Residential Heat Pump

Rebate Programme
Information session
18 February 2011

Agenda
Residential heat pump rebate programme
Item

Who

Technology
Opening
and welcome

Andrew Etzinger

Conditions of participation in programme Supplier/Customer

Evacuation procedure
Venue representative
Process
South
Africas Electricity Supply-Demand
Situation
Concluding Remarks

Andrew Etzinger

Heat Pump Rebate programme

Questions

Nosipho Maphumulo

- Structure of the programme

Michael Ndlovu

- Envisaged process

Fikile Segole

Way forward and closure

Nosipho Maphumulo

SA electricity supply-demand balance will remain

tight until 2015 with 2011/2012 the crucial period
Annual energy gap for 2010 to 2017 under base case outlook, TWh shortfall

9 TWh is equivalent
to ~1000 MW base
load capacity

2010

11

12

13

14

15

Assumptions
Eskom estimate of the IRP2010 moderate load forecast (~250 TWh in 2010);
Initial expectation of 6 TWh gap in 2010 did not realise due to lower than expected demand;
New build (e.g., Medupi, Kusile, Ingula) & RTS at current dates; REFIT as per IRP1 (1 GW by FY2018);
DSM as per base plan (3.9 GW by FY2018); Planned maintenance allocation increased to ~10%

16

2017

Electricity System requirements

Mainly energy savings

required during
Summer

Summer Profile
(Jan April)
Energy savings
required during
daylight hours
between 06h00 and
20h00 on weekdays

Winter Profile
(May Aug)

Peak savings a
specific requirement
during winter

The total system load factor is high (76%) such a flat profile will require
energy rather than load reduction

A number of levers have been identified and

explored to help close the gap
Supply Side Levers to help close gap1

Demand Side Levers to help close gap1

Eskom Gx performance: improve forced

Internal Energy Efficiency:

outage rate by 1% by 2012 and 2% in the next

5 years.

Increased Gx capacity in existing fleet:

There is an opportunity to get about 100MW as
existing plant is refurbished by 2012.
Own-Gen2: Partner with industry to leverage
100MW by 2011 identified by industry
(1000MW by 2015 in own-generation options).
The key issue is the grid access framework.

Municipality Gx: unlock existing capacity by

assistance & short-term PPA's. Target about
200MW over the next 3 to 5 years.

Renewables:

The renewable feed-in tariff

(REFIT) programme is targeting 1025MW by
2013. Government will lead the procurement
process and Eskom will be the buyer.

Eskom has a 1
billion kWh programme. A significant portion of
this saving is in improving the efficiency of
converting coal to electricity.

Additional Eskom DSM: Deliver on 4.1 TWh

by FY 2012/13 by leveraging the existing
funding allocation through MYPD2.

Government SWH: Implement the 1 million

Government Solar Water Heating project.

Demand response: Eskom has secured

2000MW of interruptible load and nearly
500MW of incentive based demand response
from large industrial customers. Eskom is
targeting a further 500MW by winter 2011 from
its smaller industrial and commercial customers.
There is a potential to ramp this up to about
2500MW in the entire market (including the
residential sector).

Contribution to closing the gap has been identified for each lever in constrained (i.e. funding
and resources have been secured but further effort is required) and highly constrained (i.e.
specific barriers yet to be resolved) environments
1 Excluding involuntary curtailment of demand or running peaking plant beyond agreed level for MYPD2 tariff
2 Own-Generation includes renewables, co-generation and conventional generation

Even if we deliver against all opportunities, there will

still be significant risk of a gap in the early years
TWh
Highly constrained

Energy saving opportunities identified1

Decisions required

Even
pulling all
levers

21

Constrained2

27

24

insufficient to close
full gap over whole
period

16
6

10

It is critical that
significant work is
done to unlock
constraints and
deliver maximum
value on levers
identified

Forecast energy gap if full potential is captured

a gap
still exists
in some
years

Levers alone are

-7

Gap

Further measures

-14
-19
-25
2011

12

13

14

15

16

-28

are still required to

bridge the gap in
2011/2012

2017

1 Excludes SADC options as total potential is unconfirmed

2 Examples of constraints: Funding, Policy and legislation, Industry manufacturing, installation and service capacity

A safety net is needed to close the remaining gap

and protect SA in case levers do not deliver
Measures to close the remaining gap

Closing
the energy
gap

Energy
Conservation
Scheme (ECS)

Legislated energy reduction for the 500 largest

Additional
Demand
Response (DR)

By deploying smart metering

Providing
capacity to
meet peak
demand
Increased use
of OCGT

industrial consumers (Eskom and Munics)

A 5% energy reduction will yield a 6 TWh energy
saving.
Encourages movement towards a more energy
efficient economy.
Some concern around impact on economic growth
hence the need to provide time to adapt.
technology options
for demand response in the smaller customer
segments, customers can participate in responding
to energy constraints.
These technologies will also provide customers a
tool to better manage their demand and reduce
costs.

