It pays to save, save energy, get rewarded. Performance Contracting Brochure

Transcription

1 Performance Contracting Brochure It pays to save, save energy, get rewarded

2 Table of Contents About the programme...4 Key features...5 Key steps Proposal and evaluation Contracting Measurement and Verifi cation Project implementation Payment...9 Other Eskom energy effi ciency Standard product programme Standard offer programme ESCo funding process...12 Eskom advisory services...13

3 About the programme In this age of globalisation where business fl ows are dictated by minimising operating costs and maximising profi ts competition is fi erce and success is determined by the ability to adjust, change, optimise and switch to new, and effi cient solutions and practices in a quest to improve net earnings. Eskom, as the premier supplier of electricity in South Africa is strategically committed to save energy and empower its customers to make the switch to energy-effi cient technologies as a measure to improve profi tability. This commitment has seen Eskom launching the Performance Contracting Rebate Programme in the service of Project Developers and large energy users, specifi cally in the commercial and industrial sectors of the South African economy. Performance Contracting pays for verified bulk savings achieved over a period of three years, on a quarterly basis, as a result of the switch to energy-effi cient solutions at multiple sites across many technologies. Payment is performance-based up to an agreed maximum, equivalent to the Rand value of the total three-year forecast energy savings plus 10%. Eskom will primarily contract for energy savings during high-rate daytime from 6am to 10pm weekdays. Savings during other periods (10pm to 6am on weekdays as well as the weekend periods) will also be compensated, but at a lower rate, in order to incentivise off-peak savings as well. Payment rates are fi xed for the duration of the three-year contract as follows: PERIOD BASE RATE REDUCED RATE High-rate period 55c/kWh excl. VAT 42c/kWh excl. VAT Low-rate period 10c/kWh excl. VAT 0/kWh PAGE 3 4 PAGE

4 Key features: The programme was developed to signifi cantly improve sustainability and reduce: - Administrative requirements regarding project approvals - Contractual complexity - Project lead times. Eskom does not provide up-front fi nancing: - Project Developers are responsible for fi nancing all capital costs incurred to achieve the bulk energy savings. A copy of the signed contract can be used as a bankable instrument in order to receive third party fi nancing. Projects must propose minimum energy savings of 30GWh during the high-rate period over three years. Only Eskom approved energy-efficient technologies in line with the NERSA guidelines will be considered. A maximum payment value will be agreed upon in a contract between Eskom and respective successful respondents, namely a contractor or the customer itself, which is called a Project Developer. Payments will only be made based on energy savings verifi ed by an independent, accredited Measurement and Verifi cation (M&V) expert. Components of a project too costly or complex to measure and verify relative to the value of the energy savings, will not be included in the contracted savings. Any estimated savings outside high-rate daytime, will be excluded from the minimum size for evaluation purposes. In the event that maximum payment value has been made and verifi ed savings exceed the forecast energy savings, Eskom will in its complete and sole discretion pay for excess savings. PAGE 5 6 PAGE

5 Key steps 1. Proposal and evaluation Large energy users or Project Developers on behalf of large energy users request proposals, go out into the market allowing any party to submit a proposal to Eskom. M&V plans and metering solutions should be submitted as part of the proposal. Eskom evaluates and approves the proposal based on fi xed evaluation criteria, taking into consideration: - Delivery time frames - Savings size - M&V complexity - Requirements in respect of supplier development and localisation* - Strategy for safe disposal of the replaced technologies (in line with Eskom s current disposal mechanisms and any other legal or environmental specifi cations). *Eskom s Supplier Development and Localisation requirements will form part of the evaluation and selection criteria. These criteria incorporate government s requirements of Broad-Based Black Economic Empowerment (B-BBEE), Accelerated and Shared Growth Initiative South Africa (ASGI-SA), Competitive Supplier Development Programme (CSDP) and the New Growth Path (NGP) Framework. 2. Contracting A performance contract is signed between Eskom and the successful large energy user or Project Developer for a period of three years (subject to the provision of proof of financing within 60 days after signing). 3. Measurement and Verification (M&V) plan An independent, accredited M&V expert is appointed by Eskom. Eskom, the large energy user or Project Developer, and the M&V expert, agree on and sign-off the M&V plan. A savings baseline is established by the M&V expert in accordance with the stipulations of the plan and agreed to by Eskom and the large energy user or Project Developer. Metering equipment is procured, installed and maintained in accordance with the plan and at own cost. Eskom does not purchase or own any measurement equipment, but only pays for the services provided by the M&V team. 4. Project implementation Eskom provides a written approval to the large energy user or Project Developer to proceed with the installation of energy-effi cient technologies, and the safe removal and disposal of the replaced technologies. The large energy user or Project Developer must inform Eskom and the M&V expert about the completion of the project. PAGE 7 8 PAGE

