ATC140313: Report of the Portfolio Committee on Energy on its oversight visit to energy efficiency projects in the Cape Town area on 21st June 2012, dated 12 March 2014

Report of the Portfolio Committee on Energy on its oversight visit to energy efficiency projects in the Cape Town area on 21 ^st June 2012, dated 12 March 2014

The Portfolio Committee on Energy, having undertaken an oversight visit to various energy efficiency projects, report as follows:

1. Introduction

1.1. Purpose of the report

The purpose of this report is to report back to the National Assembly on the findings of the PC on Energy’s study tour to various energy efficiency projects in the Cape Town area.

1.2. Background

Worldwide, nations are beginning to face up to the challenge of sustainable energy – in other words to alter the way that energy is utilised so that social, environmental and economic aims of sustainable development are supported.

South Africa is a developing nation with significant heavy industry, which is by its nature energy intensive. This energy intensive economy largely relies on indigenous coal reserves for its driving force. At first sight there would appear to be an apparent paradox between using less energy and developing a healthy and prosperous nation based on energy intensive activities. This is not the case. In recent years energy efficiency has significantly gained in stature and has become recognised as one of the most cost effective ways of meeting the demands of sustainable development.

The benefits of energy efficiency upon the environment are self-evident. These benefits are of particular relevance, as South Africa remains one of the highest emitters of the Greenhouse gas CO ₂ per capita in the world. At a local level the problems of SO ₂ and smoke emissions have been the focus of concern for many communities living adjacent to heavily industrialised areas. Energy efficiency can address both the macroscopic and microscopic aspects of atmospheric pollution.

The economic benefits of improving energy efficiency have been well documented since the first Oil Crisis in the early 1970’s. Many forward-thinking industrial and commercial concerns have already adopted energy efficiency as a key policy towards maximising profits. The national electricity utility, Eskom, has itself embarked upon a Demand Side Management programme to help reduce the requirements for investment in new power generation capacity.

Such positive contributions to both our physical and economic environments will inevitably benefit our social well-being also; the alleviation of fuel poverty, job creation, improvements to human health, better working conditions - the list goes on. All of these factors will significantly contribute towards the aims of sustainable social development.

It is for these reasons that South Africa needs an Energy Efficiency Strategy.

1.3. Purpose of the oversight visit

The committee envisages scheduling public hearings on energy efficiency, where stakeholders and interested individuals will be invited to make written and oral presentations to the committee.

The committee therefore resolved to undertake a study tour on energy efficiency projects prior the public hearings, in order to get a sense of what initiatives is being undertaken and what challenges are being experienced.

The committee identified several initiatives undertaken by the City of Cape Town, as well as initiatives undertaken by business.

1.4. Plan of development

The report will firstly describe the initiatives undertaken by the City of Cape Town and secondly those undertaken by business.

2. City of Cape Town Energy Efficiency initiatives

2.1 Kuyasa Clean Development Mechanism Pilot Project

The Kuyasa CDM Pilot Project involves the retrofitting of solar water heater (SWHs), insulated ceilings and energy efficient lighting in over 2 300 low-cost homes in Khayelitsha, Cape Town. The project will see an immediate impact on the social, health and economic well-being of the targeted beneficiaries.

Kuyasa is South Africa’s first internationally registered Clean Development Mechanism (CDM) project under the Kyoto Protocol on climate change and was the first Gold Standard Project to be registered in the world. The project has generated substantial interest locally and internationally as a pilot for the energy-efficient adaptation of South African low-cost housing.

Kuyasa is a low-income community in Cape Town. The particular area within Kuyasa comprises 2,300 low-income RDP households. The Kuyasa Clean Development Mechanism (CDM) project was developed to address the inefficient design of the houses, with a particular aim of improving the quality of life of the Kuyasa residents and reducing the required monthly expenditure on energy sources. The successful implementation of this project required finance, buy-in and support from many different parties, notably the UNFCCC, private sector, as well as national, provincial and local government.

The project’s main interventions were the installation of solar water heaters (SWHs), thermal insulating ceilings, energy-efficient lighting and improved wiring. Some houses also received ‘hotboxes’ (thermal insulation cooking devices), which help to reduce the cost of cooking. One of the project’s key aims was to support local job creation and skills development, and members of the community were trained and employed through the project to install the various technologies; this resulted in over 65,000 person-days of labour

Figure 1: Solar Water Heater on one of the houses in Kuyasa

The Kuyasa project was developed by the nongovernmental organisation (NGO) South South North (SSN) for the City of Cape Town’s Environmental Resource Management Department and Urban Renewal Programme. Ten pilot houses were adapted in 2005, providing the practical data for an efficiency measuring system.