Increased operation of OCGTs during critical years

Increasing the OCGT load factor by 5 percent
provides ~1 TWh additional energy p.a.
Creates significant additional cost for Eskom of
~R2bn per TWh additional energy.

In the absence of this

system safety net, a
reduction in planned
critical maintenance is
the final alternative to
national loadshedding
A 1% reduction in
annual planned
outages equates to
~2.3 TWh additional
energy available to the
system
Further postponing
critical maintenance
creates serious risk to
safety of our people
and integrity of our
assets and is not the
preferred option.
7

Summary
The current focus is on the energy gap into the foreseeable future
A portfolio of supply and demand solutions are being implemented to address the
projected energy gap
Acceleration of Demand Side Management is a key lever in strengthening security of
supply
Internally Eskom is optimising current DSM processes to make it more attractive to
the market
Eskom would like to better leverage the external market to implement DSM
Eskom will make available additional funding to accelerate the DSM programme
Residential Heat Pumps Rebate Scheme provides a unique opportunity for project
developers to accelerate their businesses with efficient hot water solutions
Eskom would like to partner with yourselves to ensure that we address this challenge
We want to obtain your inputs, issues and concerns in the implementation and
refinement of the residential HP rebate scheme
The objective of today is to listen to you in order for us to develop a solution that will
address the immediate problem
We see this as a springboard to a healthy, long term relationship to support
sustainable energy efficiency in South Africa.
8

Agenda
Residential heat pump rebate programme
Item

Who

Technology
Opening
and welcome

Andrew Etzinger

Conditions of participation in programme Supplier/Customer

Evacuation procedure
Venue representative
Process
South
Africas Electricity Supply-Demand
Situation
Concluding Remarks

Andrew Etzinger

Heat Pump Rebate programme

Questions

Nosipho Maphumulo

- Structure of the programme

Michael Ndlovu

- Envisaged process

Fikile Segole

Way forward and closure

Nosipho Maphumulo

Heat Pump Rebate Programme - overview

Purpose of the domestic heat pump rebate programme

The current heat pump programme only caters for the industrial and
commercial sectors utilising the NERSA budget allowance and ESCO
model process. It does not cover the residential market.
The purpose of the residential heat pump rebate programme is to provide
financial assistance to the residential market through a rebate, enabling
individual customers to purchase energy efficient heat pumps at a
rebated cost.

10

Residential heat pump rebate programme

Eskom commissions a supplier to offer his product (heat pump) to the
customer at a discount (rebate).
The supplier claims the discount/rebate from Eskom.
This rebate is mutually beneficial to all parties involved
the supplier sales are increased
the customer electricity bill reduces,
Eskom achieves its business objectives

11

Residential heat pump rebate programme

What does it entail?
The rebate programme is for retrofit purposes where there is an existing
working electrical conventional geyser.
The customer must buy the product from a registered supplier
Supplier must perform a complete installation

What is the target Market?

Middle to high income
Individual home owners, game lodges, bed and breakfast, metros buying
in bulk, municipalities and corporate organisations

What is the programme duration?

Up to March 2013 as aligned to MYPD2
12

Programme, budgets and targets

The residential heat pump rebate programme budget is R 250 mil for
saving 54MW

This is part of the total heat pump programme allowance of R 679 mil,
128 MW over 3 years

Min of 65 585 units (air to water) to be installed over 3 years

13

Agenda
Residential heat pump rebate programme
Item

Who

Technology
Opening
and welcome

Andrew Etzinger

Conditions of participation in programme Supplier/Customer

Evacuation procedure
Venue Representative
Process
South
Africas Electricity Supply-Demand
Situation
Concluding Remarks

Andrew Etzinger

Heat Pump Rebate programme

Questions

Nosipho Maphumulo

- Structure of the programme

Michael Ndlovu

- Envisaged process

Fikile Segole

Way forward and closure

Nosipho Maphumulo

14

Residential heat pump rebate structure

Heat Pump tank Ranges

100 L

100 L

200L

500L

300L
400L

500L

Category 1
Rebate = R 3,668
Category 2
Rebate = R 4,320

The rebate prices to remain unchanged until 31 March 2013

15

Supplier requirements
To meet all the test requirements from SABS on specifications and standards
The performance testing of the systems will include among others the initial
verification of product design, inspection and verification of compliance of installed
systems to applicable standards.

