Energy Efficiency: public hearings Day 2

Meeting report

Energy Intensive User Group (EIUG) submission
Mr Mike Rossouw, EIUG Chairman, said that there was some good news: objectives were in place but the fundamental problem was that there was no effective strategy in place. Corrections were needed in some areas. EIUG had developed a scorecard. Before starting any endeavour, a fact base was needed. Objectives were arbitrary at present.

Mr Rossouw said that EIUG had consulted widely, including with international partners. The biggest growth area in Africa was for housing, which would require energy. As countries developed, their energy needs were initially satisfied by the use of wood and fossil fuel sources and eventually moved on to other energy sources.

Mr Rossouw said the majority of domestic consumption was during the morning and evening peak hours. It was a myth that nothing was being done. He demonstrated the different aspects of power usage, such as lighting and water heating, and the demands they made on the electricity grid.

Mr Rossouw said a framework was needed which would analyse why targets were not being met. Various factors were considered in developing this framework, focussing on each aspect of energy. An example of one of these was lighting. A desktop study had been done in 2007. This had shown that the mining industry had been the biggest consumer of energy. Theoretical potential for energy saving had been identified, and the difficulty in achieving such savings. Eskom had done a survey which showed that residential consumption was 17% of the total. The survey went further in determining the amount of power used by different household applications, such as water heating, kitchen appliances and lighting.

Some energy use could be regarded as compressible, loosely categorised as luxuries, and non-compressible. For example, more efficient water heating methods could be used but if the structure of the house was not thermally efficient, it would have to be rebuilt to achieve greater efficiency.

Mr Rossouw said that EIUG advocated a bottom up approach. A base line should be established at a facility level. This would move to an activity and then a sector level. There was not a proper monitoring structure.

Eskom submission
Mr Andrew Etzinger, Eskom Senior General Manager, said that Eskom had been involved with energy efficiency for a number of years. The reasons for energy efficiency were clear. This was the quickest tool to implement to manage energy supply and a lot more advantageous to the economy. Efficiency programmes would also create jobs. The load shedding of 2006, when the Koeberg station had gone off-line, had been the first illustration of the need for energy efficiency. Eskom had started a campaign of encouraging energy efficiency and the use of alternative sources, such as gas stoves, as well as an awareness campaign of the load on the system. This was in the form of advertising a power alert on television. This had worked well. There was still a constraint on the supply of power, and this problem would have to be dealt with in the long term. Decisions on new power stations would have to be taken soon, but these would be long-term plans. Energy saving was needed now.

Mr Etzinger said that maintenance was being done, but the programme had been cut back in order to keep enough supply available. Everything was not well, and energy efficiency programmes needed to be pursued vigorously. Eskom had an energy efficiency programme in place, funded from tariffs. Eskom had set a target of 1 037 MW demand savings and 4 055 GWh energy savings over a three year period. Targets were being met, and performance was audited. The output of more than five generators had been saved. The energy savings for 2011/12 was equivalent to the annual consumption of Buffalo City municipality in a year. Practices such as using light emitting diode (LED) lights, heat pumps or solar water heating was achieving savings. Over 54 million compact fluorescent lighting (CFL) bulbs had been distributed, the largest such programme in the world. The World Bank had recognised Eskom's achievements.

Mr Etzinger said that consumption was heaviest during the winter months, increasing as the temperature dropped. There had been 164 projects. Some 300 000 solar water heaters had been installed.

Mr Etzinger said that the mines were still a major consumer. They had various essential services such as air conditioning and lighting, which could not be compromised.

Mr Etzinger said that the focus in low-income housing was on solar water heating. There was a strong demand for this and for the CFL programme. In middle-income homes a different strategy was needed. More appliances were available. Lighting was also addressed, but Eskom had also distributed free geyser timers and low energy showerheads. In high-income houses, homeowners were encouraged to make energy efficient decisions on purchasing houses. The occupants of high-income housing were often not keen to allow visitors to their homes and preferred to make their own arrangements.

Mr Etzinger said that government had approved a R4 billion programme to install solar water heaters. Eskom was planning to spend R5 billion before the following winter. There were measurable reductions in demand when the power alert message was broadcast warning the public of high demand on the system. This method of communication with the public worked well. Great savings had been achieved during the 2010 World Cup.

Mr Etzinger said that skills development and localisation were addressed by Eskom. Local manufacture of solar heating systems was encouraged although some components had to be imported. Companies owned by black women were encouraged.

Mr Etzinger said that Eskom was involved in addressing electricity problems within the Southern Africa region. Eskom had a programme to encourage science teachers to spread the word of energy efficiency to their learners. At Midrand an educational facility had been established. The second group of thirty students had recently graduated.

Mr Etzinger said that quick-to-implement options had been developed for the commercial sector.  Funding was available, even to Parliament. The Chairperson and another Member were involved with a project to green Parliament. Eskom was introducing 1 000 energy efficiency projects per month, while continuing to focus on domestic and large industrial users.

Mr Etzinger said that there had been a 300% increase in the number of Energy Services Companies (ESCOs). Eskom itself was leading by example and had more than achieved its targets. One example was the use of solar panels to provide shaded parking at Megawatt Park which provided a large portion of the building's energy consumption.

Mr Etzinger said that initiatives could not be relaxed. Energy efficiency and demand side management would help to ensure security of supply. Continuity in Eskom's programmes was essential.