With funding from the Department of Environment and Tourism's (DEAT's), Social Responsibility Programme and Provincial Government’s Department of Housing, the retrofitting of 2,300 houses in Kuyasa, Khayelitsha started in August 2008 and was completed in October 2010.

2.1.1. Findings

• Community members of Kuyasa have been involved from the initial stages, where they have ownership of the project, i.e. there is community buy-in.
• Because of the community involvement there has been no vandalism or break-ins.
• The cost to retrofit the houses is around R10 000.
• Initially Chinese manufactured solar water heaters were used. Since its inception, 10 has already been replaced.
• No local manufacturer could initially be found in SA, however the City found a service provider who could manufacture solar water heaters for R6 000 per unit.
• The life span of the Chinese solar water heaters (R3 500) is around 4 to 5 years (the delegation was informed that these ones rust quickly as well), whereas the locally produced solar water heaters’ (R6 000) life span is around 20 years.
• With regard to replacing the units, the City does have a maintenance budget and maintenance plan in place
• One hundred (100) people are currently employed by the project.
• A number of participants have undergone training as plumbers at Northlink College for between 2 – 3 months.
• Four members trained have been accredited as certified plumbers by Eskom.
• Two participants has found employment with the City of Cape Town
• This project was the first in South Africa to access the United Nation’s CDM and was the first in the world to be registered as a Gold Standard project.
• The Kuyasa project has been the focus of much interest, both locally and internationally, and is a good example of the potential that energy-efficiency projects have within low-income communities.
• Of the 680 households surveyed after the completion of the project, 148 had received hotboxes. Of these households, 123 made use of the hotboxes, most commonly for cooking samp and rice. The hotboxes are also used for cooking pap (maize), meat and vegetables. The savings attributed to the hotbox vary significantly, but those using it on a regular basis have positive feedback.
• The survey conducted after the installation of ceilings identified a significant drop in the incidence of respiratory illnesses. 81% of households indicated that there had been a decrease in the frequency of illnesses.

3.2. Manenburg Human Settlements Contact centre

3.2.1. What is a green building?

A green building is energy and resource efficient and environmentally responsible, and incorporates design, construction and operational practices that significantly reduce or eliminate negative impacts on the environment and its occupants.

On a practical level, this involves the use of design, materials and technology to reduce energy and resource consumption. Green building measures include careful design to reduce heat loads, maximize natural light and promote the circulation of fresh air; the use of energy-efficient air-conditioning and lighting; the use of environmentally friendly, non-toxic materials; the reduction of waste, and the use of recycled materials; water-efficient plumbing fittings and water harvesting; the use of renewable energy sources, and sensitivity to the environmental impact of the development.

3.2.2. Information on the centre

The City’s new Human Settlements contact centre in Manenberg could be the first municipal building in the country to receive a Green Star SA rating from the Green Building Council of South Africa.

To earn this prestigious rating, the design team was asked to create a contact centre that would be sustainable from an environmental, economic and socially responsible perspective. This meant designing and building a structure that incorporated sustainable site development, water saving, energy efficiency, material selection, indoor and outdoor environmental quality and social connectivity.

There are only a handful of buildings that carry a Green Star rating in South Africa. The contact centre provides facilities for two departments, Existing Settlements and Revenue. It has a public component of cash offices, meeting cubicles and waiting halls, and a staff component of offices, meeting rooms and planted breakaway courtyards. At the new offices, Manenberg residents can access the City’s service hotline; make enquiries regarding the Housing database, tenancy matters, service and rental accounts; pay municipal accounts and traffic fines; buy prepaid electricity, and apply for services, rates rebates and indigent benefits.

The bar was set high. The team had to create a green building in relatively uncharted construction territory within budget – and they had to factor in the challenge posed by its location in an area notorious for gang activity. The building needed to be secure, yet approachable, so the design strategy incorporated simple materials and blurred the distinction between fence lines and building edges.

The public space in front of the building’s public courtyard has been landscaped for the pleasure of the community. It consists of lawn areas with shade trees and seats, and beds with indigenous, locally indigenous and even endemic plants.

