for the work ahead of us (the occupants) trudge forward into our boxes. We trudge forward into spaces void of daylight or often, we close blinds or find any way we can to mitigate the harsh reality of the power of the sun in the cases where we are fortunate enough to have it some of the time.




Living and working on multiple continents has taught me that we have more in common than that which sets us apart. It is an interesting trait of human kind that we move passionately forward with purpose in our lives and pursuits; however, we accept for the greater majority mediocrity in the spaces that we live and work. These are the spaces we spend the majority of our time working with the people, resources and a purpose that we care for the most. Although the tides are changing slowly, we have put a monetary value to energy and in some cases green house gases; in the same sustainable breath, we trivialize the monetary value of human resources and the very real direct and indirect costs to “sustain” and “keep” them healthy and productive. We use the terms like “hard savings” for fixed variable operating costs like electricity and “soft savings” for our precious and essential human capital. To achieve excellence inside of the walls that house your business or work, the purpose of the space must be at the center of the building’s design for new or retro-fit. Then one can move forward with purpose combining Form and Function to achieve excellence in sustainable design. Only with this formula is it possible to achieve spaces that truly inspire, invigorate and calm us. These are all attributes



of quality natural light that we can experience every day if we choose to design with purpose and introduce healthy, natural, circadian light as a central theme for our occupied spaces.

Sustainable and Daylight Design

Sustainable Design is defined as “living conditions and resource-use continue to meet human needs without undermining the “integrity, stability and beauty” of natural…. systems” A guiding principal of sustainable design is all areas where occupants spend their time must be daylight at a daylight level adequate to complete the main activity intended for the space on any sunny day. Meeting these criteria would establish a new standard of excellence. This can be achieved in most new and retrofit construction combining traditional passive and new active/dynamic building materials/ systems. In some cases, with new construction, the site and building orientation combined with a building design with the right height, length, width and architectural features will allow for a fully passive design to achieve excellence. In most cases, only with the addition of intelligent active/dynamic window systems can excellence be achieved.


Human Factors impact on Daylighting in Buildings

From my experience working in new and existing retro-fits with Architects, Owners and Occupants, many designs fail as they do not consider the location, orientation and human factors together in solutions. It is very difficult to mitigate glare, contrast and heat challenges without considering advanced technical and/or architectural solutions. The challenges and typical occupant responses are the same on sunny days whether the sun shines 30% or 90% of the time. Occupants will do what they can and more to stop the sun and the intended benefits from natural light disappear. People (young and old) do not like glare, high contrast or intense heat. We will find creative ways to change our space to mitigate these challenges if blinds or curtains are not supplied as part of the design. In all cases, the benefits of natural light are eliminated. Sadly, many of the benefits sought also evaporate

while the heat can remain inside the building envelope with poor designs. Studies show that it is quality, not quantity of light that is the discerning factor that determines when occupants will take action to mitigate the challenges with low quality daylighting.

The sun is powerful and outdoor light levels are typically 200-400 times higher than indoor light levels standards set by the IES – Illuminating Engineering Society – www. . Outdoor light levels on sunny days range from 8,000-10,000 FC while indoor light levels range typically from 25-50FC. Even on a cloudy day, outdoor daylight is 1,000 FC or more. There are extensive resources on passive design for windows, light and shade shelves and skylights. One source is: http://www. The WDGB identifies the following factors for success: • Exterior shading and control devices; • glazing materials and aperture size &location; • reflectance and room surfaces, and; • integration with electric lighting and controls. With the introduction of commercially viable active daylighting and dynamic windows, these systems can be including as options/ alternatives/additions to traditional glazing materials and apertures. SUSTAINABLE ENERGY RESOURCE HANDBOOK



Exterior Shade and Control Light and/or shade shelves can improve both the quality and depth of delivery of sunlight to core spaces with traditional glass with and without low E coatings with the added costs

of the shading and reflective surfaces. The orientation and season must be considered to understand the full impact and properly mitigate the negative effects of direct sunlight.

Source: Whole Building Design Guide – National Institute of Building Sciences -

Windows (Glazing Materials) For the building faces that are exposed to direct sunlight (South, East and West – Northern Hemisphere); (North, East and West – Southern Hemisphere), typically traditional Low E glass is not sufficient with-out either shade and or blinds to achieve a comfortable result. Blinds will eliminate the negative and positive effects of daylight on the space; however, they shut out the natural light we strive to bring in. Dynamic glazings can deliver views while eliminating or greatly reducing glare and heat from direct sunlight. Traditional Low E

Source: RavenWindow – Denver, Colorado -





Skylights One comprehensive design guide for skylights is available through the www. Consideration should be given to the number, spacing, size, glazing materials and the use of light wells to mitigate glare and improve the distribution of sunlight to provide quality daylight throughout a space on sunny days regardless of season.

Core Daylighting 2 floors down – CSU Power House

In PG&E building energy efficiency study, lighting accounts for a large amount of energy load in commercial buildings and the majority of these buildings did not have skylights. With the SkyCalc program and a sister city approach to daylighting, a good understanding of potential impact could be established for skylights and their impact from a lighting and energy perspective. Core Daylight with applied teaching lab - Hockaday

PG&E Codes and Standards Program. 2008. Draft Report Updates to Skylighting Requirements. CEC Title 24 Building Energy Efficiency Standards. Prepared by the Heschong Mahone Group. Core Daylighting Large Open Work Area – North Texas Food Bank

Core Sunlighting Core Sunlighting is the process of capturing sunlight at the envelope of a building, and then concentrating, transporting, and distributing it inside the building to provide useful illumination for a host of general, task and accent lighting applications1. Through thoughtful concentration, transport and distribution of sunlight to meet lighting needs, highly efficient use of the sun without the challenges from glare, contrast and heat can be achieved. 1 Source: IES Subcommittee on Core Sunlighting for Buildings.

Through the combination of passive daylighting methods, dynamic glazing’s and core sunlighting, a new approach to the building envelope can be taken to achieve high quality, full day daylighting on sunny days. In addition, a tighter building envelop can be achieved without sacrificing views or hours of circadian illumination. Lighting and Lighting Controls Daylight harvesting using off the shelf lighting and lighting controls for general lighting can maximize the energy efficiency for the majority of the lighting loads. Commissioning of the systems is important for sustained




success. The addition of occupancy controls will ensure highest energy efficiency.

Daylighting Impact Models

Though the use of a space is obvious, the benefits of daylight are often unique and distinct with respect to its primary purpose. In every case where people are working, the direct benefit to the staff is a common theme. The following models illustrate and provide reference materials for the impact of natural light in different environments. Office

Desk Top studies - 20% better cognitive performance with daylight1 EPA Webcast 2006 Up to $0.66/sf saved electricity cost with optimized daylighting2 California Energy Commission Study 2003 2.6% increase in productivity for LEED™ buildings3 Michigan Study Lockheed Building 1574 Substantial Employee Retention, Productivity Attendance, & Health Sundolier Core Daylighting Case Study – Active Core Daylighting

The greatest impact of daylight related to the purpose of the building is not on the operating costs of the building, it is on the people. Daylight done right will reduce cooling loads, reduce lighting related electric loads, reduce related green house gas emissions and in the cases where heat is of high concern, advanced solutions (advanced window technologies and active daylighting with heat rejection) can further impact air conditioning loads. The graphic illustrates the typical cost of an office over 20 years. A sustainable design with a primary metric around energy will never fund a truly healthy and sustainable work place.

Education The essential purpose of any education facility is obviously to teach; however, despite evidence that daylighting significantly improves cognitive performance and retention levels, for the most part, we marginalize daylight in our classrooms worldwide. The compounded impact over 12-13 years is impressive. Deliver quality daylighting designs to your classrooms requires an investment in daylight that is between $10-20 per square ft over a box, a trivial cost over the life of the building against the impact on 100s of students futures.

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Improve the Speed of Learning While Reducing Energy and Emissions The central tendency among all the models studied would be a 25% improvement in reading and a 16% improvement in math, or a 21% general improvement between children in classrooms with the most daylight compared to those in classrooms with the least daylight….The daylighting effect does not vary by grade.

- California Energy Commission Study (http:// projects-PIER.htm) Daylighting must be superior A well-integrated daylighting design has a greater positive impact on a school than any other sustainable design strategy. The most important impact aspect of good daylighting design is to understand how it affects human nature. For daylighting strategies to be effective, the great majority of the time that teachers and students are in a particular space, the daylighting strategy must be superior to the electrical lighting. - Rensslear Polytechnic Institute (http:// daylightguide_8511.pdf ) If one considers 16%-21% improvements compounded over 13 years the impact is worth pursuing with gusto. For primary education, if one considers only 1/3 of the 16% benefit to students, the knowledge base can improved by a factor of 2. In Sundolier survey’s of classrooms, the majority of children in a 6-8 grade classroom indicated their headaches where gone when the florescent lights were turned off after installation of the Sundolier.

teaching in different classrooms in a middle school stated, ‘she loved the Sundolier classroom the best, the kids calm down quicker and get to work faster’. Why not Daylight? Health Care

The impact on Health Care is broad including impacts on the care givers, the patients and general administration (an ever increasing element of the care giving process in many countries). Medical offices that are void of daylight or suffer from the same challenges that static windows deliver with direct sunlight (closed blinds) are often the norm. Doctors, Nurses, and Administration work all day long in these spaces mostly void of daylight. Designs breaking this paradigm consider architectural elements like interior glass in the walls, more expansive space in height and a combination of view windows and core daylighting to achieve daylight everywhere when the sun is out for both the caregivers and the patients. • Dying in the dark: sunshine, gender and outcomes in myocardial infarction - 1998 Beauchemin Hays J R Soc Med • The Effect of Sunlight on Postoperative Analgesic Medication Use - 2005 Walch et al Psychosomatic Med • Light and Healthy Design - files/CHD_Issue_Paper2.pdf • Circadean Rhythm and Human Health - html

In a second classroom a library skill’s teacher




Concept Design Case Study of Dynamic/Core Daylighting .vs. Static Windows (partial daylighting) Does not include impact on patient speed of healing

Retail The purpose of a retail space is to attract and bring back customers. Certainly the products and/or services offered play the most significant role; however, studies show on average 5% increase in sales with as much as 40% improvement in the cases. Associates will be healthier more productive and as a result they provide better service. Energy can be reduced and the payback for most retail environments between $100-400 per square foot of space is 2-7 years. With

quality daylighting, a you get improved color rendering, calming and soothing daylight and all of the benefits that come from reduced energy and GHG emissions with daylight that is typically just overhead. • Retail sales increase with daylighting by up to 40% - 2003 and 1999 studies Daylighting/A-5_Daylgt_Retail_2.3.7.pdf

• Save up to $0.66/sf in electricity cost with optimized daylighting system retailc.pdf

Retail Model




Energy Impact of High Quality Daylight Daylight, well distributed, is cooler than electric light. Unchecked direct sunlight can create hot spots and can be a source of glare and create high contrast challenges. Well designed active and passive systems and architectural features can distribute sunlight very well throughout a space eliminating the electric load and reducing or greatly eliminating the heat from the sun (infra-red spectrum) through advanced glazing systems. For example, hot mirrors can be manufactured to maintain a very high full spectrum visible light transmittance while rejecting infra-red. The basis for the summary below is a Sundolier system compared to standard commercial general lighting.

This general energy model can be applied to other spaces with similar loads!

References •

Heschong Mahone Group -

Whole Building Design Guide -

Energy Design Resources -

SLEEP, A Very Short Introduction by Steven W. Lockley and Russel G. Foster.





Est. 1995

Celebrating 20 Years of Service to Africa and Beyond ABOUT PEER Africa was founded in 1995 by Lilia Abron, Ph.D., PE, BCEE, Douglas “Mothusi” Guy, MBA, and Thami Eland (of KCIHT), our South African community partner. PEER Africa is a design-build consulting firm specializing in upgrading and transforming communities and local small and medium municipalities to resilient, sustainable sintegrated settlements. Since COP17, PEER Africa is working hand-in-hand with small and rural municipalities to develop “leap frog” integrated development plans (IDP), that deliver appropriate basic municipal services. The program empowers previously disenfranchised small business and local governments to take charge of and improve their strategies in a manner that promotes democracy, enrichment, economic soundness and growth for all. Over the past two decades, PEER Africa has established innovative “best practice solutions” for environmentally sound and sustainable projects in the built environment that contribute to the eradication of poverty, and promote and enhance local economic development in targeted benchmark communities in South Africa. Celebrating 20 years of service in 2015, PEER is now offering small and rural municipalities a comprehensive plan to develop off-grid/grid-tied solutions that enhance basic service delivery.



Provides integrated environment, economic, empowerment, cost-optimized solutions for a sustainable, built environment. Our emphasis is on empowering our communities in Africa and the developing world to take charge and control of their livelihoods in a responsible manner.

It is now as easy to build an energy-efficient, low-carbon footprint, resilient, affordable community, as it is to “build a slum”. It is now as affordable to capacitate those populations in those communities to take charge of their lives, prepare and enter the workforce trained to contribute to the growth of their communities and country, as it is to import trained workers.





Circa the 1990s, the Witsand community in the Western Cape of South Africa was a 20 yearold shantytown of over 2,000 shacks; living conditions were deplorable, with limited to no access to basic services. PEER Africa and PEER Consultants were chosen by the Cape Town City Council to transform the community using the integrated Energy Environment Empowerment Cost-Optimization (iEEECO™) methodology. Through the development of ‘sustainable’ iEEECO™ human settlements, PEER was able to alleviate the poverty issue, while improving the health and welfare of indigent South Africans. The iEEECO™ methodology involves: a set of procedures that create viable sustainable communities out of the rubble of shantytowns; active participation of project beneficiaries; a bottom-up, self-help approach that results in a sense of ownership and responsibility among community members; building structures designed using software tools (ERGY-10™) that identify cost-effective, energy-saving measures; calculating and analyzing building performance using

embedded data collection devices and evaluation, monitoring and verification (EM&V) protocols established by the National Renewable Energy Laboratory (NREL), Northeast Energy Efficiency Partnerships (NEEP), and the U.S. Environmental Protection Agency (USEPA). iEEECO™ human settlements and home features include: Passive solar design of the twon plan, and 1) Wind turbine/solar panel hybrid power systems (pilot phase); 2. Solar energy products - e.g. flashlights & cell phone charging unit (optional: for houses not connected to the power grid); 3. Solar thermal water heating units; 4. Passive-solar design with 600 mm roof overhang; 5. Large north-facing windows for cooling during summer months; 6. Native plants used for shading and greening; 7. Plastered concrete block houses with sandfilled hollows to increase mass. The project also included: water and power conserving appliances and fixtures; community gardens; storm-water best management practices; appropriate municipal infrastructures; R10 ceiling insulation, fire-retardant wall & ceiling board.




As a result, over 2,600 families now reside in single-family, multi-family, and mixeduse homes, building passive-solar homes with energy-efficient and water-conserving appliances and fixtures with cool, insulated and reflective coatings. Moreover, iEEECO™ empowered communities and municipalities are now experiencing: low carbon footprint

emission, solar-thermal water heating solutions, significant job creation within the community along with the development of local businesses to expand iEEECO™ concept, reduced energy and water consumption, low and affordable monthly household utility bills, reduced burden on the city’s utilities and infrastructure.