Council for Scientific and Industrial Research (CSIR) submission
Mr Llewellyn van Wyk, CSIR Principal Researcher, complimented Eskom on their achievements. The World Energy Outlook of 2010 would target buildings. People worked, lived, worshipped and played in buildings. Non-residential buildings were the biggest growth sector. In South Africa the situation was no different. Fossil fuels were being used for energy, contributing to the greenhouse gas problem.

Mr van Wyk said that the slowdown in the construction sector was cyclic. The global figure of energy use in the built environment was 40%. The South African figure was slightly lower. The figures were stable. There was a reason to examine the way buildings were designed.

Mr van Wyk said that lighting was a major component of energy usage, together with cooling systems in the face of increasing temperatures, and office machinery. The same kind of efficiencies achieved in lighting needed to be mirrored in cooling and equipment consumption. There was a major opportunity for savings.

Mr van Wyk said that there was a bigger problem. There was a challenge in that the base construction materials were plentiful. The challenge was in the energy requirement to convert these base materials into a form suitable for building. One needed to understand the pattern of consumption. Transport used energy. Water had to be pumped to cities, and had to be pumped throughout the cycle of supply. The cycle was energy intensive.

Mr van Wyk said that if 100 units of energy were originally available, only 9% were actually used. This highlighted the level of losses.

Mr van Wyk said that one of the problems was containing urban sprawl. Densification would only happen when sprawl was contained, and services could be delivered to a more compact area. He used the example of Phoenix in the United States of America in how cities should blend into the environment.

Mr van Wyk said that transport was another area for savings. A massive opportunity had been missed with the Gautrain. People should be used towards major transport nodes rather than relying on massive car parks. The full range of public transport should be considered. If this was done then proper urban development could be considered. He showed another example from the USA where residential and commercial properties shared energy sources.

Mr van Wyk said that CSIR had been able to cut the energy requirements of a typical reconstruction and development programme (RDP) house by 50% through more efficient design. There was a test site at CSIR in Pretoria.

Mr van Wyk supported small-scale solutions. Small buildings could become independent of water, electricity and sewerage grids. A building satisfying this requirement was being developed in Port Elizabeth. If a building could run itself, neutral energy and water requirements could be achieved. A South African model was being planned.

Mr van Wyk said that the construction industry should be transformed by the use of energy efficient materials. Another initiative was to design construction to eliminate wastage. There were regulations to police dumping but they were difficult to enforce.

Mr van Wyk said that if the previous nine issues could be addressed then there could be proper investment in alternative energy. Some energy saving could be achieved in existing buildings, but more needed to be done to encourage savings. A project in Kleinmond had recently been completed. Although the measures looked modest, in solar panels and a rainwater tank, massive energy and water savings had been achieved. Waste had been reduced. If such designs could be used when the housing backlog was addressed there would be massive benefits for the country. Government had a fantastic opportunity to achieve significant energy efficiencies. Net zero houses could be achieved, not to mention all manner of other government buildings. There was enormous potential.

Discussion
The Chairperson regretted the absence of the Department of Public Works (DPW).

Mr J Smalle (DA) noted the targets for energy saving by Eskom. He asked if these were not too low. In the second year of the programme the targets had been achieved by a large margin.

The Chairperson seconded the point being made by Mr Smalle. If Eskom was overachieving already, then the target for savings should be increased.

Mr Smalle said that he felt the targets were set 30 to 40% too low. The shift of the demand side was idealistic. He asked how the focus could be shifted to 25% of power plant losses. The financial sector was incentivising green developments by reduced financial costs. He asked if similar incentives were in place to bring in the higher and medium income groups, who might not be concerned with energy costs.

Mr L Greyling (ID) agreed that there was no energy efficiency strategy. Energy efficiency models should compare the savings on energy to savings on the costs of building new power stations. Eskom was already saving more that what was in the Integrated Resource Plan (IRP). The targets should be more realistic in the light of this. It was correct to differentiate between the different sectors. The long-term strategy should be on reducing peak demand. Time-of-use meters might be an option. There should be a mass rollout from municipalities, but he was not sure who would cover the costs. The concepts of the CSIR illustrated the need for a new way of thinking. He had experience of a net zero building. The one problem area was in refrigeration. Gas was the only option there, and this was expensive.

Ms N Mathibela (ANC) was inspired and enlightened by the submissions. Water was scarce in South Africa, and the concept of rainwater harvesting was really needed. Rainwater was going nowhere while people could not irrigate their vegetable gardens. She asked how people would build their houses if the traditional materials were not efficient. She asked Eskom about the 700 teachers had been taught. She asked about the distribution of these teachers. The downlighting should be inspected by Members.

Ms B Ferguson (COPE) also agreed that Eskom's targets were too low. Energy efficiency should be the flagship of the Committee. The submissions had been thought provoking, but it was clear that there was still a lot of work to be done. It would be good to see what the DPW was doing. She asked if there had been any engagement with the Department of Human Settlements (DHS). She asked what plans government had in place to counter global warming. She asked how successful Eskom's training programme had been. She asked if there was any kind of measurement on the number of jobs being created, or if it was merely a case of recycling jobs. She asked if skills were being developed. She asked how the rollout proposed by Eskom would be financed. The advertisements on television were powerful, and she looked to see what could be turned off in her house when demand was shown to be high.

Ms S Mayathula (ANC) said that Eskom was referring to the difficulties in approaching high-income houses. Parliament should take the message to these people. He wanted a better understanding if people building houses in rural areas could apply for assistance. He was not sure if he was benefiting from the solar heater in his house. He asked if Eskom's developments were confined to certain areas. He asked for more clarity on the threat Eskom described to security of electricity supply. On the CSIR proposal for the 'passive house', he asked what this meant in practice. He asked what was meant by a small-scale solution. He asked how practical the proposals would be for rural residents. If there was no strategy, he asked who should be responsible for developing a strategy.

