South Africa

ZA-1:National Energy Efficiency Leadership Network (EELN) (previously called Energy Efficiency Accord)

Policy Description

The National Energy Efficiency Leadership Network (EELN) (previously known as the Energy Efficiency Accord) sits within South Africa's overall strategy on energy efficiency policies, as defined in the National Energy Efficiency Strategy (NEES). This NEES was launched in 2005 and sets the overall target of achieving 12% energy savings by 2015 relative to a Business as Usual baseline for all energy using sectors. The focus in South Africa's energy efficiency strategy has been on achieving reduction in electricity consumption because of shortage in electricity supply capacity.

Description

National Energy Efficiency Strategy

The National Energy Efficiency Leadership Network (EELN) (previously known as the Energy Efficiency Accord) sits within South Africa’s overall strategy on energy efficiency policies, as defined in the National Energy Efficiency Strategy (NEES). This NEES was launched in 2005 and sets the overall target of achieving 12% energy savings by 2015 relative to a Business as Usual baseline for all energy using sectors. The focus in South Africa’s energy efficiency strategy has been (is) on achieving reduction in electricity consumption because of shortage in electricity supply capacity. The first NEES stated that targets, set per sector, would be voluntary at first, but sub-sectoral targets could become mandatory in the course of time. A specific reduction target of 15% of final energy demand by 2015 was set for the industry and mining sector [1]. The NEES is reviewed every three years and the first review took place in 2008. Among others, it was acknowledged that sub-sectoral targets should be implemented for the industry and mining sector as all industries are not able to achieve the same targets. In the 2008 revision, the following sub-sectoral targets were agreed upon [2]: • An improvement in energy intensity of 1% per annum for the iron and steel Industry;

• An improvement in energy intensity of 1% per annum for the chemical and petrochemical industries;

• A final energy demand reduction of 10% for the mining sector by 2015 (using an adjustable baseline);

• An improvement in energy intensity of 2% per annum for the paper and pulp and printing industries;

• An improvement in energy intensity of 2% per annum for the cement industry.

The NEES was reviewed again in 2010-2011. At the time of writing (August 2013), the NEES was under the process of its second strategy review and was not yet in effect [9]. As per the second review, targets are aspirational, set for broad energy-use sectors and applicable till the end of 2015. Individual energy users are expected to determine their own individual performance targets and the baseline remains the year 2000 as in previous NEES. This review of the NEES sets the national energy intensity reduction target to 12% by 2015 for all energy uses. Further sub-sector targets are specified, namely for industry, mining, transport, power generation, commercial and public buildings and residential sectors. Both industry and mining have an energy efficiency improvement target of 15% by 2015 (for targets for other sub-sectors see [10]).  Targets laid down in the NEES aim to be delivered under a number of specific energy efficiency policies and agreements such as the National Energy Efficiency Leadership Network (EELN) (previously called Energy Efficiency Accord).

National Energy Efficiency Leadership Network

The National Energy Efficiency Leadership Network (EELN) was established at COP17 in Durban in December 2011 and replaces the Energy Efficiency Accord. Broadly, the EELN engages the private sector into the NEES and its signatories  voluntarily pledge to:

  • develop a road map for improved energy efficiency, supported by the implementation of an energy management system 
  • develop appropriate internal energy efficiency targets appropriate to company operations and also respond to government policy and strategy, 
  • publicly report on progress towards energy efficiency targets and energy intensity of operations,

The EELN is voluntary and provides a platform for members to establish and implement their own energy management plans, baselines and energy efficiency targets. EELN members will be able to track their own achievements and provide reports to the National Energy Efficiency Monitoring System. An inaugural workshop was held on 6 March 2012. The EELN builds on its predecessor the Energy Efficiency Accord (EEA). At COP 17, 45 companies signed onto the EELN and currently the network consists of 58 companies including Eskom, Chevron, ABB, De Beers, BP and others (for a full list see [11]).  Members of EELN benefit through access to best practices, technical expertise, public recognition, improved understanding of role of energy efficiency, improved competitiveness, and energy cost savings.

