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PUBLIC HEARINGS ON THE IMPLEMENTATION OF THE WHITE PAPER ON CLIMATE CHANGE 4-8 June 2012

PUBLIC HEARINGS ON THE IMPLEMENTATION OF THE WHITE PAPER ON CLIMATE CHANGE 4-8 June 2012. Presented by Ms. Nelisiwe Magubane, Director-General. PRESENTATION OUTLINE. Department of Energy’s mandate Department of Energy’s Vision and Mission Overview of Energy Landscape in South Africa

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PUBLIC HEARINGS ON THE IMPLEMENTATION OF THE WHITE PAPER ON CLIMATE CHANGE 4-8 June 2012

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  1. PUBLIC HEARINGS ON THE IMPLEMENTATION OF THE WHITE PAPER ON CLIMATE CHANGE 4-8 June 2012 Presented by Ms. Nelisiwe Magubane, Director-General

  2. PRESENTATION OUTLINE • Department of Energy’s mandate • Department of Energy’s Vision and Mission • Overview of Energy Landscape in South Africa • Drivers and Pressures in the energy sector • Enabling environment: Governance Instruments for Energy and Climate Change • Implementation of Climate Change in the Sector • Current Policies and Regulatory framework in line with the National Climate Change Response White Paper • Other projects and programmes that are being implemented with mitigation potential • Way Forward (Successes and Challenges)

  3. DEPARTMENT OF ENERGY’S MANDATE • Ensure secure and sustainable provision of energy for socio-economic development through: • Provision of an enabling platform for other sectors to speed up economic growth and transformation , create decent jobs and sustainable livelihoods, • Unlocking of infrastructure investment through policy and regulatory framework, • Contribution to the massive programme to built economic and social infrastructure, • Implementation of various interventions to encourage sustainable energy resource management and use, through flagship interventions such as solar water, (Wind, PV, CSP, etc) • Improved efforts to meet the energy efficiency and renewable energy projects

  4. DEPARTMENT OF ENERGY’S VISION AND MISSION MANDATE • Ensure secure and sustainable provision of energy for socio-economic development. VISION 2014 • A transformation and sustainable energy sector with universal access to modern energy carriers for all by 2014 VISION 2025 • Improving our energy mix by having 30% of clean energy by 2025 MISSION • To regulate and transform the sector for the provision of secure, sustainable and affordable energy

  5. ENERGY SITUATION IN SOUTH AFRICA • Coal is the main source of electricity generation, and the South African energy supply will continue to be dominated by fossil fuels, especially coal for sometime. Other sources such as crude oil, petroleum products, renewables and wastes are currently part of our energy mix. Nuclear, hydro and geothermal solar constitute the smallest portion of our energy. • The country is well endowed with renewable energy resources with the potential to produce energy from biomass, wind, solar, small-scale hydro and waste; these resources remain largely untapped hence the stand to intensify the country’s energy mix. • The main use for the renewable energy would be power generation and non-electric technologies such as solar water heating and biofuels (list exhaustive). There are other opportunities such as solar thermal chemistry (Sasol) or the boosting of coal-fired power stations with concentrated solar power. • The national electricity transmission grid covers the country extensively over a distance of approximately over 2 000 kilometres. This network has to cope with some severe conditions, including high altitudes and some of the world’s worst lightning conditions in some parts of the country.

  6. ENERGY SITUATION IN SOUTH AFRICA • South Africa’s power installed capacity is just above 50,000MW representing over 60% of installed capacity in Africa. • The energy sector accounts for approximately 80% of South African Green-house gas emissions, which makes the country and the sector one of the largest emitters of greenhouse gases in Africa. • South Africa has, in the last decade, faced drastic power supply demand that has of late resulted in load shedding programmes being implemented to balance supply and demand. Our 2008 situation of load shedding and power interruptions attest to this situation. • Therefore, the vision of the South Africa’s energy strategy, as championed by the Department of Energy, is to contribute towards affordable energy for all, and to minimize the negative effects of energy usage upon human health and the environment.