The Chairperson had a thick strategy document with him, prepared by the Department of Minerals and Energy in 2005. The Department of Energy (DoE) had committed itself to revising this document by the end of 2011. It was now more than a year later. He asked if these targets were now being challenged. Some number-crunching must have been done to reach these figures. It was important for public representatives to be provided with the correct information and they looked to the academic sector to provide this information. He asked how the work could be expanded by public participation. He asked how ordinary workers could become involved. He was keen to see the results of international benchmarking. The meeting the previous day had been jovial. There was a relationship with geothermal energy sources. CSIR had introduced a paradigm shift in thinking. People might be resistant to these new ideas. One of the tools in the multi-use approach put forward was interesting, and he asked how this form of power-sharing could be achieved.

Mr van Wyk replied that refrigeration and heating through resistance were indeed major power consumers. Some work was being done on this. CSIR was running a five pillar approach to developing more efficient building materials. Corrobrick was using more efficient processes in their kilns. Hybrid technologies combined conventional, fringe and new technologies. The fourth option was bio based materials, and the fifth option was nano materials. This technology was far from developed. There was another process called aerated concrete. The cement content was reduced, replaced by fly ash from power stations. Steam was used to heat this during manufacture. A company wished to use the fly ash produced by Eskom to make an advanced material. The solutions were there, but opportunities were not used.

Mr van Wyk said that he was en route to making a submission to DHS. The project at Kleinmond had in fact been managed by DHS. The materials were plentiful but there were manufacturing costs. The question was on the amount of energy used in fabricating the materials. Temperatures of between 1 500 and 3 000 degrees were generated. A concentrated solar power plant could produce up to 800 degrees, with the national grid only then needed to augment this solar supply.

Mr van Wyk invited the Committee to visit the alternative building site at CSIR. They were looking at homes rather than houses. A completely passive house had been created, and temperatures were monitored every fifteen minutes.

Mr van Wyk said that every municipality in the world, with the possible exception of Singapore, was battling to cope with infrastructure problems. Even the USA had slipped from a C- to a D+ rating. South Africa could hardly be expected to do better. Small scale solutions might be the genie in the bottle. CSIR was working with the Department of Science and Technology (DST) to establish a completely off-grid settlement in KZN. This would incorporate water, electricity and sewerage.

Mr van Wyk chaired the energy efficient committee at CSIR. Geothermal opportunities were under discussion. Any government faced the challenge of solving solutions across the board. The Kleinmond project showed how different government departments could find solutions as water, energy and housing interests were all being addressed. If water was needed, government built a huge dam. The rainwater tanks were a free and sustainable way of capturing water forever. There was a lady who had managed to connect the rainwater tank to her washing machine. There was a fantastic opportunity to address interactive development. In most municipalities, the town planning scheme dated back to the 1950s. Areas were designated for specific uses, and any rezoning application had major applications. An alternative approach was to specify a certain percentage of off-grid development. Melrose Arch in Johannesburg was an example.

Mr van Wyk said that ventilation could be used without the need for air conditioning, especially when outside temperatures were ambient. Air conditioning was needed when the outside temperature was not ideal. Solar energy could be used to heat, but the same principle could be achieved in reverse to refrigerate.

Mr van Wyk also extended an invitation to the Committee to visit the Kleinmond project. The CSIR Parliamentary office could facilitate this. As Chair of the standards committee, he had assisted in the development of a standard for energy costs. However, there was no benchmarking. This was a critical component in understanding the current situation, and the way to achieve an ideal situation. This showed the need to establish a base line. He pleaded for inter-governmental co-ordination.

Mr Rossouw echoed Mr van Wyk's sentiments. However, the fit-for-purpose needed to be observed as well. EIUG was available to gather and process data on behalf of government. Ad hoc responses were made to the issues of the day in the absence of a proper strategy. The only comment he had on incentives for green programmes was the need to review the order of priorities. In some cases, policies were put in place before a policy was in place. An example was National Treasury's desire to implement a carbon tax before a policy was in place.

Mr Rossouw again stressed the need for a fact base. Objectives had not been properly formulated. The problem with energy efficiency lay in the sequencing of policy. An integrated energy plan should be in place but was not. Consequently any policy would have to compensate for the lack of other policies. Energy efficiency should be an integrated part of the energy plan. This fact had to be recognised.

Mr Rossouw said that solar water heaters were not always beneficial. This was because of the way municipalities charged for electricity. Tariffs were based on actual usage, and for other services such as the provision of connections and metres. These charges were in excess of the National Energy Regulator of South Africa (NERSA) recommendations. Fixed charges were built into the price. He felt that municipalities were killing enterprise and nullifying savings. This might lead to civil unrest.

Mr Rossouw said that EIUG had been requested to submit a critique on the White Paper. Funding had been secured for consultation with an international company. This could be made available immediately. Strategy was more technical than policy work. EIUG stood ready to assist. The best solutions for the country as a whole should be proffered. The road map was lacking.

Mr Rossouw said that the mining industry was well placed in the rural areas to implement corporate social involvement (CSI) programmes. Totally self-sustained systems were being provided for clinics, but more could be done. Geothermal heat sources were deep, up to as much as 2 km below the surface. The rocks were not necessarily hot enough for commercial exploitation.

The Chairperson said that some time would have to be invested in finding solutions to the problem of advancing rural energy.

