Energy Efficiency Potential in South Africa

Transcription

1 Energy Efficiency Potential in South Africa A Project Completed by Frost & Sullivan September /05/14 1

2 Table of Contents Segment Page Introduction 3 Background to the Research 4 Overall Findings 9 Agriculture 13 Commercial 17 Industrial 21 Residential 25 Consolidated Analysis 29 Assumptions 33 Demand Side Management Old versus New Estimates 36 2

3 Introduction Eskom is currently in the process of applying for tariff increases (MYPD3) and requires intelligence on the market potential for an energy efficient (EE) technology roll out in South Africa, as well as the subsequent MW savings potential This information will assist Eskom in applying for a fair allocation of EE supporting funding from the Regulator Frost & Sullivan has been conducting research on behalf of the Eskom IDM team for the last 2 years and has been requested to review the out-dated assumptions on EE potential in the country Frost & Sullivan has also been requested to developed a potential roadmap for the roll out of EE initiatives over a 10 year period starting with the easiest and most impactful interventions, then eventually focusing on more complex interventions (towards the end of the forecast period) This document contains the key findings of the research Frost & Sullivan worked closely with Eskom s demand forecasting division in order to reflect the EE potential in this market by using actual electricity sales data from Eskom and Frost & Sullivan s market research in the Agricultural, Commercial, Industrial and Residential markets Frost & Sullivan would like to state that various assumptions were made during this project Making use of other assumptions than the assumptions used, would lead to new conclusions Therefore, thorough discussion on the approach and content of the document is recommended 3

4 Background to the Research 4

5 Background to the Research In 2011, Frost & Sullivan conducted extensive market research on the actual technologies consuming energy in South Africa within the Agricultural, Commercial, Industrial and Residential markets The outcomes of the research focused on quantifying various pre-determined technologies and estimating energy consumption per industry as well as the replacement rates of various technologies (in order to assess the relative ease with which Eskom can focus on assisting with replacement of technologies) The outcomes of the research are contained in 14 detailed market reports (all made available to Eskom s IDM division) as well as a final executive summary that summarises the technology counts The research had some limitations including: The refusal of government to part take in the research (the DPE in particular) The exclusion of Eskom s 146 largest customers (on request from Eskom) Limited interviews being conducted (budget constraints) and hence some of the data was extrapolated However, very useful intelligence was collected and this information forms the basis for the analysis in this document 5

6 Methodology Frost & Sullivan worked closely with Eskom s IDM team to develop the information in this report Eskom supplied: Sales information % estimates of energy savings per technology and sector types Load factors for technology types Insight into the opportunities for small scale renewable energy roll out Frost & Sullivan completed the analysis of the data based on the research completed to date EE Potential Analysis 6

7 Methodology (Contd ) The following methodology was used: 1. Use the actual sales data for 2011 (Source: Eskom) 2. Correlate this with maximum demand figures for 2011 (Source: Eskom) 3. Determine the load factor per technology group / per industry segment (Source: Eskom) 4. Calculate the potential savings in MW based on feedback from industry (Source: Eskom and Frost & Sullivan) 5. Determine the level of a) practicality of technical replacement, b) the end-user willingness to replace technologies and c) the relative cost of replacement (per unit) (Source: Eskom and Frost & Sullivan) 6. Determine which technologies could be the easiest to replace and which ones should be replaced at a later stage and rank them accordingly(source: Eskom and Frost & Sullivan) 7

8 Methodology (Contd ) The following charts were created: Technical potential (practically) versus market potential to replace Technical change was rated on a scale of 1 to 5 where 1 is very complex to change and 5 is very easy to replace (typical plug and play ) Market potential refers to end-user willingness to replace the technology (rated on a 1 to 5 scale where 1 is unwilling and 5 is willing to replace) Willingness Sector: Technical and Willingness Willingness to Replace but Technically Challenging Unattractive for Change Attractive to Replace Easy to Replace but Low Willingness Technical practically versus economic potential Technical change was rated on a scale of 1 to 5 where 1 is very complex to change and 5 is very easy to replace (typical plug and play ) Economic potential refers to the relative cost of replacement (rated on a 1 to 5 scale where 1 is high cost and 5 is relatively low cost) In each case the size of the bubble represents the size of the MW savings potential Cost Technical Potential Sector: Technical and Cost Low Cost but Technically Challenging Unattractive for Change Attractive to Replace Easy to Replace but High Cost Technical Potential 8

