A Presentation to the:

Portfolio Committeeon Minerals and Energy

(30 August 2001)Given by:

Barry BredenkampBonesa Electricity (Pty) Ltd

Efficient Lighting Initiative(South Africa)

PRESENTATION OUTLINE

Bonesa – the company;Background information;ELI goals;Benefits;Practical example;The way forward;Conclusions.

BONESA – THE COMPANY

Bonesa is the local implementing agency established to implement the SA-component of an ELI-programme in 7 developing countries, worldwide. It is funded by Eskom (R48.8 million) and GEF through the IFC (US$2.5 million) and is made up of three local partners, (TSI (EE), Umongi-Karebo and Africon Engineering).

Background1997 - Global Environment Facility (GEF)

granted US$225 000 to Eskom to conduct a feasibility study on the ELI;

Eskom matched the funding;The ELI recommendations were based

primarily on the Eskom ISEP:– peak demand reduction targets– ‘window of opportunity’ ito emerging market -

build in efficiency;

Background (cont’d)Eskom support based on ISEP objectives

- peak demand reduction (820MW by 2019), & associated environmental benefits;

Estimated net present value saving in avoided utility costs of approximately R990 million over 20 years;

Medium term - funding for similar projects a strong possibility - allow for flexibility and permanence in expanding the role of the implementation structure (LIA).

Feasibility Study Completed

Draft ELI Business Plan completed;Identified barriers to market entry;Examined consumer behaviour;Determined strategies for programme

implementation:– Organisational: structures required for

implementation;– Financial: finance needed to implement;– Economic: viability of the programme.

Agreements Reached

GEF committed grant funding of US$2.5 million to the LIA (Bonesa) to implement the ELI;

Eskom Management Board approved three-year funding for ELI,to meet ISEP targets;

Eskom Enterprises (Pty) Ltd agreed to the establishment of the LIA;

Implementation of programme through a BEE JVC - Bonesa.

ELI Goals

Increased penetration of energy efficient lighting technologies to meet ISEP target of peak demand reduction;

Improve customer service through reduced electricity bills;

Capacity building and skills transfer; Conserve the environment through reduced greenhouse

gas emissions and reduced consumption of water at power stations;

Support the African Renaissance, through job creation and poverty alleviation.

Benefits of ELI:

Benefits to Eskom - MajorMeet the ISEP target of 820 MW peak

demand reduction by 2019;Net benefits through avoided capital and

operating supply costs (G, T & D);Affordable electricity for all sectors of society;Education and capacity building;Positive contribution to socio-economic factors

affecting the country;Increased access to energy.

Benefits of ELI:

820 MW CFL'S AND SYSTEM CAPACITY AS A RESULT OF ELI

IEP 7A

0

100

200

300

400

500

600

700

800

900

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

YEAR

No. of C

FL'S

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

MW

Demand (MW)

CUM CFL'S

Benefits of ELI:

Benefits to Eskom -

SecondaryMedium term opportunities -

aggregate solutions and replicate elsewhere;

Expected reduction in non - payment;“Take - back” effect;Lower risk of under-utilised assets;Improved customer focus.

Benefits of ELI:

Benefits to Customer

R15 R30 R45

homepower @ 1,6 hrs/day 1,6 3,2 4,7

homelight 1 @ 3 hrs/day 0,6 1,2 1,8

bulb priceSIMPLE PAY-BACK (Yrs)

tariffs and average hrs/day

•Affordable and increased access to energy;•Contribution to poverty alleviation.

Benefits of ELI:

Benefits to Environment

megatons coal 11.57megalitres water 28973kilotons particulates 8.65megatons CO2 21.62kilotons SO2 178.15kilotons NOx 88.74

These benefits are vitally important, in terms ofSouth Africa hosting the World Earth Summit in 2002.

Benefits of ELI:

Benefits to Munics & Developers

Benefits to Municipalities:• Avoided network capital, operating and maintenance

savings;• Avoided bulk purchase cost.

Benefits to Developers:• Avoided infrastructure costs.

Benefits of ELI:

Benefits to South Africa South African society to benefit from the sum

of the above benefits; Less capital will be used in building additional

networks as CFLs will penetrate the market; Black economic empowerment and SMME-

opportunities will increase; Socio-economic benefits relating to poverty

alleviation, and access to affordable energy.

All Africa Games Village – A Practical Example

The Village: Homes 1 800 units each ±30m² Lights/home 4 lamps 7200 Luminaires Burning h/day 3 hours 1000h/year Old lamp 60 watt Original Design New ELI lamp 15 watt Energy Efficient Lamp

Savings: Lighting load ±45 watts Annual saving 345 780 kWh/year Demand reduction 324 kW Water saved 459 kl/year CO2 saved 339 097 kg/year SO2 saved 2 762 kg/year NOx saved 1 380 kg/year Particles 239 kg/year Coal not used 177 390 kg/year Savings to residents R 99 338 per year (Electricity cost 28 cents/kWh)

Luminaire Cost STD Lamp (OLD) R15 ELI R48 ELI Topping up R310 000 incl builders Fee and VAT This constitutes an example of how the EBSST could possibly be implemented through efficient lighting.

Targets – The Way ForwardTarget for 2001: 266 000 additional CFLs in SA market, (500

000 sold ‘Y-T-D’);Introduction of “Efficient Lighting” into curricula of Schools and

Tertiary Institutions;Contribute towards EBSST – poverty alleviation;Help identify and retrofit needy institutions, eg. supporting

healthcare and the elderly;Assist in establishing new retail outlets – job creation.

ConclusionsThe energy sector stands to benefit greatly from ELI -

from a strategic ISEP as well as from a profitable business perspective;

South Africa will benefit in terms of the following criteria:– Innovation;– Effectiveness;– Poverty impact;– Sustainability;– Replicability.

Future opportunities could be opened up through this initiative - similar programmes in SA or by replicating the ELI in other developing countries.

Conclusions (cont’d)

Positive benefits for ALL!– Win-win situation;– Utility does not loose;– Economy gains;– Innovation encouraged;– Customer benefits.

Thank you

Discussions and/or

Questions?