  7. DRIVERS AND PRESSURES IN THE ENERGY SECTOR IN SOUTH AFRICA International cooperation Energy security Climate change (Clean energy) Access to energy Poor economic regulation Skills and capacity Energy sector Demand management Diversity of supply Upward pressure on cost of energy Safety

  8. ENABLING ENVIRONMENT: GOVERNANCE INSTRUMENTS FOR ENERGY (RE & EE SECTOR) AND CLIMATE CHANGE

  9. South African RE Sector Governance Instruments (cont’)

  10. IMPLEMENTATION OF THE NATIONAL CLIMATE CHANGE RESPONSE WHITE PAPER ON THE SECTOR • In December 2009, South Africa through the President of the Republic, announced at the Copenhagen (COP 15) a target to reduce greenhouse gas emissions by 34% and 42% below ‘business as usual’ emissions levels by 2020 and 2025 respectively subject to availability of resources. • Mitigation should be based on balancing the country’s contribution to the international effort to curb global emissions with the economic and social opportunities presented by the transition to a lower-carbon economy as well as the requirement that the country successfully tackles the development challenges it faces. Note: The Energy sector is in the center in addressing climate change mitigation

  11. ENERGY SECTOR PROGRAMMES ADDRESSING CLIMATE CHANGE • In March 2011, Cabinet approved the Integrated Resource Plan (IRP 2010) which was promulgated on 6 May 2011 with the primary objective of determining long term electricity demand and detailing how this should be met in terms of generation type of sources, timing and cost. • Accuracy of this plan will be improved by regular reviews and updates as and when things or new information becomes available. • Overall, small projects and large scale renewables (excluding large hydro power from the region) will contribute a total of 17.8 GW by 2030 as follows: Wind – 8.4 GW; Solar PV – 8.4 GW; CSP – 1 GW. • Procurement is done in phases, the first phase up to 2016 of 3 725MW started in August 2011. This includes separate allocation of 100MW to small projects (under 5MW) with less stringent requirements so as to encourage small entrepreneurs. • The slides to follow provide progress made to date on IRP implementation.

  12. Sequence of Events: 1st Bidding Window

  13. Sequence of Events: 2nd Bidding Window

  14. ENRGY SECTOR REGIONAL INTEGRATION – IRP 2010 • The IRP 2010 also outlines 6% of import hydro which will also contribute as one of the programmes that would contribute to climate change mitigation. • This requires us to forge partnerships, strengthen our relationship within the region and continent to create interconnectivity. • This has already started happening with the existing bilaterals and among others, Mozambique, Lesotho (i.e. Lesotho Highlands Project), DRC (Inga projects), Botswana (SADC Renewable Energy Strategy), etc. • Regional integration also looks at other energy sources

  15. FUTURE ENERGY DIVERSIFICATION (IRP2010)Potential Energy Future – 2030 BURUNDI KENYA DR CONGO TANZANIA MALAWI GABON ZAMBIA MOZAMBIQUE ANGOLA ZIMBABWE NAMIBIA BOTSWANA SWAZILAND LESOTHO SOUTH AFRICA GEO-THERMAL CONGO HYDRO GAS PV COAL GAS WIND CSP WIND NUCLEAR WIND

  16. SOLAR PARK CONCEPT INITIATIVE SOLAR PARK INITIATIVE • On 09 October 2009 the Department of Energy (DoE) signed a Memorandum of Understanding (MoU) with the Clinton Climate Initiative (CCI) • MoU to prepare a pre-feasibility study assessing the potential of developing one or more Solar Parks in South Africa. The collaboration produced a Solar Park Pre-feasibility Study Report which was approved by the Department in May 2010. • The report concluded that solar power can be deployed in South Africa in large quantities over the next decade at costs that become competitive with coal-fired power, • Significant progress has been made on this initiative , Northern Cape Solar Corridor Development. Prefeasibility estimated a potential of 5 000 MW.

  17. Introduction: South Africa’s Solar Resource

  18. OTHER ENERGY SECTOR PROGRAMMES ADDRESSING CLIMATE CHANGE CONT’

  19. THE SOUTH AFRICAN RENEWABLE INITIATIVE (SARi) • The vision – unlocking South Africa’s green growth potential. The South African Renewables initiative (SARi) has now been confirmed by Cabinet and is part of the programme that seeks to close the financial gaps / blockages on the deployment of Renewable Energy.

  20. SARi: OVERCOMING THE INCREMENTAL COST CHALLENGE • The South African Renewables Initiative (SARi) has been established by the Government of South Africa to support the rapid and ambitious scaling of renewables in South Africa in a manner that will deliver economic, social and environmental benefits without imposing unacceptable costs on the nation’s citizens and economy.

  21. ECONOMIC IMPACTS OF THE RENEWABLES VALUE CHAIN IN SA • While a full economic analysis has not been undertaken, a number of key elements have been assessed. Based on this modelling if the incremental cost of renewables is passed on entirely to consumers it is likely that this would have a moderate negative impact on industrial competitiveness and consumer welfare and with this a significant negative impact on the ability to develop business and political will to support renewables.

