edrc randall spalding-fecher ppc workshop on energy efficiency and demand side management 30 august...
TRANSCRIPT
EDRC
Randall Spalding-Fecher
PPC WORKSHOP ON ENERGY EFFICIENCY AND DEMAND SIDE MANAGEMENT
30 August 2001
Energy & Development Research CentreUniversity of Cape Town
ENERGY EFFICIENCYWhy is it important to South Africa?
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OverviewOverview
Rationale: energy efficiency and developmentRationale: energy efficiency and development
South Africa’s energy intensitySouth Africa’s energy intensity
Barriers to energy efficiencyBarriers to energy efficiency
Energy efficiency and the White PaperEnergy efficiency and the White Paper
Policy instruments and the role of governmentPolicy instruments and the role of government
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What is energy efficiency?What is energy efficiency?
People don’t want People don’t want energyenergy, , they want they want energy servicesenergy services
Energy efficiency relates:Energy efficiency relates: energy input (kilowatt hours or litres of fuel)energy input (kilowatt hours or litres of fuel) to energy services output (passenger-kilometres, litres to energy services output (passenger-kilometres, litres
of hot water per minute)of hot water per minute)
!!!Most energy is wasted!
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34
100
31
6
Powerstation
Transmission& distribution
Incandescentlightbulb
Only 6% of input energy becomes light!
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100
40
1915 10
Combustionchamber
Enginelosses
Trans-mission
Tyres & wind
Only 10% of the energy in petrol moves the car forward!
Braking
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Why bother with energy efficiency?Why bother with energy efficiency?
Energy = moneyEnergy = money
More efficient use >> More efficient use >> greater industrial and commercial competitivenessgreater industrial and commercial competitiveness more disposal income for householdsmore disposal income for households
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Economic benefits from interventions Economic benefits from interventions in poor householdsin poor households
0
10
20
30
40
50
60
CFLs Thermal efficiency Refrigerators
Annual economic benefit* (R m, total programme)
*levelised NPV for programme, including external costs
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Why bother with energy efficiency?Why bother with energy efficiency?
Energy has major health and Energy has major health and environmental impactsenvironmental impacts
More efficient use >>More efficient use >> cleaner air (indoors and outdoors) cleaner air (indoors and outdoors)
and fewer health problemsand fewer health problems fewer accidents (paraffin, coal mines)fewer accidents (paraffin, coal mines) more clean water availablemore clean water available
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Reducing health costs through energy efficiencyReducing health costs through energy efficiency
Avoided costs
CFLs Ceilings Refrigerators
R m/year 0.7 37.6 3.3
Health impacts of Health impacts of wood and coal smokewood and coal smoke
Paraffin poisoning Paraffin poisoning and firesand fires
Air pollution from Air pollution from coal-fired power coal-fired power plantsplants
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South Africa’s energy intensity is very highSouth Africa’s energy intensity is very high
OECD China Brazil
0.57
0.26
0.32 0.32
0.25
0.19
S Africa Non-OECD India
0.39
Africa
Total primary energy supply/GDP, 1998(toe/000 1990 US$ ppp)
Source: IEA
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Energy intensity is related to economic structureEnergy intensity is related to economic structure
Coal-based energy industries have low conversion Coal-based energy industries have low conversion efficiencies (eg power stations, boilers)efficiencies (eg power stations, boilers)
Energy-intensive resource-based industries are large Energy-intensive resource-based industries are large part of economypart of economy
Primary minerals benefication is highly energy Primary minerals benefication is highly energy intensiveintensive
Reliance on coal for electricity generation (~95%)Reliance on coal for electricity generation (~95%)
Production of liquid fuels from coal and gasProduction of liquid fuels from coal and gas
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Barriers to energy efficiency (1)Barriers to energy efficiency (1)
Awareness and information Awareness and information - who ever heard of?- who ever heard of?
Split incentives Split incentives energy suppliers vs usersenergy suppliers vs users contractor vs owner/tenantcontractor vs owner/tenant
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Barriers to energy efficiency (2)Barriers to energy efficiency (2)
Financing the “up front” cost - new equipmentFinancing the “up front” cost - new equipment
Low energy costs Low energy costs - do they reflect real cost?- do they reflect real cost?
Lack of access to clean and efficientLack of access to clean and efficientfuels and appliancesfuels and appliances
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... more barriers... more barriers
Supply side paradigm and bias in regulationSupply side paradigm and bias in regulation eg electricity tariffs, petrol pricing eg electricity tariffs, petrol pricing
Lack of policy and departmental co-ordination Lack of policy and departmental co-ordination
Urban structure - poor planning and transient populationsUrban structure - poor planning and transient populations
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Energy efficiency and the White Paper (1)Energy efficiency and the White Paper (1)
Promote awareness in commercial and Promote awareness in commercial and industrial sectorsindustrial sectors
Establish energy efficiency standards for Establish energy efficiency standards for industrial equipmentindustrial equipment
Facilitate audits, demonstrations and training Facilitate audits, demonstrations and training programmesprogrammes
Develop voluntary guidelines on energy efficient low Develop voluntary guidelines on energy efficient low cost housingcost housing
Energyin
SouthAfrica
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Energy efficiency and the White Paper (2)Energy efficiency and the White Paper (2)
Reduce energy consumption in government Reduce energy consumption in government installationsinstallations
Education programme for ‘decision makers’ Education programme for ‘decision makers’ around low cost housing and energyaround low cost housing and energy
Promote appliance-labelling Promote appliance-labelling programmeprogramme
Energyin
SouthAfrica
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Electricity restructuring and energy efficiencyElectricity restructuring and energy efficiency
Unbundling means strong disincentive for generation Unbundling means strong disincentive for generation utilities to invest in the demand-sideutilities to invest in the demand-side
Even distribution utilities need significant tariff reform Even distribution utilities need significant tariff reform to provide incentivesto provide incentives
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Implementing the White Paper - regulationImplementing the White Paper - regulation
Utility regulation:Utility regulation: Integrated Resource Planning Integrated Resource Planning
requirementsrequirements Set rate-of-return instead of margin Set rate-of-return instead of margin
Pricing reform: leveling the playing field Pricing reform: leveling the playing field
Efficiency guidelines and Efficiency guidelines and standards: mandatory to standards: mandatory to overcome disincentivesovercome disincentives
Appliance labellling Appliance labellling and standardsand standards
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Implementing the White Paper - financingImplementing the White Paper - financing
Direct incentives: tax credits, subsidies, Direct incentives: tax credits, subsidies, concessionary interest rates concessionary interest rates advanced technologies, cogeneration, renewablesadvanced technologies, cogeneration, renewables
Develop financing models: small scale is key for Develop financing models: small scale is key for consumers – energy efficient bonds, refinancing consumers – energy efficient bonds, refinancing
Seek international funding andSeek international funding and technology transfer – Global technology transfer – Global Environmental Facility, Clean Environmental Facility, Clean Development MechanismDevelopment Mechanism
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Implementing the White PaperImplementing the White Paper - information and policy - information and policy
Awareness campaigns: always coupled Awareness campaigns: always coupled with other programmeswith other programmes
Promote energy service companiesPromote energy service companies
Cross sectoral/departmental co-ordination - Cross sectoral/departmental co-ordination - Interdepartmental Task Team modelInterdepartmental Task Team model
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ConclusionsConclusions
““Energy efficiency is the cheapest way to supply Energy efficiency is the cheapest way to supply energy needs” - it is cheaper to save energy than to energy needs” - it is cheaper to save energy than to supply energysupply energy
Government role in removing barriers to socially Government role in removing barriers to socially beneficial projects is essentialbeneficial projects is essential
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……although energy intensity has declinedalthough energy intensity has declined
0
10
20
30
40
50
1993 1994 1995 1996 1997 1998
MJ TPES/US$
MJ* TPES/US$ PPP
*commercial energy
Trend in energy intensity (TPES/GDP)
Source: Reserve Bank, DME
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Bringing together role players and Bringing together role players and programmes in governmentprogrammes in government
DME: new office for energy efficiency DME: new office for energy efficiency (Directorate)(Directorate)
SABS: equipment and material standardsSABS: equipment and material standards
Dept of Housing: housing standardsDept of Housing: housing standards
Dept of Transport: transport regulations, new taxi Dept of Transport: transport regulations, new taxi programme, intermodal switching and infrastructureprogramme, intermodal switching and infrastructure
NER: electricity licences and IRP, NER: electricity licences and IRP, DSM cost reco veryDSM cost reco very
Local planning, transport and public Local planning, transport and public works departments: town planning, works departments: town planning, infrastructure, electrificationinfrastructure, electrification
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The “ideal” houseThe “ideal” house
Thermally efficient:Thermally efficient: orientationorientation construction materialsconstruction materials ceilings and insulation ceilings and insulation
Household best fuel practice:Household best fuel practice: electricity for lighting, refrigeration and mediaelectricity for lighting, refrigeration and media gas for cooking (also electricity gas for cooking (also electricity
and coal)and coal) coal and gas for space heatingcoal and gas for space heating solar for water heatingsolar for water heating
Efficient electrical and Efficient electrical and non-electrical appliancesnon-electrical appliances
Energy-efficient lightingEnergy-efficient lighting