Mr Etzinger noted the points on Eskom's energy saving targets. There was an incentive programme in place, but other measures were needed. New homes should be built with either a solar heater or a heat pump. The public should be aware of the energy efficiency of household appliances, with the worst offenders disappearing from the market.

Mr Etzinger commented on the proposed time of use tariff. Eskom would support this fully. There was currently no concept of different prices for different times. If a million homes had such devices installed, the cost would be about R5 billion. Eskom would need to start this with high use customers. There would be a tariff for peak and off-peak times, but a national strategy was needed for a fragmented industry. It could be funded through tariffs, or the national fiscus. National Treasury (NT) would have to make an allocation and administer it through the Department of Trade and Industry (DTI). It could be done, but departments would have to co-ordinate efforts.

Mr Etzinger explained that the 700 teachers were the products of a programme that had run for less than a year. There were 775 teachers in Soweto, 170 in Limpopo and ten in other provinces in the northern part of the country. Progress reports were received on a quarterly basis from the schools affected. There was a big impact from two initiatives. Eskom ran a national competition for young scientists, and a lot of interest has been stimulated. For the previous twenty years there had been a competition for energy saving. The entries in the current year exceeded any previous year both in quantity and quality.

Mr Etzinger said that solar water heating was the biggest initiative. More than 1 000 jobs had already been created, and another 1 000 in other efficiency programmes. There were 300 companies involved, and 1 000 jobs might be an under estimate.

Mr Etzinger said that the power alert programme was one of the biggest success stories. There were other marketing campaigns. The key phrases were 'switch to' and 'switch off'. If a solar heater was correctly installed it should provide savings. There would be a saving on actual usage, but the fixed component of the tariff mitigated against the saving. There was an ombudsman who would investigate cases where the expected savings were not being achieved.

Mr Etzinger said that local communities were used in the CFL programme. On the solar water heating side, installers would be trained and appointed on a permanent base on a localised basis.
Rural access was an important consideration. There was a higher cost involved because of the lower population density. For a solar water to work, a home had to have running water. The contents of the water in rural areas might clog filters and reduce the efficiency.

Mr Etzinger said that the South African National Energy Development Institute (SANEDI) had raised two points the previous day. Eskom was a player in the field. All its programmes were verified by the company's audit department, and further verified by independent teams. NERSA was the regulator which could express a view on their satisfaction with Eskom. There were a number of audits. He felt there was sufficient separation.

Mr Etzinger said that all allocated funds would be spent.

Mr Etzinger said that regular workshops were held country-wide with small, medium and micro-enterprises (SMMEs). Large and small customer forums were held regularly.

Mr Etzinger was aware of the technology of making bricks from fly ash. Tremendous savings could be achieved, and large amounts of ash were already being provided. Eskom was looking at putting waste energy back into the cycle. There was a programme to reheat water going into the boilers.

Mr Etzinger said that the integrated resource plan assumed that the savings targets would be achieved. Changes should be made without disruption to programmes.

The Chairperson said that there could be changes of opinions. The assumption that there was no strategy was relative. It was a journey. At some stage the various players would get together. The ultimate goal was a refined, revised and more powerful energy strategy.

Centre of New Energy Systems (CNES), University of Pretoria submission
Prof Xiaohua Xia, Director: Centre of New Energy Systems (CNES), was addressing a parliament for the first time. Two key words had cropped up, namely technology and innovation. The National Hub was a five year project initiated by the South African National Energy Research Institute (SANERI). It was hosted by the Centre of New Energy Systems at UP. There were programmes across various disciplines, including Electrical, Electronic & Computer Engineering (EECE), Chemical Engineering, mechanical engineering, civil and bio engineering and architecture. Graduate, honours, masters and PhD programmes were available. Several awards had been earned.

Prof Xia said that the mechanical group included a heat transfer group. This group had published a number of papers. Experimental platforms had been developed. Many industrial solutions had been developed. There was a good resubmission at CNES. Several projects were being run and there was one spin-off company. He listed the research topics being undertaken. Open source training was provided. A tax incentive management system had been devised.

Prof Xia said that the Hub had been launched in June 2008. Short courses and open source training had been developed. The sixty papers produced by the Hub equated to half of the papers produced in the country. Since 2008, the number of students had increased from 27 to 109. Of the current number of students, 21 were female, 30 white, 48 black and 10 Asian. Only top students were selected.

Prof Xia said the intention was to develop a regional research centre, which would be a national key lab on the model of the Lawrence Berkeley Lab. There would be a joint SANEDI/UP brand and infrastructure. UP would provide the land and SANEDI the budget. There would be an input from the Department of Higher Education and Training.

Department of Electrical, Electronic & Computer Engineering, University of Pretoria submission
Prof Wilhelm Leuschner, Department of Electrical, Electronic and Computer Engineering, University of Pretoria, was probably the only person in the country with both a Masters and PhD in lighting. He wanted to speak as a consumer. The current approach seemed to be to address the symptoms rather than the cause. People questioned the value returned by their investments, while those getting free handouts would not say no.

Prof Leuschner asked whether energy reduction was being chased at all costs. Electrical energy was being given a bad name. There was no saving when consumers were urged to turn off devices such as geysers and swimming pump pools as they would use them later. Consumers would be happy with off-peak tariff, but municipalities would lose out should the out-of-time tariff be introduced. The savings of turning appliances off rather than leaving them on standby were negligible.