Over the next year, a building facilities manager will monitor and report back on the effectiveness of the environmental controls used in the centre’s construction, for later review by both the design and construction team.

A proud highlight for the City of Cape Town is that the building will be their first Green Star rated building - a 4-Star Certified rating that recognises ‘best practice’ in the industry. It has been designed to be sustainable, economically and socially responsible. Ecologically approved building material will be used. Maximum water saving measures have been incorporated into the design - these will ensure that 100% of rainwater falling onto the roofs will be recycled, and that all waste water will be captured and recycled into the ablution facilities and landscaping irrigation. 75% of the centre’s electricity usage will be harvested from the sun and wind, with intelligent electrical systems and task lighting allowing it to function efficiently, almost independent of the electricity grid. The indoor office space has also been considered with a plentiful supply of fresh air, natural light and landscaped courtyards.

The area on the southern and eastern side of the building will be publically accessible and will be landscaped with predominantly indigenous vegetation for the enjoyment of the community. The landscaping will include pathways, pedestrian lighting, bicycle lock-up facilities, seating and lawn areas with shade trees. Bio-retention ponds will form part of the landscaping and help to reduce the annual stormwater load.

3.2.3. Findings

• About seventy five (75) percent of the building’s energy usage will be harvested from the sun and the wind
• All rainwater will be captured in collection tanks and recycled.
• A black water (sewage) treatment system has been implemented, to capture wastewater and recycle it back into the ablution facilities, with a portion redirected for landscape irrigation.
• The goal is zero water wastage, with minimum freshwater use.
• The site’s bio-retention ponds will also reduce the stormwater pollutant load, which helps meet the City’s sustainable drainage system objectives in terms of its urban stormwater policy.
• Materials used in construction were selected for their eco-friendly content and low-carbon footprint in manufacture and delivery; Forestry Stewardship Council (FSC)-certified timber was specified, and recycled plastic bottles were used as insulation material.
• The developers also reduced their cement content by substituting industrial waste products, and a large percentage of all steel specified had to be re-used or recycled
• Indoor environmental quality has been enhanced by increasing fresh-air intake significantly, inviting daylight into the workspace and incorporating landscaped courtyards that will encourage staff productivity and improve their general health and well-being.
• Local people worked in the construction, landscaping, civil works and artwork.

3.3. Traffic Management Centre - Goodwood

The Traffic Management Centre (TMC) – a 2010 FIFA World Cup™ project - will integrate services such as Freeway Management, Urban Traffic Control, the Transport Information Centre , the new Integrated Rapid Transit system(MyCiti) , Traffic Services and Metro Police in a single operational environment so that they are able to function side-by-side. This will improve Cape Town’s incident and information management capability and will ensure effective and efficient traffic and public transport operations.

The new centre operates from Goodwood in a custom designed building funded by National Government and the City. Council approved the original plans in May 2008, the ASTII Consortium was appointed in June 2008 to manage the project, and the building was completed in November 2009.

The TMC will enable the City to actively manage traffic flows, public transport, safety and security and incident and information from one central point.

The Goodwood Transport Management Centre (TMC) is a building that houses most of the Cities Transport department employees.  This building was used as an energy efficient building as the lighting in the building as well the design of the building all encompasses energy efficient technology.

3.3.1. Energy efficiency retrofits in Council buildings and Electricity Saving Campaign

Energy efficiency retrofits in 4 Council buildings

The City has many programmes that it’s running that form part of our Energy and Climate Action Plan. They focus on energy efficiency, renewable energy and improving the City’s resilience to climate change, through effective planning. One of these programmes focuses on energy efficiency retrofits of City owned and operated buildings. Interventions in these buildings include: Light & lighting controls, solar water heaters, Power factor correction, intelligent thermostat control on Air Cons & operating hour’s optimisation

According to the City, o verall, the project is performing better than expected. The guarantee is based on average savings, where the City can see that the guarantee period will be shorter than anticipated, if the performance continues. The City highlighted that they have installed good quality meters as a means to track consumption effectively. This online tool allows the City to monitor electricity consumption in the buildings in real time, half hourly intervals. This will help the City to improve their information on its buildings, and will also serve as a facilities management tool, to help manage behaviour in these buildings.

The City is also utilizing Division of Revenue Act (DoRA) which has been allocated to the building retrofit project. This covered 14 buildings in four areas of the City. The funds will only be spent on lighting and metering, and the savings that will be guaranteed are staggering, according to the City. Alongside technical retrofit the City also embarked on behavioural change interventions, where they will be able to increase savings even more if staff are included in the process and are conscious of their consumption habits and impact. Interventions took the form of workshops, exhibitions, handouts (flyers), and monthly tracking of consumption through posters in the facilities.

