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An overview of the Energy Efficiency Strategy of the Republic of South Africa

Approved by Minister on 1 April 2005

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Why do we need an Energy Efficiency Strategy

• In recent years energy efficiency has significantly gained in stature and has become recognised as one of the most important cost-effective ways of meeting the demands of sustainable development.

• Benefits are environmental, economic and social.

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The Status Quo

• In 2000 the total primary energy supply was nearly 4300 PJ of which 79% was attributable to coal

• This was part of the reason why the electricity prices are amongst the cheapest in the world

• South Africa is energy intensive• World Summit on Sustainable Development in 2002

recognised ee as a key tool to enhance clean energy development

• The Strategy offers a consolidated approach to capture opportunities in the best interest of our nation

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The Strategic Process

• The White Paper on Energy Policy 1998 gives a mandate to the DME to promote ee through various means.

• The Strategy sets out a national target for energy savings of at least 12% by 2015

• This target is expressed in relation to the forecast national energy demand at that time, based on the “business as usual” baseline scenario for South Africa modelled as part of the National Integrated Energy Plan (2003)

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Energy Efficiency enabling instruments that will be used

• Economic and legislative means• Information activities• Energy labels• Energy Performance Standards• Energy Audits• Energy Management• Promotion of energy efficient technologies

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Vision

• To encourage sustainable energy sector development and energy use through efficient practices

• thereby minimising the undesirable impacts of energy usage upon health and the environment

• And contributing towards secure and affordable energy for all.

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8 GOALS OF THE STRATEGY

• Goal 1:• Improve the health of the nation• Energy efficiency reduces the atmospheric

emission of harmful substances such as SOx, NOx and smoke.

• Such substances are known to have an adverse effect on health and are frequently a primary cause of common respiratory ailments

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8 GOALS OF THE STRATEGY

• Goal 2:• Job creation• Studies show that jobs will be created by the

spin-off effects of energy efficiency implementation. Improvements in commercial economic performance, and uplifting the energy efficiency sector itself, will inevitably lead to nationwide employment opportunities

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8 GOALS OF THE STRATEGY

• Goal 3:• Alleviate energy poverty• Energy efficient homes not only improve

occupant health and wellbeing, but also enable the adequate provision of energy services to the community at an affordable cost

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8 GOALS OF THE STRATEGY

• Goal 4:• Reduce Environmental pollution• Energy efficiency will reduce the local

environmental impacts of its production and use. These impacts include the atmospheric emission of harmful and odorous gases

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8 GOALS OF THE STRATEGY

• Goal 5:• Reduce CO2 emissions• Energy efficiency is one of the most cost-

effective methods of reducing GHG emissions, and thereby combating climate change. Addressing climate change opens the door to utilising novel financing mechanisms, such as the CDM, to reduce CO2 emissions.

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8 GOALS OF THE STRATEGY

• Goal 6:• Improve industrial competitiveness• It has been demonstrated that one of the most

cost-effective ways of maximising commercial profitability is the adoption of appropriate energy efficiency measures. Nationwide, this will improve South Africa’s export performance and improve the value that her economy derives from indigenous energy resources

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8 GOALS OF THE STRATEGY

• Goal 7:• Enhance energy security• Energy conservation will reduce the necessary

volume of imported primary energy sources, crude oil in particular. This will enhance the robustness of South Africa’s energy security and will increase the country’s resilience against external energy supply disruptions and price fluctuations.

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8 GOALS OF THE STRATEGY

• Goal 8:• Reduce the necessity for additional power

generation capacity• It is estimated that the country’s existing power

generation capacity will be insufficient to meet the rising national maximum demand by 2007 –2012. Energy efficiency is integral to Eskom’sDSM programme, which is intended to reduce the level of load growth by a cumulative value of 4255MW by 2025, equivalent to a saving to a six unit coal fired power station.

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Baseline Statistics: Primary Energy Supply

Coal79%

Crude Oil10%

Gas2%

Renewables6%

Nuclear3%

Hydro<1%

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Sectoral usage

Industry41%

Mining6%

Commerce4%

Residential17%

Other1%

Transport28%

Agriculture3%

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Final energy use by carrier

Electricity26%

Coal30%

Petroleum Products

33%

Gas2%

Other (incl. Biomass)9%

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Targets• A final energy demand reduction of 12% by

2015• Expressed as a percentage reduction against

the projected energy usage in 2015• Forecast derived from LEAP in IEP• Assumptions

– Population growth: 2000 = 44m, 2015= 53.3m (1.3% p.a)

– GDP growth: 2.8% average p.a. growth over period– Economic growth: 2.8% over period– Fuel switching limited apart from general increase in

electricity consumption in residential sector

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Final Energy Demand

0

500

1000

1500

2000

2500

3000

3500

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013Year

PJ

Target Outcome to 2015

Projected Demand to 2015

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Review of Targets• A review of the national and sectoral targets will

be undertaken every 3 years• Aim to check progress in achieving targets and

to address any areas where additional input may be required from stakeholders

• The targets should be seen as both challenging and achievable

• In most cases the sectoral targets comprise a conservative estimate of the likely impact of technical interventions, coupled with the additional impact of EM initiatives.

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TARGETS TO BE MET BY 2015

• Industry and Mining – 15% final energy demand reduction

• Power Generation – 15% reduction in parasitic electrical usage

• Commercial and Public Sector Buildings – 15% final energy demand reduction

• Residential sector – 10% final energy demand reduction

• Transport sector – 9% final energy demand reduction

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Monitoring and Measurement

• A system will be established to measure the effectiveness and efficiency of measures implemented

• Success of the system will inevitably depend upon using a multi-stakeholder approach, including consultation with representative bodies within each sector.

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Implementing Instruments• Support mechanisms:

– EE standards, appliance labeling, certification and accreditation, education, information and awareness, research and technology, regulation, energy audits, EM systems

• Policy, mandate and governance• Finance instruments

– Incentives, fee bates, financing public sector implementation plan, energy services companies, CDM, DSM and energy pricing

• Stakeholders

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Sector Programmes• In order to meet the objectives of the

strategy, it is intended that interventions be implemented in a phased approach. The timing of the phases are as follows:– Phase 1: March 2005 to February 2008– Phase 2: March 2008 to February 2011– Phase 3: March 2011 to February 2015

• Interventions for each sector are described

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Industry and Mining sector programme

• Norms and standards for horizontal technologies – standards developed for boiler efficiency, electric motors and thermal insulation.

• Responsibilities: DME, dti, SABS, Education providers, ESCo’s, industry associations and wider industry

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Commercial and Public Buildings sector programme

• Standard for office buildings developed: SANS 204 to be incorporated into the National Building Regulations at dti

• Mandatory energy audits for commercial buildings

• Energy Management systems• Technologies

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Transport Sector Programme• Optimisation of passenger and goods

transport. Policy and regulations to be drafted and necessary fiscal and budgetary reform

• Introduction of energy management measures in passenger transport

• Facilitation of energy efficiency in freight logistics

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Conclusion• RSA is one of a few countries in the world with

an Energy Efficiency Strategy• Implementation is currently voluntary except for

areas where mandatory standards are existing• The cooperation and assistance of all energy

users are required for energy efficiency to become a culture in South Africa

• www.dme.gov.za