Prof Leuschner said that there were inconsistencies in campaigns to save fuel. The battery-powered car was given a bad name, but the use of vehicles with photo-cells should be encouraged. Less use of electricity would make Eskom less profitable and might lead to higher taxes. Most energy saving systems were expensive. Consumers had to be convinced of the benefits. A major capital investment was needed, but this was hard to believe for a person with immediate cash flow problems. Subsidies would be needed.

Prof Leuschner asked what happened when energy saving systems failed. Low energy light bulbs did fail, and conventional bulbs might be used to replace them. Industrial users could measure their energy usage, but domestic consumers could only guess. A lamp should burn for at least three hours a day to repay their higher cost . New technology would be available for LEDs in the next few years.

Prof Leuschner said that energy saving gadgets were only of temporary benefit. If there was investment in renewable sources, then electricity use would need to increase to pay for their construction.

Prof Leuschner said that lighting was effective but should also be aesthetically pleasing. He could not think of a single LED lamp that could match an incandescent lamp in quality. The wow factor was missing. There was great potential for LED lighting, and the technology was being developed daily. The marketing and development of LED lamps should be stimulated. There was a competition in the USA with a prize of $5 million to develop a high specification LED lamp.

Prof Leuschner said that photovoltaic energy was the technology of the future. Solar energy could be used to heat water, but could also be linked to batteries. In Cape Town one could sell the energy derived in this manner back to the municipal grid.

Prof Leuschner said that electric vehicles were available in the country. The technology was simple, reliable and clean. Electric vehicles would support energy saving. The philosophy of “energy reduction at all costs” might have been the death-knell of the battery powered car. It was important to know what to measure.

Discussion
Mr Greyling completely disagreed on the reluctance of municipalities to introduce peak hour tariffs. The City of Cape Town charged consumers a single tariff, but had to pay Eskom 26 different tariffs for the bulk supply, based on time of day. The cost of installing the meters might be prohibitive to municipalities. He was very satisfied with the LED lighting in his house. People might baulk at the cost of purchasing these bulbs without realising the long-term benefits. Government policy had to address the requirement for behavioural changes.

Mr Mayathula was still confused about geysers. He asked if it was cost-efficient to switch them off for certain parts of the day. During the recent winter he had to run his geyser on electricity in order to heat the water to a comfortable level.

Ms Ferguson asked if the Eskom training initiative was providing a higher throughput of students at the Hub.

The Chairperson thanked the presenters. He had thought that it was a combined submission as both Professors were from UP. The Committee would want to hear more from Prof Xia at the following week's meeting. Prof Leuschner had made some assertions regarding electric cars, but had not backed these up with facts. Members needed information from the public in order to influence the work of the Executive. A body of facts was needed to substantiate the claims being made. He had saved by switching off his geyser during the day. Eskom was a state owned enterprise. The company had been bombarded with questions, but these would help Eskom to improve in its work. Their task was to provide a sustainable supply of electricity. On the difference between switching appliances off or leaving them on standby, the saving might be minimal but there would be a cumulative effect if all members of society played their part. It was a question of changing behaviour patterns.

Prof Leuschner said that when the study had been done on the time of day tariff, the prices had been such that the municipality had generated a profit. The tariffs might have changed since then. The life expectancy of an LED lamp could refer to the chip or the lamp. Only extremely expensive lamps had the long life that was advertised. Lamps needed to be air-cooled. If they were in enclosed housings this cooling was not achieved and the lamps could fail at any time. An architect had told him that 40% of LED lamps failed within the first six months of operation. He emphasised that the lamps had to be used for long periods to recover the cost.

Prof Leuschner said that geysers were not perfect and did lose heat. They should be switched on about two hours before hot water was needed. The installation and maintenance costs of solar water heaters were high, and impacted on cost-effectiveness. Time switching certainly did save money.

Prof Leuschner said that his comments about the cost to utility companies by energy saving were not directed at Eskom specifically. Saving a few milliwatts by unplugging a television set were minute when compared to the wasteful lifestyle many people followed, by, for example, driving faster than was necessary. There was an overemphasis on the reduction of electrical energy at all costs instead of looking at the overall energy usage. Building regulations in Tshwane specified the use of double glazing and heat pumps.

The Chairperson said that the advertisement for submissions had been a quest to gain information. The tone of Prof Leuschner's submission was not what Members wished to hear. There were some valid points and it was important to entertain all views, but these needed to be backed up by facts. The submission had not been helpful. Earlier EIUG had said there was no national strategy, but had conceded there was a strategy in place but it was so flawed that it had to be reconsidered.

National Energy Regulator of South Africa (NERSA) submission
Mr Thembani Bukula, NERSA Regulator Member – Electricity, reminded Members that NERSA was a child of the statutes. They had certain regulatory functions regarding licensing and setting of tariffs. These tariffs applied to Eskom and municipalities. Certain energy efficiency standards had been applied.

Ms Bianka Belinska, Head of Department: Electricity Infrastructure Planning, NERSA, defined the concepts of energy efficiency (EE), demand side management (DSM) and demand management programmes. The advantages of EEDSM were both economic and environmental in nature. The first case was cheaper than creating new generation plants and had shorter lead times to implement. On the environmental side, EEDSM would result in lower environmental impact.

Ms Belinska said that the EEDSM regulatory policy had been introduced in 2004.  Eskom had started with the implementation of this policy in 2005. Funding was through electricity tariffs. A percentage of Eskom revenue had to be invested in EEDSM programmes. Energy saving targets were to be set. Funds for EEDSM would be ring-fenced by Eskom. There would be measurement and verification procedures. There would be a claw-back of the funds for EEDSM should targets not be achieved. Annual reports were to be submitted. The EEDSM fund would be audited annually.

