Green Energy Efficiency Overview of Financed Cases

Jose-Luis Bobes, June 2013

Energy Saving vs Energy Efficiency Conference

South Africa: Energy Challenges

• Since the South African economy largely relies on coal reserves for electricity, many opportunities exist for Renewable energy (RE) and Energy Efficiency (EE) improvements.

• Currently, future energy supply is not expected to be sufficient to match the anticipated demand, and increased pressure on price and energy security, force industry players to focus on green initiatives (mainly RE and EE).

• Recurring power outages since early 2008 have highlighted the fact that electricity generation is unable to keep pace with demand.

COP17

Solutions to provide energy

COP17

Better: Be able to do more with the same

Late2010

2011

2012

2013

• Market Launch of the R500M Green Energy Efficiency Fund(GEEF)- Aggressive marketing with Industry Associations & Partnership with Eskom

IDC and KFW sign loan agreement for €48M and €2. 1M Technical Assistance and Capacity Building Grant

ESCO Market Study published-access to finance barrier to entry

17 companies financed at R174 million ( ca 35% of GEEF)69% of funds committed to SMEs

MARKET SITUATION

Constrained electricity supply and high prices

Constrained electricity supply and high prices

Access to finance barrier to EE/RE

investments

Access to finance barrier to EE/RE

investments

RESPONSE

Increased demand for ESCO services High cost of small

scale RE development

Increased demand for ESCO services High cost of small

scale RE development

HIGHLIGHTS/IMPACT

8MW cogen SACC plant-45GWh/yr and 46ktCO2

8MW cogen SACC plant-45GWh/yr and 46ktCO2

mass rollout of 310GWh

/34MW showerheads

mass rollout of 310GWh

/34MW showerheads

60% of committed funding to ESCOS

60% of committed funding to ESCOS

27 FREE Walk through audits and 4 investment

grade audits

27 FREE Walk through audits and 4 investment

grade audits

Industrial Energy Efficiency

Industrial Energy Efficiency

WHY GEEF: FINANCIAL ENABLERS:

IDC

impact

Green Energy Efficiency Fund

GEEF: Developmental and Environmental Impacts

CO2 TonsEquivalent

Avoided

383,445/year

Energy saved

386,930/year

Future Focus

17Number of Deals approved

Programme supported by the German Cooperation and Development Ministry

Future R174mAmount committed

circa: 35% of R500m

SWH Energy Performance ContractsCogeneration Waste to Energy Variable Speed DrivesRoof Top PV

INDUSTRIAL ENERGY EFFICIECYAND SELF USE RE

Frequently Asked Questions about GEEF

• Is GEEF compatible with Eskom IDM programs?

– Yes

• Can GEEF finance the end user?– Yes

• Do we have to pay for the GEEF Energy Audits/Technical Assessments?

– Depends

• Are the loans in Euro or Rand?– Rand

• Local Requirements?– Standard IDC strategy

• Pricing is always prime -2%

Frequently Asked Questions about GEEF (II)

• Can GEEF finance ESCOs?– Yes

• Why should I get a loan if my company has enough capital to finance from balance sheet?

– Cost of capital

• Will I get a loan even if I am (fill whatever the mental barrier)?

Marketing Tools

Conference Users Forum

Share experiences

Learn from each other

Provide feedback

Target Audience:

ESCOs

ESCO clients

Industry Workshops:

Foundries, Plastics, Automotive..

Remind the resources for your business:

GEEF Brochure

6 Funded Cases

6 Industry Sector brochures

Industry Workshop

Energy Audits

GEEF Website:

www.idc.co.za/development-funds/geef

Some Funded Cases

Case Study 1: 25% Reduction in Grid Electricity Consumption by Installing a Solar Photovoltaic (PV) System

• A Cape Town-based company that produces sport wear and leisurewear under license to an international brand.

• The company has embarked on a project to install a grid connected (grid-tied) rooftop PV system to generate 25% of the company’s annual electricity requirement

“Electricity accounts for more than 90% of our carbon emissions and is a scarce resource that is vital to the successful operation of our business. We are confident that the solar installation will generate between 30 – 40% of our energy requirement, thereby reducing our carbon footprint, save money and improve our sustainability into the future.”

William Hughes, MD, Impahla Clothing

Sector Textile Industry

Region Western Cape

Goals Reduced reliance on coal based electricity from grid

Investments Solar Photovoltaic (PV) system – 30kW peak

Financial Savings

Investment cost covered by energy and cost savings

Other Benefits

Positive image as a progressive environmentally friendly company

CO2 Reduction

50 CO2 tons per annum

Case Study 2: 18% Energy Savings from Utilisation of Waste Gas to feed a Combined Heat and Power (CHP) Plant

• The chemical production company wants to use the waste gas as fuel for a 7.8 MW CHP plant to replace part of the power supply from the grid.

• This results in 18% savings from using the waste gas to feed the CHP plant.

“The company spends close to R7-million on electricity a month, and this new co-generation plant will cut this bill by about 20%. The additional 8 MW capacity will enable the company to operate at full production compared with the 70% capacity because of electricity constraints. „

Claudio Siracusano, GM, SACC

Sector Chemical Industry

Region KwaZulu-Natal/South Africa

Goals Reduced reliance on coal based electricity from grid

Investments • 4 co-generation units• Scrubber plant

Financial Savings

• Investment cost covered by energy and cost savings

Other Benefits

Increased reliability from own energy supply

CO2 Reduction

46,000 CO2 tons per annum

Case Study 3: More than 40% Savings in Energy Consumption with Solar Water Heaters

• A financial intermediary that provides Solar Water Heaters (SWH) on a lease-to-own agreement to private households and commercial buildings.

• Solar water heating systems are one of the most cost-effective uses of solar energy in South Africa as they replace more than 40% of electric heated water.

“The Green Energy Efficiency Fund will enable us to roll-out Solar Water Heaters to at least 400 households, by removing the challenge faced by many clients in financing the high upfront costs of SWH.”

Quinton Zunga, CEO, Solar Network

Sector Financial Services

Region Gauteng

Goals Reduced reliance on coal based electricity from grid

Investments Solar Water Heater (SWH) – lifetime of >20 years

Energy Savings

2,700 KWh per annum (avg)

Financial Savings

Investment cost covered by energy and cost savings

Other Benefits

Positive image due to carbon footprint reduction

CO2 Reduction

2.8 CO2 tons per annum per system

Thanks!

Visit: www.idc.co.za/development-funds/geef

for more information about

GEEF: Green Energy Efficiency Fund