The President of the Southern African Association for Energy Efficiency (SAEE), Karel Steyn, puts forward what the year ahead might bring. Karel has pooled a handful of industry experts across various sectors in South Africa to formulate a list of predictions for 2016 covering the hot topics, which have been splashed across national and international headlines and trended on Twitter over the past year, while others take on new forms of their own …
The Oil Price to Stay low
The analysis, contrary to popular believe, indicates that Brent could decrease to less than $40 per barrel, and even to $30, over the next few months. This will lead to an increased usage and subsequent increase in GHG emissions putting the COP 21 outcomes at risk.
ExxonMobil is the world’s largest refiner of fuel for the retail trade, the demand of which, even in the current weak worldwide economy, is still rising. Oil exploration offers the company an upstream income, while refining fuel offers ExxonMobil a downstream income. They also make money by selling chemicals, which are a by-product of the oil industry. ExxonMobil’s products are marketed under the names of Engen, Zenex, Mobil One, Petronas (in SA) and Lewis Hamilton’s Formula One car. ExxonMobil will be prosecuted for climate change fraud. [“First VW and now…” interesting trend]
A Major Nuclear Drive
The 2016 year will be an exciting year for the nuclear industry in SA, with the advent of the nuclear new build just around the corner. This could potentially create investments with many jobs but unfortunately mostly will be for higher skilled and qualified individuals. Nuclear developments will include the revival of the Pebble Bed Module Reactor program.
Private Sector to Engineer a Fusion Breakthrough
Nuclear fusion has long tantalized humanity as a potential energy panacea—a fuel source that could prove to be cheap, inexhaustible, and clean. Large-scale government efforts to sustain and commercialize fusion have shown relatively little progress, but some entrepreneurs are reporting better results on smaller projects. With billionaires including Jeff Bezos, Paul Allen and Peter Thiel now backing small-scale private-sector projects, expect a major step toward commercially viable fusion in 2016. […and more good news: If you’re reading this, it means none of the researchers have inadvertently melted down the planet].
Electricity Tariffs will Increase Again in 2016
(Obviously) Increases could be substantial if the regulator allows the claw back of expenditures.
Electricity and Water Load Sheddings
SA has been fortunate in that we had no electrical load shedding for the past 3 months. However during the past few weeks most of us had a taste of water shedding. It’s expected that both water and electricity shedding will resume, but to a lesser extent towards the second half of 2016.
More Businesses to Focus on Energy Management
A 2015 study from the Association of Energy Engineers (AEE) sheds light on some important statistics as to why energy management and energy efficiency will continue to grow as a corporate focus and investment in 2016 and beyond. The survey of +and energy managers found that 76% of respondents’ companies are currently working towards or already have established policies concerning sustainability, of which energy management can play a major role.
Further, 39% indicate that the current energy efficiency marketplace has made it easier than ever to get future energy efficiency projects approved. Both of these statistics indicate that companies already have incentive to focus on energy management – and that future energy management advocates are going to find less resistance to their projects in the coming year. Although this reflects the status of the USA industry, things do not look much different in SA. Energy security concerns and substantial emission targets in SA makes the aforementioned more relevant to our world.
Sustainable Energy Options More Accessible
As energy management becomes a priority for more and more businesses, we also must expect sustainable energy options, especially solar power and storage, to become more accessible. PV grid parity will increase the PV market share, as the demand for these types of energy sources, fuelled by incentives, cost savings and others can only improve, leading to lower costs and even more incentives to make the change to more sustainable energy sources easier.
Increased Political Activity in Energy Management
Arguably, politics and the energy industry are never far from one another. Not only is energy a topic that affects virtually every constituent, but big industry players are frequently engaging stakeholders to influence and plan for the future.
However, with the SA electricity supply being owned by government and with some claiming to be operated by politicians, with a nuclear program getting off the ground, this involvement is bound to become more active and visible!
Women in Energy Efficiency – A Force to be Reckoned with
Although already highly involved, more woman will enter the world of energy efficiency in all capacities where they typically do very well for themselves. Many of government’s programmes are focussed on woman and creating opportunities for them.
Obviously ladies are taking up the challenges and opportunities. The SAEE experience with its Females in Energy Efficiency (FEE) Division also supports this prediction. Businesses would do well to keep this in mind and adapt accordingly!
SA Tax Incentives for Energy Efficiency
Energy savings tax-incentives will take its rightful place in the SA energy industry during 2016. This being a triple bottom-line win with no losers makes it a no brainer decision for all concerned. The industry has gone through the growing pains and it’s now all hands on deck with more incentives to come.
SA Energy Efficiency Strategy
The SA energy efficiency targets for post-2015 will be published for public comments and finalised shortly thereafter still during 2016. This will add impetus to the implementation of energy efficiency.