9 Overall Findings 9

10 Overall Findings Agriculture holds the lowest potential followed by commercial, residential and industrial holding the most potential Overall MW Savings Potential However, there are various opportunities in each segment that can be addressed in the short (2 years), medium (3-5 years) and long term (5-10 years) MW Savings Potential Based on Maximum Demand in 2011 Sector MW Savings Potential Agriculture Commercial Residential Industrial MW Savings Potential Total Sector Source: Frost & Sullivan Analysis 10

11 Overall Findings (Contd ) Lighting and Geysers holds the highest potential for efficiency creation across all sectors This is followed by HVAC, motors and Compressors, cool storage (residential only), pumps, fans and lastly pool pumps These numbers were obtained based on peak demand in 2011 of MW The following efficiencies per technology group per industry were used: MW Overall Opportunity by Technology Type Fans Pumps Compressors Lighting HVAC Motors Geysers Cool Storage Pool Pumps Technology Industrial % of Total Consumption Industrial Utilisation Factor Commercial % of Total Consumption Commercial Utilisation Factor Agriculture % of Total Consumption Agriculture Utilisation Factor Residential Technology Residential % of Total Consumption Utilisation Factor Fans 6.0% 39.2% 5.0% 31.2% 5.0% NA Fridges 17.4% 49.2% Pumps 15.0% 29.8% 4.0% 20.3% 20.0% NA Geysers 50.7% 5.3% Compressors 9.8% 37.9% 2.0% 18.6% 6.0% NA Stoves 11.8% 0.1% Lighting 2.0% 8.5% 18.0% 4.8% 12.0% NA Lighting 6.6% 34.8% HVAC 8.1% 23.5% 26.0% 49.8% 6.0% NA HVAC 3.5% 2.0% Motors 35.1% 31.0% 14.0% 19.7% 11.0% NA Televisions 6.3% 40.7% Geysers 0.2% NA 8.0% NA 5.0% NA Other 3.7% NA Others 23.8% NA 23.0% NA 35.0% NA Source: Eskom and Frost & Sullivan Analysis 11

12 Overall Findings (Contd ) Agriculture, Commercial and Industrial Sectors MW Savings Potential Per Technology Type in the Agriculture, Commercial and Industrial Sectors The most significant savings are in the lighting (40%) and geyser (40%) technology groups Compressors and HVAC systems have 15% savings potential each Fan replacement and process optimisation can result in a 10% energy saving 40% 30% 20% 10% 0% Pump and motor optimisation can bring about 5% efficiency (Please note that the research uncovered many instances where the pump and motor are over sized for a specific application) MW Savings Potential Per Technology Type in the Residential Sector Residential Sector Lighting and geyser replacement offers the highest efficiency opportunity at 40% This followed by cool storage (30%), pool pumps (25%) and laundry (20%) 40% 30% 20% 10% 0% Optimising heating and cooking technologies can bring about a 10% savings each Source: Eskom and Frost & Sullivan Analysis 12

13 Sector Analysis Agriculture 13

14 Agriculture: Key Findings Lighting and geysers represent the largest and easiest MW savings potential in the agriculture segment (representing 55 MW and 22 MW savings respectively) Another area of interest is the HVAC segment (7 MW potential) since most units are split units that can be replaced relatively easily Although pumps and fans consume significantly large proportions of energy within the segment, these technologies are hard to replace based on the lack of willingness of the farming community to do so Cost Agriculture: Technical and Cost Fans Pumps Compressors Lighting HVAC Motors Geysers Technical Potential Motors and compressors also offer limited opportunities based on the technical difficulty of changing the equipment. Compressor optimisation (such as fixing system leaks) is probably the best approach for efficiency creation Many pumps in this segment are technically larger than what is required thus creating further potential In general it was found that the farming community takes very good care of their pumps (to the point of giving their pumps specific names) Relative savings per pump is also rather low (around 5% and will hence create significant work without major MW savings) Willingness Agriculture: Technical and Willingness Fans Pumps Compressors Lighting HVAC Motors Geysers Technical Potential 14

15 Agriculture: 10 Year Plan Agriculture: 100% Efficiency in 10 Years Yearly Plans Agriculture Total Improvement Assumption Fans Long Term: 10 Year Roll out Pumps Long Term: 10 Year Roll Out Compressors Short Term: 5 Year Roll out Lighting Short Term: 2 Year Roll Out HVAC Short Term: 5 Year Roll Out Motors Medium Term 8 Year Roll Out Geysers Short Term: 5 Year Roll Out Total The agricultural segment holds the least potential for energy savings but there are specific areas that can easily be addressed This includes specifically lighting and geysers Efficiency of compressors should also be explored further (patching air pipes) Pumps, fans and motors are either technically difficult to replace or the owners are least willing to replace them and hence should be targeted during normal replacement and perhaps an incentive program can alter this The bulk of the Agriculture opportunities can be addressed over the medium term 15

16 Agriculture: 10 Year Plan (60%) Yearly Plans Agriculture (60%) Assumption Total Improvement Fans Long Term: 10 Year Roll out Pumps Long Term: 10 Year Roll Out Compressors Short Term: 5 Year Roll out Lighting Short Term: 2 Year Roll Out HVAC Short Term: 5 Year Roll Out Motors Medium Term 8 Year Roll Out Geysers Short Term: 5 Year Roll Out Total It is most likely unfeasible to set a 100% target for energy efficiency roll out in South Africa over the next 10 years For this reason Frost & Sullivan suggest that a target of 60% of the total target should be set as the benchmark The savings obtained by achieving this target will help to reduce demand sufficiently so that maintenance and overhaul of generation plants will be feasible during the summer period In some areas the targets can be increased (especially lighting, geysers and HVAC) 16

17 Sector Analysis Commercial 17

18 Commercial: Key Findings In the commercial segment the largest opportunities for efficiency creation is in the lighting (302MW), HVAC (150MW) and geyser replacement (126MW) The replacement of motors, pumps, compressors and fans can result in a combined savings of 78 MW but at significant cost The research indicated that the commercial segment is very aware of the type of lighting (especially in the retail segment) required and hence will have to be lobbied in order to make wholesale changes to current lighting Cost Commercial: Technical and Cost Fans Pumps Compressors Lighting HVAC Motors Geysers Technical Potential The most significant opportunities for HVAC lie in replacing single and split units with more efficient plug and play alternatives An important note is that the government segment (which refused to participate in the research) holds significant opportunity for efficiency creation and should for a key part of the Eskom EE plan To date the commercial hot water space (geysers) have not received significant attention and should form a larger part of the overall strategy Willingness Commercial: Technical and Willingness Fans Pumps Compressors Lighting HVAC Motors Geysers Technical Potential 18

19 Commercial: 10 Year Plan Commercial: 100% Efficiency in 10 Years Yearly Plans Commercial Total Improvement Assumption Fans Long Term: 5 Year Roll Out Pumps Long Term:5 Year Roll Out Compressors Long Term:5 Year Roll Out Lighting Short Term: 3 Year Roll Out HVAC Short Term: 5 Year Roll out Motors Medium Term: 8 Year Roll Out Geysers Short Term: 5 year Roll Out Total Opportunities in the commercial sector are more varied than the agriculture sector Specific short term opportunities include: Lighting, HVAC (especially single and split units) and geysers Medium term opportunities are in the motors segment Long term opportunities should be further explored especially in technically difficult areas such as the use of fans, pumps and motors A special note is that a large portion of energy use in the commercial segment is the government itself and Eskom should dedicate a team to government energy efficiency measure to roll out efficiencies rapidly (especially in lighting and HVAC) 19

20 Commercial: 10 Year Plan (60%) Commercial (60%) Yearly Plans Total Improvement Assumption Fans Long Term: 5 Year Roll Out Pumps Long Term: 5 Year Roll Out Compressors Long Term: 5 Year Roll Out Lighting Short Term: 3 Year Roll Out HVAC Short Term: 5 Year Roll out Motors Medium Term: 8 Year Roll Out Geysers Short Term: 5 year Roll Out Total It is most likely unfeasible to set a 100% target for energy efficiency roll out in South Africa over the next 10 years For this reason Frost & Sullivan suggest that a target of 60% of the total target should be set as the benchmark The savings obtained by achieving this target will help to reduce demand sufficiently so that maintenance and overhaul of generation plants will be feasible during the summer period In some areas the targets can be increased (especially lighting, geysers and HVAC) 20

21 Sector Analysis Industrial 21

22 Industrial: Key Findings The industrial segment is the most complex segment as a result of the large energy consumption and the broad variety of activities The largest opportunity is presented in the motors technology group (623 MW) This is followed by compressors (553 MW), fans (394 MW), HVAC (235 MW), lighting (150 MW), pumps (123 MW) and geysers (20 MW) A significant challenge with the industrial segment is that it is difficult to change key pieces of equipment such as motors, fans and pumps The easiest replacements is represented by the lighting and hot water (geyser) technology groupings and single and split HVAC systems mostly located in administrative buildings of the industrial segment It is recommended that companies should be encouraged to replace inefficient technologies with more efficient technologies when they have lived out their usage period (motors, fans, compressors and pumps) Cost 3 2 HVAC 1 Motors 0 Geysers Technical Potential Willingness Industrial: Technical and Cost 6 Fans 5 Pumps 4 Compressors Industrial: Technical and Willingness Technical Potential Lighting Fans Pumps Compressors Lighting HVAC Motors Geysers 22

23 Industrial: 10 Year Plan Industrial: 100% Efficiency in 10 Years Yearly Plans Industrial Total Improvement Assumption Fans Long Term: 5 Year Roll Out Pumps Long Term: 5 Year Roll Out Compressors Short Term: 10 Year Roll Out Lighting Short Term: 5 Year Roll Out HVAC Short Term: 10 Year Roll Out Motors Short Term: 10 Year Roll Out Geysers Short Term: 2 Year Roll Out Total The industrial sector is the most complex in terms of energy efficiency roll out Short term opportunities exist in the lighting, geyser, compressor (air leakage fixes and later compressor replacement), and HVAC (especially single and split units in administrative offices) technology groups Fans and pumps are typically difficult to replace especially since they form part of larger systems and are difficult to reach and replace It should be noted that there are many pumps, motors and fans in this market that are larger than their application requirements and hence energy auditors could well increase the level of efficiency The long term potential in the industrial segment is higher than the short term potential 23

24 Industrial: 10 Year Plan (60%) Yearly Plans Industrial (60%) Total Improvement Assumption Fans Long Term: 5 Year Roll Out Pumps Long Term: 5 Year Roll Out Compressors Short Term: 10 Year Roll Out Lighting Short Term: 5 Year Roll Out HVAC Short Term: 10 Year Roll Out Motors Short Term: 10 Year Roll Out Geysers Short Term: 2 Year Roll Out Total It is most likely unfeasible to set a 100% target for energy efficiency roll out in South Africa over the next 10 years For this reason Frost & Sullivan suggest that a target of 60% of the total target should be set as the benchmark The savings obtained by achieving this target will help to reduce demand sufficiently so that maintenance and overhaul of generation plants will be feasible during the summer period In some areas the targets can be increased (especially lighting, geysers and HVAC) 24

