Outcomes of COP17/CMP7 Energy Side Events - Presentation

1. PRESENTATION TO PPC ON THE OUTCOMES OF COP 17/CMP 7 ENERGY SIDE EVENTS 17 FEBRUARY 2012

2. OUTLINE OF THE PRESENTATION • Departmental participation • Background to UNFCCC Negotiations • COP17/CMP7 Expectations • Energy Sector SA CCR EXPO Side Events • DoE participation on the DNA Forum • International collaboration • Lessons learned • Way Forward • Recommendations

3. DEPARTMENTAL PARTICIPATION • The Department of Energy’s presence at the COP17/CMP7 Conference in Durban was in three fold, namely: • Firstly, Team Energy was part of the UNFCCC Negotiation Process; • the department’s officials covered issues on Mitigation and Clean Development Mechanism; • Secondly, The DoE’s role was coordination and hosting of Energy Side Events within the SA Climate Change Response (CCR) Expo; and • Thirdly, managing the Department’s Exhibition Stand within the SA CCR Expo. • The Energy Sector side events were hosted in partnership with the energy stakeholders based on a year’s preparations through the COP 17 Energy Technical Steering Committee comprised of key government Depts, SOEs, Business & Industry, NGOs, etc • This collaboration involved also some of the International organisations such as the International Energy Agency (IEA), International Renewable Energy Agency (IRENA), French Energy and Environment Agency, International Atomic Energy Association (IAEA), Business & Industry, (BUSA) UNIDO, UNDP, African Union, World Bank and European Investment Bank.

4. OVERVIEW OF CLIMATE CHANGE • The focus of climate change negotiations was twofold: firstly it was focused on how to take forward and complete the tasks from COP 16 (i.e. to ensure that the Adaptation Committee is launched, the Technology Mechanism is operationalised in 2012, the Green Climate Fund is approved and to provide more clarity on fast-start finance), and secondly to answer key political questions relating to the future of the Kyoto Protocol • South Africa, as the COP presidency sort to ensure that the discussions are held in a transparent, inclusive, balanced, equitable, binding and the process had to be party driven. • The negotiations were complex and very political, especially given the global socio-economic developments, and the fact that most countries have already pronounce their un-willingness to adopt the second commitment.

5. COP17/CMP7 EXPECTATIONS • COP 17 /CMP 7 had to take over the COP 17 Presidency and lead the negotiations processes forward. • The focus for Durban was on the following: • The adoption of the second commitment period under Kyoto • Operationalisation of the Cancun agreement(Adaptation Committee, the Technology Mechanism the Green Climate Fund ) • Maintaining the multi-lateral rules based system (i.e. using UNFCCC framework as a basis for climate change mitigation and adaptation)

6. ENERGY SECTOR SA CCR EXPO SIDE EVENTS

7. DOE’s PARTICIPATION ON THE DNA FORUM • The Department of Energy and United Nations Framework Convention on Climate Change (UNFCCC) secretariat co-hosted the 12th Designated National Authority (DNA) Forum from the 26-27 November 2011 in Durban. • The objective of the CDM DNA forum was to provide opportunities for DNA representatives to exchange views share their experiences relating to the CDM and bring forward common views and issues to the attention of the CDM Executive Board. • The Minister of Energy, Ms Dipuo Peters officially opened the forum on 26 November 2011. • As the discussions progressed, it was highlighted that as part of the implementation of the “Guidelines for the Establishment of Sector Specific Standardized Baselines”, the secretariat developed general guidelines to ensure the quality of data required for the establishment. • The Executive Board emphasized that since the use of standardized baselines is voluntary, the level of stringency of the standardized baselines should be sufficient to ensure a high level of environmental integrity.

8. DOE’s PARTICIPATION ON THE DNA FORUM CONT’ • Identified Key challenges: • Countries highlighted that lack of data relating to the development of standardized baseline would certainly pose a big challenge. • The meeting also emphasized that countries will prefer to priorities sectors with potential in order to optimize standardized methodologies that would have been developed for these countries. However, involvement of private sectors such as universities and other players such as the project developers as the custodians of the projects would alleviate the problem. • It was reported that the UNFCCC secretariat is working on developing sector specific data templates. Data delivery protocol will have to be established and data sets to be collected from different countries. • This was identified as a challenge because most DNAs do not have statistical information. However, a resolution was taken that the Secreteriat should work on capacity building and financial mechanisms to ensure the desired outputs.