6 5. Payment The M&V expert issues Performance Assessment (PA) Certifi cates in accordance with the M&V Plan. The Project Developer is in a position to submit an invoice to Eskom for savings realised in line with the value stipulated on the PA Certifi cate. Eskom starts paying the large energy user or Project Developer upon receipt of the invoices and validation thereof, and will continue to pay for verifi ed savings over the period of the contract subject to payment limitations. Payments are at fixed intervals based on measured and verifi ed savings. Timeous energy savings delivery is incentivised through Eskom s rates, payment levels could be reduced in case of late delivery. Over-delivery could be compensated up to a total of 10% of the maximum contracted energy-saving. Note: Eskom will periodically issue large energy savings blocks (e.g. 1,000GWh) through a tendering process. PAGE 9 10 PAGE

7 Other Eskom energy efficiency funding programmes include: Standard product programme Offers funding for the implementation of small and medium-sized projects that enable the switch from the most commonly used energy hungry technologies to off-the-shelf energy-effi cient alternatives, such as Light Emitting Diode (LED) lighting, energy and water saving shower heads, and heat pumps. A comprehensive list of participating technologies are published on the website. Key features: Funding capped at R1,875 million per project Electricity savings to be achieved from 1kW to 250kW Annual electricity savings to be achieved greater than 2MWh Project approval could be as quick as two weeks after submission of a detailed proposal. Standard offer programme Offers funding for the implementation of large projects, with potential electricity savings from 50kW to 5MW, that enable the switch to energy-efficient technologies and processes, such as building management systems, hot water systems, industrial and commercial solar water heating systems, process optimisation systems, energy-effi cient lighting technologies and small scale demand side renewable technologies (pilot programme). Key features: Electricity savings to be achieved from 50kW to 5MW Programme focus is on electricity usage during the 16 daytime hours between 6am and 10pm weekdays Contract duration three years Total programme amount capped at R250 million If successful, funding will be via fi xed amounts per kwh over a period of three years Project approval could be achieved within four to six months. ESCo funding process Offers funding for the implementation of large projects, with potential electricity savings of 500kW or more, that enable the switch to energy-effi cient technologies and processes. The programme is aimed specifi cally at Eskom accredited Project Developers who specialise in specifi c target markets, identify energy effi ciency opportunities for achieving reductions in electricity consumption, and scope and execute projects. Project Developers utilise their knowledge of demand management technologies to determine the best and most suitable way of obtaining electricity savings at a business, as basis for establishing a four-way partnership via legal contracts between Eskom, the customer, the Project Developer, and an independent, Eskom accredited Measurement and Verifi cation expert. Due to the legal complexities, the process is characterised by longer lead times. PAGE PAGE

8 Eskom advisory services Country wide support Eskom s advisory teams are located conveniently across the country, to provide industrial, commercial, agricultural and residential customers, large and small, with close and easy access to energy advisory services. To assist customers to locate their closest Energy Advisor, refer to the table below. Energy Advisors can assist with techniques and technologies that are available for the purpose of saving energy. To log a call, customers can also call the Eskom Customer Contact Centre on or visit Southern region Eastern region North West region Eastern Cape region (including Port Elizabeth and East London including Butterworth, East London, King Williams Town, Adelaide, Albany, Alexandria, Alice, Grahamstown, Humansdorp, Joubertina, Kirkwood, Port Elizabeth, Aliwal North, Cradock, Graaff-Reinet, Lady Frere, Queenstown, Elliot, Lusikisiki, Mthatha North, Mthatha South KwaZulu-Natal Free State Province, Ekurhuleni (including East Rand, Gauteng) Frances Baard District Municipal area (including Kimberley), Pixley ka Seme District Municipal area (including De Aar, Colesberg), Siyanda District Municipal area (including Postmasburg) in the Northern Cape. Rene de Kock Clive Nicosia Barney Kakora rene.dekock@eskom.co.za clive.nicosia@eskom.co.za kakorab@eskom.co.za Eskom regional office Areas covered Contact person address Western Cape region Entire Western and Northern Cape (excluded are Frances Baard District Municipal area including Kimberley), Pixley ka Seme District Municipal area (including De Aar, Colesberg), Siyanda District Municipal area (including Postmasburg) in the Northern Cape. Wayne Fortuin wayne.fortuin@eskom.co.za Central region Northern region Johannesburg, Midrand, Sandton, Randburg, Roodepoort, Krugersdorp, Randfontein, Carletonville, Westonaria, Fochville, Vanderbijlpark, Vereeniging, Potchefstroom, Klersdorp, Mmabatho, Vryburg. Pretoria, Centurion, Rustenburg, Mpumalanga and Limpopo. Arend Louw Victor Martins arend.louw@eskom.co.za victor.martins@eskom.co.za PAGE PAGE

9 Call the Eskom Customer Contact Centre on for assistance by an Energy Advisor on any of Eskom s energy efficiency funding programmes. Visit for detailed information. Issued by Eskom Integrated Demand Management December 2012 Eskom Holdings SOC Limited Reg No 2002/015527/06