Industrial Energy Efficiency Project (IEEP) This document is solely for the internal use of ArcelorMittal.

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1 Industrial Energy Efficiency Project (IEEP) This document is solely for the internal use of ArcelorMittal.

2 Energy Management Standards and Systems Alfred Hartzenburg 14 May 2013

3 Content o Context o Energy Management Standards and Systems o ISO 50001: Energy Management Standard o Case for Certification o Energy Management System Results o Case Study Highlights o Changing Attitudes and Behaviour

4 Climate Change Policy Scenarios Source: IEA/ UNIDO 2010 Most emissions reductions possible through deployment of existing best available EE practices and technologies

5 Why Energy Management Systems? Benchmarking study in Russian Foundry sector PRICES of INPUTS FINAL PRODUCTION COSTS Poor resources efficiency = Loss of Competitive Edge Source: IFC,

6 Energy Efficiency Potential in Developing Countries Sector and Product Technical Savings Potential (%) OECD Countries Developing Countries Petroleum refineries Chemical and petrochemical Steam cracking (excluding feedstock) Ammonia Iron and Steel Cement Pulp and Paper Textile Food and beverage Other sectors Source: UNIDO 2008 and

7 Why Energy Management Systems and Standards? o Most energy efficiency in industry is achieved through changes in how energy is managed in an industrial facility, rather than through installation of new technologies. o Energy Management Standard provides a market-based framework and best-practice methodologies to integrate EE into industry corporate culture and daily management practices. Energy Management Systems (EnMS) provide: o A framework for understanding significant energy users (SEU s) o Action plans for continually improve energy performance o Structure and organizational framework to sustain energy performance improvements over time and change of personnel

8 Energy Management Standard SANS/ISO o o o Purpose: Enable organizations to establish systems and processes necessary to improve energy performance Applicable to all organizations Specifies requirements applicable to energy supply, uses and consumption. o Does NOT prescribe specific performance criteria with respect to energy Source: SWEDAC

9 Integration with other ISO Standards Different Standards All Critical One CANNOT replace the other ISO Energy Management ISO ISO 9001 Environmental Management Other Management Systems Quality Management

10 ISO Status 2008: ISO forms ISO PC 242 Energy Management Project Committee to develop standard. June 2011: ISO published. July 2011: SANS/ISO adopted in South Africa. October 2012: First 20 Lead Auditors accredited in SA. April 2013: ISO/TC 242 meeting in Cape Town developing ISO 50002/3/4/5/15 family of standards. Present Status: companies certified 50% in Germany

11 How does it work? Reduce kwh Is it working? Make Changes Do it! What are you going to do?

12 Six Key Concepts Management Review Management Responsibility Checking Policy Planning Implementation & Operation 1. Commitment o Roles and Responsibilities 2. Significant Energy Users (SEUs) 3. Energy Performance Indicators (EnPIs) 4. Opportunities List 5. Operational Control 6. Review

13 kwh of Natural Gas per annum Case for Certification Case 1 No Certification 18,000,000 Consumption Gas target Linear (Gas target) Target taken at 25% reduction from 2004 baseline 16,000,000 13,944,326 14,000,000 12,000,000 11,273,810 12,216,666 10,000,000 9,315,832 8,000,000 6,000,000 7,151,985 4,000,000 2,000,000 0 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 12

14 Case for Certification Case 2 No Energy Saving Energy Use (2003 Base Year) 2-3% saving per year 5% saving per year EnMS Certification Investment Ban

15 Case for Certification Case 3 Good Balance EnMS No! Energy Manager (EM) Opposed Bad experience with ISO EnMS Yes! Top management decision EM reluctant EM Control Result Add value only Value = improved energy performance Simple system Part of daily operations Certification Improved Performance 14

16 Case for Certification Savings Voluntary Image Cultural Fixed Date Verification Focus None added Incentivise, e.g. SEAI Collector Many like rules Less likely to drift Independent Clients, national schemes Need for international consistency Management and others 15

17 EnMS Results Industrial enterprises that implemented EnMS 2-3% Annual energy intensity reductions Business as usual 1% Annual energy intensity reduction Organisations new to energy management 10-20% savings during the first 2 years o EnMS accelerate adoption of EE best-practices and technology upgrades, enhances productivity and competitiveness. o Improve enterprises bottom line.

18 EnMS Results Company ArcelorMittal Saldanha 2010 Implementation kwh Savings 2011/ /13 Comments No/low cost investments. Toyota SA Projects; Compressed Air, Lighting, Pumps, etc.. Gelvenor Textiles projects; switched off generator & chillers and fitted VSD s to 9 circulation fans. Saint-Gobain Construction Products Combustion efficiency improvement, lighting, compressed air, water gauge.

19 EnMS Results Current Implementation Company kwh Savings Comments Mercedes Benz Compressed Air System Kraft Foods pf, Lighting, idle machines PPC Cement PE Axial sampling of grinding media Tenneco Emission Control Lighting Tenneco Ride Control Oven, Knives, Induction Geyser, VSD Willard Batteries Curing time, wet scrubbers, chargers Distell Adam Tas Winery Lighting, Compressors Sappi Cape Kraft Peak clipping Polyoak Packaging CT Lighting retrofit BMW Paintshop ovens, driers Consol Glass - Wadeville Lighting, Compressor ACSA Durban Lighting Feltex Cooling, Comp, Lights, idle Mach Richards Bay Minerals Pumps, Compressed Air, Lighting

20 Case Study Highlights Toyota SA Link Company Action Plan Implemented Saving Secured Implemented EnMS in 2010 and represents 73 energy saving projects 15GWh in 3 years Moved up to 4 th best Gelvenor Textiles Disconnected parallel transformers kwh (no cost) Kraft Foods ArcelorMittal Saldanha Link Gledhow Sugar Link Switched off idle machines during December 12 shutdown WTP Pump Systems 1 & 2. Switched off one 280kW pump & maintained meltshop process parameters Coal switch to Bagasse (cane extraction & depithing by-product) kWh (no cost) 7GJ/ton - 4.6GJ/ton R1.1M savings R3.9M in 2 years reducing coal use

21 Changing Attitudes and Behaviour Would you allow this man to make a R500 purchase on behalf of your company? What about R10,000?

22 Changing Attitudes and Behaviour o Awareness and Knowledge are Key and Attitude is King. o If you don t know about potential savings opportunities you won t look for them! o If you don t look for savings you won t find them. o If you don t care Savings won t happen. It s all about attitude! Johnson Matthey

23 Participating Companies

24 thank you for your attention Any Questions? Alf Hartzenburg Senior Project Manager National Cleaner Production Centre of South Africa Pretoria: * Cape Town: * Durban: ncpc@csir.co.za Websites: