heat pump presentation

Residential Heat Pump

Rebate Programme

Information session

18 February 2011

2

Agenda

Residential heat pump rebate programme

Technology

Conditions of participation in programme Supplier/Customer

Process

Concluding Remarks

Questions

Item Who

Opening and welcome Andrew Etzinger

Evacuation procedure Venue representative

South Africas Electricity Supply-Demand Situation Andrew Etzinger

Heat Pump Rebate programme Nosipho Maphumulo

- Structure of the programme Michael Ndlovu

- Envisaged process Fikile Segole

Way forward and closure Nosipho Maphumulo

3

Annual energy gap for 2010 to 2017 under base case outlook, TWh shortfall

SA electricity supply-demand balance will remain tight until 2015 with 2011/2012 the crucial period

Assumptions Eskom estimate of the IRP2010 moderate load forecast (~250 TWh in 2010); Initial expectation of 6 TWh gap in 2010 did not realise due to lower than expected demand; New build (e.g., Medupi, Kusile, Ingula) & RTS at current dates; REFIT as per IRP1 (1 GW by FY2018); DSM as per base plan (3.9 GW by FY2018); Planned maintenance allocation increased to ~10%

15 14 16 2017 13 11 12 2010

9 TWh is equivalent to ~1000 MW base load capacity

4

Electricity System requirements

Summer Profile (Jan April)

Winter Profile (May Aug)

Energy savings required during daylight hours

between 06h00 and 20h00 on weekdays

Mainly energy savings required during

Summer

Peak savings a specific requirement

during winter

The total system load factor is high (76%) such a flat profile will require energy rather than load reduction

5

A number of levers have been identified and explored to help close the gap

Supply Side Levers to help close gap1

Eskom Gx performance: improve forced outage rate by 1% by 2012 and 2% in the next 5 years.

Increased Gx capacity in existing fleet: There is an opportunity to get about 100MW as existing plant is refurbished by 2012.

Own-Gen2: Partner with industry to leverage 100MW by 2011 identified by industry (1000MW by 2015 in own-generation options). The key issue is the grid access framework.

Municipality Gx: unlock existing capacity by assistance & short-term PPA's. Target about 200MW over the next 3 to 5 years.

Renewables: The renewable feed-in tariff (REFIT) programme is targeting 1025MW by 2013. Government will lead the procurement process and Eskom will be the buyer.

1 Excluding involuntary curtailment of demand or running peaking plant beyond agreed level for MYPD2 tariff 2 Own-Generation includes renewables, co-generation and conventional generation

Internal Energy Efficiency: Eskom has a 1 billion kWh programme. A significant portion of this saving is in improving the efficiency of converting coal to electricity.

Additional Eskom DSM: Deliver on 4.1 TWh by FY 2012/13 by leveraging the existing funding allocation through MYPD2.

Government SWH: Implement the 1 million Government Solar Water Heating project.

Demand response: Eskom has secured 2000MW of interruptible load and nearly 500MW of incentive based demand response from large industrial customers. Eskom is targeting a further 500MW by winter 2011 from its smaller industrial and commercial customers. There is a potential to ramp this up to about 2500MW in the entire market (including the residential sector).

Demand Side Levers to help close gap1

Contribution to closing the gap has been identified for each lever in constrained (i.e. funding and resources have been secured but further effort is required) and highly constrained (i.e.

specific barriers yet to be resolved) environments

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Even if we deliver against all opportunities, there will still be significant risk of a gap in the early years

Even pulling all levers

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10 6

3

27 24

a gap still exists in some years

-19

14

-14

13

-7

12

6

2011

5

2017

-28

16

-25

15

TWh

Energy saving opportunities identified1

Forecast energy gap if full potential is captured

1 Excludes SADC options as total potential is unconfirmed 2 Examples of constraints: Funding, Policy and legislation, Industry manufacturing, installation and service capacity

Highly constrained

Constrained2

Gap

Decisions required Levers alone are insufficient to close full gap over whole period

It is critical that significant work is done to unlock constraints and deliver maximum value on levers identified

Further measures are still required to bridge the gap in 2011/2012

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A safety net is needed to close the remaining gap and protect SA in case levers do not deliver

Closing the energy gap

Providing capacity to meet peak demand

In the absence of this system safety net, a reduction in planned critical maintenance is the final alternative to national load-shedding A 1% reduction in annual planned outages equates to ~2.3 TWh additional energy available to the system Further postponing critical maintenance creates serious risk to safety of our people and integrity of our assets and is not the preferred option.