Not only is the City focusing on changing behaviour in the Cape Town municipality, but also looking at a wider audience. According to the City, the electricity saving campaign, launched in 2011, has been a resounding success. The material developed for the campaign has been incredibly well received – it is attractive, accessible and provides actual interventions that households across Cape Town can use. The next phase of the campaign, expected to start in September 2012 will be a 2 ½ year campaign. It will also include the commercial sector, through the continuation of the City’s energy efficiency forum, and will help companies to access various EE incentives (like Eskom’s standard offer). The City aims to focus its messaging around periods of tariff increases, to help households and businesses to cope with the extra costs.

3.3.2. Division of Revenue Act (DoRA): Energy Efficiency Demand Side Management (EEDSM) program

The Energy Efficiency Demand Side Management ( EEDSM) program is a grant fund disbursed to municipalities to implement energy efficient retrofits, which is managed by Department of Energy (DoE). The program currently only focuses on lighting interventions, where the City has been a participant in the EEDSM program since 2009-2012.

Projects implemented and savings realized:

Financial year	Funds allocated	Capex	Outcomes
2009/10	R4 million	Street lights	Luminaires retrofitted : 3154 Energy savings : 1 406 053 kWh/pa Carbon Savings : 1401 tCO 2 e
2010/11	R20 million	Street lights: R10 543 848 Traffic lights: R9 456 152	Street lights: Luminaires retrofitted: 7765 Energy savings: 1 669 216 kWh/pa Carbon Savings: 1663 tCO 2 e Traffic lights: Luminaires retrofitted: 20 214 Energy savings: 4 449 000 kWh/pa Carbon Savings: 4433 tCO 2 e
2011/12	R40 million	Street lights: R14 985 001 Traffic lights: R16 144 999 Building lights: R6 300 000 Opex projects M&V: R1 769 998 Capacity Building & interns: R400 000 Public awareness & promotion: R400 000	Street lights: Luminaires to be retrofitted: 13 468 Energy savings: 1 731 509 kWh/pa Carbon Savings: 1725 tCO 2 e Traffic lights: Luminaires to be retrofitted: 20 400 Energy savings: 4 690 980kWh/pa Carbon Savings: 4 675 tCO2e Building lights: Luminaires to be retrofitted: 5 963 Energy savings: 148 839 kWh/pa Carbon Savings: 148 tCO 2 e

Source: Presentation by CoCT on 21 June 2012

4. Visits to businesses

The Industrial Energy Efficiency Improvement Project (IEE) in South Africa assisted the committee in identifying the various businesses which can be visited.

The IEE project was established in 2010 in response to the growing need to improve the energy efficiency of South Africa. 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, embarked on a program to address the global drive for greater energy efficiency; the ultimate goal being to demonstrate the positive impact of energy management as a means of reducing carbon-dioxide emissions and to demonstrate the effectiveness and financial impact of in-plant energy management. The project is hosted by the National Cleaner Production Centre of South Africa (NCPC-SA) at the CSIR and will be integrated into the centre after it has completed its 4 year lifespan.

It has been demonstrated, time and time again, that energy-efficiency saves industrial firms money, increases the reliability of operations and has a positive effect on productivity and competitiveness. The Department of Trade and Industry (the dti), the Department of Energy (DoE), the Department of Environmental Affairs, and Business Unity South Africa (BUSA), in collaboration with the United Nations Industrial Development Organisation (UNIDO) and the Swiss State Secretariat for Economic Affairs, have initiated a project to improve the capacity of the South African industry to use available energy resources more efficiently and productively.

The project is housed by the National Cleaner Production Centre of South Africa (NCPC-SA) at its offices in Pretoria and Cape Town. Started in 2010, the goal of the Industrial Energy Efficiency (IEE) project is to contribute to South Africa’s industrial energy-efficiency, reduce carbon-dioxide emissions and demonstrate the effectiveness of in-plant energy management as a means of increasing profitability.

4.1. Nampak - Bellville

Nampak offers the most comprehensive product range, across multiple industries throughout Africa, manufacturing to the highest commercial and environmental standards in metal, glass, paper and plastic.