Ms Belinska said that several pillars were used in the EEDSM regulatory process. These were planning against a five year plan submitted by Eskom, review of regulatory rules, public consultation, regulatory analysis, regulatory determination, measurement and verification, monitoring and reporting, annual reports, annual audit and reconciliation of revenue.

Ms Belinska highlighted some achievements, including the implementation of 974 projects. There was an accumulated peak demand saving of 2 604MW. The estimated accumulated peak energy saving was 19 960 GWh. The estimated deferred capital expenditure was R13.02 billion, a saving to the country of R7 billion.

Ms Belinska said that there had been a considerable acceleration in demand savings in recent years. EEDSM has been included as a resource option in the development of the IRP. The approved IRP 2010 included a cumulative amount of 3 420 MW in demand savings. Programmes implemented to date included the CFL replacement campaigns, LED lighting and solar water heaters.

Ms Belinska suggested ways of improving on energy efficiency. Clearer government policies were needed. The role and obligations of NERSA should be clarified. Co-ordination was needed between government departments, policies and institutional mechanisms. Incentives should be diversified. Targets should be set. Institutional oversight was needed. Information mechanisms should be developed to gather and disseminate information. The Independent Systems and Market Operator (ISMO) Bill would place control of supply and demand in the hands of the system operator. Government policy should provide municipalities with guidelines. The measurement and verification function should include small-scale broad based black economic empowerment concerns, and should operate independently of the fund administrator. This team should report directly either to DoE or NERSA.

Mr Bukula offered a different perspective on energy efficiency. Data was available and only had to be manipulated correctly. NERSA was ready to suggest improvements.

Ms Belinska said that it was not clear where measures such as load shifting should be located. They should be responsibility of the System Operator.

National Union of Metalworkers of South Africa (NUMSA) submission
Mr Woody Aroun, NUMSA Parliamentary Officer, said that the country was the thirteenth highest carbon emitter in the world. A national target of 12% had been set for improving energy efficiency by 2015. Some major users had made significant savings. The Department of Energy was due to release a strategy document in 2011 but there was no sign of this yet.

Mr Aroun said that the accord on energy efficiency was a voluntary one. Energy efficiency was left in the hands of the private sector. The National Business Initiative (NBI) and Business Unity South Africa (BUSA) felt that voluntary efforts made by business to conserve energy should be recognised. Any power rationing should be applied fairly across all sectors of the economy.    There should be more engagement from government. Government should provide incentives for business. More support was needed for SANEDI. There was a need for training in energy management. Support became a one-sided affair. Business was setting the agenda. There was no civil society involvement. Trade Unions and civil society had been absent from the policy development process. The only reference from DoE to civil society was a referral to the National Economic Development and Labour Council (Nedlac).

Mr Aroun said that DoE had made a submission to NUMSA on 17 October 2011. The opinions of shop stewards had been canvassed. One shop steward from Assmang Chrome said that there was an energy efficiency section led by the Energy Manager. Other feedback showed that companies were effecting energy efficiency measures, but there was little involvement with the unions. Management was seen to be taking all the credit. Unions should be taking a position on energy efficiency and not just negotiating wages and conditions of employment.

Mr Aroun said that NUMSA had its own plans. The first was a review of government-supported solar water heating projects. Many NUMSA members worked at these manufacturers. 40% of solar heaters were now imported from China to the detriment of local manufacturers. The second plan was to implement regulation on energy efficiency of buildings. Local content requirements had to remain part of the programme. A massive contract for low-pressure solar heaters had gone to a company that imported most of its stock.

Mr Aroun said that the third plan was the review of energy efficiency strategy. Finally, NUMSA was determining its position on a proposed carbon tax. NUMSA energy research and development groups (RDGs) would focus on energy efficiency and renewable energy RGD.

Mr Aroun said that energy efficiency would continue to be prejudiced until all stakeholders became involved.

General Electric SA submission
Mr Lwazi Sikwebu, Commercial Manager, General Electric SA, said that the transport and industry sectors were the largest users of energy in South Africa. Iron and steel was the heaviest user, at 28%. The company manufactured high quality CFL and other light bulbs. It produced diesel powered generator sets. It manufactured energy storage batteries and rooftop solar panels. It had developed a solar-powered traffic light although this could not yet be put into service. One of their products was a motion sensor which could switch off lights when there was no longer movement in an area.

Mr Sikwebu said that General Electric SA was heavily involved in the transport sector. Initiatives included energy efficient railway locomotives, battery powered cars and hybrid buses. There had been complications in this last endeavour.

Mr Sikwebu said that the company had developed systems that could harness heat from any industrial process producing heat. Up to 125 kW of electricity could be generated. This could even be done with the heat produced by an electric generator to develop more power. A gas engine had been designed which could recycle exhaust gases, leading to substantive savings. Breweries used reverse osmosis techniques in the brewing process, and this saved resources. Methane gas from grain could be used. The company had developed a landfill solution at its eThekwini municipality.

Mr Sikwebu said that there were many offerings for municipalities. There were many losses due to leakages and inefficient transmission systems. Municipalities were responsible for electricity reticulation.

Mr Sikwebu said some quick wins were possible. Solar powered street lamps could provide savings without a great capital expenditure. R20 billion had been set aside for energy efficiency. General Electric SA had the capability to deliver these programmes. He suggested that tax benefits should be allowed for energy efficiency projects. There should be a balance between incentives such as tax breaks, and negative incentives such as the carbon tax. There was no reason why the Auditor-General should not comment on wasteful expenditure regarding energy.