Energy Efficiency Accord (EEA)

The Energy Efficiency Accords were introduced in 2005, following the Government's Energy Efficiency Strategy (NEES), and started with voluntary agreements being signed between 24 major energy users, seven industry associations and the government through the Minister for Energy and Minerals [3]. In subsequent years, more companies and organisations followed. The accord includes companies from the mining, industrial, commercial and financial sectors, who are the top energy users in the country [4], [5]. By signing these Energy Efficiency Accords the industries committed themselves to individually and collaboratively work on achieving the government’s energy savings targets laid down in the NEES. In addition, industries that signed the accord amongst others have agreed to:

• Promote the use of Demand Side Management contracts concluded with energy suppliers;

• Develop common reporting requirements for energy usage from all energy sources;

• Define industry-specific projected energy use in the future, based on Business-as-usual (BAU) growth expectations and use 2000 as the baseline year against which performance will be measured;

• Establish methodologies allowing for among others: baseline quantification for energy use/intensity in various sub sectors that takes into account

1) the need to measure specific (or relative) energy intensity rather than absolute energy use,

2) the promotion of industrial growth whilst achieving energy efficiency, 

3) the recognition of the energy conservation measures already implemented in some sub sectors,

4) the increased production. • Develop a generic energy auditing protocol that can be adapted for use by the individual sectors and company signatories;

• Where appropriate, exploit opportunities presented by energy efficiency projects to develop CDM projects.

In return the government under the Energy Efficiency Accord amongst others agreed to:

• Develop strategies, including the provision of fiscal and other incentives with signatories to encourage the achievement of agreed sectoral targets by industry on a sector or company basis;

• Promote CDM projects as a vehicle to achieve improved energy efficiency. The agreements do not hold sanctions in case of non-compliance by the signatories [3].

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Administrative, Voluntary Agreement

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2005

End Date: 2015

Policy Linkages

Supported By Eskom’s Energy Efficiency and Demand-side Management (EEDSM) incentive program Supporting Measure
Supported By Eskom Energy Conservation Scheme (ESC) Supporting Measure
Supported By Energy Efficiency Tax Incentive Regulations Supporting Measure

Agencies Responsible

Department of Minerals and Energy
National Business Initiative (NBI)
Energy Efficiency Technical Committee (EETC)

Primary Objective: Energy

Objective

To drive the continuous improvement of energy efficiency in the South Africa business sector supporting government policy and strategy, leading to enhanced international competitiveness and greenhouse gas emission reduction. The EELN is also intended to support the business commitment to the Green Accord [12].

Target Group

Top energy users in the industry (with a focus on the iron and steel Industry, the chemical and petrochemical industries, the mining sector, the paper and pulp and printing industries and the cement industry) and mining sector (next to these sectors also companies in the service and financial sectors signed the Accord).

Driver of energy consumption or emissions affected by policy: Total energy use / Total emissions / Specific energy consumption / Relative efficiency / Other: load reduction/security of electricity supply.

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

 Cross sectoral: the policy is not limited to a specific target group and the EELN currently has a diverse group of companies. The majority is from the industrial and mining sectors.

Quantitative Target? no

Progress Monitored? yes

Monitoring Done By

Organisation Type Organisation Name
Government Agency Department of Minerals and Energy
Target Group National Business Initiative (NBI)
Target Group Energy Efficiency Technical Committee (EETC)

Verification Required? yes

Enforced? no

Sanctions: No sanctions are in place in case of non-compliance

Requirements on the Target Group

No specific requirements are in place for the target group. Participants agree to collaborate on defining projected energy use and use a common monitoring and reporting format (see policy description above).

Support by Government

•    Current activities are supported by GIZ through the South African-German Energy Programme (SAGEN) [12].

Implementation Toolbox

  • An Energy Efficiency Technical Committee (EETC) was established to implement the Agreement, and the National Business Initiative (NBI) acts as Secretariat to the EETC. It has developed energy saving measurement and verification guidelines an energy management performance matrix, reporting guidelines, and has conducted case studies
  • The Department of Energy is establishing an Energy Efficiency Information Management System (EEIMS), an online system for information dissemination.
  • Energy Efficiency Campaign Activities are expected to also be incorporated in the EELN Program of Action.
  • Annual industrial National Energy Efficiency Action Plan (NEEAP) activities in 2012/2013 will be developed through the Industrial Energy Efficiency project (IEE) This is a project suppoted by UNIDO, along with the Swiss Secretariat for Economic Affairs, the UK Department of International Development and partnered by the Department of Trade and Industry (dti) and the Department of Energy (DoE) of South Africa [6].

Complexity of Implementation

Government

The government needs to support the development of proper monitoring and evaluations systems, which were (are) lacking with the start of the EEA.

