A structured approach to prioritise industrial energy efficiency measures by assessing feasibility criteria

Abstract

The increasing importance of energy management is evident in the growing global energy demand as well as in the incentivisation of energy efficiency by the South African government. Despite the large potential in industry, there are multiple barriers that prevent implementation of energy efficiency measures (EEMs). Contributing factors include the implementation cost of proposed EEMs, the associated project uncertainty, and the multitude of EEMs to choose from. These factors can be mitigated by using energy efficiency incentive programmes, conducting feasibility studies, and prioritising the implementation of initiatives using verified techniques, respectively. There is, however, a lack of a structured approach to obtain a prioritised list of feasible EEMs. A need therefore exists for an approach to determine what EEMs are feasible to implement and how incentive programmes can improve the business case of these measures. Additionally, there is a need for a prioritisation technique of feasible EEMs. The research objective of this study is to develop an approach that meets the following requirements: considers financial incentive programmes; systematically determines the feasibility of EEMs; and prioritises the implementation order of the feasible EEMs using multi-criteria decision-making. Various energy efficiency incentive programmes are researched to gain an understanding of the potential benefits of utilising incentives. An extensive literature review of both technical and financial feasibility criteria for EEMs is conducted. Technical criteria include factors that influence the performance and complexity of EEMs such as energy savings, ease of implementation, and maturity of the technology. Financial criteria include profitability indicators and cost implications. A detailed review of various prioritisation criteria for EEMs is conducted. Subsequently, different prioritisation techniques are reviewed, and a suitable multi-criteria prioritisation technique is chosen to design the structured approach. The structured approach consists of two phases. Phase 1 of the A structured approach to prioritise industrial energy efficiency measures by assessing feasibility criteria

structured approach entails sorting the relevant reviewed feasibility criteria into three structured stages of feasibility. Phase 2 of the structured approach comprises the weighting and verification of relevant prioritisation criteria via questionnaires completed by energy management experts. The developed structured approach is validated by applying it to a large and complex industrial facility with 161 proposed EEMs as part of the facility’s energy management programme. The feasibility of these initiatives was systematically determined by applying Phase 1 of the structured approach. Furthermore, the structured approach yielded a prioritised list of 18 feasible EEMs. The recommended implementation of the feasible EEMs has potential energy efficiency savings of 1.3 TWh per annum, estimated cost savings of R332 million, and estimated incentive shareholder value of R338 million. The case study results prove that the research objective was met and highlight the need for a structured approach to determine the feasibility of EEMs in order to prioritise them.