A positive customer experience is made possible by Nampak’s large geographic footprint , extensive value-added services , large infrastructure, significant capacity to deliver , one of the world's leading packaging research and development facility and a proven innovation process .

Nampak acknowledge the benefits of corporate driven strategic initiatives, systems and best practices to strengthen its leading market position.  Nampak highlighted that they believe in a culture that actively recruits, develops and retains talent and diversity. They value mutually beneficial long-term partnerships with both their suppliers and customers, built on a foundation of superior quality, innovation and service.  They continuously drive sustainable business excellence through profitable operations , sound asset management and satisfied stakeholders.

Nampak is committed to operating in an environmentally responsible way. In terms of their environmental policy, any impact on the environment is minimised by:

· considering the environment in all business decisions and actions

· promoting environmental awareness internally and externally

· continually improving environmental performance

· setting internal controls that recognise legislated standards and practices

· providing the necessary financial and human resources.

As a group, Nampak have adopted an environmental management system that is based on the ISO 14001 standard.

Nampak has a target of allocating up to 1% of profit-after-tax to corporate social investment. Key focus areas are education, health and welfare and the environment.

4.1.1. Findings

• Nampak produces around 60 000 ton of products, which is 20 percent more than an equivalent company.
• Energy costs are currently around R8 million a year.
• The Johannesburg and Durban factories mostly use natural gas, whereas the Cape Town factory uses liquefied petroleum gas (LPG), which is more expensive.
• Energy as a percentage of Nampak’s costs: in 2008 it was 8 percent and 2011 increased to 11 percent.
• In order to address the efficiency and to reduce the base load, Nampak embarked on the following initiatives:
• Establishing an Energy Water and Waste Committee – for the entire Nampak group
• Establishment of plant level Energy Committees
• Conducting Energy audits
• Projects undertaken to address energy efficiency included:
• Utilization of a boiler – where Nampak aims to save 43 000MWhr per annum, which will be used from September 2012.
• Steam system optimisation techniques
• Redesigning energy intensive procurement policies
• Removal of unnecessary and inefficient processing steps
• With the increases in electricity, Nampak is unable to recover the costs from the consumer.
• Nampak is the 4 ^th largest electricity user in the Western Cape. They used to be part of the “Power User Group”

4.2. Hose Manufacturing Company - Stikland

Hose manufacturers(Pty) Ltd, is part of an international group spanning Europe, USA, South America and Australia, which was established in the early 1960’s to manufacture fire hose for the Southern African continent.

Their strategy has always been to dedicate time and energy to research and development, which can be seen in their approach to rapidly changing and emerging markets where they will find themselves in, while being part of an overseas company which gives them access to and keeps them abreast of the latest technologies and developments.

Hose Manufacturers is part of the South African Bureau of Standards (SABS), where they have all their quality mark of approval for all hoses under SABS 1456-2 to 5. They have also passed standards required by the countries to which they export, including Ozone, Fuels, Oils & Chemicals, Foods and varying temperature tests. Hoses are manufactured according to ISO 9001:2000 Quality Management System.

Hose Manufacturer’s firehose market has developed over the years, where they now have a range of six types of firehoses used for various situations.

They have developed hoses for different working environments including rugged hoses for the mining sector and extra-tough hoses for the industrial sector. Irrigation hoses for the agricultural sector and submersible hoses for boreholes.

4.2.1. Findings

· The electrical tubing in transformers used to be big business for Hose Manufactures, as this was one of Eskom’s capex expenditures. However since Eskom is not building as many transformers as they use to, business has gone down.

· Hose Manufacturer’s applied in February 2012 for the installation of a transformer and in about 2 weeks the transformer was installed. The whole process took about 5-6 months at a cost of R600 000.

· Certain processes at Hose Manufacturing are very energy intensive, therefore the request to install a transformer, where all the different lines can be run simultaneously.

· The Department of Trade & Industry (thedti) with the Industrial Development Corporation (IDC) approved an amount of R250 000, to upgrade the facility to adhere to food and safety standards, in order to export. The funding received was from the Textile Improvement programme.

· Hose Manufacturers employ 40 full-time staff and 7 contractors.

· Weaving operations runs for 24 hours, whereas the extrusion and back-up runs normal working hours.

· Hose Manufacturer receives its PVC from Durban, polyurethane from Germany and polyfibres from Japan.

· Other initiatives to address energy efficiency include:

o Utilization of heating towers

o Lighting savings via Eskom subsidies

o Hose Manufacturing also ascertained that they were billed at the incorrect tariff by Eskom.