25 Sector Analysis Residential 25

26 Residential: Key Findings The residential segment remains highly attractive for energy efficiency implementation Geyser replacement present the largest opportunity at 1080 MW This is followed by lighting (413 MW), cool storage (228 MW), cooking (146 MW) Cost Residential: Technical and Cost Cool Storage Pool Pumps Heating Lighting Laundry Cooking Laundry technologies (47 MW) and pool pumps (41 MW) makes up the rest of the potential savings Although the replacement of certain technologies is theoretically very easy (such as cool storage, heating and cooking) it is highly unlikely that end-users will participate in such programs other than when they replace these technologies at the end of the technical life of the equipment From the research conducted it was clear that the Eskom s lighting roll-out program was widely viewed as a good initiative Unfortunately it also became clear that end-users were not always continuing the process (i.e. they are replacing their spent CFL s with incandescent lights) Willingness Technical Potential Residential: Technical and Willingness Geysers Cool Storage Pool Pumps Heating Lighting Laundry Cooking Geysers Technical Potential 26

27 Residential: 10 Year Plan Residential: 100% Efficiency in 10 Years Yearly Plans Residential Total Improvement Assumption Cool Storage More Research Needed Pool Pumps Short Term: 10 Year Roll Out Heating More Research Needed Laundry More Research Needed Cooking Medium Term: 5 Year Roll Out Lighting Short Term: 2 Year Roll Out Geysers Short Term: 5 Year Roll Out Total There are substantial energy savings opportunities in the residential sector The two largest opportunities are in the lighting and geyser segments and should be addressed as an immediate concern Cooking presents an opportunity especially large scale LPG roll out programmes and convection oven technology increase At present there is no feasible short term solution to cool storage, heating and laundry technology replacement and Frost & Sullivan suggests additional research into these areas 27

28 Residential: 10 Year Plan (60%) Yearly Plans Residential (60%) Total Improvement Assumption Cool Storage More Research Needed Pool Pumps Short Term: 10 Year Roll Out Heating More Research Needed Laundry More Research Needed Cooking Medium Term: 5 Year Roll Out Lighting Short Term: 2 Year Roll Out Geysers Short Term: 5 Year Roll Out Total It is most likely unfeasible to set a 100% target for energy efficiency roll out in South Africa over the next 10 years For this reason Frost & Sullivan suggest that a target of 60% of the total target should be set as the benchmark The savings obtained by achieving this target will help to reduce demand sufficiently so that maintenance and overhaul of generation plants will be feasible during the summer period In some areas the targets can be increased (especially lighting, geysers and HVAC) 28

29 Consolidated Analysis 29

30 Total 10 Year Plan 100% Efficiency Target Year TOTAL Fans Pumps Compressors Lighting HVAC Motors Geysers Cool Storage Pool Pumps Heating Laundry Cooking TOTAL An ambitious target of 100% may be too high but this provides significant information on the actual opportunities in the market From the analysis it is clear that the highest opportunities still reside in the geyser, lighting and motors technology clusters and should form part of the first level of implementation Further potential exists in compressors, fans, and HVAC technology segments Within the residential segment there are significant opportunities for savings in the cool storage, and cooking technology segments but these are very difficult to implement

31 Total 10 Year Plan 60% Efficiency Target Year TOTAL Fans Pumps Compressors Lighting HVAC Motors Geysers Cool Storage Pool Pumps Heating Laundry Cooking TOTAL A 60% target of the total installed technology universe is in all likelihood a more achievable target and allows room for strategic planning Some areas could well yield higher savings: Current incandescent lights can be replaced with CFL s and then in the medium term replaced with LED technology resulting in short term gains as well as longer term continued savings It is critical to mention that the most effective way of creating savings is through thorough energy auditing and Eskom should invest heavily in the training and sponsoring of Energy Auditors (with Eskom Accreditation) and enhancing knowledge on the specific areas Eskom should focus on

32 Total 10 Year Plan % Contribution 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Opportunity by Sector Year Residential Industrial Commercial Agriculture % Contribution Total Opportunity by Technology Type 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Years Cooking Laundry Heating Pool Pumps Cool Storage Geysers Motors HVAC Lighting Compressors Pumps Fans The low hanging fruit for EE implementation remains in the residential sector The industrial sector holds the most long term potential but many of the opportunities are technically difficult to replace, or end-users are resistant to change a continued marketing approach is needed here The commercial segment holds significant potential especially in lighting and HVAC (single and split) units Special attention needs to be placed on the implementation of a government buildings roll out as Eskom could work closely with the DPE in the rollout of efficient technologies Additional research in this regard is however needed to quantify the opportunity better The agricultural segment holds the least potential but there are easy opportunities in lighting, geysers and compressor optimisation The technologies holding the most short term potential are the plug and play technologies such as lighting, geysers and HVAC systems 32

