John Thorby, Senior Manager Integrated Demand Management, Eskom

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With the expected Eskom increases over the next five years, retail service stations are facing reduced profitability and some even closure as profits are continually eroded by rising operating costs. Electricity is one of the costs that can be managed and self generated.

This conference aims to examine best practices in energy efficiency and unpack the options and complexities of generating electricity from renewable energy specifically for retail fuel sites.

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  • Energy Service Companies (ESCos) who are accredited by Eskom operate by establishing a three-way partnership between themselves, Eskom and the customer, and use their knowledge of DSM technologies and programmes to determine the best way of obtaining results at customer premises. These organisations are experts within targeted vertical markets, capable of identifying opportunities for achieving reductions in electricity consumption, and scoping and executing such projects.   To participate in the funding programme, the ESCo submits a proposal on potential savings (per load factor) which EEDSM reviews on its technical and financial merits, as well as, energy savings potential. Once a contract has been signed, the ESCo is given the go-ahead to implement the project.   20100121 IDM Presentation
  • 20100121 IDM Presentation
  • The Standard Product model comprises pre-approved rebates for energy savings achieved through specified technologies. Through this programme, customers are able to replace most commonly-used inefficient technologies with their energy efficient equivalents. The Standard Product offer was developed to create capacity to implement small and medium-sized projects. Standard Products, referred to as an application specific standard product (ASSP), are available as off-the-shelf components. Such products, approved by Eskom, are replacements for less energy efficient technologies. A product can be a component, sub assembly or a complete “machine”. Technologies include lighting equipment (CFLs instead of incandescent bulbs) control systems (building/process management, occupancy sensors, daylight sensors etc), and programmable process control systems. Energy saving projects may be undertaken by Energy Services Companies (ESCOs) or customers. Issue: Manual business processes and resource intensive processes for relative low savings. Extend range of Standard Technologies 20100121 IDM Presentation
  • What it is: A sustainable Energy Efficiency package based on free, non-free and services to the customer To deliver Load management during peak times  Reducing 2012 winter peak load How will this be achieved? The mass roll-out of standard offer products to obtain sustainable energy savings Simple residential load management devices will form part of the initiative (Short term load control objective incentivised with in-home display )
  • John Thorby, Senior Manager Integrated Demand Management, Eskom

