A performance-centered maintenance strategy for industrial DSM projects

Abstract

South Africa’s electricity supply is under pressure because of inadequate capacity expansion in the early 2000s. One of the initiatives funded by Eskom to alleviate the pressure on the national electricity grid was an aggressive demand-side management (DSM) programme that commenced in 2004. A positive outcome of the DSM programme was that the industrial sector in South Africa benefited from the implementation of a relatively large number of DSM projects. These DSM projects reduced the electricity costs of industrial clients and reduced the demand on the national electricity grid. Unfortunately, the performance of industrial DSM projects deteriorates without proper maintenance. This results in wasted savings opportunities that are costly to industrial clients and Eskom. The purpose of this study was therefore to develop a maintenance strategy that could be applied, firstly, to reverse the deterioration of DSM project performance and, secondly, to sustain and to improve DSM project performance. The focus of the maintenance strategy was to obtain maximum project performance that translated to maximum electricity cost savings for the client. A new performance-centered maintenance (PCM) strategy was developed and proven through practical experience in maintaining industrial DSM projects over a period of more than 60 months. The first part of the PCM strategy consisted of developing a new strategy for the outsourcing of DSM project maintenance to energy services companies (ESCOs) on the company group level of the client. The strategy served as a guideline for both ESCOs and industrial clients to implement and manage a group-level DSM maintenance agreement successfully. The second part of the PCM strategy consisted of a simplified method that was developed to identify DSM projects where applying a PCM strategy would increase or sustain electricity cost savings. The third part of the PCM strategy consisted of practical maintenance guidelines that were developed to ensure maximum project performance. It was based on the plan-do-check-act cycle for continuous improvement with an emphasis on the monitoring of DSM project performance. The last part of the PCM strategy consisted of various alternative key performance indicators that should be monitored to ensure maximum sustainable DSM project performance. The PCM strategy was evaluated by implementing it on ten different DSM projects. The results showed that applying a PCM strategy resulted in an average increase of 64.4% in the electricity cost savings generated by these projects. The average implementation cost of the PCM strategy was 6% of the total benefit generated through it. This indicated that implementing the PCM strategy was a cost-effective manner to ensure that maximum performance of DSM projects was maintained sustainably.