Moving forward, in Phase 3, PEER hopes to: 1. Finalise the development and retrofit of the first off-grid small and rural municipality in !Kheis Northern Cape 2. Finalise a project funding mechanism that enables small and medium municipalities to smooth out the delivery and development ofenhanced Integrated Development Plans (IDP). 3. Formalise the establishment of the regional iEEECO(TM) Off-grid Hybrid Utility and service centre hub program and expansion into commercial and private sector markets 4. Introduce the country’s first rural Cool City program linked to local FET College training and skills development


!Kheis is an administrative area of the ZF Mgcawu District of the Northern Cape in South Africa. !Kheis is a Khoi name meaning “a place to live or your home”. Not initially on the Department of Energy’s (DoE’s) Solar Home Systems (SHS) roll-out screen, PEER is currently

Africa Utility Week Best in Africa project team



in the full-on implementation stage to achieve a sustainable plan to address universal access to safe energy and more in the !Kheis Municipality. The entire Council has attended clean energy workshops linked to the RE for South Africa municipalities hand book (Hans Seidel Foundation) and are in the process of modifying

Unit coated with iEEECO™ Envirocoat® cool, insulating and reflective coatings where temperatures dropped from 44 deg C to 30 degrees C inside as when compared to the uncoated zinc walls and roof


the IDP and Supply chain management criteria to accommodate innovative interventions to achieve its constitutional mandate in a timely fashion; and to be the catalyst and advocate to provide basic services to all. A iEEECO(TM) “Leap frog” roadmap has been developed and contractual and legal tools are currently being finalised to enable the fasttracking of integrated energy environment and empowerment based services and local economic development via what PEER calls The iEEECO™ manufacturing, off-grid utility and service centre iHub™. This is a comprehensive, integrated and tiered BEE commercialization oriented implementation platform supported by the local community and council who appointed PEER Africa iEEECO™ and the Affiliate Professional Services and Supplier Network, who then engaged with SANEDI, Eskom, Bokpoort ACWA Power CSP Pty, the DoE, Specialised Solar Systems, Upington Rural FET College and others. Each of these role-players are playing a role in the formulation of the rollout plan for the !Kheis iEEECO™ iHub™. The iHub™ has already started distribution and manufacturing of local Renewable Energy (RE) products and supplies as a local supplier

development and as a SME revenue adjunct facility to the program. A similar model is being rolled out in the Umzinyathi District municipality of Kwazulu Natal. PEER has also approached a number of finance houses to gain a better understanding of how funding is made available for projects such as this. Status of the program at !Kheis • 30 local SMEs and !Kheis council members

and staff are being trained as part of the iHub™ on DC Micro grid and other systems (water conservation and demand management, cool membranes, EEDSM e.t.c.) • 507 new solar home systems with web-

based management systems (provided by Specialised Solar Systems) will be completed by June 2015. • The !Kheis Enhanced IDP is completed and

funding proposals are being solicited for financing the development program which is valued at +- R3Billion over the next 5 years. • For more information, please watch the

!Kheis Municipality video clips on YouTube. PEER aims to achieve a sustainable program to address universal access to basic service before the end of 2020. Their plan and goal is to complete this plan over the next 3 years.

CONTACT DETAILS: Douglas “Mothusi” Guy (co-founder): +27 82 579 6032

Cool coating being applied to !Kheis informal dwelling

HEAD OFFICE: 89 7th Avenue Highlands North Johannesburg 2192 Emaiil:





This article examines what can be done in order to reduce fuel costs in the operation of Heating Ventilation and Air Conditioning (HVAC) systems as well as in chillers found in industry and agro-processing. At the heart of these application is a refrigeration system. There are different types of refrigeration equipment but this article is restricted to considering only the most common type, namely the electric motor driven mechanical vapour compression version. Food freezing is similar to producing chilled air or water, except that the temperature is below the freezing point of water (0ËšC). Freezers are not examined in this article.



Implementing energy efficiency measures is the quickest, most cost-effective and lasting way to reduce necessary energy consumption, its cost and associated carbon dioxide emissions. It is also a simple way of making limited resources go further and is thus a hedge against even more costly loss of production.

Refrigeration system components

The refrigeration system under consideration has four main components: motor / compressor, control device, evaporator, and condenser. These are all connected in a pipecircuit through which a refrigerant (fluid) is made to flow. A very basic layout is shown in the diagram below.


process directly (diagram below) and this is ultimately rejected via the condenser as previously described. The chilled water is usually at temperatures above 0˚C, up to about 10˚C.

The upper half of the diagram depicts the low pressure section of the system while the high pressure section is shown at the bottom. The compressor draws in refrigerant gas from the cooler (evaporator) and discharges it at a higher pressure to the condenser. (The evaporator and condenser are heat exchangers. The evaporator receives heat while the condenser gives up heat. In both cases the medium of heat transfer can be air or another fluid, usually water). The fourth essential component is the control device (usually in the form of an expansion valve) which meters the refrigerant flow and separates the high pressure and low pressure sections. In the case of an HVAC system as used to condition a space for human comfort or machine performance, the evaporator usually has air blown across it such that the air gives up its heat to the evaporator and the now cold air can be used to reduce the temperature in the conditioned space. The space is usually kept at between 20˚C and 24˚C. The heat which was transferred into the refrigerant is generally rejected outdoors to the environment, either directly by blowing outdoor air over the condenser or by transferring it into water which circulates through a cooling tower.

In the case where manufactured products (e.g. foods) have to be processed in a reduced temperature environment, mechanical cooling is used to keep the room at below about 10˚C. Chilled air is used to do this but it is not quite like HVAC since the air can be below its dewpoint temperature and the moisture in the air will freeze. A consequence of this is that the air passages in the heat exchanges block with ice and the heat exchanger effectiveness decreases considerably. A defrost cycle (as with a domestic refrigerator) has to be used in order to remove the offending ice. The following diagram is an example of a small scale refrigeration system to a cold store. The cooler in the conditioned room is named ‘fan coil’ while all the other components are outside in the ‘condensing unit’.

Process cooling (e.g. in the plastics industry) is different in that it is chilled water that is supplied to the process rather than chilled air. The chilled water removes heat from the




Energy (and cost) saving measures

Experience shows that that the most cost effective and sustainable gains result from behavioural changes. These are often noor low-cost measures since they involve behaving thoughtfully when using energy consuming equipment. However, this is not always as easy as it sounds and a ‘systems’ approach is usually needed in order to create a business environment that is designed to manage energy with the same consideration given to other business areas, such as staff and equipment used in production. For this reason, Energy Management Systems continue to be implemented at a growing pace throughout the world. Energy tariffs Although ‘free’ energy in the form of sun and wind is gaining ground rapidly, most of us still have to pay for what we use. This article is about using energy more efficiently, ie less energy input for the same service output, but most consumers want to reduce their consumption in order to reduce their costs. Part of an energy audit could be the examination of how much energy is used at different times of the day or season. Price variation may not be a large factor in the purchase of fossil fuels such as coal or gas but here may be instances where buying in the low season and stockpiling for the high season could be advantageous. Electricity pricing is often very different since pricing is meant to reflect the cost of supply. Peak demand times during the day or peak season (winter in South Africa) have higher costs which can be seen in Time of Use tariffs. The peak rates can be several times the off-peak rates. There may well be a Maximum Demand component in these tariffs where consumers pay for the maximum simultaneous demand for a whole month at the rate obtained in any half-hour of the month. Note that demand is ‘power’ and



is measured in units of Watts while ‘energy’ is the duration of power usage over time and is therefore measured in Watt-hours. Maximum Demand is also measured in a variation of power called Volt-Amps (usually shown in bills as kVA). Paying for kVA is actually a penal tariff as it is a reflection of the inefficient use of power and the facility is said to have a poor Power Factor. Installing Power Factor Correction equipment will not reduce the energy bill but will reduce the kVA component of the bill. Energy efficiency improvements aside, the quantity of energy consumed for a particular task is dependent upon the thermodynamic requirement of the process, e.g. the quantity of energy to melt a given mass of metal. If this melting is carried out electrically and is not continuous throughout the day, consider melting during the lower night tariff period. The quantity of energy will not be reduced but it may be billed at a lower rate at night and the kVA charge may not apply then; almost certainly it will not be at a time of simultaneous maximum demand and the MD charges during the day would be reduced. This example highlights a very important thermodynamic and cost issue. It does not make sense to burn a fossil fuel in a power station and convert the energy to electricity at an overall conversion efficiency of around 35% simply to provide heating. It would be much better to burn the fossil fuel at the point of need and apply the heat generated directly. This thinking has many applications, the most obvious being the use of electricity to heat water and cook in our homes. Perhaps gas would be better? HVAC systems HVAC systems are usually designed well after the building features have been agreed and accepted. The building design will generally have allowed installation space for the


mechanical and electrical hardware for the conditioning systems, but buildings are most often not designed at the outset to be energy efficient. A thermally well designed building is one where the post-hoc introduction of thermal comfort conditioning systems has been ‘designed out’ in the beginning. This does not mean that there is only one thermally correct design for all buildings. There are many varied and attractive examples of thermally efficient buildings. The photograph to the right clearly demonstrates that solar shading can be functional and make an architectural statement. The image below shows how a residential building may be configured to optimize

the impact of natural light, sunshine and ventilation.

Efficient HVAC systems start with energy efficient buildings. The first consideration is the orientation of the building. The plan form comes next. In the southern hemisphere buildings should face north and the long axis through the building should run east-west, both features increasing the opportunity for maximum solar gain during winter. The materials of construction and related

thermal properties also impact on the static performance of the building and it is the static thermal performance that contributes most significantly to a reduction in the operating energy of any HVAC system which may subsequently be installed. It is quite possible, in some climatic zones, to design and construct comfortable buildings without any need of HVAC.




The two photographs below show how deciduous vegetation shades the building in

summer and lets more sun in during winter:

Source: CIBSE Journal March 2015

Air conditioning systems are usually thought of in the context of only providing cooling. However, air conditioning is an all embracing term and includes not only cooling, but also, heating, dehumidification, humidification, sound attenuation, and air quality. In South Africa we do not require much heating in most climatic zones, although there are severe cases such as Sutherland or Bethlehem. The generally reduced severity and duration for heating has led us to use simple direct acting elements in the older style all-air HVAC systems. The point has been made about using electricity for heating but thermodynamic purity takes a back seat to the trade-off between capital costs and operating costs. Simple electric heating elements were easy to install but the cost of using them is increasing rapidly, making the use of alternatives financially viable. These days a heat pump may be viable as the cost of the heat is of the order of one-third the cost of electricity. When we refer to heat pumps we generally mean heating equipment. ‘Heat Pump’ is the generic name for the scientific process of the refrigeration system described above. The



heat pump is thought of in every day terms as a device where we use the heat rejected from the refrigeration system as the primary benefit. Clearly both cooling and heating are available simultaneously and we should try to use both effects at the same time rather than throwing one of them away. This is often possible in deep plan buildings as the occupied areas around the core of the building may require cooling throughout the year while one or more of the perimeters areas may require heating at the same time. A good opportunity thus exists for ‘heat recovery’ from the normally discarded condenser heat to be used to heat the cold perimeter(s). Chillers with so called double bundle condensers have been available for some time to provide for this sort of heat recovery. In addition, it is possible to open the refrigerant circuit immediately after the compressor discharge and before the condenser in order to insert another heat exchanger – a desuperheater. The refrigerant gas leaving the compressor is at a much higher temperature here than when it is condensing and can provide a high quality of heat to water used in showering, for example. This is something that


can be retro-fitted to many systems. Big ducted all-air systems are not often specified these days as Variable Refrigerant Volume (VRV) systems have become fairly common. Here the refrigerant pipe work is extended such that the two heat exchangers can be place far apart, one in the occupied space and the other outdoors. Furthermore, the heat exchanger functions can be made reversible such that they can either provide heating or cooling, depending upon the space requirements. A development of the VRV system is that the heat recovery feature mentioned in the previous paragraph is integral to the overall system and individual units can provide heating or cooling simultaneously. Another benefit is that individual indoor units can be switched off when not required. The most effective and immediate way to reduce the running costs of a HVAC system (short of turning it off!) is to set the temperature controller to a value that is closer to the external temperature, i.e., set a higher temperature in summer and a lower temperature in winter. Air-based HVAC systems recirculate a large proportion of their air in order to economically provide satisfactory internal conditions. Another (relatively) easy energy reduction method is known as ‘economy’ or ‘free’ cooling operation. This is when these air-based systems admit more or less outdoor air into the conditioned space in accordance with the difference between the outdoor and indoor temperatures. Spring and autumn are the usual times when this can happen as, for example, the external ambient conditions are not imposing great loads on the building and the external air temperature is below its highest summer temperature or above the lowest winter temperature. At times when the building requires cooling (mainly because of the occupants and their use of lights and

other equipment), more cool outdoor can be introduced and the refrigeration system can be switched off. Significant energy and cost is saved in this way. A related savings measure can be employed when the electricity tariff is such that charges are lower for consumption during the night. Pre-conditioning the building at the lower tariff rate allows the energy to be ‘soaked up’ by the building fabric during the night. The temperature of the fabric at the start of the working day is such that the need for air conditioning for at least the first part of the day (often a peak cost period for electricity) is reduced. A step beyond this pre-conditioning of the building fabric is to make and store cold water during summer nights, or hot water during the winter nights. The water is circulated through the HVAC system during the daytime occupancy period to reduce – or even eliminate – the need for conditioning the water at the more expensive daily rates. These so-called Thermal Energy Storage (TES) systems usually require a large volume, something that may not be desirable where the cost of space is very high. An alternative system may be a phase-change TES like ice, where the volume of storage is smaller relative to water. System and equipment improvements There will be applications where the climate or the processes within the building require some form of mechanical cooling and in these cases efficiency improvements can be made to the individual pieces of equipment as well as how they are assembled into a system. This applies equally to residential and commercial buildings, as well as to factory buildings and processes within those factories that require cooling. The need for energy efficiency is now so




widespread that equipment such as electric motors and refrigeration compressors are marketed according to their energy performance. For new applications there is a large body of knowledge and expertise to enable energy efficient systems to be built and maintained. However, many of the systems that will be operating over future decades are currently in place and may not have benefitted from energy efficient design. These systems are opportunities for retrofitting energy efficient components, improving system performance, and ensuring maintenance improvements. Again, we should start with the heart of the cooling system – the refrigeration compressor. The description above referred to low pressure and high pressure sections of the system with the compressor being the device that increases the pressure. Less effort will be required from the compressor if these pressures are closer to each other. In turn, the motor driving the compressor with require less energy. How to bring the pressures closer together? First we should note the thermal performance of the system actually requires a pressure differential and the pressures cannot be too close. The given pressures result from initial design choices and (lack of ) maintenance in use. As the heat exchangers become dirty and clogged in use, they become less effective at receiving or rejecting energy. The system will cope with this by operating at a low pressure in the evaporator and or a higher pressure in the condenser. In order to prevent this kind of operation, the initial design of the heat exchanger can be more generous with heat transfer surface area. The capital cost will be slightly more but the cost in use over the equipment life dominates and therefore larger surface areas can produce a lower life cycle cost. Similarly with maintenance: in the end cleaning costs less than operation. Very often the pressure on the high pressure



side of the system (‘head pressure’) is maintained at a relatively high value, even although the possible of operating at a lower pressure exists. ‘Floating head pressure control’ allows the high pressure to drop as the heat rejection capacity at the condenser increases, something that is usually associated with lower ambient temperatures. A very simple way of increasing the operating pressure in the low side of the system is to slightly increase the temperature of the fluid being cooled. System operators may add a ‘safety margin’ to their requirements by reducing the temperature but this should be challenged and higher temperatures tested with due regard for the ultimate comfort or quality impacts. The need to defrost the evaporators in cold rooms has been mentioned. There are several ways of doing this, each with its own energy cost. If it was only that simple then the most efficient method would be fitted every time. However, inevitably, the most efficient method is often the most complex and therefore costly. On detecting a need to defrost the system could be made to act in reverse, i.e., heat is now rejected into what was the cooler while the condenser similarly reverses its function. This reverse acting defrost cycle applies a lot of energy at relatively low cost but is relatively complex in all bar very small systems and is not often seen. A variation is hot gas defrost where a portion of the hot gas leaving the compressor is bypassed into the frozen evaporator. Both of these systems require additional controls and the hot gas method requires additional refrigerant piping. A very simple but effective way to remove frost has been the use of electric heater elements in the evaporator. Clearly this has become more expensive to operate over time. Timers are often used to initiate and terminate defrosts


but this overly simple method can be wasteful if the defrost is not needed by the time the next cycle is scheduled to begin. It is better to associate this method with a refrigerant gas pressure sensor such that the pressure overrides the timer since the gas pressure in the evaporator will increase when the frost is removed. An often missed general system improvement is from regular, thorough maintenance. Heat exchanger surfaces do scale from the minerals in the water that passes through them and it is necessary to use mechanical cleaning (brushing) or chemical cleaning by introducing a solvent into the circulator water. Water and air filters must be cleaned often as the very action of their operation causes them to block and increase the pressure in the line that the pump or fan must overcome. Maintenance can be preventative and it can also have a monitoring system which clearly indicates the degree of performance reduction as items of equipment age or become clogged. Finally, mention must be made of the refrigerants that are used in different systems. In the case of HVAC application and for smaller industrial cooling applications this is usually a chemical compound or mixture. The generic categories are hydrofluorocarbons (HFC) and chlorofluorocarbons (CFC), as well as hydrochlorofluorocarbons (HCFC). CFCs and HFCs contribute to ozone depletion in the upper atmosphere and the manufacture of such compounds has been phased out under the Montreal Protocol. They are

being replaced with other products such as hydrofluorocarbons (HFCs) hydrocarbons, and CO2. However, these replacements are sometimes considered pollutants in their own right as they have a global warming potential. Ammonia refrigerants are very common in large industrial systems and have zero global warming potential and a zero ozone depletion characteristic but can be explosive in certain concentrations in a confined space.


None of the engineering techniques described above is particularly novel and none is in any way experimental or untested. All can be applied with existing knowledge. Yet, this is too infrequently the case. One explanation may be that we are not facing sufficient hardship in terms of energy costs and availability. Perhaps we are still accustomed to having energy (particularly in the form of electricity) supplied by external sources and the costs arrive in our business as a necessary overhead which is simply paid without too much reflection. This is not the case amongst large or intensive energy users who have adopted energy savings techniques for some time. Many businesses are rightly focussed on their production and have little resources to devote to energy efficiency. There is no ‘silver bullet’ that anyone can offer or use to make energy costs go away; perhaps the most effective method is to recognize energy as a vital component of all business activities and to bring it into consideration along with other management decisions about vital aspects of operation.














onvincing an energy user to convert to a much more efficient low wattage 3W LED light from the traditional 60W incandescent bulb has its benefits; but it is a fruitless conversion if you still don’t have the minimum 3W to power that efficient light bulb. Motivating financially and developing energy retrofit projects for Industrial clients that reduce their production energy input significantly also does have its benefits; but it saves no purpose to invest in high efficiency extrusion machines when load curtailment prevails that brings your production line to a complete halt more often than your production output projection even for breakeven allows. We need to transition from an isolated scenario of promoting energy efficiency as a way to reduce ones energy cost and carbon footprint to a total Energy Management solution that includes alternative energy sourcing. Simply, the definition of energy efficiency is such that the Energy Consumption/ usage is measured for a particular level of output, volume or service level. An energy consumption/ usage reduction without loss of performance is an energy efficiency gain.



With Technology, one can achieve energy performance improvement but yet still even that Energy Efficient technology requires a minimum in power requirement that ought to be there when needed. Load shedding negates this minimum power requirement. Energy Efficiency is also seen as our first line of defence in containing the rising energy prices. It is presently an irrefutable fact that energy prices will continue to rise. Despite the rising prices of the energy commodity, it unfortunately doesn’t make it then readily and only affordable to those that has financial resources and can afford it; it simply is presently a rare commodity. In the early 2000, South Africa was subjected to very conservative tariff increases but the evident power challenges of 2008 ushered in a change in the whole energy landscape with significant price jumps from 2009 onwards. South Africa has experienced an effective Electricity tariff increase of over 170% from 2009 to 2013. We have further experienced tariff increases in each year from 2014 with the latest one expected in June 2015. But yet still, according to the Multiyear Price determination (MYPD timelines), electricity prices are still not yet cost reflective and so will continue to rise.


Maria van Hoeven, Executive Director of the IEA stated in the Energy Outlook 2013 publication that “Key to adapting to higher energy prices over the longer term will be efficiency”.However, Energy Efficiency has its limitations to addressing the problem of business continuity. It is not just about containing the cost of energy, but much about accessing readily available affordable power to retain and ensure business continuity. Eskom has indicated that Emergency Load Reduction which could take the form of either Load shedding (where load reduction is obtained by disconnecting load at selected points on the transmission or distribution system) or load curtailment (where load reduction is obtained from customers who are able to reduce demand on instruction) shall be expected and in operation in these times of supply constraint and highly compromised reserve margin. Eskom’s present situation lends to a number of scenario permutations that make it apparent that load shedding must be expected; which situations include: 1. Primary energy constraint (shortage of coal, water, diesel, etc) 2. Generation plant performance (low energy availability due to high unplanned/planned plant unavailability due to maintenance schedules) 3. Infrastructure damage (technical failure, sabotage, natural phenomena including solar storms) 4. Industrial/ social unrest ( Eskom strike, coal strike, disruption to Eskom operations) 5. New supply capacity ( inadequate capacity build execution or shortcomings of the NDP) 6. Demand increase ( significant uptake of the national economy) 7. Post-blackout recovery (for up to atleast 2 weeks and longer after the incident)

Granted, load shedding or load curtailment or buybacks will be the order of the months to come until we have contained the energy deficient conundrum. For most businesses, having the power to produce or conduct their business is imperative to them staying in business. With every effort made to reduce their total energy requirements and baseload through energy efficiency technology swap outs and best practices, they still now remain with the challenge of keeping that minimum baseload or critical business loads operational. To even start to entertain the thought of buy-back of power for a business to not use power to produce their product in exchange for a compensatory amount paid is defeatist in the bigger scheme of things; job and wealth creation, National GDP growth, global competitiveness of industry, and continuous improvement in innovation. Herein enters the concept of Energy Management; which involves the careful management of resources including reducing total energy use (energy conservation) and using energy more efficiently (energy efficiency). Energy Efficiency measures ought to be complemented with Energy Conservation as well as Strategic Sourcing of energy sources be it primary or secondary; this is what constitutes an effective Strategic Energy Management solution. Strategic sourcing of energy sources includes for example the use of the correct secondary energy source (use electricity to power tools instead of compressed air), it also includes sourcing primary energy at the right price (comparison of service providers’ tariffs, optimisation of tariffs through migration, reduced penalties and avoided additional charges due to over declared NMD or poor pf or low lf ), self-generation at grid parity or avoided cost of unserved energy. Energy Efficiency and Conservation as religiously followed by strategic sourcing of

(Excerpt from an Eskom stakeholder engagement presentation) SUSTAINABLE ENERGY RESOURCE HANDBOOK



energy sources and services are all measures that lead to energy security. These activities are not mutually exclusive but are inclusive of what constitutes a Total Energy Management solution. Fact is, the more energy you consume, the greater the risk that energy price increases or supply shortages could seriously affect your profitability, or even make it impossible for your business/organization to continue. With energy management you can reduce this risk by reducing your demand for energy and by controlling it so as to make it more predictable (BizEE Energy Management Made easy). A strategic approach to energy management further allows you to guarantee business continuity and uninterruptible production-toschedule with the comfort that self generation meets this requirement. Business adoption of a strategic energy management approach is imperative in securing energy supply, containing cost, and retaining market share through a heightened Customer confidence to receipt of goods at all times. Dovetailing energy efficiency measures to a captive power solution of self use energy source which is preferably a renewable one is a logical step to take now and in future. With the heightened concerns of no readily available capacity to supply power even for new developments and as much as the present scenario indicates a glaring supply-demand deficit, the alternative is to self-generate. Bringing all relevant issues in context such as regulatory and legislative directives, technical limitations and environmental concerns, a business paradigm shift to looking at ways to self-generate at cost parity to grid power ought to be seen. Business financial modelling that looks at the cost of unserved energy has to be done in motivation of putting up plant to serve production in order to meet production output that ascertains business profitability and continuity. Granted, at first



glance, the initial cost of self generated power may present higher than the traditional grid power, however notwithstanding the fast falling prices of power generation energy technologies, the total cost to business of energy loss needs to be brought into context. This includes cost of unserved energy, loss of market share and customer confidence as well as damage to equipment and plant due to erratic power. The National Energy Regulator of South Africa (NERSA)’s released a discussion paper on small scale embedded generation regulatory rules (at time of this article where not yet published) focusing on the regulatory rules for a modified net-metering scheme (or net-billing scheme) with different tariffs for exporting and importing energy for small-scale embedded generation up to 1MVA of installed capacity. These regulatory rules will define the basic principles and mechanisms for such a scheme. Such a net-metering (or net-billing) scheme could be implemented in the short term, within the responsibilities of the individual distributors. This discussion paper lends itself to the cries of many that wished to see policy guidance on small scale embedded generation in particular as it relates to rooftop Solar PV systems. It should be noted still that there are presently a number of residential and commercial rooftop grid tied PV systems using net-metering by agreement with the relevant municipalities (where applicable). Several municipalities have drawn up procedures for connecting such systems, and NERSA has also produced documents covering such situations. Business can look to alternative renewable energy captive power solutions such as solar PV, CSP, and Bioenergy etc which can be realised through various mechanisms such as: 1. Full turnkey/ EPC solution offered to the business by an ESCO or Energy Projects Developer where Business owns the energy generating facility. These projects can also


be financed off-balance sheet without the business putting up capital but rather capital is provided by an independent financier with the aim of recovering this investment plus interest over an agreed time period. 2. Independent Power Producer (IPP) or Energy Services Contract (ESC) model where an ESCO or Energy Projects Developer owns the facility and sells energy and energy services to business. Other than selling the traditional electrical energy (electricity), other energy services such as secondary energy steam or hot water or compressed air can be sold via an agreed energy services contract between the business and the IPP/ ESCO.

The Hybrid system will consist of different subsystems as described below: 1. Photovoltaic Generator able to provide clean energy during the day. 2. Anaerobic Digestion plant able to produce biogas from organic waste from ’A Company’s own operations. 3. CHP (combined heat and power) unit composed of a genset powered by biogas able to provide electrical and thermal

A captive power solution where a Company’s own waste can be recycled back into the energy generation value chain supplemented through a hybrid system with say solar PV or wind or Fossil fuel can be designed to produce clean energy (electrical and thermal) for customer-owned industrial processes in self consumption mode. These systems are designed to void loss of production (security of supply from any load shedding/ supply reductions/ load curtailment) as well as Gridparity attainment what with the continuously rising energy prices. An example of such system is given below:

energy. The wasted heat of the genset, recovered either from the exhaust gases or the cooling water, will be used both to heat digesters and to serve thermal room. 4. Battery bank, the electrochemical storage used to store PV energy excess and genset electric energy excess in order to optimize the frequency of the start and stop and give this stored energy back when required. 5. Thermal Room in which will be installed: • Heat Transfer Tank, a heat exchanger



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able to direct the thermal energy to the heating system or to the cooling system as needed; • Hot Tank in order to store hot water that will be distributed to the building thermal loads; • Absorption Chiller ( lithium bromide cycle) able to generate chilled water starting from hot water; • Cold Tank in order to store chilled water

that will be distributed to the building cooling loads; • Heat Pump, between Hot Tank and Cold Tank, that allows to use photovoltaic energy when it exceeds both the users’ need and the electrochemical storage capacity. 6. HyREITM Smart Manager able to manage all the energies flowing in the system.




Vivienne Roberts







ost REIPPP project developers or owners to date have opted for a fully wrapped Engineering, Procurement and Construction (EPC) contract. This type of contract is intended to pass design, procurement and installation risks from the facility owner to the appointed contractor. These contracts typically cost more as a result. The administration of these contracts, however, becomes very important, as poorly controlled projects can result in the owner assuming risk on a poorly designed, constructed or commissioned facility, while still being left with the construction bill. In an ideal world, the terms of the contract would be negotiated prior to financial close, both parties would be familiar with their respective rights and obligations under the contract, and the EPC contractor would conduct the works accordingly, with little to no oversight by the owner. A final, completed facility would be handed over to the owner on time, and payments made to the contractor would have been in accordance with an agreed schedule of milestones. Documentation would provide evidence that the facility was constructed and commissioned correctly, and everything would be signed off, filed and available onsite. Cash flow, progress, quality and onsite labour concerns would be the contractor’s to manage and what matters most would be the final product presented to the owner at commercial operation. In reality, the owner often needs to play a much more involved role.


The specifications of a contract should be detailed enough to ensure that the facility is fit for purpose, without being too detailed to require a contract variation for a minor design amendment. The contractor should be required to submit a materially completed design to the owner for review and comment.



At this stage, the owner reviews the design and comments on any non-compliance with the specifications laid out in the contract. As way of example, on a solar PV facility, key design checks would typically focus on: • Whether the equipment matches that specified in the contract • Checking that the design complies with the constraints listed in the project permits (including the environmental authorisation) • Whether there is evidence that good engineering processes have been followed with calculations provided substantiating certain aspects of the design, such as structural and road designs and cable loss assumptions • Reviewing the appropriateness of the assumptions used in the energy yield calculations • Checking that the full scope of works (including stormwater management and drainage) have been incorporated into the design It is important to note that this design review should not relieve the contractor of their obligations to comply with the contract, but it does help to flag any potential issues at an early stage, and avoid any design revisions at a later stage (i.e. once construction commences). It also helps to avoid any rework. Design works are also often one of the first milestone payments and this review helps to ensure that the payment is made only once the contractor has fulfilled their design obligations.


Prior to financial close, a programme of suitable detail should have been developed which would include an allocation of time for the procurement of key equipment, particularly long lead items. The contractor is


responsible for ensuring that this equipment is ordered and paid for and that the necessary logistical arrangements are made in order to meet scheduled targets. Most EPC contracts have a defined cap on the damages payable by the contract in the event of delays. In addition, the daily amount payable for delays may not equate to the revenue that would have been generated were the facility operating as expected. As such, the owner is only protected from procurement delays to a limited extent. It is therefore in the owner’s interest to be aware of any potential procurement delays, particularly if there is any influence that the owner could exert on expediting the delivery of equipment. The condition of the equipment delivered to site is also extremely important. Electrical equipment such as PV modules and inverters are very sensitive items, subject to breakage or damage. The contractor should be handling and storing all equipment in accordance with the manufacturer’s instructions, however this is often not done in practice. If the owner is aware of the manufacturer’s requirements, they are able to ensure that these requirements are enforced, particularly as this should be an obligation under the EPC contract. By playing a strong and visible role in the inspection of procurement documentation (e.g. purchase orders) and of equipment delivered to site, the owner can help to mitigate against delays or performance issues from damaged or compromised equipment.


The contractor has a number of functions and responsibilities to manage and facilitate during construction. They need to ensure that construction activities are taking place in the correct sequence, on time and to a suitable level of quality.

Construction management Depending on the size of the project, there are hundreds of people working onsite whose activities need to be coordinated. In addition, local community stakeholder engagement should be taking place. Labour disputes are not an unfamiliar concept within infrastructure projects and renewable energy projects have not been without their fair share of strikes and periods of unrest. While the responsibility for ensuring that all works are carried out in accordance with relevant labour related regulations typically rests with the contractor, the reputational risk associated with any prolonged dispute often rests with the owner. Ultimate responsibility for noncompliance with health and safety obligations also remains with the owner. It is therefore in the owner’s interest to maintain an oversight of the contractor’s construction management procedures and the implementation thereof. Construction method statements Similarly to the design review discussed above, the contractor should be developing, as they go, construction method statements. These should outline how they intend to carry out construction activities such as trenching, cabling, module mounting, concrete pouring etc. These method statements help to ensure that the equipment manufacturer’s installation requirements are complied with, and that best practice is followed. The owner’s inspections of works onsite, and the compliance of these activities with the approved construction method statements will help to identify any apparent construction control issues onsite. Sub-contractors should be aware of the latest method statements and construction drawings, and regular briefings and staff training sessions should be taking place. Construction quality The owner is protected against construction quality issues through the inclusion of performance liquidated damages, serial defect



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and latent defect clauses in the EPC contract. However, as with delay liquidated damages, there is typically a cap set on the damages for which the contractor can be liable. In addition, loosely defined defect clauses may not protect the owner from issues arising outside of the defect liability period. The quality of construction could therefore present a significant residual risk to the owner. There are some items that the owner can influence in the control of quality onsite: • The contractor should be obligated to develop a quality management plan. This should outline how quality will be controlled, monitored and reported on, and how issues identified will be remediated, and preventative measures effected to prevent any repeat of quality concerns. This should be reviewed by the owner for completeness and comprehensiveness. • Hold points should be identified to allow the owner to inspect a sample of completed works. In a PV facility this would typically be a reference table of modules installed, or a reference field with the inverter and associated cabling completed. The owner can then comment on any identified quality concerns to be addressed. Once approved, all works are to conform to the reference sample standard. • Comprehensive documentation serving as evidence of thorough quality inspections should be maintained by the contractor. This documentation should be available to the owner for inspection. The owner can therefore conduct independent inspections to verify the accuracy of the reporting. • Progress payments claims should be reviewed with respect to the physical

completion of activities conducted onsite, but also with consideration given to the quality of completed works. Minor snags may be considered to be acceptable, but pervasive or major issues should be addressed as they arise to avoid the need for widespread remediation at a later stage. Construction progress As with procurement activities, the owner should monitor construction progress in accordance with the overall project programme of works, to identify and help in addressing potential delays. The contractor should provide a clear, logical and comprehensive project programme to the owner, updated on a regular basis, to allow the owner to verify progress claimed, and identify any issues, particularly along the project’s critical path.


For the owner to conduct any of the activities listed above, they need to have a very clear understanding of the EPC contract. This contract forms the biggest tool at their disposal for facilitating the timely and successful construction of the facility. Caution should be given to making sure that the recommendations and requests made by the owner are appropriately phrased, and that the owner does not issue any direct instructions to the contractor (other than those required to ensure that health and safety issues are resolved) as these instructions may be considered to be variations under the contract or may lead to disputes over delay or quality issues that result from the contractor carrying out any such instruction.



SMALL SCALE RENEWABLE EMBEDDED GENERATION (SSREG) The Opportunity for on-site Commercial & Industrial (C&I) Rooftop PV in South Africa Matthew Turner






1. What is Small Scale Renewable Embedded Generation?

Following the extensive implementation of distributed Solar PV1 generation in many parts of the world (most notably in Germany, Spain, Italy and California), and on the back of the successful local utility-scale RE programme2, there is a growing expectation that we are now entering an era where Small Scale Renewable Embedded Generation (SSREG) will start winning market share from traditional grid-supplied electricity in South Africa. This is especially true for Commercial and Industrial use, where costs of solar generation compete favourably with the rates businesses currently pay from Eskom and municipalities. While ground-mounted PV plants will continue to see application in areas where space is available (e.g. for agricultural and mining offtakers), a combination of lower construction costs and the abundance of roof space where

electricity is consumed will ensure that the rooftop PV market grows rapidly in South Africa over the next few years. It is for this reason that this article will focus specifically on rooftop C&I PV.

2. What value can businesses unlock by installing a Rooftop PV Plant?

South African business owners are faced with an increasingly challenging situation in terms of both rising electricity costs (“cost per kWh”) and lack of energy security (“cost per lost kWh”). The uncertainly caused by the current electricity climate also makes it extremely difficult for business owners and executives to confidently make strategic investment decisions. With no short-term solution in sight, South Africans have been warned that ‘inadequate electricity supply…will impose a serious constraint (in) the short term’3.

Photovoltaics are best known as a method for generating electric power by using solar cells to convert energy from the sun into a flow of electrons. The photovoltaic effect refers to photons of light exciting electrons into a higher state of energy, allowing them to act as charge carriers for an electric current (Wikipedia)


Renewable Energy Independent Power Producer Procurement (REIPPP) Programme


National Treasury, National Budget: Economic Outlook budget/2015/review/chapter%202.pdf )






i. Rooftop PV mitigates against future tariff increases Business owners are faced with increased operating costs resulting from recent electricity tariff increases the “cost per kWh” (see Figure 14). Many businesses cannot easily improve the energy efficiency of their operations and are either unwilling or unable to pass these increased costs through to customers for fear of losing competitiveness, a situation that results in margin squeeze. The combination of above-inflationary electricity tariff hikes and significant reductions in the cost of installed PV systems over the past few years has resulted in a situation where PV-generated electricity has already reached grid parity5 in widespread areas of South Africa. Not only does this result in immediate cost savings that increase over time, it also has the added benefit of allowing businesses to accurately model future capital investment strategy based on accurate electricity cost inputs. ii. Rooftop PV offers energy security to businesses Of potentially greater concern than the operating cost pressures resulting from tariff hikes, is the effect on businesses of the “cost of lost kWh”. Business owners are being forced to reduce output or even shut down operations during load shedding – a scenario that results in loss of revenue and reduced profits. The IRP 2010 estimates the Cost of Unserved Energy (COUE) to be R75 for every kWh6 that is not available when the economic sector requires power, although this value varies by manufacturing sector due to the fact

that higher-value finished goods may incur a proportionately higher loss of revenue for each lost kWh. More recent estimates place the COUE closer to R100 per kWh not supplied to businesses due to load shedding7. Many businesses have already turned to expensive, noisy and polluting diesel generators to meet their power requirements during periods of load shedding. Switching a grid-connected PV plant over to the existing backup generator circuit during periods of load shedding will enable business owners to reduce both costs and emissions. It is vitally important that the interface between the PV Plant and the diesel generator set controller is optimized in order to provide seamless integration of systems and prevent damage to and/or increased operating and maintenance costs associated with running the generators – business owners should insist on one of the proven and cost-effective fuel saving solutions that are already available on the market. iii. Rooftop PV can provide cash flow savings from month one In a solar lease or solar power purchase agreement (PPA), a customer pays for the solar power system as an operating expense over an extended period (typically 10-20 years), allowing businesses to take advantage of the benefits of PV-generated electricity without making any up-front capital investments. In a power-purchase agreement, a customer agrees to purchase all the energy from a solar system over a fixed period of time. By taking advantage of solar PV for little or no money down, businesses can often realise immediate energy savings.


Figures from Eskom and Statistics South Africa


Grid parity is defined as the point where PV-generated electricity becomes competitive with the retail rate of grid power


IRP 2010 ( )


Chris Yelland, December 2014 (




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Should a business wish to own their rooftop PV plant, a well-engineered solar system combined with tax allowances, attractive loans, and/or government grants will ensure that a rooftop PV plant delivers immediate cash flow savings. Accelerated tax depreciation allowances allow businesses to depreciate the rooftop PV plant over 3 years (50/30/20), greatly accelerating the payback of the investment. Many financial institutions are also offering preferential loan terms for on-site energy projects, using the value of the plant as security against default. Lastly, various grants have been made available by government trade departments8 to incentivise businesses to invest in productivity and cost saving infrastructure. iv. Rooftop PV provides more certainty when making investment decisions Knowing that there will be power for production when needed, and knowing how much that electricity will cost at any future period, enables businesses to make large-scale investments with far more clarity. Removing some of the uncertainty surrounding investment decisions will allow strategic decision makers to decide whether to make future Capital or Operational investments

3. How much does PV-generated electricity really cost?

Many businesses looking to invest in alternative electricity generation make the mistake of considering only the cost of purchasing the PV plant. The installed cost, generally quoted as a “cost per kW installed”, doesn’t take into account the amount of electricity generated by the plant, or any additional operational and maintenance (O&M) expenses that will be incurred in running the plant. The most important metric to consider is what a kWh generated by the rooftop PV plant will cost 8

relative to a kWh supplied by the grid. The standard measure of the generation costs over the lifetime of the plant is referred to as the Levelised Cost of Energy (LCOE). i. What is LCOE? The Levelised Cost of Energy (LCOE) is a measure used to compare the combination of plant performance against the net present value (NPV) of capital costs, finance costs, operations and maintenance (O&M) costs and fuel costs in order to calculate the unit-cost of electricity produced over the lifetime of a generating asset. It is often used to estimate the average price that the generating asset must receive in a market to break even over its lifetime.

Where: LCOE = Levelised Cost of Energy It

= Investment expenditures in the year t


= Operations and maintenance


= Fuel expenditures in the year t = Electricity generation in the year t

Et r n

expenditures in the year t

= Discount rate = Operating life of the system

Table 1 compares the capital and operational cost drivers for various generating technologies. Typically, generating assets with high capital costs need to be run at higher capacity for a long period of time to cover the financing costs. Generating assets with relatively higher operating costs are more likely to be able to be dispatched as and when needed, and can be more easily decommissioned once newer, more cost

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effective generation (or generation-storage combination) technologies emerge.

Renewable Energy

Traditional Generation

Generation Technology

Capital Costs

Operating Costs

Solar PV


Very Low (certain)



Very Low (certain)

Solar CSP

Very High

Very Low (certain)

Tidal/Wave Power

Very High

Very Low (certain)


Very High

High (uncertain)



High (uncertain)



High (uncertain)


Very High

Low (uncertain)

Table 1: Cost drivers influencing LCOE for common generating technologies

ii. What can a business expect to pay for electricity generated from a rooftop PV plant? The capital cost of a rooftop PV plant can vary depending on the installed capacity and the available roof structure on which the plant will be mounted. Added to this, the amount of energy that will be generated over the lifetime of the PV plant will vary greatly depending on the geographic location of the plant (inland regions tend to have higher irradiation than coastal regions – see Figure 29) and the orientation of the proposed roof area (North facing roofs have higher yields in southern hemisphere locations). A 558kWp ground-mounted PV tracker plant currently being commissioned for the Council for Scientific and Industrial Research (CSIR) in Pretoria will produce electricity at a cost of 83c per kWh over a lifetime. While the production yield from a fixed-inclination rooftop PV plant is lower than that from a tracking system (which optimizes output by tracking the sun through the sky), the absence of complex tracking components together with the fact that many rooftop PV plants can be connected directly to a low voltage (LV) circuit without requiring an 9

expensive voltage transformer lowers the capital costs of a rooftop plant, effectively delivering electricity at an even more competitive LCOE.

Figure 2: Global Horizontal Irradiation for South Africa

A typical rooftop plant mounted on a northfacing roof in Gauteng should produce electricity at a cost of between 80c per kWh (1,000 kWp) and 90c per kWh (500 kWp), while you can expect a similar plant in Cape Town to have an LCOE of up to 10% higher than this.

SolarGIS chart published by Centre for Renewable and Sustainable Energy Studies (CRSES), Stellenbosch University




4. How do you establish whether a rooftop PV plant will benefit your business? A number of factors must be taken into account when calculating how much a rooftop PV plant will save a business. If most, or all, of these factors are favourable, the savings from installing a rooftop PV plant can significantly influence the profitability of a business.

i. How much electricity your business uses While larger rooftop PV plants can be built more cost-effectively than smaller systems, a rooftop PV plant should ideally be sized according to the amount of electricity a business uses during the day. Despite the existence of export tariffs, these are lower than the cost of generation (LCOE) and PV generated electricity should be for on-site consumption to optimize financial returns. In addition to the reduced returns from a high-export plant, municipalities have indicated that businesses generating their own electricity who still have the balance of their electricity supplied from the municipal grid must adopt a self-consumption model under which will not be allowed to be netexporters of electricity over an annual billing cycle. As a rule of thumb, businesses using more than 50,000 kWh per month should benefit most from installing a rooftop PV plant. ii. When you use electricity Does your business operate year-round? Do you continue to operate over weekends? Is your business reliant on refrigeration, airconditioning and other daytime loads that increase the energy demand during daylight hours relative to overnight levels? 10

Business owners that answer yes to these questions will be able to have higher percentage of their electricity supplied from a rooftop PV plant.

Figure 3: Typical daily C&I load profile showing PV generation profile in yellow

iii. How much you currently pay for electricity Eskom is being forced to increase tariffs at rates well above inflation in an attempt to cover their costs of building new generation capacity and in order to meet rising operating and maintenance costs at existing generation facilities. If your tariff for Eskom or municipality-supplier electricity was more than 80c per kWh in 2014/1510 then a rooftop PV plant should save your business money. iv. The available roof area Rooftop PV plants are best suited to large open roofs, oriented in a northerly direction and free of structures (chimneys, ventilation outlets, walls) that may cause shading on the modules. The roof structure must be able to support an additional static load of up to 20kg/m2 with the surface material in good condition with an expected lifespan of at least 20 years. Strengthening roof structures will add significantly to the cost of the project, as will dismanteling and re-assembling the PV plant while performing maintenance to the roof surface material. Businesses with a roof that is

Annual Eskom tariff increases are applied on 1 April, while municipal tariffs are increased annually on 1 July. At the time of writing this article, Eskom has asked NERSA for a 25.3% tariff increase




either nearing the end of its useful life or is in poor condition, should repair or replace the roof before installing a rooftop PV plant. There are a variety of reliable mounting systems that have been developed for a variety of roof types. The most cost effective are clamps that attach directly to metal roof sheeting (typically Klip-Lok or IBR), although mounting on flat concrete roofs is often also cost-effective. A 500 kWp rooftop PV plant mounted parallel to the roof surface on a pitched roof will typically require around 4,000 m2 of roof area. A PV-plant mounted on a flat concrete roof will require substantially more area for the same installed capacity due to the shading effect created by the raised panels.

5. What factors are currently hindering the adoption of rooftop C&I?

Despite a lack of clarity around legislation, the absence of approved LV11 connection standards, and reluctance on the part of municipalities to lose revenue, many businesses continue to go ahead and install SSREG in South Africa. i. Current legislation is vague, especially on rooftop PV plants larger than 1MVA Most municipalities will register and authorize grid connection of SSEG’s up to 1 MVA without evidence of a generation license (granted by NERSA12 ), simply requiring the SSREG to register the specifications of their plant on a national database. Any business wishing to install a rooftop PV plant larger than 1MVA will need to apply for a generation license, which will add to the project delivery timeline. It is also currently unclear whether

any additional licensing or permitting – such as EIA’s13 - will be required for larger plants. ii.Absence of approved standards for LV (low voltage) connections Two main reasons exist for connecting a rooftop PV plant directly to a LV distribution board: lower costs and less complexity. Both of these result in an improved business case. Unfortunately, a number of LV connection standards/requirements are still in the process of being drafted. Despite the absence of existing regulations, any grid-connected SSREG connected will need to prove compliance with new standards as they emerge. Businesses looking to implement a rooftop PV plant are advised to confirm with the company installing and connecting their PV plant that the grid connection complies with the relevant NRS 097-2-x standards. iii. Municipalities perceive SSREG’s as a threat to revenues Since those businesses faced with the highest tariffs are likely to be the first adopters of C&I PV generated electricity, municipalities are faced with the reality of losing their most profitable customers first. Municipalities have responded by releasing unfavourable embedded generation tariffs that attempt to compensate for the loss in revenue, penalizing SSEG’s and watering down the business case for the adoption of C&I PV. Members of the PV industry are currently working together with stakeholders and municipalities to try to find an equitable solution to this problem.

6. Future developments worth watching

Large-scale investment and commercialization of Solar PV over the past


Low Voltage, defined by Eskom as nominal voltage levels up to and including 1 kV


NERSA: National Energy Regulator of South Africa


EIA: Environmental Impact Assessment




10 years has resulted in significant cost reductions and efficiency gains of PV plants, bringing the LCOE of PV-generated electricity in line with more traditional generation models. With future savings in Solar PV LCOE likely to be incremental as opposed to the rapid price reductions of the past, investors are increasingly channelling money into energy storage that has been identified as the ‘next big thing’ in the energy technology sector. i. Have we entered the age of affordable battery storage? A number of battery storage options have been launched in recent months, with energy storage capturing the public’s imagination for the first time. However, even the recent launch of the Tesla Powerwall14 - arguably the most high-profile launch to date - has elicited varying responses from market commentators. Many pundits claim that the launch of the Powerwall is the advent of the era of affordable energy storage – a view backed by consumers following $800m worth of orders being placed within the first week of order

availability. Others, such as Bloomberg15 are more sceptical, saying that “The Powerwall product that has captured the public’s imagination has a long way to go before it makes sense for most people”. So are the new energy storage options more about hype than substance? A Report by GTM16 research titled “The Future of Solar-Plus-Storage in the US” forecasts that the annual market value for energy storage will grow from $42 million in 2014 to over $1 billion by 2018 (see Figure 4). The report predicts the penetration of solar-plus-storage for commercial customers to grow from 1% in 2014 to 11% by 2018 as increased investment in energy storage results in the availability of better-performing batteries at lower costs. ii. Should South African businesses invest in storage technology right now? For businesses with relatively low load demands that incur high loss of revenue during load shedding, investing in energy storage may already make sense. However, for broader C&I application, 2015 is probably a bit too soon to justify the costs of on-site energy storage.

Figure 4: The future of Solar-Plus-Storage in the US



Bloomberg New Energy Finance (BNEF) response to the launch of the Tesla Powerwall


Quotes and figures from Greentech Media (




ACHIEVING PRACTICAL SUSTAINABILITY GOALS FOR SOUTH AFRICA We have constantly been made aware of the dangers of climate change in recent years, as global temperatures continue to rise and natural disasters affect human settlement more frequently. The dialogue of world leaders repeatedly emphasises the need to focus on the development of a green economy to ensure the wellbeing of our planet. In working towards achieving the country’s necessary green goals, the WWF Nedbank Green Trust is sponsoring a two-year programme to lay the foundation for South Africa’s practical transition to a lower-carbon, climate-resilient economy. An essential component of this programme is the integration and streamlining of the many and various green-economy development plans and programmes within government departments such as energy, trade, agriculture, water and health. Head of WWF’s Living Planet Unit, Saliem Fakir says: “It’s extremely important as it is all about developing policy instruments that can be practically implemented by citizens and business

Solar field supplying power to the national grid 172


in South Africa to bring down our carbon emissions. One example is the implementation of a carbon budget, where every sector of the economy is officially limited to a specified amount of carbon that they can emit.” As indicated in the Integrated Energy Planning Report, the generation of approximately 4 000 MW of power has been allocated to independent renewable-energy producers who will feed into the national grid and help South Africa to meet its current energy requirement of 40 000 MW. Power supplied by independent renewableenergy power producers will increase to 19 000 MW by 2030 when South Africa’s energy requirements will be an estimated 66 000 to 70 000 MW. The programme is also partnering with the Department of Environmental Affairs (DEA) to build the necessary capacity to take the National Climate Change Response Policy forward. Winner of the 2014 South African Energy Efficiency Association Patron Award and Nedbank Carbon Specialist, Dr Marco Lotz, says that the bank becoming carbon-neutral is evidence of our desire to be the most admired bank on all fronts. This milestone was achieved by reducing our own annual impact as much as possible first, and then offsetting the remainder of the footprint. Footprint reductions are achieved through a variety of initiatives – from internal behavioural change to working towards clear reduction targets in terms of paper, water, electricity, waste, travel and carbon emissions. As a result, greenhouse gas emissions for each fulltime employee have significantly decreased since 2009.


Nedbank switches off during Earth Hour Nedbank’s sustainable aspirations have seen the bank achieving carbon-neutral status for five consecutive years. It also remains one of two participants in the 2013 South African Carbon Disclosure Project Index to achieve a 100% disclosure score. Marco has been part of Nedbank’s Carbon Disclosure Project from the initial stages and has played a significant role in helping the bank reduce its energy consumption. ‘Disclosures including the Carbon Disclosure Project, has helped move climate change and energy efficiency onto the business radar and into mainstream business thinking. Companies are better able to protect themselves from the impacts of climate change and to become more energy efficient. That said, the project needs to keep evolving to capture the everchanging sustainability space,’ says Marco. It’s not only large corporations that calculate their carbon emissions that need to be cognisant of their energy consumption. This year Nedbank and the WWF are calling on everyone, individuals and corporations alike, to join the Earth Hour campaign and be a part of the growing movement for change. ‘Earth Hour is a fantastic campaign that highlights the power we all have to be effective proponents for climate change awareness.

Children of the Northern Cape utilising a solar cooker By switching off our lights and non-essential appliances on 28 March 2015 between 20:30 and 21:30 we automatically become advocates for South Africa achieving a greener economy,’ explains Marco. Nedbank encouraged all 30 000 of its staff members across its 22 campus sites and 170 branches to participate in last year’s Earth Hour. A total of 575 MW of electricity was saved by South Africans during this hour, which translated into enough electricity to power the city of Polokwane for an hour. This year our aim is to make an even bigger and more significant difference. SUSTAINABLE ENERGY RESOURCE HANDBOOK



How developing countries are getting into hot water Christine King


his article is a summary of the Food and Agriculture Organisation of the United Nations (FAO) report on the Uses of geothermal energy in food and agriculture and the opportunities that exist for developing countries. Geothermal energy is heat energy that is generated and stored in the Earth. Heat, left over from the formation of the planet and from the radioactive decay of matter over its lifespan, is continuously moved from the Earth’s core to its surface where it is vented through such natural means as hot springs, geysers and volcanoes. This constant flow of heat energy is said to be equivalent to 42 million megawatts (MW) of power. It is considered to be a sustainable, renewable energy because the Earth’s heat



reserves are predicted to last for billions of years even considering the potential for cooling through its use as a source of energy. Geothermal energy is also considered to be clean even though geothermal wells can release greenhouse gases (GHGs) trapped deep within the Earth. The GHG emissions per energy unit are much lower than those of fossil fuels. Throughout human history, geothermal energy has been used for bathing and heating. The first use of geothermal energy for electricity generation came in Italy in 1904. At present, according to the FAO, 24 countries are using geothermal energy to generate electricity, with a further 11 countries developing and testing geothermal systems. Countries deriving more than 10% of their


electricity from geothermal sources include Iceland, Costa Rica, El Salvador, Kenya, New Zealand and the Philippines.

Geothermal in practice

2. back-pressure turbines, which release into the atmosphere; and

Greenhouses According to the FAO, greenhouse heating has been the most common use of geothermal energy in agriculture for the past 25 years. In many European countries, geothermal heat is used to produce vegetables, fruits and flowers on a commercial scale all year round. The FAO records several benefits to the use of geothermal energy to heat greenhouses: • Geothermal energy often costs less than energy from other available sources.

3. binary plants, which use lower temperature water or separated brine

• Geothermal heating systems are relatively simple to install and maintain.

The FAO lists three main categories of geothermal power plant, depending on the chemistry, fluid temperature and pressure involved: 1. condensing power plants, with dry steam and single- or double-flash systems;

According to the report, geothermal energy has potential for a range of agricultural and agro-industry uses from aquaculture and soil warming to food processing, pasteurisation, pickling, distilling, sterilising and timber drying, amongst many other applications. The sources of geothermal energy for agricultural and agro-industrial uses include low- and intermediate-temperature, up to around 150°C, geothermal resources, as well as the waste heat and cascading water from geothermal power plants. Most developing countries use geothermal energy for recreational activities and space heating, but a number apply it to the agricultural and agro-industry sectors, namely Algeria, Kenya, Costa Rica, El Salvador, China, India and Indonesia. According to the FAO, these countries mainly use geothermal energy for: • fish farming • heat pumps • drying agricultural produce • greenhouses • food processing

• Greenhouses account for a large share of agriculture’s total consumption of lowenthalpy energy. • Greenhouse production areas are often close to low-enthalpy geothermal reservoirs. • It improves the efficiency of food production by making use of locally available energy sources. Greenhouses are built on steel or aluminium frames covered by glass, plastic film, fibreglass and/or other rigid plastics. • Glass – heavy, lowest energy efficiency, highest light quality • Plastic – insulation properties of a double layer reduces heat loss by up to 30 - 40 percent, increased energy efficiency • Fibreglass – lighter than glass with similar amount of heat loss, costs less to construct Aquaculture Geothermal hot water is used to heat freshwater in heat exchangers or is mixed with fresh water to obtain suitable temperatures for fish farming. According to the FAO, pond and raceway heating are among the most common applications of geothermal energy in aquaculture; making it possible to carry out aquaculture operations in colder climates or close to markets where alternative heating sources would not be economical. Used mainly




at the hatchery stage, geothermal energy in fish farming protects the fish stock against cold weather and increases fish production. According to the FAO, “the breeding of different species of fish in water heated with geothermal energy makes production cheap and profitable all year round.” The main species raised are carp, catfish, tilapia, frogs, mullet, eels, salmon, sturgeon, shrimps, lobsters, crayfish, crabs, oysters, clams, scallops, alligators, mussels and abalone. Cold water is heated in a heat exchanger using hot wastewater from a geothermal power plant, or is mixed with water from a hot spring. Once it has reached a suitable temperature – around 20-30 °C – the water is pumped into the fish pond. The size of the pond, according to the FAO, depends on the temperature of the geothermal source, the temperature required for the fish species, and the heat losses incurred during operation. Food drying Food and agricultural industries make use of thermal drying processes to preserve a growing range of foods. According to the FAO, in industrialised countries, drying processes use 7-15 percent of total industrial energy consumption, but their thermal efficiency remains relatively low, at 25-50 percent. According to the report, low- to mediumenthalpy geothermal resources are the best option for reducing energy consumption in agricultural drying. Drying can use heat from the hot water, steam from geothermal wells, or the waste heat recovered from a geothermal plant. The report names the geothermal heat exchanger as one of the most important devices in a dryer system using geothermal energy. “This consists of steel or copper pipes equipped with copper or aluminium fins to increase the heat transfer surface. Geothermal hot water or steam is circulated inside the pipes and air is blown through the heat exchanger using a propeller fan. The air is heated by the geothermal hot water or steam and is then blown into the drying chamber for the drying process.”



Food processing Peeling and blanching are important preprocessing steps in many food processing industries, such as those for fruits and vegetables. In the peeling process, the food is introduced into a hot water bath where the skin or outer layer is softened before being mechanically scrubbed or washed off. According to the report, geothermal energy can assist with the peeling system when geothermal hot water or steam is applied directly to the produce stream, or indirectly by heating the produce bath. Vegetables and fruits are often blanched to inhibit enzyme activity and microbial growth, remove gas from the plant tissue, shrink and soften the tissue, and maintain some natural properties of the food before certain processing operations, such as canning, freezing or dehydration. In blanching, food is heated rapidly to a predetermined temperature, maintained at that temperature for a set time, and then either cooled rapidly or passed on immediately to the next processing stage. According to the FAO, geothermal fluids are used to provide the required energy through heat exchangers because the properties of the blanching fluid usually need to be closely controlled. Common temperatures for peeling and blanching processes range from 77 °C to 104 °C.

Geothermal in Africa

Kenya Agricultural produce drying – In Eburru, the local community uses a traditional system to harness and condense geothermal steam for drying agricultural products such as pyrethrum, tobacco and maize. Greenhouses – In Oserian, Naivasha, the Oserian Development Company has been utilizing geothermal energy to heat rose greenhouses since 2003, starting on 3 ha and expanding to 50 ha. Geothermal heating reduces humidity in the greenhouses, which eliminates fungal infection and results in lower production costs. The use of geothermal


greenhouses leads to better-quality flowers and increased production. Algeria Fish farming – The government is promoting a project for utilizing geothermal energy, and providing financial support of up to 80 percent of the total project cost. So far, three fish farms have been built – in Ain Skhouna, Ouargla and Ghardaia. The Saida tilapia farm in Ain Skhouna consists of 33 ponds covering a total surface area of 49 500 m2. Hot water at 30 °C is supplied from a drill hole with a capacity of 60 litres per second. In 2008, 200 tonnes of tilapia were produced and production is expected to increase to 500 tonnes over the coming years. Drill holes provide 44 litres per second of water at 21 °C at Ouargla and 150 litres per second of water at 28 °C at Ghardaia. About 1 500 tonnes of tilapia are produced each year from both sites. Kenya’s success According to the FAO, Kenya is one of the most successful countries using geothermal energy for both electric power generation and direct uses. The Government of Kenya has approved several acts of parliament that work together to regulate and guide geothermal use in a sustainable manner. This legislation will play an important role in ensuring the sustainable development of geothermal resources. The report also states that the Government of Kenya “has signed important international treaties and conventions such as the United Nations Framework Convention on Climate Change, the Convention on Biological Diversity and the Ramsar Convention on Wetlands of International Importance”. Which the FAO suggests could have implications for geothermal development in the country. The report outlines the importance of government investment in opening up and preparing geothermal projects in Kenya. This is due to the unwillingness of other entities to finance resource exploration and

geothermal assessment. According to the FAO, multilateral, bilateral, private and other entities often only step in financially in the subsequent phases, once assessment has been successful. For this reason, according to the report, the Government of Kenya “has invited private investors to participate in the exploitation of geothermal resources and promotes investments in renewable energy research and development through policy developments such as support to public– private partnerships, feed-in tariffs and the backing of loans”. The FAO suggests that major incentives backed by legal policies are needed to make geothermal development more attractive to the private sector. To encourage foreign investors, the Government of Kenya allows both Kenyans and nonKenyans to hold foreign currency and foreign currency bank accounts, does not restrict the repatriation of income, and provides tax incentives for foreign investors along with other, conducive tax policies. According to the FAO, the establishment of the Geothermal Development Company as a government body has given Kenya access to support from and collaboration with international financial institutions and financiers. The participation of stakeholders in early stages of a project can help build support from communities in the areas where geothermal development activities are being implemented.


The FAO suggests a number of challenges to using geothermal energy for food and agricultural industries in developing countries: 1. Policy and regulatory barriers • Government policies and legislation are important factors in creating an enabling environment for geothermal investment and resource mobilisation and in encouraging investments from the domestic and foreign private sector. However, few governments have clear policies that promote the use of




geothermal energy, and budgetary allocations to geothermal energy research and development tend to be low in developing countries. • Most developing countries lack the financial resources to make the necessary investments in geothermal exploration and utilisation. The legislative framework is inadequate for attracting private or foreign investment in geothermal projects. Governments can play a very important role in initiating geothermal projects by financing the early phases. However, this requires the right policy environment, which is lacking in most cases. • A successful geothermal system requires the right institutional framework, and coordination and consultation among relevant stakeholders. These are lacking in most developing countries, preventing the development of synergies and complimentary systems. 2. Technical barriers • Technical expertise is crucial for developing geothermal systems. A critical mass of policy analysts, economic managers, engineers and other professionals is required. However, there is a continuing shortage of qualified personnel in most developing countries. • Infrastructure to support geothermal systems is often lacking or inadequate, including transport systems and communication networks. 3. Financial barriers • The high upfront cost of geothermal energy technologies is one of the main barriers to geothermal energy investments in resource-constrained economies. Most developing countries lack the financial resources to enable investments in the development of



geothermal systems. The shortage of funding for certain phases of geothermal energy deployment discourages investors from undertaking the crucial first steps, such as energy resource assessments or feasibility studies for geothermal energy projects. The limited availability of public funds often leads to competition for financial resources among different sectors, which may restrict the availability and allocation of funds to the geothermal energy sector. • Financing plays an important role in geothermal programmes. The challenge often faced in the financing of geothermal energy projects is in developing models that can provide technologies and services to consumers at affordable prices while ensuring that the industry remains sustainable. • The conditions laid down by financial institutions are often not suitable for – and may even act as a deterrent to – potential investors.

South African potential

Since South Africa is located in a geological stable zone, containing no major fault lines or particularly active volcanic sites, geothermal is not usually considered in the debate about renewable energy sources for the region. However, the country is relatively well endowed with thermal springs. According to the report of Tshibalo et al. Evaluation of the Geothermal Energy Potential in South Africa, there are 87 thermal springs, with temperatures ranging from 25˚C to 67. 5˚C, that we have documented knowledge of at present. They suggest that while South Africa does not have the potential to provide very high temperature geothermal energy (200 to 300°C), which is usually related to volcanic activity, the nature of its geology could provide medium to high energy geothermal resources.


Tshibalo et al. suggest that South Africa needs to develop reliable geothermal evaluations and technologies in order to make efficient use of these resources. They say that the availability of dedicated research at every level: scientific, technical, economical and environmental is one of the limiting factors for the growth of geothermal energy in the country. According to Tshibalo et al. “heat flow is an important factor in geothermal exploration as it gives an indication of zones of abnormal heat generation in the earth. The average heat flow for the Earth is 70 mW/m2 corresponding to a gradient of 2.5 – 3 °C/100m. A heat flow above average is usually the main indicator of possible geothermal source at depth.” Areas of potential The report of Tshibalo et al. found several areas of potential geothermal energy resources: Hot dry rock south of Upington, the Namaqualand region and in the northern part of Kwazulu-Natal. According to the report, temperatures of 100°C to 150°C, at depths of 3000 to 5000m, were measured in these areas. Deep fractured aquifers were also identified in the Limpopo belt and Cape folded belt where temperatures of 60° to 80°C at depths of 1000 to 2000m could be measured. According to Tshibalo et al. many thermal springs can be found in South Africa that measure temperatures exceeding 25°C all year round. The report found two groups of springs of particular interest at the Tshipise cluster in the Soutpansberg Basin of Limpopo Province, in the North, and at the Cape Fold Belt cluster, around Brandvlei, in the Western

Cape Province in the South West. Tshibalo et al. found that the water at these springs circulates from the recharge area to a deep permeable fractured aquifer (1000 to 2000m deep) where it gets heated up and sent back to the surface along a fault zone. Tshibalo et al. suggest the Binary system power plant as a possible plant that can be used to generate electricity from geothermal sources in South Africa. “It uses low temperature (74˚C minimum) geothermal resources as a heating source. The heat is used to evaporate a low boiling point fluid which drives the turbine.” Conclusion The reports consulted suggest that geothermal energy has the potential to provide longterm and secure base-load energy for the agricultural and food industries. The FAO found that geothermal energy is already used in these industries in many countries, but that geothermal development has been slow in most. The main constraints and challenges impeding the use of geothermal energy in the agricultural and food industries are policy, regulatory, technical and financial barriers. In developing countries, reports suggests that, governments have to take into consideration these constraints and challenges. Addressing these constraints would see a gradual increase in the use of geothermal energy. Geothermal energy has both the technical and economic potential to facilitate the development of a range of added-value agricultural products. Besides contributing to clean power, geothermal energy may also represent brand new fields of capacity building and training for South Africa.

References •

FAO, 2015, Uses of Geothermal energy in food and agriculture - opportunities for developing countries. Retrieved from:

Tshibalo, A.E. Dhansay, T. Nyabeze, P. Chevallier, L. Musekiwa, C. and Olivier, J. 2015, Evaluation of the Geothermal Energy Potential for South Africa. Retrieved from: db/WGC/papers/ WGC/2015/16054.pdf




CVW Electrical Beaufort West Case Study Introduction Surya Power (Pty) Ltd is an energy services and infrastructure developing company. Energy management can support provinces in reducing operating costs, improving competitiveness and demonstrating its commitment to both operating in an ethical and sustainable manner. Surya Power focuses on Demand Side Management, and we have an experienced team of energy professionals in place to support your municipality and provinces in achieving its green energy goals. Our Focus: • Energy Efficiency (EE) in Buildings • Load Control Management • Renewable and Alternative Sources of Energy Role and Responsibility •Sourcing of funding •Program Management •Recruiting and Training •Project Management •Stakeholder Management •Implementation Management Experience of work on similar projects a)Renewable energy projects Surya Power are familiar with the IPP process and have registered for numerous projects even the COP17 small projects, we have however not been successful in these Bids due to larger international companies dominating the market. b)Power engineering design experience We have a team of electrical, chemical and mechanical engineers as part of the project team, therefore no project is too big. We employ a dynamic team of professional engineers, who specialise in all fields of Engineering and have well equipped offices in Mossel Bay, Cape Town and Johannesburg. All offices are managed by experienced registered professional engineers, supported by qualified technicians and administrative personnel. All design work is carried out in house by means of the following software applications.



Software packages: • Microsoft Office • Dig-SILENT • Retic-Master • Auto-CAD 2006 • Global Mapper The Beaufort West municipality has identified the following potential efficiency projects for funding consideration by the Department of Energy: • • • •

Retrofits of lights in other municipal buildings Retrofits of street lights Retrofits of traffic lights Replacement of HVAC systems in municipal buildings • Replacement of inefficient water pumps/ motors that are being utilized at the water services with efficient technologies. The funding received for the EEDSM project 2014/15 were used to implement energy efficient technologies; the M & V Report shows the actual savings. Additional funding is required to complete all the projects listed in the business plan. According to the original EEDSM Business Plan: Beaufort West, the projected Energy savings = 156 582kWh /annum. Due to budget constraints, the retrofitting of the 125W Mercury Vapour (MV) and 250W High Pressure Sodium (HPS) lights were omitted in the M&V implementation. The new projected Energy saving from the business plan = 75 027 kWh / annum. The current energy saving based on the M&V implementation is calculated at 67 884 kWh per annum. This amounts in a 52% decrease in energy consumption per annum. This is within 10% of the updated projected energy savings. This is a mainly a result of the actual power usage of the installed lights being higher than the rated values that the EEDSM Business Plan was based upon. This result is acceptable. The M&V team is satisfied with the results of this implementation.

Tel: 087 700 8484 | Cell: 081 272 3330 Email:

PRIVATE AND MUNICIPAL INVOLVEMENT Makukhane Consulting Engineers, trading as CVW Mechanical & Electrical, staked its claim in the Southern Cape Karoo in Low Cost Housing Projects, Substations, Private Developments and Wind Power Generation, to name a few.

Power Qualifications: • Building and Designing of Medium Voltage Networks in Southern Cape • Wind Power Generation • Power Factor Correction • Protection - Circuit Breakers & Auto-Reclosers • Reticulation of New Developments • Load Flow Studies SUSTAINABLE ENERGY RESOURCE HANDBOOK


Is it worth it going from Fluorescent technology to LED technology? We all know that fluorescent lighting has been pushed by Eskom and the industry as it is, is apporximately 3060% more efficient than incandescent lighting. CASE STUDY: For 5ft LED Tubes Build It, Bothas Hill, 45 Old Main Road Load factor: 9 hours a day, 6 days a week, 52 weeks a year. Electricity Tariff: R1.14 kw/h estimate escalation for year 2. Saving: Their monthly electricity bill was averaging R22000 a month after remedial the bill dropped to R12 000 a month saving them R120 000 a year. Return On Capital: 18months Even with a low load factor this case study has proven that to swop out from fluorescent to LED’s makes economical sense because if we financed this over 36 months the client would have been paid to reduce their carbon footprint.

LED Comparison VS Incandescent and CFL LED Lights have a longer lifespan

LED Lights are more efficient

Incandescent - 1200hrs CFL - 6000hrs LED - 40 000hrs

Incandescent - 60W CFL - 15W LED - 8W

Cost per year (R) @ 4 hours per day Incandescent - 99.86 CFL - 24.96 LED - 13.31

Firefly heat pumps have proven to be one of the most loved heatpumps in South Africa with over 6000 heat pumps sold. Firefly heat pumps can supply all your needs right from the very small 100 Litre geyser right up to your very large commercial projects containing thousands of litres. Similarly with the swimming pool heat pump. Firefly caters from small jacuzzi to large olympic size swimming pools. Can you get paid to reduce your carbon footprint with a Firefly heat pump? CASE STUDY: Aryan Benevolent Homes Chatsworth 1x 1500L Boiler with 12kW element (Kitchen) 2x 1200L Boilers in series with 2x 12kW element (Laundry & J Ward) 1x 1200L Boiler with 12kW element (H Ward & Pravesh) 2x 1200L Boilers in series with 2x 12kW element (G & Q Block) 1x 1200L Boiler with 12kW element (E Ward) 1x 1200L Boiler with 12kW element (C & D Ward) 1x 1500L Boiler with 12kW element (A & B Ward & Flats) Solution is: 7 x Commercial heat pumps 9 x Domestic heat pumps Installation Total Cost: R 431 780.00 Monthly Savings: R 65 000 Return On Investment: 8months

sustainable acoustic for well-being


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lay brick construction, in its basic ‘solid’ double skin format as widely applied in South Africa, has long been appreciated for the thermal comfort conditions such wall construction provides in South Africa’s climates. Climate change and the pursuit of greater energy efficiency of building envelopes have led to considerable research into how improved energy efficiency may be achieved. In South Africa the research in respect of walling envelopes has typically used thermal modelling and/or ‘steady state’ R-value type laboratory studies to compare how different walling composites perform and define walling specifications for achieving the SANS 204 Energy Efficiency in building performance standards. The studies in most cases have compared double skin clay brick walling (un-insulated and insulated) with insulated lightweight walling composites applied to Alternate Building Technologies such as Light Steel Frame Building (LSFB). The results have been used to make cases both for and against walling with heavy mass (un-insulated and insulated) and lightweight walling with higher R-values.

Outputs of Thermal Modelling Software

Different thermal modelling software has been used, the outputs being a function of the equations built into the different models for dealing with heat transfer through building envelope composites and how heat is absorbed, stored and released. The equations in each programme treat the thermal performance properties of thermal capacity (thermal mass) and resistance [R-value] differently and therefore produce different results.

The CSIR Built Environment Division used Ecotect™ V5.6 modelling software [which is not ASHRAE Standard 140] to compare the thermal performance of lightweight and heavy mass walling while the Clay Brick Association of South Africa (CBA) used ASHRAE compliant Design Builder Energy Plus and Visual DOE2 software. Ecotect™ produced findings in favour of insulated lightweight walling (11), the researchers from their analysis of the results concluding that “high R-value and low mass building envelope materials are much more energy efficient when compared to low R-value and high thermal mass building envelope materials in six cities”. Design Builder Energy Plus (2, 4, 6 & 10) and Visual DOE-2 (5) found in favour of double skin walls with thermal mass and the same with added insulation. So where does the truth lie? Is high R-value walling with no or little thermal mass indeed more energy efficient than walling with a lower R-value and high thermal mass in climates akin to South Africa? More importantly however, how can the recognised thermal benefits that solid clay brick walls provide, be designed and specified to enhance thermal comfort further and raise energy efficiency to optimal levels? The answer to the first question becomes apparent in: • The points made by Assistant Professor Juintow Lin in her ‘Introduction to Ecotect™ V5.6 modelling software’ (8). She noted: “Ecotect™ V5.6 is a tool for architects to test their designs. It is not a validation tool to extract absolute values. It should not be used to determine the amount of energy used i.e. “watt per day etc.” She further notes: “Some more accurate programmes include DOE-2 and Energy Plus. Ecotect™ V5.6 uses a simpler algorithm Admittance Method for its thermal calculations while the SUSTAINABLE ENERGY RESOURCE HANDBOOK



other programmes (namely DOE-2 and Energy Plus) use ASHRAE formulas”. • The findings of a parametric study by the University of Pretoria (10) showed Ecotect™ software produced results 40% at variance with the mean score of the outputs of Design Builder Energy Plus and Visual DOE-2. This study found that Ecotect™ failed to respond adequately to the addition of thermal capacity in walling modelling. • The report of Rees et al. 2000 where it is noted that in the application of the Admittance method that the methods used to treat solar heat gains “are very simplified by current standards and cannot be expected to give accurate results except in a limited range of circumstances”. • The conclusions of “A review of computer based calculation methods for simulating unsteady-state heat transfer through walling systems” by Dr A Johannsen (10): “A key assumption of the Admittance method, related to heat conduction through walls, is that variations in the outdoor thermal environment have a sinusoidal, 24 hour cyclic pattern, and that this pattern repeats itself for a number of the days preceding the current day. During an annual energy simulation, the outdoor thermal environment changes continuously on an hourly and daily basis. These variations can be highly irregular, far removed from the sinusoidal pattern assumed in the Admittance method. It was a consequence of the above that the University of Pretoria considered Ecotect™ as unsuitable for the Thermal Performance Study (TPF), ‘A Thermal Performance Comparison Between Six Wall Construction Methods Frequently Used in South Africa’ commissioned by the Clay Brick Association of South Africa April 2015 (10). The findings of that study are



summarised later in this chapter.

Empirical Research of Real Buildings under Real World Environments

The complete answer, and one that also gives valuable insight into the design and specification of masonry for achieving greater thermal comfort and energy efficiency of houses in South Africa, are to be found in the extensive empirical studies into the thermal performance of different walling envelopes of real structures, as undertaken at the University of Newcastle Australia, Faculty of Engineering and Built Environment (1). This empirical research and analysis, that is ongoing, has been led by Think Brick Australia in collaboration with the University of Newcastle, Australia, Faculty of Engineering and Built Environment. The research has not only clearly established clay brick walling’s capacity to keep a house cool in summer and warm in winter but that built projects that incorporated thermal mass coupled with passive design showed the superiority of clay brick as a building material. The study findings while demonstrating the importance of thermal resistance refuted the notion that a higher wall R-value is always desirable when attempting to achieve occupational comfort within a dwelling and that the extra R-value did not always translate to lower energy consumption and cost. The empirical study findings notably showed that the thermal mass and resistance provided by double skin cavity walls afforded longer periods of thermal comfort in the summer months. The study showed also that insulated lightweight walls do not assure lower cooling energy costs. When insulation was applied in the cavity of the brick walls these walls outperformed the insulated light weight walled building modules with comparable wall R-values.


Further to this, and contradicting the reported findings of a separate unpublished CSIR study that lightweight walling used internally uses less heating and cooling energy than high mass walls, the empirical study found that adding thermal mass to the inside through the use of clay brick for partition walls enhanced thermal comfort and energy efficiency further no matter the external wall construction type. Clay brick internal partition walls improved the energy efficiency of the insulated lightweight external walled buildings by some 20%.

Solar Passive Design

It is acknowledged universally that design has a significant impact on energy efficiency. Solar passive design is energy efficient design which considers the local conditions to help maximize thermal efficiency in a building. Design features of structures are tailored to each climate. Good solar design uses natural heat and natural cooling to keep temperatures within a comfortable range (typically 18-24 degrees Celsius) and has the ability to reduce the need for expensive mechanical heating and cooling. Key considerations of passive design are as follows: • Orientation and solar access • Shading and glazing • Sealing and ventilation • Insulation • Thermal mass Thermal Mass: Thermal mass is the ability of a material to retain heat energy when subjected to a temperature differential and to slowly release it back into the environment as the conditions change. Structures with high thermal mass can reduce the transfer of heat by absorbing the heat energy flowing in from the outside. This process is slow and results in a delay called thermal lag. The ability to absorb large quantities of heat energy combined with the thermal lag effectively increases the

thermal performance of a material. R-value: The thermal resistance to heat flow or R-value of a walling material contributes to the thermal efficiency of a building or structure. The higher the R-value of a material, the better it is at resisting heat loss (or heat gain). The R-value is a static parameter calculated in a laboratory by keeping the one side of the material at a constant temperature. The result is a “steady-state” R-value. In real life situations, however, the inside and outside temperatures are not constant. Records of diurnal temperature swings in SA’s climatic zones confirm that the driving force for conductive heat flow can change dramatically or even reverse during the course of a day. Consequent to that the R-value alone does not predict the energy used in maintaining internal temperatures in real-life dynamic temperature environments.

Specific Findings of the Empirical Study of the Thermal Performance in Australian Housing

The research program, that is ongoing, has provided hard experimental data on thermal performance of various walling systems used in domestic construction. Key goals of the program were to provide a sound understanding of thermal performance of walling systems using both experimental and theoretical techniques and to provide credible information to the industry and community. One of the key outcomes of the first phase of the research was the confirmation that the R-value does not directly correlate with thermal performance of real buildings, under dynamic conditions (3). Subsequent research outputs, as elaborated on in this chapter courtesy of Think Brick Australia, has shown that clay brick is superior




in producing thermally comfortable, energy efficient environments for people to live, work and play (1). R-value Tests Over the 12 year period of research, various walling systems have been tested; cavity brick (CB), insulated cavity brick (InsCB), insulated

brick veneer (InsBV), insulated reverse brick veneer (InsRBV) and insulated lightweight construction (InsLW). The walling systems were first tested in a guarded hot box apparatus (ASTM C 236-89) to determine their R-values under standard conditions, (see Table 3.1) followed by cyclic (dynamic) tests under a varying temperature regime.

Table 3.1 Wall Type, Element Thickness and R-Values (surface-to-surface) Wall Type

Element Thickness(mm)

R-value(m².K/W) T=18ºC

Cavity Brick + Internal Render



Insulated Brick Veneer



Insulated Cavity Brick + Internal Render



Insulated Reverse Brick Veneer



Insulated Lightweight



Module Construction and Details Full scale housing modules were then constructed to monitor performance under actual seasonal conditions. The research was conducted in suburban Newcastle, which has a typical moderate Australian climate. Each module was studied with the interior space being in a “free-floating” state (directly influenced by real weather conditions) and also with the interior being artificially heated

or cooled, with the energy used for heating and cooling being measured. After initial observation of windowless modules, a major window was inserted in the northern walls to allow the direct ingress of sunlight to realistically represent solar passive design effects. The housing modules shown in Figure 3.2 had a square floor plan of 6 m x 6 m and were spaced 7m apart to avoid shading and minimize wind obstruction.

Figure 3.2– Full Scale Housing Modules

The walling and roof systems of the modules were constructed identically following standard Australian practice. Solar passive design was considered so that the north wall of each building was aligned with astronomical north. Instrumentation recorded the external



weather conditions and the incident solar radiation on each wall. For each building, a total of 105 sensors were used to measure temperature and heat flux profiles through the walls, slab and ceiling in conjunction with internal and external air temperatures.


Data was captured every 5 minutes for each module over the entire testing period.

Comparison of Lightweight Construction and Cavity Brick Modules

When the test buildings were without windows the wall thermal mass and accompanying thermal lag played a key role in limiting the

magnitude of the maximum and minimum internal temperatures. The study showed that cavity brick reduces the heat transfer by absorbing and storing the heat in the external brick leaf then reradiating it back to the outside environment, thereby reducing the net heat flux across the wall. This is demonstrated in Figure 3.3. A simplified diagram of heat flux distribution is shown in Figure 3.4

Figure 3.3 Heat flux profile through cavity brick Figure3.4 – Heat flux through cavity brick (1) (Western wall, Feb., 2004) (1)

This was not the case for the InsLW walling system which had a higher R-value but little thermal mass. As a result there was a greater

variation in internal temperatures and no thermal lag exhibited by the InsLW module, as shown in the Figure 3.5.

Figure 3.5 Internal and external temperature for InsLW and InCB modules (1)

The InsLW module was on average warmer than the CB module during the warmer conditions and average cooler than InsCB module during cooler conditions. The daily internal temperature swing for the InsLW was also much higher than for both the CB and InsCB modules.

Free Floating Conditions Figure 3.6 depicts external and internal air temperature profiles for the modules in “free-floating” state, after a major window was inserted in the northern walls to realistically represent solar-passive design.




Figure 3.6 External and Internal Temperatures of modules under Free-floating Conditions (1)

The heavy walling systems, more effectively handle external temperature variations, resulting in longer periods within the comfort zone (18-24 degrees Celsius). In addition, it is noticeable that the thermal mass present in cavity brick results in lower temperature fluctuations in both seasonal conditions.

12 Month Parallel Observation Period for the CB, InsCB, InsBV and InsRBV Modules

Since the insulated lightweight showed the worst performance in all conditions, the researchers decided to convert the InsLW

to reverse brick veneer (InsRBV) in August 2008. A 12 month observation schedule was introduced to provide consistent experimental results under all seasonal conditions for both free floating and air conditioned states. Under “free-floating� conditions, data from 6 weeks of each season was obtained, and typical temperature profiles for 1 week from each season are shown in Figure 3.8. The mean internal temperatures together with standard deviations calculated from the entire data collection period of 6 weeks are shown in Table 3.2.

Table 3.1 Wall Type, Element Thickness and R-Values (surface-to-surface) Summer

Mean Module Temperature

Standard Deviation


Mean Module Temperature

Standard Deviation

























External Air



External Air



Mean Module Temperature

Standard Deviation

Mean Module Temperature

Standard Deviation

























External Air



External Air








To allow the subsequent study of solar-passive mechanisms and the interaction with the various components of the modules, a major opening was introduced in the northern wall of each module. The results confirmed the beneficial effects of thermal mass (coupled with appropriate insulation and design) in enhancing thermal performance and significantly reducing energy output. To assess the energy consumption performance of the various heavy walling systems, an air conditioner was installed, which

maintained the interior of each module within a given temperature range between 18°C and 24°C (comfort zone). The air conditioner was programmed so that the building would always be “freefloating” between 20-22°C. Figure3.7 shows the energy consumption of modules artificially heated and cooled under various seasonal conditions. It is evident that the heavy walling systems (CB, InsCB and InsBV) require less energy to maintain a comfortable temperature range than the lightweight counterpart (InsLW) particularly in hot conditions.

Figure 3.7 – Energy Consumption of modules under Controlled Conditions (1)

In each data collecting period, as shown in Figure 3.8, the four modules all had similar mean temperatures yet their behaviour to the external conditions was significantly different with regard to the diurnal swing, demonstrating why mean temperature cannot be solely considered. Despite the difference among different seasonal periods, the InsBV module exhibited a much larger temperature oscillation about the mean than the modules with internal thermal mass, having almost double the standard deviation of InsCB and easily peaking to the highest daily temperature of all modules. The high diurnal swing within the InsBV module [lightweight walling inside] would result in a greatly reduced level of thermal comfort compared to the other forms of brick construction.

The modules with internal mass (InsCB, CB and InsRBV) all performed relatively similarly with slight differences pertaining to the distribution of mass and insulation throughout the construction. The InsCB module had the lowest standard deviations in three out of the four seasonal periods, as a result of the combination of internal and external thermal mass as well as cavity insulation. The CB module also had a lower standard deviation than the InsRBV module due to the presence of the external thermal mass. Thermal mass provided a definite dampening effect on the internal temperature cycle. The internal temperature of the InsRBV module dropped more rapidly than both the InsCB and CB modules as it lacked the external skin of thermal mass, accounting for the higher standard deviation. The lack of internal thermal mass in the InsBV module




leads to the internal temperature being less stable than the other modules with thermal mass on the inside.

The performance of the modules under controlled interior conditions for the four seasons is shown in Figure 3.9.

Figure 3.8 – Module Temperature profiles for four seasons under free floating internal conditions (1)

Figure 3.9 – Total energy consumption over 5 weeks for each season (1)




As can be seen from Figure 3.9, the InsCB module was the most efficient performer for four seasonal periods. It was particularly superior to the InsRBV module in autumn (the InsCB module required approximately a third of the energy compared to the InsRBV), which demonstrates the contribution of the external brickwork skin during periods of high solar gain. The performance of the InsBV and InsRBV modules show that a single skin of brickwork (whether on the external or internal side of the insulation) does not provide the same benefits as double brickwork.

Newcastle University Research Findings

The common perception is that a higher R-value is desirable when attempting to achieve occupational comfort within a dwelling, translating to lower energy consumption and costs. The results above challenge this perception. If the R-value were to be considered as the sole indicator of thermal efficiency, the lightweight system (R1.51), which has an R value 2.5 times larger than that of cavity brickwork (R0.44), should give greater periods of internal thermal comfort and under controlled conditions consume less total energy throughout the year. The above observations of real building behaviour obviously refute this perception and illustrate that there are more significant contributing factors to the wall performance. There is no doubt that insulation can play a major role in improving the energy efficiency of a building, but it cannot be assumed that adding insulation to any lightweight configuration will produce the best thermal performance. A better solution can be achieved by using a combination of insulation to provide thermal resistance and a material with high thermal mass (such as clay masonry) to mitigate the temperature

fluctuations which occur with the diurnal temperature cycle.

Summary of Empirical Research

Whilst the research and analysis is ongoing, the results published to date (http:// have shown that heavy walling systems, such as clay brick, are very energy efficient, sustainable and outperform lightweight construction configurations. Thermal mass, inherently present in heavy walling systems, coupled with solar design can significantly improve thermal performance by reflecting and absorbing solar heat. Accordingly, heavy walling systems perform well in maintaining thermal comfort thus reducing energy expenditure on HVAC. It has also been found that the current measurement of thermal resistance (R-value) does not completely define the energy efficiency in materials or buildings. Clay brick construction offers a more energy efficient and sustainable walling solution compared to other forms of construction studied. Interestingly the findings of the University of Pretoria Thermal Performance Study (10) summarised below are similar.

Summary of University of Pretoria Thermal Modelling Study (10)

The comparative energy usage (heating and cooling) for six wall construction systems across the selected three building typologies and in all the six climatic zones of South Africa has indicated that: • Solid clay brick masonry is the most thermally and energy efficient walling system for day-time or non-residential occupancy buildings. • Clay brick masonry cavity walls are the




most thermally and energy efficient walling system considered for all day or residential occupancy buildings. • A clay brick masonry cavity wall is a suitable choice for universal application in the South African regulatory built environment (SANS 10400 Part XA) as a first step towards more energy efficient wall construction in South Africa, particularly as a replacement for the 140mm hollow concrete block which is found to be universally the worst performer of the wall construction methods examined. • The low-mass light steel frame and timber frame wall construction are not as thermally efficient as clay brick masonry walling methods and the SAN 517 and 10082 standards should be amended to reflect the required increase in effective thermal insulation via reduced heat bridging, and/or greater thicknesses of thermal insulation. • There is a significant energy cost premium associated with the use of light-weight partitioning systems in all three building typologies modelled. The above thermal modelling research that has passed critical review [by Dr. Rainer Zah, Quantis Switzerland/Germany] was to provide input to the full LCA of the clay brick industry being undertaken by the University of Pretoria. The CBA will be reporting the detail of the findings of this thermal modelling study in due course.

Final Word

The empirical research findings pertain to how different walling envelopes perform under dynamic real world conditions. These closely correlate with the findings of four South African thermal modelling studies of different house types [three using Design Builder Energy Plus software (4,6 & 10) and one using Visual DOE (5)] and an Australian thermal modelling study



of two house floor plans also using Design Builder software. The latter study findings were used as input to the Energetics Full Life Cycle Assessment (2) of wall types for housing in Australia. Design Builder Energy Plus software was specifically chosen for the Energetics LCA study because of its assessed capability of treating thermal mass conservatively and thus providing credible comparative findings. The empirical research findings are however disparate with that of thermal modelling studies undertaken by the CSIR Built Environment Division using Ecotect™ V5.6 modelling software and an unpublished CSIR study that showed that thermal mass used for internal walls took longer to heat and cool than lightweight and used more energy than lightweight. These CSIR study findings have been widely referenced by the proponents of insulated lightweight Innovative Building Technologies (IBTs), such as the CSIR Built Environment Division, SASFA (12) and Saint Gobain (Business Day Home Front, 20 February 2015 – Article on Stand 47 Monaghan Farm – ‘A testament to modern materials’), as credible proof of the ‘claimed’ superior energy efficiency of insulated lightweight walled Innovative Building Technologies [IBTs] over clay brick construction in real world South African environments. This chapter is not about insulated lightweight walling composites not being energy efficient but rather that all credible research points to clay brick construction having a whole lot more to offer to the sustainability equation, particularly from an energy efficiency perspective. In this regard clay brick walling can be used to achieve optimal energy outcomes no matter the South African climatic zone (4) & (5), with SANS 204 DTS Energy Standards for Masonry Building [currently voluntary] providing good direction as to the requisite CR Product (7) combinations of thermal capacity [thermal mass] and resistance - for achieving that.


This truth, coupled with clay brick’s unique basket of sustainability benefits, can be expected to continue to set clay brick construction apart from insulated lightweight

walled IBTs such as LSFB, for defining a sustainable more energy efficient future here in South Africa.

References 1. Priority Research Centre for Energy, University of Newcastle. A Study of the Thermal Performance of Australian Housing, 2012. (Available through 2. Energetics, LCA of Brick Products -Life Cycle Assessment Report after Critical Review. Ref J/N 107884, February 2010 3. Alterman D., Moffiet T., Hands S., Page A., Luo C., Moghtaderi B., A concept for a potential metric to characterise the dynamic thermal performance of walls, Energy and Building 54(2012) 52-60 4. 130m² Standard House Energy Modelling Project – WSP Green by Design (2010) using DesignBuilder Energy Plus software 5. Thermal Modelling of a 132m² CSIR house by Structatherm Projects (H. Harris 2009) using Visual DOE software 6. 40m² Low Cost House Energy Modelling Project – WSP Green by Design (2009/2010) using DesignBuilder Energy Plus software 7. C.R. Product Research – “A Novel Algorithm for the Specification of Thermal Capacity and Resistance in External Walling for the South African Energy Efficient Building Standards - WSP Energy Africa – (Prof. D Holm and H Harris April 2010) 8. Introduction to Ecotect V5.6-Modelling - Juintow Lin, Assistant Professor Cal Poly Ponoma, Department of Architecture, October 29, 2007 9. Mass and R-value: Making Sense of a Confusing Issue – EBN: 7:4 (Energy Building News 2013/01/10) 10. The University of Pretoria, Department of Architecture, A Thermal Performance Comparison Between Six Wall Construction Methods Frequently Used in South Africa, April 2015 – (Authors, Associate Professor P. Vosloo, H. Harris, Emeritus Professor D.Holm, N. van Rooyen and G.Rice) 11. Thermal Mass vs Insulation Building Envelope Design in Six Climatic Regions – Dr. D Conradie and T Kumarai CSIR Built environment – The Green Building Handbook South Africa Volume 4 – The Essential Guide. 12. Steel Frame Building Article – ‘CSIR Research Confirms the Superior Efficiency of Light Steel frame Building’ – Mr John Barnard director of SASFA – SA Roofing January 2012







ou upgrade your cell phone or computer every few years without much thought; technology is constantly improving and upgrading gives you the opportunity to reap the benefits of more efficient functionality. The same is true for the buildings you work and live in. Many of these run on technology that is decades old and many of us barely give this a second thought. Upgrading your building with an energy retrofit will reduce financial and environmental costs for a more sustainable future.


The term energy retrofit, or green retrofit, refers to the maintenance and preservation of buildings, and their continued operation, using energy efficiency technologies. This can range from home owners fitting energy efficient light bulbs, to overhauling existing properties and making them certifiably green using such technologies, amongst others, as renewable energy.



The value of retrofitting is in the reduction of operating costs relating to energy, heating and cooling and in the reduction of environmental costs such as carbon emissions. This is great for the homeowner’s pocket, the environment and for business. The rewards of energy retrofitting for business are multiple: • Lower operating costs - the most obvious reward seen in a reduced energy bill. • Higher return on investment - tenants are often willing to pay more for a space that is environmentally friendly and more energy efficient • Increased value - improvements to a building’s systems and infrastructure can increase its capital value • Improved environmental sustainability lowering the building’s carbon footprint and greenhouse gas emissions • Improved corporate image - stakeholders


and investors are increasingly seeking businesses with sustainable operations • Attracting investors - energy efficient buildings, with minimal running costs, that are well-placed to deal with future demands for sustainability compliance are more attractive to investors. The cost of retrofitting is seen as the biggest barrier for business; converting a traditional building into a green one is no easy, or cheap, task. However, energy retrofitting can be done on the small and large scale. A popular, minor, method of retrofitting is the conversion from traditional lighting to energy efficient lighting. Major retrofitting can include overhauling the air conditioning system, adding rain water harvesting technology, fitting solar panels and reviewing waste disposal methods. With greater cost, however, comes greater return. All you need to do is work out the payback period; how long it takes to reap the rewards of your up-front expenditure. Managing director of the Concrete Institute, Bryan Perrie, suggests that retrofit costs should be viewed in relation to the life cycle of a building – as such green initiatives are likely to save money in the long run. The Green Building Council of South Africa (GBCSA) puts the standard payback period of cost savings after retrofits at between three to five years. Some of the benefits include lower operating costs – particularly savings in energy and water usage by up to 50%, increase in property value of up to 12% (according to US and Australia case studies), higher rental rates and attracting tenants. “Our green buildings are showing signs of enhanced returns and better fundamentals. The challenge for our industry lies in future-proofing the existing stock through sustainable and greening initiatives.” – Investment Property Databank (IPD)

executive director Stan Garrun.

Retrofitting in SA

With its abundant renewable energy resources, such as solar and wind, South Africa is in a prime position to take advantage of energy retrofitting for the benefit of its communities. And business is leading the way. A World Green Building Trends survey done by McGraw-Hill Construction, a United Statesbased company, suggested that 58% of South African firms have plans for green retrofits to be implemented by 2015. This puts South Africa ahead in the adoption of green building worldwide; beating Australia, the United Arab Emirates, Singapore and Brazil. This is because it makes good business sense to retrofit old buildings. According to Dr Rodney Milford, president of South Africa’s Construction Industry Development Board (CIDB), “Electricity consumption and greenhouse gas emissions arising from the existing building stock will far exceed that from the buildings constructed over the next 20 years or so”. It is also what the people want; tenants in nongreen buildings are increasingly demanding sustainable building upgrades to create greener spaces in which to work and live.


Durban - Cato Manor In 2011, the historic, Durban township of Cato Manor was the first low-income area retrofit completed by the GBCSA, in association with the World Building Council and funded primarily by the British High Commission. The project was undertaken in order to demonstrate the range of socio-economic, health and environmental benefits which are possible through sustainable design and resource-efficiency interventions; and to show that people’s quality of life can be improved,




while keeping the country’s development on a low carbon, more sustainable, path. 30 low-income houses in the Durban cul-desac received an energy efficient retrofit in the form of solar water heaters, insulated ceilings, efficient lighting, and heat insulation cookers. Rainwater harvesting tanks were also added to the area, and food gardens were established for the production of healthy, home-grown food. According to the case study done on this project, if retrofits just like this were done for 3 million existing low-cost houses: • The savings from electricity and water would be estimated to be worth about R3 billion per year (at current tariffs). • The electricity saving would be over 3400 gigawatt hours (GWH) per annum, which is equivalent to about a third of what a city the size of Durban or Cape Town uses. • An estimated 3.45 million tonnes of CO2 would be avoided per year from the electricity saving. • For the purposes of generating revenue on carbon markets, almost 10 million (9,720,000) tonnes worth of carbon credits would be possible. • For employment, it is estimated that about 36.5 million days of work could be created, equivalent to employing over 165,000 people for a year of work. Cape Town - Brackenfell Also in 2011, Eskom’s Brackenfell Building Complex, in the Western Cape, received an energy retrofit that focussed on: • Changing magnetic ballasts to Electronic Control Gear (ECG) to reduce strain on the electricity supply; • Changing fluorescent tubes to energy efficient tubes; and • Installing occupancy sensors on lighting and air conditioning units.



The retrofit realised a saving of 760 MWh per annum which equates to a 15% reduction in electricity consumption. The savings were confirmed by the University of Cape Town (UCT) Measurement and Verification (MV) team, an independent auditor acting on Eskom’s Integrated Demand Management projects. The buildings we live and work in could be doing so much more for our lives and our communities. Consider the retrofitting options for your home and work spaces and reap the benefits of a more efficient and functional building.


References •

City of Cape Town. 2011. Case Study Eskom’s energy retrofits of multiple office blocks and engineering workshops in Cape Town – a shining example. Retrieved from: EnvironmentalResourceManagement/Documents/Smart_Office_Toolkit/SOH_Case%20StudyENER-Eskom%20 energy%20project.pdf

City of Melbourne, 2015, Retrofitting is good for business. Retrieved from: au/1200buildings/Pages/GoodForBusiness.aspx

GBCSA. April 2012. Case study report of the Cato Manor Green Street retrofit. Retrieved from: https://www.gbcsa. pdf

Mahlaka, R. 15 September 2014. South Africa’s strong case for green retrofitting. Retrieved from: http://new.







Activate Architecture (Pty) Ltd 22; 30-31 AdSolar 72-73; 98-99 African Utility Week (Spintelligent) 104 Anaergia Africa (Pty) Ltd 46 Arcelor Mittal 212-215 BeveraTech Engineering 108-109 BlueScope Steel Southern Africa (Pty) Ltd IFC; 114-117 Bridgit Africa 92 Builders OBC CEN Integrated Environmental Management Unit 208 Central University of Technology, Free State 40 Clear Sky LEDs 66 Conlog 44 Corobrik 198-199 CVW 64;180-181 Ditala Energy Solutions 90 Emerson Industrial Automation Southern Africa (Pty) Ltd 158 Engineered Thermal Systems 6 Evapco 16 Firefly Solar 86; 182-183 General Cable 4-5 Green Built Energy Solutions 38 GreyGreen Sustainable Energy Engineering 76 Hellermann Tyton 28-29 Hydrotec- Andre Du Toit Projects 60 Indusquip Marketing CC 54-55;152-153




“Perfection is Achieved Not When There Is Nothing More to Add, But When There Is Nothing Left to Take Away” WWW.NDLELAPHAMBILI.CO.ZA ADDRESS: 16 Morrison Road Cambridge West East London 5247 ENERGY RESOURCE HANDBOOK 206 SUSTAINABLE

CONTACT DETAILS: Tel: 0713968849 Fax: 0866691228



Itron 150 juwi 166 Knauf AMF 184-185 LED Z Shine 26 Lomacor Electric CC IBC Mellet and human Architects 209-211 NCPC/ UNIDO 14; 32-33 Ndlelaphambili Trading Enterprise CC 206 Nedbank 2-3;172-173 NTL-Lemnis Africa (Pty) Ltd 142-143 Netshield (Pty) Ltd 70 PIESA- The Power Institute for East & Southern Africa 80 PEER Africa 130-133 Shiftinnovation Energy 12 Sika South Africa (Pty) Ltd 8 Smart Energy Solutions 52-53 Solairedirect Technologies (Pty) Ltd 164 Surya Power 180-181 UMFA 204 UNIDO/NCPC 14; 32-33 University of Johannesburg 170



CEN Integrated Environmental Management Unit South Africa is confronted with numerous socioeconomic problems. Poverty, inadequate housing, water supply, and sanitation, unsustainable patterns of development, inadequate financial, human and technical resources and the lack of a co-ordinated approach to environmental management. This has resulted in a rapid decline in environmental quality, a loss of vital biodiversity and an increased exposure to health hazards in the environment from polluted water, air, unsafe and toxic waste material. The philosophy of CEN Integrated Environmental Management Unit is forged on the belief that the people of South Africa will only achieve their goals and aspirations through a drive for sustainable development or development that delivers basic environmental, social and economic services to all without threatening the viability of natural, built and social systems upon which these services depend. The sustainability that concerns the CEN IEM Unit is not just about ecology and sustaining environments. It must meet the essential needs for jobs, food, energy and water and achieve sustainability of both human and natural resources. Sustainable development must unite economics and ecology in decision-making and enhance the resource base. MISSION OF CEN INTEGRATED ENVIRONMENTAL MANAGEMENT UNIT To contribute to the socio-economic advancement and the sound management of the natural resource base of Southern Africa, but in particular, the Eastern Cape Province.

The CEN Integrated Environmental Management Unit will achieve its mission through:

• the implementation of rural development and resource management programmes

• conducting environmental and social impact assessments of development initiatives

• policy initiatives on environmental and development issues

• the formulation of guidelines for projects and assessments of projects

• the initiation and implementation of rural development programmes

• the initiation and implementation of

integrated environmental management plans

The Unit offers a wide range of environmental, educational and rural development services. It offers these services on a retainer consulting relationship as well as on a project based consulting relationship. Through its services it aims to integrate economic, social and environmental sustainability. The Unit can provide expertise in a number of fields including:

• Agro-forestry Development • Biodiversity Conservation • Catchment Planning and Management • Renewable Energy Impact Assessments, • • • • • • • • • • •

Environmental Management Plans and Environmental Auditing Environmental Impact Assessments Environmental Management Plans and Programmes Game / Cattle Farming Operations Land Use Planning Natural Resource Management Protected Area Planning and Management Soil Conservation Sustainable Development Strategic Planning Tourism Site Location, Planning and Development Urban Agriculture Urban Open Space Planning

Photograph: Jeffreys Bay wind farm

CEN Integrated Environmental Management Unit 36 River Road Telephone: (041) 5812983 Walmer Fax: 0865042549 Port Elizabeth 6070 Email:


in association with

 BEST ARCHITECTURE SINGLE RESIDENCE SOUTH AFRICA A South African Home For Art by Mellet & Human Architects


The client asked for a retirement house that is energy efficient, sustainable, of low maintenance, and private from neighboring properties. The Estate had architectural guidelines to be followed, with living areas flowing to the northeast of the stand, and an allowed maximum coverage of 50%. This house is situated on a corner stand of 600 square meters in the Retire @ Midstream Village of Midstream Estates, a development with typical Highveld climate: Cold winters and moderate summers. Views are afforded to the southeast, and an existing house borders to the north and west. The resulting design makes full use of the coverage guidelines. The house is compact, is very private from adjoining properties, and maximizes on northern exposure. A central living space connects the private bedroom wing, kitchen, outside living space and pool, as well as the garage and staff room. No space is wasted, folding doors connect outside and inside living areas, and no passages or steps are found. Clerestory windows in the high

volume rooms allow sunlight into the house. These windows are remote controlled to open for ventilation, and rain sensors automatically close them in rainy weather. The pitched roofs along an east west orientation provide sufficient surface for solar and photovoltaic panels. Concrete roof links collect rainwater, and provide sun protection over windows and doors. The house envelope is completely insulated with high density polystyrene insulation in the floors, cavity walls and ceilings and on top of concrete roofs. Double glazed, UPVC windows and doors are used. The heated lap pool has remote controlled pool cover in order to retain heat, and a rechargeable automatic pool cleaner. Energy efficient LED lighting is provided throughout. Cooking is done with a gas hob and braai, and all kitchen appliances have low energy usage. The exterior has low maintenance finishes of face brick, natural stone, Chromadek roofs and uPVC framed windows. The water wise garden designed by the architects to compliment the architecture, has plantings of succulents, extending onto the pavement. Grey water is recycled for use in the garden, as well as flushing of toilets.

Kyasol Green Building Solutions was approached by the architects to provide the following practical energy saving solutions for the house: 1. Rainwater: Rainwater collected from the roofs is stored in 3x 6500l rainwater storage tanks with automatic municipal switchover and 5000l water back up capacity at all times. Filter rinsing is automatically or manually triggered. The rainwater is ozone treated to drinking water quality and supplied to all consumers in the house. 2. Hot Water: A 500l storage tank is heated by 10square meter high performance flat collector panels on the roof. Back up is provided by a heat pump and 2.3kW submersible heating element. Insulated warm water is ring fed throughout the house with timer pre-heating at peak times in the mornings and evenings, according to set temperatures. Excessive heat from solar heating is diverted to the pool for heating purposes.

3. Heating and cooling of the house: Underfloor and in wall water heating is provided and insulated by 50mm thick high density polystyrene underneath. Water based wall hung air handling units are installed in the living areas and bedrooms used for cooling or as heating booster, powered by a 14kW heat pump. This heat pump also acts as backup for hot water in case of insufficient solar radiation. 4. Photovoltaic panels: 22x245W polycrystalline photovoltaic panels supply +- 5.4kW to all consumers in the house. A total of 28kWh battery storage supplies essential appliances with power during power outages or at night. This system is optimized for self-consumption, but backed up by the power utility. 5. Home automation: Light switching and creation of scenes is via wireless EnOcean switches or via cellphone app. The automation also sets temperatures in the rooms, switches the heat pump to different operational modes, controls the level of rainwater tanks, and controls pool pump schedules.

Those who hold tomorrow, count on our green choices today.


We choose a brighter future for them. Do you? Pioneering a sustainable roofing alternative with the Chromadek roofing range, using a chrome free colour coating process. This is beneficial to both the immediate environment as well as positively impacting on the ecological balance as a whole.


CHROMADEK® - THE EFFICIENT THERMAL CONTROL CHOICE The consideration that every building is a combination of materials that can each contribute to thermal efficiency is a promising avenue in innovative construction. With the advent of developments in innovative materials, consider for a moment what makes a Chromadek® roof cooler as it becomes hotter, when exposed to the sun.

The logic involved with heat reflectivity as an aspect of thermal efficiency starts with the explanation that dark colours absorb most of the visible light striking a surface while lighter colours reflect most of that solar energy. It is just like keeping cool in a light-coloured shirt on a hot day. You would probably get much warmer in a dark shirt compared to a light one. The darker one absorbs much more light, or energy, warming up the shirt. It then transfers the heat to your body, warming you more than the light-coloured shirt would. This would suggest that colour is an indication of how much visible solar energy will be reflected. The amount of infrared energy that is reflected is often a function of the colour as well. New pigment technology has been introduced into Chromadek® and Chromadek Ultim® to change that assumption. New Infra-Red (IR) reflective pigments in the Chromadek® and Chromadek Ultim® paint systems increase total solar reflectance (TSR) while contributing to a lower surface temperature. Four of the colours of the Chromadek® range, Charcoal Grey, Dark Dolphin, Buffalo Brown and Aloe Green utilise an advanced thermal technology paint system. This advanced paint system incorporates a heat reflective pigment providing up to an 8°C cooler surface temperature benefit with improved durability. The durability of an exterior coating is measured according to the colour coated surfaces capability in maintaining gloss, colour and film integrity.




How Heat Reflective Chromadek® works? The heat reflective pigments in heat reflective Chromadek® is chemically inert and highly stable. It prevents the coating from directly absorbing energy resulting in less heat build-up resulting in longer life-cycles (less fading). To gain insight into heat reflective Chromadek®, a demonstration recently showcased titled “The heat reflective aspects of Chromadek®, what you imagine you can see” captures the strides made in paint technology that enables Chromadek® to become cooler. An extract from the demonstration shows that “seeing is believing” when it comes to heat reflective Chromadek®. The key aspect of the demonstration shows the visible contrast between the same heat reflective and non-heat reflective Chromadek® colour.

Video Image (300-700nm)

NIR Video Image (700-1100nm)

The demonstration draws natural attention to the circled heat reflective colour appearing lighter therefore cooler, due to the heat reflective pigment, while the non-heat reflective colour remains darker therefore hotter. (NIR = Near Infrared) In addition a darker colour can be configured through the application of heat reflective pigment to function as a lighter colour.

Video Image (300-700nm)



NIR Video Image (700-1100nm)


To put this into a practical context Where annual cooling loads dominate, a highly reflective and highly emissive colour coated steel roof is optimal for reducing energy consumption. Where annual heating loads dominate, an unpainted galvanised steel roof is more desirable because of its low infrared emittance.

Make the Chromadek® choice, the heat reflective benefit is a reality through • • • • • •

Lessened peak loads on energy consumption Improved roof durability, less thermal cycling leads to constant temperature Contributing to green and sustainable building by reduced air conditioning usage & costs Reduced heating consumption & costs Improved thermal comfort The increased Total Solar Reflectance (TSR) threshold for Chromadek® that ensures that the fading will not occur prematurely

Remember if it doesn’t say Chromadek® it’s not Chromadek®, look out for the unique heat reflective Chromadek® colours that offer these benefits at no extra cost. Since there’s more that meets the eye, Chromadek® is the preferred steel colour coated roofing choice ideally suited to South Africa’s climatic conditions supported by its made in South Africa heritage.

For more information, please visit: or e-mail:

Providing future friendly roofing solutions. Pioneering a sustainable roofing alternative with the Chromadek chrome free roofing range, where chrome is eliminated from the manufacturing process.




LOMACOR ELECTRIC South Africa’s leading manufacturer of power resistors. Lomacor was founded in 2000, has achieved an enviable reputation for delivering wire wound resistors, braking resistors, resistor banks and coils. Our customer’s needs are our first priority and we are committed to providing the answers to their needs, faster, more efficiently and cost effectively than ever thought possible. Paramount to our continuing success and product acceptance by some of the largest corporations and parastatals using resistors and coils, has been our commitment to the ever evolving techniques in the industry. Quality – Uncompromising real quality, the reason why so many customers come back for more.

Lomacor Wire wound resistors with various mounting styles and sizes coated with a silicone based coating that can withstand elevated temperatures.

BEE Level 4 Rating. Managing Member Douglas Lotriet – 0836481244 e-mail: Sales – Shirley Young e-mail: Unit A10 Wadeville Business Park Corner Steenbrass and Sardine Roads Wadeville, Germiston Tel: 011 824 2484/5 Fax: 011 824 2482 Lomacor Edge –wound Strip resistors and resistor banks. Low resistance, high current rating. 216


WE MANUFACTURE: Power Resisters Electrical Coils Various Electrical Components

At Builders we stock a wide variety of eco-friendly DIY alternatives, from LED & solar lighting, to heat pumps, water tanks & solar geysers. Above all, Builders offers eco-wise packaging on certain products.

Get to Builders. Get it done! Contact our Customer Care Line on 0860 284 533 or visit us at

Sustainable Energy Resource Handbook  

Volume 6

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