South Africa, BRICS and Energy Efficiency
South Africa will lead the BRICS energy efficiency action plan next year with all the countries from this group (BRICKS) working more closely together with more visible energy, environment and financial collaboration among them.
The lower oil price will hurt the Russian economy and may force Russia to take on a more or less prominent role in energy markets – depending from which perspective you view this matter.
Regulated Energy Management Plans for Businesses
The draft “Energy Management Plan” submission published for comments earlier this year will be fully regulated in 2016. This will also force businesses to consider dedicated resources for in-house energy management.
The highly controversial SA Carbon Tax will be implemented/promulgated during the 2016/17 financial year but at a zero rate.
A global climate agreement will be agreed on at COP 21 in Paris, spurred on by the need for global alliances. This will however not be legally binding. Notwithstanding, there will be more focus on climate change related activities after COP 21 which makes some of the other predictions more of a reality.
Carbon Markets & Renewables
Regional and domestic carbon markets will take off – boosting the carbon market and enabling further developments in renewables and similar types of initiatives with concomitant price drops in these technologies.
Energy Storage Solutions
The energy management world came to realise the importance of energy storage solutions during 2015. Tesla’s PowerWall, an older technology scaled up to a commercially viable solution, woke the industry up to what is required by industry and what can be done. Energy storage, and in particular battery storage solutions, will grow in leaps and bounds during the next year.
South Africa and Tesla’s POWERWALL
The commercial introduction of Tesla’s battery storage systems in SA during 2016 will positively impact the economics of residential energy storage.
South African Economy and Industry
Notwithstanding the lower oil prices, South Africa’s economy will bottom up, same with the Rand while interest rates will increase. Businesses without a solid foundation will not survive. Those who survive will do well for themselves because of the increased demand for energy management which makes consumers more effective during a tough economic climate.
The social movement #Feesmustfall which is somewhat similar to the 1976 Soweto uprising and a type of a smaller Arab-Spring Up-rise will grow and its impact will increase. This will force all in SA to find new ways of addressing the challenges raised. Other African countries are investing substantially in training and development especially in the energy sector.
Due to the challenges experienced in SA the country will lag behind and not have sufficient skills to address the energy challenges. This will make our neighbouring countries, which all have energy challenges, more focussed on their problems, more experienced, find and therefore more willing to accepting viable solutions, being more competitive, attracting more investments, with less red-tape involved, etc. to the disadvantage of SA generally.
Bit Coin and Block-chain
Bit coin, or block-chain technology, although painful, will be adopted by mainstay financial institutions and become part of the industry payments system. There are roughly 153 blocks created each and every day. They stack up on top of each other, and since bit coin’s birth on 3rd January 2009, this process has occurred over 382,000 times. Hence the phrase ‘block-chain’ as the transaction data is stored as a ‘chain of blocks’.
The true genius of bit coin is that it has been built using a database that was designed to transact, whereas traditional databases are designed to store information. The recent surge in price from $160 in August to $500 for a Bit Coin was an explosive move. The energy industry, which is by nature innovative or early adopters, will not bypass this payment system.
Energy Producers and Sellers Face Serious Challenges in 2016
Due to the lower oil price, lower increases allowed for the electricity utilities (municipalities included), non-payments, the effect of implementing energy conservation, energy efficiency, renewables, fuel-switching to more efficient or cost effective alternatives, energy storage, waste heat recovery, co/tri generation, etc. most energy producers will find it extremely difficult in 2016 and thereafter.
The smaller municipalities with their problematic networks, inadequate services and inability to pay their accounts will fail. This is already happening with smaller utilities in the USA and elsewhere, where many are in a death spiral with customers lowering electricity consumption to levels where such cannot be provided cost effectively any more, putting these producers and suppliers survival at risk.
Now would be a good time for these to consider alternative services, e.g. providing consumers with that which they want, i.e. ESCO services, battery back-ups, PV, data connectivity, real time information, etc. which could help to ensure a sustainable income and ultimately their survival.
Apple Will Buy Tesla
We know that Apple has announced plans to build an electronic car, targeting 2019. Apple could dramatically accelerate this timetable by buying Tesla. With over $200 billion cash on hand, the iPhone-maker has more-than ample resources to absorb the purchase, especially now that some of the bloom has come off Tesla’s once-rosy stock. In addition to its automobile know-how, Apple then gets access to Tesla’s battery technology, which CEO Elon Musk claims can help change “the entire energy infrastructure of the world.” Of course, Apple would also get Musk—a worthy heir to Steve Jobs’ “think different” legacy and ideally suited to be Apple’s futurist, chief technologist and CEO-in-waiting.
The above article is republished with permission and in line with the SAEE’s association partnership with ESI Africa.