Southern African Association for Energy Efficiency (SAEE) submission
Prof LJ Grobler, Dean, Faculty of Engineering, North West University and President of the Southern African Association for Energy Efficiency (SAEE), said that it was imperative to look at all energy sources. Sources should be used in an appropriate way. The overall mix included energy conservation, energy efficiency, energy substitution, and re-generation and own generation.

Prof Grobler said that energy efficiency presented the biggest opportunity. The International Energy Agency (IEA) had concluded a study on the expected global temperature increase of 2 degrees. To meet the target of a reduction in the carbon content of the atmosphere to 450 ppm of carbon dioxide, energy efficiency strategies could contribute 38% to the mix of strategies to reduce the dependence on fossil fuels.

Prof Grobler said that SAEE was a voluntary organisation focused on energy efficiency. It was a chapter of the USA based Association of Energy Engineers. Stakeholders covered a broad spectrum. The Board of Directors were all volunteers.

Prof Grobler said that South Africa was a world leader in the field of energy efficiency. Almost 2000 professionals had been trained in energy management and related matters. SAEE hosted an annual convention, and conducted awareness programmes in all regions. Stakeholders included students, end-users and equipment manufacturers. Its Board of Directors represented the academic world, Eskom and the manufacturing industry. He quoted several examples where South Africa had taken the lead in global energy efficiency projects and creating standards.

Prof Grobler said that it was easy to define energy efficiency, but the concept was not easy to understand. It was like trying to measure a void. The challenge was to make this repeatable and transparent without discrediting the projects. Exploitation of misinformed end-users placed the credibility of the industry at risk.

Prof Grobler said there should be focus areas identified by research. High energy users should have posts for energy managers. Regulations should be put in place to implement energy policies, develop in-house energy efficiency knowledge and skills, develop mandatory reporting systems, market strategies, formally consider investments and to legislate against the use of inefficient systems. Once a mandatory reporting system on usage was in place, the next step would be to put a savings reporting system in place. The monetary side would always be an issue. Old, inefficient technologies should be disincentified.

Prof Grobler said that knowledge and skills were the foundation. Children should be taught energy efficiency at school. This had been done in Germany for some time, and that country was now reaping the benefits. At tertiary level, a new career path should be created in energy engineering. The management and accounting aspects of energy efficiency should also be boosted. Energy programmes should carry a similar weight to safety programmes. While PhD students might be needed, there was a requirement for tertiary skills at all levels. A small minority of energy users were in university.

Prof Grobler said that Germany had reduced its overall energy efficiency by 15%. The total amount of energy used per year was decreasing, while South Africa still felt it necessary for growth to increase the energy capacity. Education and awareness were crucial.

Prof Grobler said that a clear strategy was needed, with targets and objectives. Incentives would open up opportunities. Energy efficiency should be a catalyst for economic growth, as it was seen overseas.

Discussion
Mr E Lucas (IFP) looked around the room and saw a terrible example. Energy efficiency should start with government buildings. The Germans had followed a strict and disciplined approach, but even that had started at a point. General Electric SA had put forward some excellent ideas, but the Committee should be seeing these innovations. On a visit to China all the public transport that he had seen was battery powered. He said that daylight saving time (DST) was an option. It had been implemented successfully in Namibia. The transport sector was where energy efficiency should start. The involvement of the trade unions was essential. Local products were becoming unaffordable compared to Chinese imports.

Mr Smalle asked NERSA how the time-of-use management system could be implemented. He asked if the introduction of this system would be cost-efficient. He congratulated SAEE on the status they enjoyed. There was a price in that leadership could be costly.

Mr Greyling said that Eskom was saying that it was time to bring in time-of-use meters. He asked how the implementation of this project should be implemented. It could be funded from national government, or wholly or partially by municipalities. He felt that Eskom was using tariff funding well to address demand side management issues. He asked if the right institutional arrangements were in place for the long term. Energy efficiency should be a national priority, run by a national agency. NERSA had the data. When the IRP had to be revised, he asked if there was enough data to make proper conclusions. The future situation should be predicted by intensive modelling, and he asked if there was enough data to achieve this. On solar water heating systems, part of the problem was that the target was one million. Eskom was talking about 800 000 low pressure systems, and the remainder high pressure. The former would get hot water to residents, but would not necessarily relieve the pressure from the grid. The high pressure systems would do this. There should be parity between the systems at least.

Mr Greyling said that it was clear from his experience that energy efficiency was not a simple matter of installing a system. Behavioural change within a company was needed. The shop stewards and workers should be the ones driving the process and not top management. This had to be embedded within companies, and he welcomed the attitude shown by NUMSA. SAEE was looking at a 38% contribution from energy efficiency. He asked if this was achievable given a saving of 15 000MW. The targets currently set were far too low.

Ms Ferguson agreed that a mindset change was needed. A huge educational drive was needed to achieve this. The transport sector had been named more than once, and had to come on board. She asked how municipalities could fund these initiatives. A holistic approach was needed.

Mr Mayathula asked NERSA how policies could be beefed up. He noted General Electric's comments that energy efficiency was the responsibility of all, but asked how ordinary people could associate themselves with the massive structures listed in the submission.

The Chairperson noted that some of the slides in the submission had not been included in the printed General Electric submission. Some more information might be needed at a later stage. He asked what role Statistics South Africa would play in the data collection and management process. This was a challenge at present. Mandatory reporting would make energy data management easier. He asked if NERSA was adequately equipped to ensure that information was available. He asked why the targets for energy saving were so low. There was a reference to a need for clearer government policies. He asked what was meant by this. The reference to co-ordination between government policies implied that there would be public engagement. He asked what was meant by diversifying incentives. He asked who would be funding the costs of measurement and verification.

