Tag Archives: tax rebates

Earth, Wind, Fire, Water & Tyres

Tyre-Blog

Grey Green recently completed a comprehensive energy audit at one of the largest tyre manufacturers in Africa. Our team investigated all energy and material flows. Excellent savings opportunities were found on:

  • Air compressors, plus compressed air distribution and use
  • Boiler, steam distribution and use
  • Effluent
  • Lighting
  • Materials handling
  • Solid waste
  • Water heating

The sixteen best savings opportunities gave payback periods between immediate (no Capex required, just improved control or maintenance) to ~3.9 years, with the average at less than 2 years. These were also quantified in terms of reduced carbon dioxide emissions and decreased carbon tax liability.

Annual financial savings were several millions of Rands.

The tyre company management shall also be able to use our Scenario Planning Tool to:

  • Graphically compare the savings produced by each savings opportunity
  • Decide when each opportunity should be implemented

Scenario Planning Tool

Grey Green also conducted pre-feasibility studies on various sources of renewable energy:

  • Earth – Biogas, from anaerobic digestion of locally sourced organic matter and biomass as a boiler fuel
  • Wind – Wind turbines opportunities in the region
  • Fire – Solar PV (i.e. photovoltaic) and solar water heating
  • Water – Hydro-electric options available.

As expected, the renewable energy opportunities have longer payback periods than energy efficiency opportunities, but once factory efficiency has been maximised, the only way of reducing energy costs further is by producing one’s own energy from renewable sources.

MILK THAT TAX REBATE!

SARS’s 12 i scheme allows companies to claim tax rebates for capital expenditure which produces energy savings. Several requirements apply. One is a baseline report which shows the energy intensity before installation of the energy savings equipment.

Grey Green compiled a baseline report for a large dairy in the Eastern Cape.

The baseline report met all the requirements and the diary is proceeding with installation of energy savings equipment.

Baseline reports have to conform to the procedures of the IPMVP [International Performance Measurement and Verification Protocol) and SANS 50010 – South Africa’s standard for Measurement and Verification.

Producing the baseline included correlating energy usage with production. The following graphic is an example.

Effect of Production on Steam Usage

Effect of Production on Steam Usage

Seasonal variations in production and therefore energy are common with agro-processing. For our dairy client these were investigated by first considering how output varies from month to month. The following graphic shows that there is considerable seasonal variation.

Seasonal Variation in Production

Seasonal Variation in Production

Next month to month electricity usage was investigated. The following graphic indicates that it does not change much.

Seasonal Variation in Electricty Usage

Seasonal Variation in Electricity Usage

In addition to using a baseline report for tax rebate applications, the data will often reveal opportunities for energy savings. For example, comparison of the previous two graphics seems to show a mismatch between production variations and monthly changes in energy consumed.