9. DOE’s PARTICIPATION ON THE DNA FORUM CONT’ • Guidelines for Demonstrating Additionality of Micro-scale CDM Project: • The objective of this session was to provide an opportunity for the participants to share latest information of guidelines regarding additionalities for micro scale CDM projects. • The Executive Board (Decision EB63) approved a list of Grid connected renewable energy electricity technologies. • The initial list consists of the following technologies of installed capacity of 15MW or less. • Solar PV and solar thermal; • Off shore wind; and • Marine technologies (wave, tidal).

10. DOE’s PARTICIPATION ON THE DNA FORUM CONT’ • In terms of Procedures for Submission of CDM Proposals, the Executive Board submitted the following as part of progress achieved : • Duly completed submission form/data template; • Most recent available data, not older than 3 years and percentage contributions of the proposed specific renewable energy technologies in the total installed grid-connected power generation capacity in the country; and • Any additional supporting documentation

11. ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS • The department hosted successfully 25 Energy Sector Side Events at the SA Climate Change Response (CCR) Expo and the events were hosted in partnership with both local and international energy stakeholders. • The side events covered a range of issues / themes, which included but not limited to: • Building Energy Efficiency; Diversification of Energy Mix Towards a Low-Carbon Economy; Nuclear Energy; Carbon Capture and Storage; Transport Fuel Efficiency and Biofuels; Financing Climate Actions in Africa-Instruments and Policy Framework; Clean Energy Financing-Policy Effectiveness;Energy Efficiency Financing ; CDM Programme of Activities Development in South Africa; Clean Energy Technology and Financing Options for SADC; Market Development Seminar for Clean Energy; Meeting the Millennium Development Goals-Financing Energy Access for All; Lock-in in the Energy Sector and Cost of Delaying Action; New and Renewable Energy Technologies-Fostering Sustainable Development and Rural Electrification in Africa; Solar Energy Seminar; Energy Efficiency Seminar;Capture and Storage Generation; Wind Energy Awareness and Wind Atlas Launch; Large-Scale Hydro Energy Seminar and Sustainable Energy Access for All.

12. ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS CONT’ • A pilot project on Sustainable Energy Access was also launched by the President Honourable Mr Jacob Zuma at ILembe District Municipality, where solar water heaters and efficient cooking stoves were handed over to community members. • This is an initiative that was funded by the United Nations Development Organisations in an effort to assist South Africa in addressing or intensify Sustainable Access to Energy by All. This initiative involves the roll out of Solar Water Heaters in Schools and Clinics. • The Energy Efficiency Campaign Strategy was launched together with Energy Efficiency Leadership Network and signing of Energy Efficiency Pledges by the Business further committing to their organisations of being energy efficient.

13. ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS CONT’ • The DoE together with the Department of Environmental Affairs and Soitech Company contributed towards inaugurating a less than 1 Megawatt Concentrated Photovoltaic plant (500kW CPV) by the President, at Ndwedwe. • Jointly with the Department of Trade and Industry, the DoE conducted a Clean Technology competition to encourage small and medium Enterprises to invest in cleaner technologies. • All the panel discussions / events were well attended with the panellists ranging from both international and nations world leaders/experts in their respective fields. • Among others, the Chairperson of PPC on Energy, Mr Njikelana moderated the session on Diversification of Energy mix towards a low carbon economy while the Chairperson of Select Committee on Economic Development , Mr F Adams chaired the session on Financing Climate Actions in Africa – Instruments and Policy Framework. • It should be noted that the side events were prepared as a collective within the energy sector including government departments, business, state-owned enterprises, civil society and NGOs and international stakeholders.

14. ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS CONT’ • The Wind Energy Awareness was also launched in partnership with the Danish Embassy. • In addition, 5 of 10 flagship projects demonstrated at the SA CCR Expo were from the energy sector. These included the Solar Water Heating, Cere Wind Concept, Solar Park Concept, Comprehensive Community Solar Energy Project, Energy Efficiency and Demand Side Management, Energy Efficient Housing. • The Department’s Exhibition Stand was shared with Eskom, CEF, PetroSA, SA Centre for Carbon Capture and Storage (in partnership with Alstom) and NERSA.