4.3. Aurecon Building - Century City

4.3.1. Introduction

Aurecon’s office building in Century City, Cape Town, which is nearing completion, is the first building in South Africa to be awarded a 5 Star Green Star SA – Office Design v1 rating by the Green Building Council of South Africa (GBCSA).

Developed by the Rabie Property Group at a cost of around R130million, the 7000 square metre office block is also the first building in Cape Town and only the fifth country-wide to achieve Green Star accreditation from the GBCSA. The four other buildings all achieved a 4 Star rating.

4.3.2. Background

Aurecon has 26 offices throughout South Africa, with its first office having opened in Tshwane in the early 1950s. These also include subsidiary companies such as Geostrada Engineering Materials Laboratory and the Asprita Microbiological Chemical Laboratory.

Aurecon’s involvement in projects in South Africa ranges from the provision of basic services in rural areas, to the design of multi-modal transportation projects in metropolitan areas. Aurecon ensures the involvement of local engineers through our local offices. The result is effective knowledge and technology sharing and networking. In this way the group ensures local knowledge is combined with Aurecon’s international expertise.

Projects undertaken by Aurecon included the award winning Department of International Relations and Cooperation Head office and Berg Water Project, the Gauteng Freeway Improvement Project, and the Peter Mokaba Sporting Complex.

4.3.3. Green measures undertaken

The new building will serve as the new regional offices for global engineering, management and specialist technical services group Aurecon who were responsible for the design of all the engineering services on the project and also the Green Star Rating application, with documentation assistance from PJ Carew Consulting.

Rabie director Colin Anderson, who was responsible for the development, says they were ecstatic with the achievement which was amazing given that they had to complete the building within a normal commercial budget. Anderson stated that their success is due to the commitment, hard work and effort put into the project by the entire team.

According to Aurecon it has become important to demonstrate that their own buildings and facilities have been built in a sustainable manner. The group is committed to ensuring that they design and execute sustainable and environmentally responsible infrastructure projects and they further ensured that their teams include suitably trained and registered professionals, including environmentalists and Green Star SA Accredited Professionals.

Aurecon stated that the building has been built to design, so there is no reason stopping Aurecon from also applying for an As Built Green Rating from the Green Building Council SA (GBCSA). Only one other building in the country has so far achieved a Green Star rating in two categories and this was the Nedbank building in Johannesburg which achieved a 4 Star Green Star SA – Office Design v1 and a 4 Star Green Star SA – As Built v 1.

Aurecon stated that in their quest for a Green-Star rating the professional team and building owners took into account the Green-Star SA criteria, namely Management, Indoor Environmental Quality, Energy, Water, Transport, Materials, Emissions, Land Use and Ecology and Innovation.

The four storey building, which has been constructed on a podium covering a naturally-ventilated semi-basement of covered parking, was designed by MaC Architects and its orientation ensures maximum indirect sunlight and reduced east and west direct sunlight.

Other measures undertaken include the following:

• A state-of-the-art air-conditioning system with a full economy cycle to provide free cooling when outside conditions are favourable
• A state-of-the-art Building Management System which monitors and controls and energy consumption
• Treated effluent irrigation and the harvesting of rain water for the flushing of toilets
• High-performance glazing on the windows to reduce glare and radiant heat
• Innovative measures include the implementation of a “Green Lease”, believed to be the first in the country, in terms of which both the landlord and the tenant have undertaken to run the building as it was designed in terms of Green building principles

4.4. St Gobain

4.4.1. Introduction

Saint-Gobain, the world leader in the habitat and construction markets, designs, manufactures and distributes building materials, providing innovative solutions to meet growing demand in emerging economies.

As one of the top 100 industrial groups in the world, Saint-Gobain continues to deploy its technological know-how, often in partnership with the most prestigious universities and laboratories.

For Saint-Gobain South Africa, sustainability is critical where it represents both a daily responsibility and a fantastic business opportunity. They are committed to integrating sustainable principles into the very nature of their business, from the development and manufacture of its products.

Saint-Gobain’s global business activities are grouped into four sectors:

1. Construction products: This includes insulation, gypsum, exterior products, piping and industrial mortars. The complementary nature of these products makes it possible for Saint-Gobain to meet the needs of every part of the construction industry, from the creation of new buildings to the renovation of old.

2. Innovative materials: This encompasses flat glass (manufacturing; transformation and distribution for the building sector; automotive glazing and specialties), as well as high-performance materials such as ceramics, plastics, abrasives and textile solutions, applied in the housing, energy and environmental fields.

3. Building distribution: With more than 4 000 outlets, Saint-Gobain is the leading distributor of construction materials in Europe, and excels in the building standards training that we provide to our tradesmen.

4. Packaging: As the world’s second-ranking producer of glass containers, they manufacture bottles and jars for the food and beverage industry.

4.4.2. Background

In South Africa, Saint-Gobain represents two of the four sectors. The construction products brands operating locally include Gyproc, Isover, PAM and Weber. These provide system solutions incorporating plasterboard and gypsum plasters, glasswool and mineral wool for thermal and acoustic insulation, a variety of foam insulation products, ductile iron and cast iron products, wall, floor and pool finishes, and tile adhesives and grouts.

The innovative materials sector embodies Saint-Gobain’s innovation orientated culture. In South Africa it includes the Norton brand.

Saint-Gobain is a founding member of the Green Building Council of South Africa (GBCSA), an independent, non-profit, membership-based organisation that was formed in 2007 by leaders from all sectors of the commercial property industry. GBCSA is a full member of the World Green Building Council, and the official certification body of buildings under the Green Star SA Environmental Rating System.

Each of Saint-Gobain’s activities has silver status membership. The company actively supports the GBCSA in its goal of ensuring that all buildings are built and operated in environmentally sustainable ways, so that all South Africans may work and live in healthy, effective and productive environments.

4.4.3. Targeted energy use

Saint-Gobain’s operations in South Africa collectively aim to reduce its total energy usage by 6% by end 2012, measured from 2010. To this end world-class manufacturing principles have already been implemented in four of the five local manufacturing sites that have the highest total energy usage.

Saint-Gobain is compelled to purchase electricity from the country’s parastatal power company, Eskom. This electricity has an inherently high carbon footprint of 968g carbon per kWh of electricity generated. We therefore ensure that 52% of our operations’ energy consumption is in the form of natural gas, which has a far lower carbon footprint (one third of that of electricity) Another 30% of our energy usage is in the form of primary fuels, such as oils and coal, as well as a small but growing percentage of renewable power, such as solar PV and thermal Using electricity from the national grid is always our last resort.

The results speak for themselves: in 2011, the energy inflation in South Africa was 30%, while at Saint-Gobain they kept the increase in energy spend to 17% unlike most hot gas manufacturing plants that use coalfired and heavy oil-fired systems, Saint-Gobain in South Africa uses 96% natural gas and light oils. They further continue to investigate the use of alternative and renewable energy sources in order to protect the environment and reduce its reliance on electricity.

5. Study tour to PetroSA Synthetic Fuels Innovation Centre at the University of the Western Cape (UWC)

5.1. Introduction

PetroSA and the University of the Western Cape (UWC) signed an agreement on 27 January 2010 in which PetroSA has committed R36 million for a five year initial project period 2010 – 2015 at the South African Institute of Advanced Materials Chemistry (SAIAMC) to further develop COD (conversion of olefins to distillates) process technology.

The project is focused on improving the efficiency of the COD process and the possibility of using alternative feed stocks such as alcohols and naphthas. Since then the PetroSA Synthetic Fuels Innovation Centre (PSFIC) has been established and a COD pilot plant has been relocated from Mossel Bay to a custom built laboratory at UWC.

The vision of the centre is to establish the PSFIC as leading research centre for the creation of marketable technologies for synthetic fuels.

PetroSA operates one of the world’s largest Gas-to-liquid (GTL) complexes at Mossel Bay, South Africa. With 15 years of operational experience, the GTL plant and processes are well proven, producing fuels with qualities unrivalled by those produced by conventional oil refiners. The COD technology itself, as part the bigger GTL process, originated on a commercial scale at the same time in an effort to allow PetroSA operational flexibility in changing diesel versus gasoline yields as market conditions change. The COD technology is thus strongly supported by a wealth of operational know-how and experience.

5.2. Objectives of the Centre

• Enhance the IP position of PetroSA by the further development of COD Technology
• Develop human capital for the oil and gas industry of SA.
• Contribute to the scholarly publications output of the UWC
• Recommend a way forward for the for the development of improved marketable COD technologies.

5.3. Current research projects and progress

The above objectives are being attained via three major research directions which are alternative feed stocks, catalyst development and process optimization to improve product quality.

