The National Business Initiative’s Private Sector Energy Efficiency programme has, among others, not only reinforced the business case for energy efficiency but also raised the bar in terms of the industry’s awareness and participation, says resource efficiency and management company Environmental Resources Management (ERM).
“Five years ago, when looking to develop an energy management strategy, you might have encountered resistance or reluctance. More recently, we have observed a definite shift towards acceptance – even enthusiasm,” says ERM technical director David Mercer.
He notes that, historically speaking, rising utility bills, fear of power disruptions and regulatory pressure triggered management reaction, with managers looking for ways of “dodging the bullet”.
“Financial and operational efficiencies then were introduced, creating huge management appetite for bottom-line benefits. For many industries, energy and carbon management has evolved to become an integral part of the bigger climate-change picture,” Mercer points out.
Policy Landscape Briefing
Mercer says that the Department of Energy’s (DoE’s) draft regulations regarding registration, reporting on energy management and submission of energy management plans still provide the backdrop for government policies.
These draft regulations were compiled within the combined framework of the 1998 White Paper on Energy Policy and the DoE’s National Energy Efficiency Strategy (NEES). The first version of the NEES was approved by Cabinet and released in 2005 to unlock the potential for improved energy use by reducing the nation’s energy intensity and decoupling economic growth from energy demand.
The ten-year lifetime of the original NEES has come to a close and a complete revision is under way to take South Africa into the 2020s insofar as energy efficiency is concerned.
The 1998 White Paper stipulates that the necessary resources should be made available to establish systems and legislation to facilitate the specification, collection, storage, maintenance and supply of energy-related data.
In terms of its efforts to combat climate change, South Africa has committed to reducing the country’s greenhouse-gas emissions by 2020 to 34% below ‘business as usual’ emissions levels, that is, the levels that would have existed in the absence of any reduction efforts. By 2025, a 42% cut below ‘business as usual’ levels is promised.
“We think that it is probable that the Carbon Tax Bill is likely to become law by the end of next year. From 2017 to 2020, affected companies face a proposed marginal tax rate of R120/t of carbon they emit, though offsets and tax-free allowances will cushion the blow,” Mercer says.
Mercer believes that a range of approaches can be adopted to achieve efficiencies in terms of energy and carbon – from quick-fix solutions focused on realising quick-win opportunities to strategic transformation to achieve long-term and continuous productivity improvements.
ERM has identified energy savings ranging from 15% to 20% through programmes it has run in conjunction with companies in different sectors.
Mercer further explains that the biggest gains are secured by systematically building resource efficiency into all aspects of the business. In the case of energy management, this can lead to in ISO 50001 certification at group level.
“We also see demand for quick wins without trying for ISO 50001 certification. We then focus on ‘picking the low-hanging fruit’ and savings that can be reported in the current year or even the current quarter.”
He adds that technical audits frequently identify surprisingly simple blind spots, such as low staff awareness, inefficient procurement practices, resulting in the installation of outdated equipment, and inefficient working pract000On-site staff often adhere to time-honoured practices without considering energy management, for instance.
“Specialists and on-site staff equipped with ERM’s Quick Environmental Savings Technique (QUEST) toolkit can rapidly make a difference,” says Mercer.
QUEST is ERM’s proprietary framework for resource efficiency and management. It also provides a systematic approach to identifing and implementing energy, water and waste-saving opportunities that have been used by ERM to support clients in their pursuit of resource efficiency and associated cost savings.
“In recent years, the QUEST framework has enabled us to identify countless real savings opportunities for clients, and has delivered more than $100-million in yearly validated cost-effective, self-funding savings,” says Mercer.
Applied to utility optimisation, QUEST adopts a whole system approach, scrutinising demand, distribution and large central equipment. This approach is essential when implementing a continuous improvement process designed to capture incremental savings over time.
“A programme may take six months to a year to develop and gains might be apparent within weeks, and that’s not long to wait for savings that accrue over decades,” Mercer concludes.