33 Assumptions 33

34 Assumptions and Limitations of the Research The 146 key Eskom customers were not interviewed by Frost & Sullivan - but for the sake of this analysis it is assumed that they have a similar profile to the rest of their industries The DPE did not participate in the research and hence no opinion on government s EE potential can be supplied however it is estimated that there are significant savings potential within administrative offices, hospitals, schools and prisons The research focussed on high energy demand technologies (such as geysers, lighting, compressors, motors, fans and pumps) All other technologies fall under "other" (i.e. smelters, boilers, office equipment etc.) The "ease of technology replacement rate" is subjective and needs to be tested and verified by energy auditors The number of units of technology (in the Frost & Sullivan reports) will have to be adapted to include the reality of the 146 key customers The main aim of EE implementation is to reduce overall summer demand to enable a well managed maintenance program The potential saving per technology type (% of the savings) is an estimate and more research is required to ensure more accurate industry information is included in the forecasts We assume that all equipment identified is operating during peak times (which is of course not the case) For each technology grouping a load factor was calculated (by Eskom) but this needs to be confirmed by a technical specialist 34

35 Assumptions and Limitations of the Research There is a lot of over design across all industries - i.e. higher rated equipment than what is needed is in operation This can result in significant additional savings % Contribution per sector was obtained from Ozone study (for consistency) in the industrial segment We assume that access to properties is easy clients are keen to welcome the technical staff of Eskom on their premises to aid them in energy saving initiatives We present the technical potential - there is additional load management opportunities We need more information on small scale hydro, solar PV and wind We need more on waste heat recovery opportunities in South Africa This study can be enhanced a great deal with the input of the Sector Forums and Sector Managers - their noninvolvement was a big limitation 35

36 Demand Side Management Old versus New Estimates 36

37 Demand Side Management Old Estimates Market Potential (MW) Estimated Total Market Potential Technology Residential Commercial Industrial Total Efficient Lighting ,170 CFL Sustainability 0 Solar Water Heating 3,713 3,713 Domestic Cooking Conversion 2,144 2,144 Infra red heating Heat Pumps ,753 Showerheads & Restrictors Hot Spot Projects 0 HWLC radio & ripple control 0 Load Management Heating, Ventilation & (HVAC Agricultural Initiatives Compressed Air 1,255 1,255 Motor Efficiency Variable Speed Drivers Fan / Pumps TOTAL 8, ,565 12,933 The market s total potential is the estimated maximum amount of demand savings that can be achieved in each technology class. The market potential was estimated in a recent research study conducted by EEDSM. In setting targets, the market penetration in any of the technology classes did not exceed 50% of the research finding s maximum market potential. The above conservative target settings approach allows for market estimation accuracy, customer own projects and supply chain constraints.

38 Demand Side Management Updated Estimates Market Potential (MW) Estimated Total Market Potential Technology Residential Commercial Industrial Agriculture Total Efficient Lighting CFL Sustainability 0 Solar Water Heating Domestic Cooking Conversion Infra red heating Heat Pumps ,753 Showerheads & Restrictors Hot Spot Projects 0 HWLC radio & ripple control 0 Load Management 9 200? 209 Heating, Ventilation & (HVAC Compressed Air Motor Efficiency Variable Speed Drivers 0 Fan / Pumps Cool Storage Pool Pumps Heating Laundry TOTAL 3, , , ,013 The market s total potential is the estimated maximum amount of demand savings that can be achieved in each technology class The market potential was estimated in a recent research study conducted by EEDSM The next steps should be to determine the level of savings that can be readily achieved and link that back to quantities of technologies to be replaced Additional savings is available in process optimisation especially in medium sized industries No information available to Frost & Sullivan