To meet with all Eskom s requirements

Suppliers must comply with the existing Eskom ESCo registration process
requirements.
The suppliers must produce a letter of good standing from their parent
company to trade and maintain the products they sell.
The integrated system warranty should be at least 1 year, the compressor
should be 5 years and the circulation pump should have a 3 year warranty.
Agree to hand/submit invoices for rebate claims
The supplier must meet the requirements first, then register on Eskom data
base as a vendor and will be linked to Eskom for payment purposes.
16

Technology

Supplier

SARS
receipt
not
LOA

Letter of
Authority (LOA)
(NRCS)
Safety - SABS
or Test Africa

Eskom Quality
Department
Eskom IDM
Acceptance

1St April
Implementation

SABS Tests/
Verify
Efficiencies
17

Conditions of the rebate programme

Customer requirements and conditions:
1. Customers who are eligible for a rebate are those who have existing
electrical water heating elements, the programme is for retrofitting only.
2. No rebate will be given to customers who have already installed the heat
pump prior to its formal announcement.
3. All the requirements and attachments as stipulated in the application must be
completed in full in order to qualify for rebate payment. It is the customer
responsibility to ensure the supplier as well as the system is accredited on
the heat programme at the time of installation.
4. The system installed must be registered and accredited as part of the Eskom
heat pump programme.
5. Customer will have to fill the rebate forms at the point of sale with his/her
details, i.e. ID number, house address, tank size, details of the unit bought,
date of installation, and the installer name.
18

Conditions of the rebate programme cont

6. The system must be supplied and installed by an accredited supplier/installer
of the heat pump programme.
7. The customer is responsible for ensuring that the system has been installed in
accordance with his/her requirements.
8. Should the customer choose to use a heat pump system that does not meet
the requirements of the heat pump programme, Eskom and its agents will not
be held responsible in any way for the quality of the system or the installation.

19

Agenda
Residential heat pump rebate programme
Item

Who

Technology
Opening
and welcome

Andrew Etzinger

Conditions of participation in programme Supplier/Customer

Evacuation procedure
Venue representative
Process
South
Africas Electricity Supply-Demand
Situation
Concluding Remarks

Andrew Etzinger

Heat Pump Rebate programme

Questions

Nosipho Maphumulo

- Structure of the programme

Michael Ndlovu

- Envisaged process

Fikile Segole

Way forward and closure

Nosipho Maphumulo

20

High level process

Register
Supplier

Rebate
Claim

Verify
Installation

Process
Payment

M&V

Exceptions

Internal Eskom Process - Any requirements from external stakeholders will be

communicated as required
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Process mapping key

Shape

Process description

Shape

Role description

Activity

HP Admin*

Start / End of Process

Heat Pump Suppliers/

Installer
M&V

Role
Technical Audit
Decision
Customer
Document / Deliverable

Input/Output

* HP Admin is the entity that will administer this

programme

22

Supplier registration

HP
Supplier/
Installer

Intent on
joining HP
Rebate
Programme

Initiate
Registration with
Eskom as Vendor

Answer Quality
Review
Questions

Registered
as Eskom
Vendor

Review Successful

1
HP Admin

Provide Quality
Review
Questions

3
Quality Review

Quality Dept
1.Quality
Review
questionnaire

Quality
Report

Eskom Vendor
Registration
Process

Registration
Admin

1.Vendor
Registration
Documents

23

Rebate claim

2
Purchase
HP System

Customer

Sign Installation
& Declaration
Form

3
Install
HP System

HP
Supplier/
Installer

1.Claim Form
2.Customer
Pack

Complete
missing
information
Submit all
documentation to
Eskom

(Batch Submission)

Advertise
HP Systems

HP Admin

HP System
Installed

5
1.
2.
3.

Claim Form (signed)

Copy Invoice
Bulk Claim Form

Registered
as Eskom
Vendor

Claim docs
verified

Verified

6
Verify
Claim

Not verified

24

Payment process
5
Make Payment

Finance

Receive
notification of
claim status

HP
Supplier/
Installer

Complete
Outstanding
Information

6
Payment
Received

Un-Successful Claim

1
Claim docs
verified

HP Admin

Claim Not
Successful

Log receipt of
claim

1.
2.
3.
4.
5.
6.
7.
8.

Copy Installation &

Declaration Form
(signed)
Copy Invoice
Proof of Address
Electricity Bill / Box #
Customer Details
Registered installer
Accredited HP system
Rebate payment date

Claim
Successful

Successful Claim

Submit to SAP for

payment

25

Agenda
Residential heat pump rebate programme
Item

Who

Technology
Opening
and welcome

Andrew Etzinger

Conditions of participation in programme Supplier/Customer

Evacuation procedure
Venue representative
Process
South
Africas Electricity Supply-Demand
Situation
Concluding Remarks

Andrew Etzinger

Heat Pump Rebate Programme

Questions

Nosipho Maphumulo

- Structure of the programme

Michael Ndlovu

- Envisaged process

Fikile Segole

Way forward and closure

Nosipho Maphumulo

26

Way forward
Item
Application
and registration of suppliers as ESCOs
Opening and Welcome
Registration of ESCOs as ESKOM vendors
Evacuation Procedure
Submission of required info to Eskom IDM to register on the rebate scheme
South Africas Electricity Supply-Demand Situation
Submission of all systems for SABS approval, when SABS is ready
Heat Pump Rebate Scheme
Submission of claims according to Eskom Heat Pump rebate requirements

27

Thank you
Questions