SA industry finally grasping energy efficiency nettle, but constraints remain

Schalk Burger | 10th May 2013 | Engineering News

Industrial energy efficiency projects are steadily being implemented in South Africa to combat price and security-of-supply pressures, but financial constraints, including funding and internal resources, remain barriers to a more broad-based deployment.

That said, low-cost and no-cost initiatives, which are the focus of the National Energy Efficiency Strategy (NEES), are helping to engender an energy management culture in the country.

The National Cleaner Production Centre of South Africa (NCPC-SA), through its Industrial Energy Efficiency Project (IEE Project), provided significant support to the drafting of the second NEES, which aims to promote energy efficiency through the development of standards, ensuring sufficient capacity to roll out energy efficient initiatives based on industrial incentive schemes.

NCPC-SA national project manager Gerswynn McKuur says that, with the help of the United Nations Development Organisation (Unido), local expertise has been developed, based on the International Standards Organisation (ISO) 50001 energy management standard.

This knowledge – including insight into available energy efficiency technologies and techniques in different industries and sectors – is now being shared to capacitate local industry in the deployment of effective systems thinking.

The first round of projects focused on training professionals and implementing energy management systems and energy systems optimisation measures.

Steel major ArcelorMittal South Africa has emerged as a key case study, having saved R170-million over a period of two years.

Mittal’s energy manager, Reinet van Zyl, says the company’s Saldanha plant reflected that 44.2% of the total costs of the plant was energy related, which prevented the plant from competing in export markets.

“We started in 2010 with our low-cost and no-cost energy efficiency interventions and achieved good results, despite significant challenges. The plant’s average maximum demand was 160 MW, but this was reduced by 10.6 MW, or 6.6% of baseline, after implementing the energy management system, which amounts to R51-million in costs saved, with an additional 2.9 MW saved the following year.”

Further, Mittal reduced energy consumption from 25.1 GJ/t to 23.7 GJ/t for hot-rolled coil and reduced liquid petroleum gas by 41% of the baseline, amounting to R39-million in 2011, she says.

The company’s rotary hearth furnace flue gas waste heat recovery project saves the company R15.8-million a year and the plant achieved an ISO 50001 energy management systems internal audit score of 94%.

“We have completed 15 projects, achieved all the targets we set and improved on them, achieving a steady decrease in energy consumption,” notes Van Zyl.

“There are compelling reasons to implement industrial energy efficiency initiatives, and part of the work of the NCPC-SA and various Department of Trade and Industry (DTI) incentives are aimed at reducing energy intensity and improving competitiveness,” adds McKuur.

Success Factors
Key factors for success include a strong manage- ment commitment because projects require resources, capital and people. Management must understand the potential benefits, where the company’s greatest energy consumption is and have a detailed implementation plan.

Management infrastructure, to measure and control the energy flow, is necessary to close the gap between project implementation and leadership by providing efficiency details during routine meetings to enable continuous improvements, highlights Van Zyl.

“Further, international best practice methodology is needed to ensure the reliability of initiatives and the sustainability of the project, such as that gained from IEE Project experts and based on the ISO 50001 energy management system. Without this expert advice and methodologies, it is difficult to sustain improvements,” she states.

An energy management system must be supported by company policy and strategy, resources and corporate planning cycles to sustain performance and ensure progress is achieved through corrective actions, she says.

“Savings are easy to achieve, but difficult to sustain. Energy management is, therefore, critical. There are also benefits to using new technology and larger savings than those initially estimated are often achieved, but the capital required to deploy these systems is a significant consideration and possible deterrent.

“The expertise and services of the IEE Project, the DTI tax incentives and support by the South African National Energy Development Institute (Sanedi) are available to companies aiming to implement energy efficiency projects,” notes Van Zyl.

Accelerating Uptake
Sanedi energy efficiency senior manager Barry Bredenkamp highlights that energy efficiency tax incentives are aimed at accelerating the uptake of proven methods and technology to reduce energy consumption.