15. LESSONS LEARNED FROM ENERGY SECTOR SIDE EVENTS • The lessons were learned from the side events interactions: • Scaling up of the RE Vs Financing: There was a general consensus that access to financial resources is a key factor in scaling up renewables and infrastructure development. This remains central to Sustainable Access to modern energy services. • Regulatory Framework: Proper incentives are needed to stimulate markets and enable investments in the RE and EE sector. There was also a general agreement that governments need to create a stable policies and regulatory frameworks that will encourage investors (i.e. clear the uncertainties by being predictive and address long term goals) while at the same time lowering the cost curve through the support of renewable energy entrepreneurs. • It was also demonstrated that several factors could enable the successful deployment of clean energy solutions, namely, supportive policy, legal and institutional framework, active public sector engagement including research funding and government procurement.

16. LESSONS LEARNED FROM ENERGY SECTOR SIDE EVENTS CONT’ • The lessons were learned from the side events interactions: • Capacity Building: It emerged that the developed and developing countries need to build a strong human and institutional resources to implement effective policies, market based-mechanisms, business models, investment tools and regulations with regard to energy. • Additional capacity is also needed on the ground to support innovative bottom up solutions and to finance, deliver, operate and maintain new energy systems towards achieving low carbon economy and green jobs. • Communication and Awareness: It became clear that it is important that all stakeholders need to understand not only the challenge, but also the opportunity. It was emphasised that Access to information and knowledge facilitates policy-making, guides investment decision and orients individual choices and behaviours.

17. LESSONS LEARNED FROM ENERGY SECTOR SIDE EVENTS CONT’ • The lessons were learned from the side events interactions: • Innovation: Government and private sector need to increase support for research and development in order to reduce the costs and improve the performance of clean energy technologies and ensure that they are designed to meet the needs of consumers. • With research and development, most clean technologies could be cost be more cost effective and easy to implement in developing countries.

18. INTERNATIONAL COLLABORATION ON CLIMATE RELATED INTIATIVES • South Africa government through the DoE has signed the Declaration of Intent (DoI) with international partners on the South African Renewable Initiative (SARi) which from inception was led by the DTI through IPAP since its inception. • The international partners are: Germany, Norway, Denmark, UK, European Investment bank and is still open for other potential partners. • Prior to UNFCCC, COP 17/CMP SARi PSC was established based on Cabinet approval. • The PSC comprised of all key Government Departments such as Energy, National Treasury, Economic Development, Public Enterprises, Environmental Affairs, etc • The PSC mainly will conceptualise the operationalisation of SARi as well as ensuring alignment on all cross cutting issues and mandates

19. WAY FORWARD (IMPLICATIONS FOR ENERGY SECTOR) • Following the promulgation of the National Response Climate Change White Paper Policy, the department should also increase its focus on assessing the risk of climate change on its activities. • To this effect, Department should gear itself up for developing Carbon mitigation, as national mitigation targets (or strategy) for the sector, which would in turn require rigorous monitoring, reporting and verification systems to be implemented along with carbon mitigation efforts. • The department should continue to engage commercial, insurance and banking industries to begin to clarify how the private sector is expected to engage and contribute to achieving the targets that will be set in the strategy

20. WAY FORWARD (IMPLICATIONS FOR ENERGY SECTOR) • Based on the recent announcement of the first 28 preferred bidders for the renewable energy programme to provide some 1 415.52 MW of power to the South African national grid from wind and solar projects. • With further plans for some 3 700MW of renewable energy as part of the Integrated Resource Plan for South Africa, the department will continue to work with international partners to implement this ambitious programme. • The technologies were disaggregated as follows: Solar (631.53 MW), Wind (633.99 MW), and CSP (150 MW). • Further to the first IPP procurement phase, other windows of opportunities will open in March and August 2012 respectively. • This will intensify the South African efforts of scaling up the renewables as well as enhancing the roll out of Energy Efficiency programmes.

21. RECOMMENDATIONS • It is recommended that PPC on Energy : • Notes that DoE participated in COP 17 negotiations, however the DEA/DIRCO will be submitting a detailed report to Cabinet; • Notes that the DoE is required to develop an Energy sector/subsector strategy in line with the National Climate Change White Paper Policy approved by cabinet in October 2011. • Notes the partnership the department has forged together with international and national partners in achieving energy initiatives. • Notes the outcome of Energy Sector Side Events held at the CCR Expo and lessons learned thereof.

22. Thank you