The impact of international donor agencies in promoting renewable energy

1. The impact of international donor agencies in promoting renewable energy Marlett Balmer GTZ ProBEC 19 March 2009

2. Outline of presentation • Introduction and objectives • An overview of the development of RE in South Africa • Review of factors shaping donor interest in RE in SA • Review of factors shaping RE development locally • Investigating a happy meeting ground for donor objectives and local realities • Overview of current initiatives and donor activities • Conclusion and recommendations

3. An overview of RE in South Africa or A short history of a long story • Pre-1994 • Energy landscape characterised by excess electricity supply capacity, low levels of access to electricity for majority of the population and renewable energy viewed as an interesting area with potential poverty alleviation application • RE was firmly in the lunatic fringe, inhabited by saffron robed, long-haired proponents • Post 1994 • Review of policy, new policy goals: White Paper on Energy - increasing access to affordable energy services; improving energy governance; stimulating economic development; managing energy-related environmental and health impacts; and securing supply through diversity. • Impressive increase in access to grid-electricity • Potential restructuring of the electricity industry launched (REDS) • Renewable Energy viewed as a viable instrument to increase access to electrification (REFSA and later non-grid rural programme) • Direct use of biomass energy acknowledged but not addressed

4. The story continued…. • Donor support after 1994 included work funded by DANCED, DANIDA, EU, US-AID • Local initiatives included the SABRE-gen project of Eskom, CSIR projects on various subjects • 2000 and beyond • RE policy launched in 2003 setting targets • Focus shifted from poverty relief to potential growth sector, influenced by climate change issues • Completely ignored the direct (poor, rural) biomass energy users • Collapse of non-grid programme • A few orchestrated PR exercises (Stirling engine at DBSA, Eskom wind farm) • Development driven by private investors (Darling wind-farm, Bethlehem Hydro) and private sector • Donors: Danish supported CABEERE propgramme, shift from support to national institutions to local authorities • Electricity supply crises - a way to sway opinion to nuclear? • Increased recent interest in RE, EE and climate change • National Energy Act approved in April 2008 - development of SANEDI

5. Factors shaping international interest • Increasing global energy demand • Increased security of supply • Climate change • Increasing energy prices • Providing opportunities for economic growth • Increased awareness • Expertise and experience through successful implementation • Continued commitment to MDG’s • South Africa as key country in the region • International interest emphasised by the launch of the International Renewable Energy Agency (IRENA) in January 2009

6. The South African reality • Low-cost, coal based energy economy • Low energy costs (cheap energy) • A developing economy, trying to keep energy costs low • Clash of political objectives (low energy costs for the voters vs.environmental agenda) • Lack of adequate political support for RE • Capacity challenges in skills and know-how • Eskom monopoly hinders growth of IPPS • Electricity supply challenges - nuclear push • Politicisation of energy - biomass users ignored and forgotten

7. Current initiatives • Wind energy: SAWEP funded by World Bank through GEF, expansion of Darling wind farm to 45MW funded by Danish government, DBSA • Danish Government funds the SA cities network for wind energy development in SA • Eskom and Agence Francaise Development (EFD) signed a 100 million euro deal to develop a west coast Windfarm near Koekenaap • BMZ funded, GTZ implemented TERNA programme supports the Dept. of Environmental Affairs and Development Planning Western Cape to achieve its RE goals and increase the use of wind energy • Solar energy: A 40 million Rand SWH manufacturing plant planned for East-London (private investors and Taiwanese support) • The national solar water heating programme is supported by E&CO (2.3 million Rand “Home Comfort Propgramme” in Johannesburg and REEE • Establishment of a thin-film solar panel production unit planned for Paarl (40 million euro from European Investment Bank) • KfW funding of DHS concession area in Eastern Cape • Hydro Energy: Ongoing Bethlehem Hydro projects (3 MW) • Planned 3 MW Sol Plaatjie Damn project, 4 MW private development between Clarens and Bethlehem (NuPlanet)

8. Current initiatives continued • Biomass: VW Stiftung supports the project “Bio-models - modeling the biomass use for the household energy sector in rural areas of SA”, coordinated through the University of Johannesburg • Regional - Programme for Biomass Energy Conservationa implemented by GTZ and funded by German, Norwegian and Dutch governments • Biofuels: SA Strategy launched • InWent and Alensyns supports SABIO - South African Biofuels Competence and Training Centre • The ‘RE-Impact biofuels project South Africa supported by Newcastle University UK and coordinated by CSIR investigated the rural application of bioenergy in South Africa • Others: RE Market transformation fund (DME AND DBSA) • Green Star SA - green commercial and office buildings • BMU supported BECCAP programme in South Africa • Enerkey project supported by the Universities of Stuttgart and UJ • GTZ development of a focal area on Climate Change and Energy in South Africa

9. The potential role of donor agencies in promoting RE • Donor agencies can support RE to ensure security of energy supply and address climate change concerns • Leverage resources and for a cleaner development path for South Africa • Donors need to acknowledge the realities of SA and work out ways to benefit all • But clear objectives and real political will required from SA • SA can access resources to develop a local RE industry that will place it in the lead in the region - Mosgas and Sasol were harebrained schemes in their times • Donors can ensure that the energy requirements of the forgotten masses (biomass energy dependent rural energy users) be addressed in innovative and novel ways - “Modernising traditional energy” by ProBEC

10. Thank you Questions?