    1. 1. New Capacity and EnergyManagement9 May 2013
    2. 2. Overview of presentation• The state of the Eskom system• The future trends in electricity pricing• IDM funding mechanisms and programmes• Savings and future design considerations for retail sites2012/05/12 2
    3. 3. The State of the Electricity Systemneed for new capacity and energy management
    4. 4. 4South Africa’s power system is constrained and will be for next few yearsEskom, together with stakeholders, have kept the lights on since 2008Most power stations are in their mid-life and require increased maintenanceStrategy of shifting maintenance outages can no longer be sustained.Significant maintenance is required to address backlogsInitiatives are in place to keep the lights onIntroduction
    5. 5. Demand profiles in Summer andWinter
    6. 6. The national power system is under strain6√• With themaintenance thatneeds to be done,and the availablecapacity, thesystem will remaintight• The identifiedsupply and demandside initiatives willhelp to improve thepicture• Actualmaintenanceschedule will needto be revised basedon the state of thesystem
    7. 7. The future for electricity pricing7
    8. 8. Electricity Pricing• Eskom has been granted an 8% price increase by NERSA for the nextfive years as part of MYPD3 – this is unsustainable and will need to berevisited.• The municipalities tariff increases are not as strictly regulated asEskom’s. NERSA has indicated that they will do more to regulatemunicipal tariffs in future. Municipal tariff hikes are a big risk tobusiness.• Electricity is still fairly cheap in South Africa but will become relativelymore expensive over the years due to:-• Capital costs for new capacity• Escalating coal costs• Environmental pressures and commitments8
    9. 9. The role of IDM – IntegratedDemand Management
    10. 10. Eskom annual achievements02004006008001000FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012PeakDemandSavings(MW)* Includes DMP & Non Funded ProjectsSavings as per year claimedEskom Target Demand Savings Achieved NERSA TargetEskom has consistently over-achieved on the NERSA targets
    11. 11. Eskom’s demand savings performance to date11Demand SavingsDemand Savings3073 MW3073 MW1 power station generator is approximately600MW therefore over 5 generators “freed up”
    12. 12. Eskom compares favourably with the rest ofthe world13/05/14 12Eskom’s innovative Power Alert tool has won prestigious international awardsin both marketing and engineering fields.54 million CFLs distributed across South Africa to date, representing one ofthe largest CFL roll outs in the world.Amongst the lowest cost programmes in the world as measured by $/MWdemand reduction.Recognised by the World Bank as one of the most comprehensive utilityenergy efficiency and demand side management programmes, certainlyamongst the BRICS countries.Aligned with best practices for energy efficiency implementationprogrammes as developed by the EU Energy Efficiency Watch survey of theNational Energy Efficiency Action Plans from 26 EU Member States.
    13. 13. IDM PROGRAMMES
    14. 14. ESCo ModelDemand-based payments for verified savings.Process Optimisation, Lighting, Heat Pumps, HVAC, etc.Individual Projects with uniquerequirementsSize: > 500 kWMarket focus: IndustrialPayments based on technologycost benchmarks averagingR5.25m/MWESCO projects claimed since inception (cumulative)450 projects869 MWdemand savings2,727 GWhenergy savingsIssues with ESCo model:1)Individual project approvals and long lead times2)Not applicable to “mass market”3)Inconsistent evaluation criteria4)Cumbersome governance processes5)Complex and onerous contracts9 20 3796166237291340400050010001500200025000100200300400500FY2003FY2004FY2006FY2007FY2008FY2009FY2010FY2011FY2012Demand(MW)&Energy(GWh)SavingsNo.ofprojectsNo. Of Projects Demand Savings (MW) Energy Savings (GWh)
    15. 15. Total Mining sector Savings = 287MW @ R613 millionCompressor ManagementDemand Savings = 76MWEg. Cooke MinePumping Demand Savings = 143MW Eg. Union MineFridge PlantsDemand Savings = 35MWEg. Harmony MineWinders & VSD & OtherDemand Savings = 34MWEg. Bambanani MineIndustrial and Commercial SectorsTypical energy savings projects undertaken
    16. 16. Standard OfferReplace inefficient technologies with apre-approved suite of energy efficientproductsSize: 10kW-5MW (Mon-Fri 6:00-22:00)Market focus: Industrial / CommercialStandard rate per kWh per technology42 – 120 c/kWh (Peak Hours)Sustainability ensured by procuringenergy savings over a 3 year period(70% on completion and 10% pathereafter)Energy Efficiency payments at a fixed rate for a fixed period (16 hours)Lighting, LEDs, Hot Water Systems, Solar, Industrial ProcessOptimisation and RenewablesSOP projects registered (cumulative progress since Apr 2011)225 projects113.25 MWdemand savings609.6 GWhenergy savings3 59 12172227 30364761667480050100150200250020406080100AprMayJunJulAugSepOctNovDecJanFebMarAprMayDemand(MW)&Energy(GWh)SavingsNo.ofprojectsNo. Of Projects Demand Savings (MW) Energy Savings (GWh)
    17. 17. Standard ProductSmall to medium projectsSize: <250kW savingsMarket focus: CommercialStandard value per rebated item,scaled up to 75% of DSMbenchmark - Rebate capped atR 975 000.00 per application.Pre-approved rebates for deemed energy savings (24/7) achievedthrough specified technologies – efficient replacementsLighting, Shower heads, Industrial heat pumpsSPP Projects registered (cumulative progress since Apr 2011)4517 projects112 MWdemand savings493 GWhenergy savings4 18 39 6713423833146057068881698311501287-30100230360050010001500AprMayJunJulAugSepOctNovDecJanFebMarAprMayDemand(MW)&Energy(GWh)SavingsNo.ofprojectsNo. Of Projects Demand Savings (MW) Energy Savings (GWh)2012/05/12