“Our objective is to support investment in the manufacturing industry because South Africa is losing manufacturing capability. A key qualification to obtain the tax incentive is to improve the skills of staff and achieve a 10% minimum energy saving through energy management and by using new, energy efficient technologies,” he says.

The incentive programme will run to 2015 and covers seven greenfield and seven brownfield projects, with R20-billion in foregone tax allowed for such projects to achieve a 12% reduction in national consumption by 2015. A total of R4.13-billion has been set aside for small and medium- sized enterprise procurement and support funding.

The South African National Standard 50010, which was adapted and adopted based on the ISO 50001 standard, provides companies with a method for calculating savings and provides an official standard for companies to measure and verify their energy reductions.

“Sanedi’s role is to confirm that a 10% saving has been achieved. In new industries and new plants, comparisons are made against international benchmarks to ascertain whether a company or plant has achieved this requirement,” notes Bredenkamp.

“Tax regimes are a popular mechanism worldwide to the accelerate the uptake of energy efficiency technologies and the ringfencing of the proposed carbon tax for reinvestment in energy efficiency is a positive step forward. Further, the expected efficiency improvement across all 14 projects is as high as 40% and an average efficiency gain of 18% is expected.”

The development of a superior energy efficiency programme requires that the programme evolves as companies in industries engage with it, says US energy efficiency organisation Energy & Sustainability Services Group manager Bill Meffert.

“Georgia Technical College developed the framework energy management standard for the US, but this is only the start. All stakeholders in the marketplace should engage with the programme, including industry and standards bodies, such as the American National Standards Institute and the American Society for Quality, which will lead to a robust programme that will incorporate effective standards and quality control,” he says.

Measuring and reporting are important for identifying opportunities and changing behaviour, while awareness and education are critical to sustaining savings. Often, it is a case of when to switch off unnecessary systems. There are many energy savings opportunities in low-cost and no-cost initiatives, such as not running conveyor belts continuously when unused and deploying variable-speed drives and soft starters to reduce basic and unproductive energy consumption, says Van Zyl.

Bredenkamp agrees, noting that about 50% of the potential energy savings in the 14 projects currently being pursued are low- cost or no-cost initiatives.

“However, to create a long-term viable energy efficiency programme in South Africa, we must improve the consistency of our data, which Sanedi is currently grappling with. Multiple energy carriers, such as electricity or gas, beside others, require more effort to determine the energy savings achieved,” he says.

Emerging Competitiveness
Meanwhile, the DTI’s incentives schemes feed into international initiatives, such as Unido and the UN Clean Development Mechanism, says Bredenkamp.

“The greatest opportunities to generate more value from available resources through efficient use and efficient production exist in emerging and industrialising economies,” says Unido cleaner and sustainable production unit chief Dr René van Berkel.

About 85% of the opportunities to improve the gain from resources exist in emerging countries that are rapidly industrialising, which presents these economies with the opportunity to implement resource efficiency measures, compared with industrialised countries that have to re-engineer many of their processes to efficiently use resources, he says.

“Economic benefits from known resource efficiency measures can total $2.9-trillion a year by 2030. Merely by applying what we now know, we can save this amount of money,” says Van Berkel.

The challenge that the world faces is to decouple economic growth and development from resource consumption, he emphasises.

“The key lever to develop a green economy is business. If enterprises are supported to become greener (more environment friendly) and implement resource efficiency technologies and practices, it will enable us to do more with less – consuming less water, energy, materials and, thus, reducing our environmental impact,” highlights Van Berkel.

The greening of industries also leads to improved competitiveness that will help businesses, in any industry and of any size, to sustain their performance, as they would be less sensitive to price fluctuation in resources and materials, he adds.

“One of the most cost-effective ways of improving profitability is to adopt appropriate energy efficiency measures. Nationwide, this will improve South Africa’s industrial competitiveness and improve the value that the economy derives from indigenous energy resources,” concludes McKuur.

SOURCE: http://www.engineeringnews.co.za/article/sa-industry-finally-grasping-energy-efficiency-nettle-but-constraints-remain-2013-05-10

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