Already promising research results have led to filing of a provisional patent application and the presentation of some other aspects of the research progress local scientific conferences.

5.4. PetroSA value proposition

In exploitation of these opportunities and through use of its patented COD technology, PetroSA is able to increase product value by:

• Increasing overall diesel to petrol yield
• Converting mixed olefins normally targeted for lower value gasoline products to higher value distillate products
• Lowering aromatic content of products
• Improving cold flow and emission properties of distillate products.

5.5. Research and Development

While PetroSA has commercially operated a COD plant in Mossel Bay, it has lately invigorated its development drive on COD technology. Proof in case is the full-time operation of COD pilot plant in the PetroSA laboratories. This pilot plant is supplemented with laboratory scale reactors allowing full-time optimisation efforts of the COD processes and catalysts. COD clients therefore have access to world-class R&D facilities.

Findings:

· The rationale for the establishment of a COD research facility at the SAIAMC at UWC is that there already exists expertise in catalysis research and gas conversion technology at the SAIAMC, although not specifically in COD. Thus the COD facility, which is called the PetroSA Synthetic Fuels Innovation Centre (PSFIC), includes in its staff compliment PetroSA COD experts who will transfer their knowledge and skills to both staff and students at the SAIAMC.

• The COD pilot plant is located in a custom built laboratory which also houses a control room, analytical laboratory, storage areas for gases and fuels, offices and the PSFIC Board room.
• Additional laboratory spaces has also been provided in the adjacent SAIAMC Innovation Centre
• There are currently 3 graduates in training, 2 masters students and 1 PhD student at the centre.
• In addition there are 8 pilot plant operators who are students from the cape Peninsula University of Technology (CPUT) completing the experiential learning component of their diplomas. A further 5 students are working as research assistants.
• The PetroSA COD technology converts light olefins predominantly into sought after low aromatic content (<10%) distillate through utilising its patented COD technology.
• The process uses catalytic conversion (oligomerisation and isomerisation) by means of a seolite type catalyst.
• The unit is designed to operate between two extreme operating modes, which are termed the Gasoline and the Distillite Modes, allowing a range of operating conditions where the yields can be manipulated to a considerable scale.
• The COD process produces distillates, gasoline and propane. The distillates can be hydro-treated and fractionated to produce low aromatic diesel and kerosene. The gasoline can typically form part of the gasoline blend pool. Propane will end up in the LPG pool
• Application of the COD diesel is specifically suited to use in niche transportation fuel markets such as very cold climates and underground environments.
• When deep hydro-treated to reduce aromatics content to very low levels, the aromatic diesel and kerosene are excellent for the following applications, inter alia: indoor fuels, lubricants, drilling fluids, ecodiesel, copper extraction fluids etc
• The diesel from this process is of exceptional quality and already exceeds future European low sulphur specifications.
• The COD process offers flexibility in terms of changing distillate to gasoline yields.
• The Centre is also in a position to test alternative feedstocks in their pilot plant and laboratory facilities.

6. Conclusion(s)

Strong incentives exist for energy efficiency improvement in the South African industry, namely increased profit, reduction of GHG emissions, and the need to maintain economic competitiveness. Several case study assessments of industry leaders in South Africa suggest that South African industry has an even higher potential for energy cost saving. Organisation structure, financial controls and culture/attitude can be barriers to the implementation of energy projects. Further investigation into the extent of energy management in South African industry may help in estimating the impact of energy efficiency programs on energy consumption and energy intensity.

The establishment of a fuels innovation centre at pilot-plant scale represents a new venture as far as technology development partnerships between industry and academia in South Africa are concerned. The Committee wishes to congratulate the PetroSA for its vision in funding this important enterprise, as well as the University of the Western Cape in housing on its campus a pilot plant facility that is dedicated to technological innovation in the national interest. The Committee is optimistic that this strategic partnership, between PetroSA and the University of the Western Cape will grow from strength to strength.

7. Recommendations

The Minister of Energy:

· Promotes Kuyasa Clean Development Mechanism Pilot Project and facilitates its replication in the rest of the country;

· In partnership with the relevant Ministers, ensure that policy development for all new public buildings to be environmentally sensitive with energy efficient designing;

· Ensure promotion of Industrial Energy Efficiency Improvement Project and increased resourcing of the National Cleaner Production Centre

· Promotes gas as an alternative source for industrial use and reviews policy to facilitate such.