Target Group

The target groups need to develop proper monitoring and accounting tools.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions ­2,405 GWh of electricity was collectively saved by 15 signatories that reported on their savings by the end of 2007. This equals a CO2 reductions of 1.7 million tonnes. [5] It must be noted that the assessment was hampered by lack of good methodologies to assess the full impact of the accord (*6).
Estimated costs/benefits for industry By the end of 2007, signatories had invested 9.9 billion rand (~1.2 billion US dollars against exchange rate February 2012).
Estimated cost for government The total amount contributed to investment in energy efficiency projects by the government (through the Eskom EEDSM fund) by the end of 2007 was 0.56 billion rand (70 million US dollars against exchange rate February 2012)

References & Footnotes

References

[1] Department of Minerals and Energy (2005). http://www.capetown.gov.za/en/EnergyForum/Documents/ee_strategy_05.pdf March 2005

[2] Department of Minerals and Energy (2008). National Energy Efficiency Strategy, http://www.info.gov.za/view/DownloadFileAction?id=103163. First review 2008. June 2009.

[3] Text of the energy efficiency Accord, http://www.nbi.org.za/SiteCollectionDocuments/energy_efficiency_accord.pdf

[4] National Business Initiative (NBI). Information from their website downloaded on 6 February 2010, http://www.nbi.org.za/Focus Area/ClimateAndEnergy/EnergyEfficiency/Pages/default.aspx

[5] NBI and DME (2008) Assessment study of the Energy Efficiency Accord, http://www.nbi.org.za/SiteCollectionDocuments/ee_accord_assessment_report.pdf. National Business Initiative (NBI), Department of Minerals and Energy (DME), November 2008, http://www.energy.gov.za/.

[6] Industrial Energy Efficiency project: http://www.iee-sa.co.za/

[7] Government Gazette, no.35069, 24 February 2012.

[8] Department of Energy (2011). Annual Report 2010/2011, http://www.info.gov.za/view/DownloadFileAction?id=152675.

[9] South African Government (2013). Media Statement by Minister of Energy Ms Dipuo Peters, May 14, 2013. Available at http://allafrica.com/stories/201305141293.html?viewall=1

[10] Department of Energy (2012). Draft Second National Energy Efficiency Strategy Review, Notice 1000 of 2012. Available at http://www.info.gov.za/view/DownloadFileAction?id=179403

[11] National Business Initiative (2013). EELN Membership website. Available at http://www.nbi.org.za/Focus%20Area/ClimateAndEnergy/EELNSS/Pages/EELN_Membership.aspx

[12] National Business Initiative, EELN Webpage. Available athttp://www.nbi.org.za/Focus%20Area/ClimateAndEnergy/EELNSS/Pages/default.aspx

Footnotes

(*1) No more recent figures are available. Also no numbers are available on the share of energy use for other energy carriers like natural gas, oil and coal by the signatories. The focus in South Africa’s energy efficiency strategy has been (is) on achieving reduction in electricity consumption because of the shortage of electricity supply shortages.

(*2) Note on monitoring: According to the Accord “Industry parties will collaborate with Government in the compilation of an annual national progress report, including energy data and progress against the agreed targets”. The assessment in 2008 showed that a significant number of the signatories made the Accord commitments without assessing their preparedness to report on their progress, i.e. they were not able to deliver data for the year 2000 as the baseline year [3]

(*3) Note on verification: One of the agreements in the Energy Efficiency Accords was that participants would develop common reporting requirements and methods to properly account for achieved savings. These are however not yet in place. The assessment report of the Agreement from 2008 concluded that “One area where the Agreement has not been effective is the lack of common reporting requirements as well as agreed and enforced measurement and verification methodology” [3]

(*4) In 2008 the Energy Act on the collection of energy information was put in place. Various initiatives have been put in place to set up a system of monitoring energy-efficiency bottom up as well as top down (“top down” monitoring implies that you look into indicators that usually can be pulled together from statistics like Energy use / unit of output, Energy efficiency improvements / unit of output). According to the annual report of the Department of Minerals and Energy there is “The Energy Efficiency Monitoring project” a collaborative effort between the Department and the Swiss Agency for Development and Cooperation. It is aimed at putting a monitoring system in place that will enable the Department to compile annual energy efficiency data and compare energy savings with the sector targets of the National Energy Efficiency Strategy [8]

(*5) Note on complexity: It is hard to provide an indication on the complexity for implementation of the energy efficiency accords as such, because they are so closely linked to the other instruments.

(*6) No information is available on the absolute reduction in energy demand for the other energy sources. The 2008 assessment report shows that assessing the impact of the Agreement is hampered by the lack of good methodologies on the definition of energy savings and energy efficiency improvements. The report states that ”The original target is set in an absolute amount of energy that needs to be reduced. This approach of calculating the energy demand reduction ignores the impact of the Business-As-Usual (BAU) projections of the energy demand (taking in account production increases, changes in production circumstances etc.) and could thus underestimate the gains made by the companies” [3].