    18. 18. Demand Response as at 31 Jan 2013500 MWreduction contracted forcurrent DMPUp to 2,500MWreductionpotential = DRAPPPayment of a fixed rate for load reduction at fixed predetermined times.Demand Market Participation (DMP) programme; Demand ResponseAggregated Pilot (DRAPP) programmeDMPSize: Customers with 20-80MWdemand reduction potentialMarket focus: IndustrialDRAPPSize: Customers with <10MWdemand reduction potentialMarket focus: Small industrial andcommercialMultiple fixed rate per MWhUpto R1200/MWh.2012/05/12
    19. 19. Residential Sector2011/11/09 1414(Source: Frost and Sullivan Market Analysis for Residential market 2012P r e d o m i n a n t l y l i g h t i n go p p o r t u n i t y a n d c u r r e n t( f r e e i s s u e ) S W Hp r o g r a m m eL i m i t e d d e m a n dm a n a g e m e n t o p p o r t u n i t yP r e f e r r e d a p p r o a c h :M a s s , d o o r - t o - d o o rr o l l o u t o f a l i m i t e d ,s t a n d a r d t e c h n o l o g y o f f e rE x t e n s i v e l i g h t i n g p l u sm o r e d i v e r s e r a n g e o ft e c h n o l o g i e s .D e m a n d m a n a g e m e n to p p o r t n u i t y v i a t i m e r s ( o rs i m i l a r )P r e f e r r e d a p p r o a c h :I n s t a l l e r t y p e m o d e l w i t h as t a n d a r d p a c k a g e o ft e c h n o l o g i e sS i g n i f i c a n t o p p o r t u n i t y f o re n e r g y a n d d e m a n ds a v i n g s i m p a c t B U Ta s t a n d a r d , f r e e i s s u es o l u t i o n i s l e s s s u i t a b l eP r e f e r r e d a p p r o a c h :R e t a i l e r m o d e l o f f e r i n gd i s c o u n t e d p r o d u c t s ( p l u si n s t a l l a t i o n o f f e r )Market segment 2(~58% of households)Market segment 3(~21% of households)LSM 1 – 3(number of appliances)Market segment 1(~21% of households)LSM 4 - 7(number of appliances)LSM 8 – 10(number of appliances)54.1 m4.1 m6.5 m22.1 m10.7 m0.09 m1.2 m2.4 m44.4 m3.2 m5.0 m11.2 m5.5 m0.8 m2.42.4 m6.8 m0.2 m0.9 m3.2 m1.8 m--0.1 mEskom follows a structured approach to achieve savings in the residential sector
    20. 20. Solar Water HeatingSolar WaterHeatersEskom will support DOE’s SWH programme1 millionSWH target330,000
    21. 21. Residential SectorResidential Mass Rollout (RMR) Programme21Eskom supports the retrofitting of old inefficient technologies
    22. 22. Marketing an communicationsDSM involves public awareness and drive to instil cultural change to energy efficiency
    23. 23. Industrial Commercial /AgriculturalResidentialESCOPerformanceContractingStandard Offer / SOPFLEXStandard Product /Aggregated SPPResidential Mass Roll-outSWH / HP RebateOther Mass RolloutIDM solutions sector coverageIndustrial Process Optimisation, FansCompressed Air, Shower Heads, LightingProcess Optimisation, LightingHeat Pumps, HVAC etc.Lighting, Hot Water Systems,Solar , Process Optimisation, RenewablesLighting, Shower Heads,Industrial Heat PumpsHP & LP Solar WaterHeaters, Heat PumpsCFL Sustainability andFill-ins“Mixed bag” oftechnologies23Customised incentive programmes have been developed and implemented foreach market, based on unique market characteristics
    24. 24. 24Comparison of Funding Mechanisms by % Split5%10%18%23%53%57%5%10%18%19%25%41%30%30%44%39%10%0%15%15%11%8%1%0%2%5%2%0%20%20%4%3%0%0%2%2%7%2%25%15%4%1%2%0%0% 20% 40% 60% 80% 100%2015/162014/152013/142012/132011/122010/11% Split of Demand SavingsCFL Mass Rollout ESCo Model Residential Mass RolloutStandard Product Performance Contracting Aggregated Standard ProductStd Rebate (SWH & Heat Pumps) Standard OfferThe trend is expected to continue – future IDM savings will be realisedpredominantly from the Residential Mass Rollouts, Standard Offer, StandardProduct & Aggregated Standard Product funding mechanisms
    25. 25. Possible Savingsand Future DesignConsiderations
    26. 26. Possible Savings Opportunities• Lighting – the development of LED technologies will create more andmore opportunities for energy saving. There may even be newtechnologies beyond the LED.• Refrigeration and Air Conditioning – there are new energy efficienttechnologies and appliances. Use of solar energy is becoming morepractical.• Pumping – savings are possible but new designs are required.• Hot Water – use solar or heat pumps• Photovoltaics – has potential but requires space. Efficiency is notgreat and the sun doesn’t always shine. Storage is required.26
    27. 27. Future Design Considerations• Use newest energy efficient lighting technologies.• Explore solar assist options for air conditioning and refrigeration.• Focus on energy efficient building design – insulation, natural light etc• Install only the most efficient fuel dispensing equipment.• Own generation will become more of a necessity due to cost andpower quality. Renewables would be an added bonus.• Electric vehicles and other fuel types will have to be taken intoaccount.27
    28. 28. Challenges of EV’s for Retail Outlets• Costs and availability of electrical infrastructure – much strongernetworks will be required to charge electric vehicles quickly• Cost of electricity – municipal supply tariffs – usage during “peak”periods• Customer requirements for “service stations” – longer trips andresidential charging facilities – will existing locations fit the bill?• Electric vehicle battery technologies – interchangeability and rates ofcharge• Generation and storage of electrical energy?
    29. 29. THANK YOU

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