The Chairperson was pleased to see that Unions were not solely concentrating on organising strikes. The National Union of Mineworkers (NUM) was also involved in the energy sector. He saw no reference to localisation opportunities. NUMSA had made contributions to this in the past. He asked what issues had been handled at Nedlac level. It seemed that Prof Grobler had some reservations on government's request for submissions on energy efficiency. He asked why it was said that not much was happening in terms of the 12L incentive scheme. He had assumed that Eskom operated within the national strategy. There was an implication that they were not operating according to these guidelines. He asked how much awareness there was of energy efficiency. It was important that children should be taught about energy efficiency, but workers on the shop floor also had to be made aware of the need for energy efficiency.

Mr Mayathula noted the comments on the need to create a career path for energy efficiency, and the call for bursaries. The body of chartered accountants had already acted in a similar way.

Mr Tebogo Leopena, Commercial Growth Leader, General Electric South Africa, said that municipalities would be the ones who would probably obtain General Electric equipment. The company would develop the technology, but it was up to municipalities to promote awareness. The company covered Southern Africa. ZESCO in Zambia had asked General Electric to retrofit all government buildings in Lusaka with energy efficient technologies. It was the willingness of authorities to embrace change that would influence the man on the street.

The Chairperson said that Prof Wangai had championed the cause of planting trees. She had died recently, but had been a champion for this cause.

Ms Belinska said that SAEE, Eskom and universities should determine the costs and effectiveness of the possible introduction of DST. Savings had been achieved, but there had not been any such programme in South Africa. There had been a study made by the Durban technikon some time previously. There was sufficient data to inform the IRP. Energy efficiency savings were informed by the Eskom energy efficiency plan and the DoE plan for solar water heaters.

Mr Bukula said that the targets had been set conservatively. There would otherwise have been an impact on the plans to build new power stations.

Ms Musito, NERSA, said that low pressure solar water heaters were not performing well in terms of energy savings. These would be financed through the fiscus while the high pressure installations would come from tariffs.

Mr Sioni, NERSA, said that a company like Arsenal Mittal produced waste gases which were simply released into the atmosphere. These gases could be captured and used to drive generators. Heat produced by industrial activities could be used to drive turbines.

Mr Bukula said that the reason for the funding for solar water heaters was because Eskom still had a CSI commitment, and there was still a compact in force with government. NT had already set aside sufficient funds to continue the project, and he agreed that the fiscus should provide the funding. The easiest approach was to fund through tariffs. This illustrated the need for clearer government policies.

The Chairperson asked for this issue to be flagged for a future discussion.

Mr Bukula added that there would be no information if none was asked. NERSA had developed a national IRP. This information had been passed to the DoE. EIUG had to ask for this information. The municipalities licensed by NERSA had to provide NERSA with information, which should be between 90 and 100% accurate.

The Chairperson said there should be a single repository for data. ISMO should be this repository. The availability of data would facilitate planning, whether by government of the private sector.

Mr Bukula said that current legislation placed the onus on SANEDI. The information was available. Eskom was not well placed to encourage people not to buy electricity. Their motivation for encouraging lower energy consumption was the tight supply situation. An independent agency should handle this matter. Municipalities could still finance their equipment either through tariffs or loans. Under normal circumstances, time-of-use or other smart meters should be a function of that municipality. Johannesburg was using this system for high-use customers who they believed could shift their loads. People in the townships could only cook at certain hours but other users might be a bit more flexible. A typical example was the municipality of Sol Plaatjie. They refused to install solar water heating because it would reduce their revenue. Electricity was treated as a cash cow. Stats SA shared information with NERSA and did play a role.

Mr Bukula said that mandatory reporting occurred in most cases. Some municipalities were unable to gather the information. Sometimes NERSA had to send their own analysts in the case of a lack of capacity due to vacancies. There was a software system in place to link municipalities to NERSA, but the information provided was not always reliable. Data was often entered incorrectly. It was easier for NERSA if they had people on the ground to ensure that the correct data was inserted. Temporary workers were appointed for this purpose. About 95% of municipalities were using NERSA tariffs.

Mr Bukula said that in 2002, when NERSA was created, they followed a consultative process. In 2009 the DoE had wanted to use Eskom funding, which the company had refused. In the determination for 2013 to 2016 funds had been ring-fenced. There were limited incentives for reducing demand. Financing could be done differently. Such schemes were used in other countries. The funds were administered by Eskom. The recommendation was that Eskom should not administering the incentives. The proposal to pass this responsibility to the Development Bank of South Africa had failed.

Mr Dinga Sikwebu, National Education Co-ordinator, NUMSA, said that the union had noticed the funds being spent by the foundry sector. Extra costs for electricity could lead to retrenchments. There were six resolutions to be tabled at the forthcoming Congress of South African Trade Unions (COSATU) congress. There was a worker-based research group, representing six energy intensive users. Shop stewards were unaware of flagship programmes. It was important for people to be involved. The IRP had gone to Nedlac. The DoE had wanted to discuss the communication and not the issues themselves. Some renewable energy technologies should be designated. There had been some involvement with the solar water heater programme. Quick tenders had been put out to circumvent the roll-out of heaters. NUMSA would be taking one municipality to court shortly. Local production was needed. It was clear that South African could not compete with China on the tubes. However, South African manufacture was competitive on the manufacture of the solar panels.

The meeting was adjourned.