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Reports of New Mechanisms Feasibility Studies: FY2011

Title of Feasibility Study (FS)New Mechanism Feasibility Study for Integrated Energy Efficiency Activities at Beer/Beverage Factories Using Specific Energy Consumption Methods in South Africa
FYFY 2011
Main Implementing EntityRecycle One, Inc.
FS PartnersClimate Experts, Ltd., SABMiller, plc
Location of Project ActivitySouth Africa
Category of Project ActivityEnergy Efficiency
Summary of FS ReportPDF (290KB)
Description of Project/ ActivityAlong with its economic development, the demand for energy in South Africa has been constantly strong, and large electricity outages are becoming a serious issue. The price of electricity is increasing by 25 % annually as a measure to counter this situation, forcing the businesses to implement energy saving measures.
The Prospecton Factory located near Durban, South Africa, of SABMiller, plc, the second largest beer/beverage manufacture in the world, was selected as a pilot case. The “Energy Consumption Structure Analysis Simulator” was applied and “Integrated Energy Saving Equipments” based on the analysis were proposed, both of which are advanced Japanese technologies, aimed at drastically reduce GHG emissions. Through these activities, the decrease in fossil consumption can be anticipated, through the reduction of electricity consumption from such energy saving activities, contributing to the climate change mitigation in ZA.
Reference Scenario and Project/ Activity BoundaryBoundary: The entire brewery
Reference scenario: "BaU scenario accounting for the efficiency improvement from the production increase"
A new scheme of "Third Party Assessment" is proposed to asses the validity of the boundary, reference scenario, among others.
Monitoring Methods and PlanThe monitoring method using the routinely collected data in the factory operation, such as production volume and energy usage, which is directly monitored (measured by weight scales and electricity meters, etc.) is proposed. The data is also proposed to be cross-checked with invoices to enhance reliability.
GHG Emissions and ReductionsApproximately 31,000 tCO2/y
MRV System for GHG ReductionsA new scheme of "Third Party Assessment" by the experts with deep knowledge of the subject sector and the host country is proposed. These Third Party Experts assess the validity of the reference scenario, additionality of the project / activity, calculation method for GHG emission reduction, and monitoring method / plan.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity) As per the demand for the Environmental Impact Assessment (EIA), only the activities defined on the list relating to regulations of the EIA are restricted and its decisions are made by the municipalities which have jurisdiction over the site. EIA of the City of Durban gave the opinion by a letter that the technologies are presumed to satisfy EIA regulation, as long as there is no additional discharge of water / exhaust gas.
Financial PlanningEarly stage investment in the energy saving activities in the Prospecton Factory is estimated to around US$4,400m in total. On the other hand, estimation shows possibility to save US$2,086m annually due to the installation with the energy saving effect and the annual maintenance cost will be only limited to US$122m. As a result, investment is estimated to be recovered in 2.06 years.
Because the investment of the equipment obtains higher evaluation based upon such standard, they are reviewing it positively. And, because SAB Miller has used their own funds for the small investment such as for energy saving equipment in the past, it is highly likely that the equipment investment for these activities will be made by their own funds and the additional procurement of the funds may not be incurred.
Introduction of Japanese TechnologyThe simulator which will be applied in these activities is designed to be used for any brewery and beverage manufacturers all over the world based upon the most advanced technology and the best practices applied by Japanese breweries. The simulator has also enabled breweries in the world to obtain the best solution for the appropriate energy saving.
With "The Improvement of the Process by Energy Structure Analysis Simulator" and ‟The Comprehensive Installation of Integrated Energy Saving Equipments" in these activities, once the reduction of GHG emission by the energy saving under the New Mechanism is credited, it will become the further incentives for the installation in the other development countries such as in ZA and it will contribute to the diffusion of Japanese technology in this area.
"Co-benefits"
(i.e. Improvement of Local Environmental Problems)
The evaluation of the anti air pollution effects in the manner of quantifying "Reduction of Emission of Sulfur Oxide Thanks to the Reduction of the Fossil Fuel Consumption due to the Energy Saving", that is set up as the concrete content of the cost-benefit effect in the above manual was conducted. As the result, if the energy saving by these activities are executed, the SOx discharged by the generating houses will be reduced by 62 ton p.a.
Contribution to Sustainable Development in Host CountryCurrently, because the increase in electricity power supply is not catching up the economic development in ZA, they are forced to face with the shortage of electricity followed by the escalating electricity price. There is a possibility that the energy problem will make certain negative effect on their economic development. Under the circumstance, the energy saving project resulting in the stable electric power supply will contribute to their sustainable economic development in the middle and the long term. Due to the energy saving, the effect of the energy cost reduction and the contribution to the improvement of the profitability of the local companies can be anticipated and so that will contribute to the sustainable development of the local companies. The GHG emission in ZA will increase remarkably due to the increasing demand for electric power along with their economic development. Thus, it is anticipated that the diffusion of the energy saving will have certain big impact on their strategies against global warming in this country. In addition, the reduction of pollution of the air/water due to the improvement of the manufacturing process will be able to contribute to the improvement of the ambient surrounding.

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