Procurement, a tool for market transformation

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Procurement, a tool for market transformation

• Stefan Camitz
• WSP Environmental, Sweden

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Technology Procurement or the art of buying
what is not available

• Conditions
• Strong and competent buyers
• Willing to have something better
• A dialog between buyers and suppliers
• Potential for development
• Expected market waiting..

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Many actors on the market
MANUFACTURER
Sub supplier
Wholesaler
Retailer
Regulator, Admin.
Installation
company
Owner of
the building
USER
Consultant
Service
Source H Nilsson
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Market Transformation
Market Penetration
Preferred Case
Aggregated proc. (AP) Labels
Base
case

Technology Procurement (TP)
Standards Directives
Product Performance
Source H Nilsson
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Manufacturers
Buyers
Source H Nilsson
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The process

• Form a group of buyers
• Specification of requirements
• Request for proposal
• Evaluation , testing
• Pick a winner
• Guaranteed delivery
• Dissemination

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The specification

• Requirements on functionality only
• Leave space for new innovation
• Balanced level of demands
• Measurable requirements
• Engage experts on edge technology
• Take your time..

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The specification..

• Mandatory vs complementary requirements
• Main functions of the product
• Energy performance
• Service
• Operational issues
• Environmental issues
• Price levels
• Procedure for evaluation
• Issue weighting

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Manufacturers
RFP
Buyers
Source H Nilsson
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Request for proposal..

• Open tendering process
• Time enough..
• Support for development work, if necessary
• Concrete object for calculation of price
• Optional and credible market description

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Evaluation

• An independent and trustworthy jury
• Preliminary classification of proposals
• Prototypes, pilot installations
• Measuring and evaluation
• Eventual subdivision in classes
• Negotiations, options for fixed price etc.

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Manufacturers
Buyers
Source H Nilsson
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The winner

• Official price ceremony
• Publicity in media
• Guaranteed delivery to the group of buyers

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Delivery, dissemination

• Information campaigns
• Market support activities, subsidies for the
  first series..
• Set up a new standard for delivery
• Get more winners

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Examples on heating, vent.

• Regulation of electr heaters
• Heat pumps
• Fuel cells
• Solar panels
• Smart regulation of heating systems
• Apartment substations
• Conversion of electr. Heated houses

• Ventilation regulated on demand
• Filters with low pressure drop
• Heat recovery in small houses
• Hot water accumulators
• Windows
• Pumps
• Fans

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Examples on white goods, lighting

• Refrigerators
• Freezers
• Stoves
• Tumble dryers
• Washing machines
• Dishwashers
• Refrigerated cabinets

• Occupancy sensors
• High frequency ballasts
• Efficient light bulbs, CFL
• Streetlighting

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Examples from Stockholm sustainable housing
projects

• Apartment metering
• Integration of PV inst.
• Traffic light, LED
• IT systems for smart homes
• Low energy water taps
• Int. systems for food-waste and sewage water
• Storm water treatment

• Improved technology for waste water treatment
• Biogas vehicles
• Ethanol cars
• Electric vehicles
• Efficient day-care centre
• Improved regulation of heating in apartments
• Double glazed facades

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Results
improvment
Average
Existing
Winner
Best
Requirement
Start End
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Results
Start End
Requirement
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Results
improvement
Average
Existing
Winner
Best
Start End
Requirement
1 The winning heat pump was also 30 cheaper
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Results
Start End
Requirement
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The TP effect

• Innovators (Enthusiasts)
• Early Adopters (Visionaries)
• THE CHASM
• Early Majority (Pragmatists)
• Late Majority (Conservatives)
• Laggards (Sceptics)

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Experiences of TP

• Developed for infrastructure but shown to be
  applicable to fragmented markets
• Reduction of time to first series (2-3 years)
• Considerable Step changes in performance
• Opens a direct dialogue between buyers and
  suppliers
• Companies will focus the development to tracks
  that leads faster to the market

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TP in SA?

• Find an operator and a promoter
• Organise buyers groups and stakeholders
• Identify basic unfulfilled needs and options for
  improvement
• Can job creation and poverty be added?
• Address local suppliers and manufacturers, have
  tuning discussions

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Why not?

• Low cost one family houses
• Solar thermal kits for domestic hot water
• Stoves
• Refrigerators, chillers
• Simpler washing machines
• Cheaper stand alone lighting systems
• Public transport systems

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Ndiyabulela !
NYATHI