Legislated energy reduction for the 500 largest industrial consumers (Eskom and Munics)

A 5% energy reduction will yield a 6 TWh energy saving.

Encourages movement towards a more energy efficient economy.

Some concern around impact on economic growth hence the need to provide time to adapt.

Measures to close the remaining gap

By deploying smart metering technology options for demand response in the smaller customer segments, customers can participate in responding to energy constraints.

These technologies will also provide customers a tool to better manage their demand and reduce costs.

Increased operation of OCGTs during critical years Increasing the OCGT load factor by 5 percent

provides ~1 TWh additional energy p.a. Creates significant additional cost for Eskom of

~R2bn per TWh additional energy.

Energy Conservation Scheme (ECS)

Additional Demand Response (DR)

Increased use of OCGT

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Summary

The current focus is on the energy gap into the foreseeable future A portfolio of supply and demand solutions are being implemented to address the

projected energy gap Acceleration of Demand Side Management is a key lever in strengthening security of

supply Internally Eskom is optimising current DSM processes to make it more attractive to

the market Eskom would like to better leverage the external market to implement DSM Eskom will make available additional funding to accelerate the DSM programme Residential Heat Pumps Rebate Scheme provides a unique opportunity for project

developers to accelerate their businesses with efficient hot water solutions Eskom would like to partner with yourselves to ensure that we address this challenge We want to obtain your inputs, issues and concerns in the implementation and

refinement of the residential HP rebate scheme The objective of today is to listen to you in order for us to develop a solution that will

address the immediate problem We see this as a springboard to a healthy, long term relationship to support

sustainable energy efficiency in South Africa.

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Agenda


Technology


Process

Concluding Remarks

Questions

Item Who








10 10

Heat Pump Rebate Programme - overview

Purpose of the domestic heat pump rebate programme

The current heat pump programme only caters for the industrial and commercial sectors utilising the NERSA budget allowance and ESCO model process. It does not cover the residential market.

The purpose of the residential heat pump rebate programme is to provide financial assistance to the residential market through a rebate, enabling individual customers to purchase energy efficient heat pumps at a rebated cost.

11 11


Eskom commissions a supplier to offer his product (heat pump) to the

customer at a discount (rebate).

The supplier claims the discount/rebate from Eskom.

This rebate is mutually beneficial to all parties involved

the supplier sales are increased

the customer electricity bill reduces,

Eskom achieves its business objectives

12 12


What does it entail?

The rebate programme is for retrofit purposes where there is an existing working electrical conventional geyser.

The customer must buy the product from a registered supplier

Supplier must perform a complete installation

What is the target Market?

Middle to high income

Individual home owners, game lodges, bed and breakfast, metros buying in bulk, municipalities and corporate organisations

What is the programme duration?

Up to March 2013 as aligned to MYPD2

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Programme, budgets and targets

The residential heat pump rebate programme budget is R 250 mil for

saving 54MW

This is part of the total heat pump programme allowance of R 679 mil,

128 MW over 3 years

Min of 65 585 units (air to water) to be installed over 3 years

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Agenda


Technology


Process

Concluding Remarks

Questions

Item Who


Evacuation procedure Venue Representative






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Residential heat pump rebate structure

100 L 200L

Category 1 Rebate = R 3,668

300L

500L 400L

Category 2 Rebate = R 4,320

100 L 500L Heat Pump tank Ranges

The rebate prices to remain unchanged until 31 March 2013

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Supplier requirements

To meet all the test requirements from SABS on specifications and standards

The performance testing of the systems will include among others the initial verification of product design, inspection and verification of compliance of installed systems to applicable standards.

To meet with all Eskoms requirements

Suppliers must comply with the existing Eskom ESCo registration process requirements.

The suppliers must produce a letter of good standing from their parent company to trade and maintain the products they sell.

The integrated system warranty should be at least 1 year, the compressor should be 5 years and the circulation pump should have a 3 year warranty.

Agree to hand/submit invoices for rebate claims

The supplier must meet the requirements first, then register on Eskom data base as a vendor and will be linked to Eskom for payment purposes.

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Technology

Supplier

Letter of Authority (LOA)

(NRCS)

SARS receipt

not LOA

Safety - SABS or Test Africa

SABS Tests/Verify

Efficiencies

Eskom Quality Department

Eskom IDM Acceptance

1St April Implementation

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Conditions of the rebate programme Customer requirements and conditions:

1. Customers who are eligible for a rebate are those who have existing electrical water heating elements, the programme is for retrofitting only.

2. No rebate will be given to customers who have already installed the heat pump prior to its formal announcement.

3. All the requirements and attachments as stipulated in the application must be completed in full in order to qualify for rebate payment. It is the customer responsibility to ensure the supplier as well as the system is accredited on the heat programme at the time of installation.

4. The system installed must be registered and accredited as part of the Eskom heat pump programme.

5. Customer will have to fill the rebate forms at the point of sale with his/her details, i.e. ID number, house address, tank size, details of the unit bought, date of installation, and the installer name.

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Conditions of the rebate programme cont

6. The system must be supplied and installed by an accredited supplier/installer of the heat pump programme.

7. The customer is responsible for ensuring that the system has been installed in accordance with his/her requirements.

8. Should the customer choose to use a heat pump system that does not meet the requirements of the heat pump programme, Eskom and its agents will not be held responsible in any way for the quality of the system or the installation.

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20

Agenda


Technology


Process

Concluding Remarks

Questions

Item Who








21

High level process

Register Supplier

Rebate Claim

Verify Installation

Exceptions

Process Payment

21

M & V

Internal Eskom Process - Any requirements from external stakeholders will be communicated as required

22

Shape Process description

Activity

Start / End of Process

Role

Decision

Document / Deliverable

Input/Output

Process mapping key

Shape Role description

HP Admin*

Heat Pump Suppliers/Installer

M&V

Technical Audit

Customer

22

* HP Admin is the entity that will administer this programme

23

Supplier registration

Registered as Eskom

Vendor

HP Admin

HP Supplier/ Installer

23

Intent on joining HP

Rebate Programme

Quality Review

Quality Dept

Provide Quality Review

Questions

Answer Quality Review

Questions

Quality Report

Initiate Registration with Eskom as Vendor

Review Successful

Eskom Vendor Registration

Process

Registration Admin

1 3

2

5

4

1.Quality Review questionnaire

1.Vendor Registration Documents

24

Rebate claim

Purchase HP System

Install HP System

Sign Installation & Declaration

Form

Submit all documentation to

Eskom

Verify Claim

Complete missing

information

Not verified Verified

7

5

4

3

2

6

1.Claim Form 2.Customer

Pack

1. Claim Form (signed) 2. Copy Invoice 3. Bulk Claim Form

Registered as Eskom

Vendor

(Batch Submission)

Advertise HP Systems

1

HP System Installed

HP Admin


Customer

24

Claim docs verified

25

Payment process

Claim docs verified

Log receipt of claim

Receive notification of claim status

Finance

Submit to SAP for payment

Make Payment

Claim Not Successful

Claim Successful

Complete Outstanding Information

1

4

3

5

2

1. Copy Installation & Declaration Form (signed)

2. Copy Invoice 3. Proof of Address 4. Electricity Bill / Box # 5. Customer Details 6. Registered installer 7. Accredited HP system 8. Rebate payment date

HP Admin

Payment Received

6


25

Successful Claim

Un-Successful Claim

26

Agenda


Technology


Process

Concluding Remarks

Questions

Item Who




Heat Pump Rebate Programme Nosipho Maphumulo




27

Way forward

Item Opening and Welcome

Evacuation Procedure

South Africas Electricity Supply-Demand Situation

Heat Pump Rebate Scheme

Application and registration of suppliers as ESCOs

Registration of ESCOs as ESKOM vendors Submission of required info to Eskom IDM to register on the rebate scheme

Submission of all systems for SABS approval, when SABS is ready

Submission of claims according to Eskom Heat Pump rebate requirements

Thank you

Questions