  22. ENERGY EFFICIENCY DELIVERY FRAMEWORK: SA’s PERSPECTIVE BASED ON IEA’S MODEL Institutional Arrangement Enabling Framework • Policy & Regulations • Strategy & Action Plans • Funding Mechanism Energy Efficiency Delivery Framework • Resourcing Requirements • Energy Service Companies (ESCOs) • Stakeholder Engagement • Public-Private Cooperation • International Assistance • Implementing Agencies Coordinating Mechanism • Government Coordination • Targets • Monitoring and Evaluation Source: IEA, 2010 The DoE has progressed in creating an enabling environment for the EE sector while implementing on various programmes

  23. ENERGY EFFICIENCY DEMAND SIDE MANAGEMENT PROGRAMME • Energy efficiency is one of the most cost-effective ways towards energy supply, sustainable development and provision of energy security. • The Energy Efficiency Accord which was signed with leading companies in 2005 to demonstrate reductions in energy consumptions has now been reviewed into the National Energy Efficiency Leadership Network (NEELN) which was launched in December 2011 during COP 17. • This resulted in the Department of Energy signing pledges with business / industries affirming commitment in taking leadership within the energy efficiency sector. • The NEELN will see business/industry building in energy efficiency measures into their day to day activities and also taking responsibility of ensuring energy savings whilst not producing more with less energy.

  24. ENERGY EFFICIENCY DEMAND SIDE MANAGEMENT PROGRAMME CONT’ • The DoE is continuing with the implementation of energy efficiency (EE) strategy and is instituting measures with municipalities to robustly implement EE initiatives such as lighting technologies (i.e. Street and traffic lighting). • In the residential sector: the incandescent light bulbs are being replaced with compact fluorescent lights (CFLs) while in the commercial sector there are incentives to introduce CFLs, efficient fluorescent tubes (electronic ballasts over magnetic ballasts) and LED, lighting control systems; and in the industrial sector there are moves to change mercury vapour lights to high pressure sodium lights or other more efficient alternatives. • Some municipalities have plans to retro-fit traffic lights with LEDs, to install SWHs, gas installations, ripple controls, installation of motion sensors; installation of EE HVAC systems and after-hour shut downs, improving vehicle energy efficiency of local government fleet and use of cleaner fuels.

  25. ENERGY EFFICIENCY DEMAND SIDE MANAGEMENT PROGRAMME CONT… • The Energy Efficiency Demand Side Management programme is done in terms of Division of Revenue Act (DoRA), according to Schedule 6: EEDSM transfer of grants directly to the participating Municipalities; and Schedule 7: Transfer of grants to Eskom as the implementing agents • This programme is funded through the fiscal allocation and electrcity tariff. The fiscal phase of the programme is implemented in the following municipalities: Tshwane, Naledi, Sol Plaatjie, Umsobomvu, Musina whilst the rebate programme by Eskom and other organizations is spread across the country.

  26. IMPLICATIONS ON THE IMPLEMENTATION OF WHITE PAPER ON CLIMATE CHANGE BY THE SECTOR • As one the biggest GHG emitters, the setting of the carbon budgets will have serious and direct financial and human resource implications for the sector and in particular the Department. • The two year period that sectors are required to develop the sector/sub-sector climate change strategy or mitigation and lower-carbon development strategies (by October 2013) will put the Department of Energy as the lead department and the entire energy sector under enormous pressure, and will require additional resources.

  27. CLEAN DEVELOPMENT MECHANISM • South Africa as a signatory to the Kyoto Protocol, has through Cabinet approved in 2005 the establishment of the Designated National Authority (DNA) under the now DoEto facilitate the development of clean development mechanism (CDM) projects, scheduled to expire at the end of 2012 when the new Kyoto Commitment Period comes into operation in 2013 • The DNA is responsible to perform “inter alia” the following functions: • Regulation function: Project evaluation and approval in accordance with section 40(a) of the Marrakech Accords. • Promotion function:To promote and facilitate the development of CDM projects in South Africa; Secure an adequate share of CDM investment in South Africa; To promote CDM projects of a developmental nature and ensure that the mechanism is in the national interest (Gov. objectives).

  28. CLEAN DEVELOPMENT MECHANISM CONT… • The Projects submitted to the DNA for initial review and approval encompass biofuels, energy efficiency, waste management, cogeneration, fuel switching and hydro-power, and sectors such as manufacturing, mining, agriculture, energy, waste management, housing, transport and residential. • 251 projects have been handled to date: (42 Project Design Document (PDDs) and 209 Project Identification Note (PIN’s) received to date. Out of 42 PDDs, 21 Registered with the CDM Executive Board • NB* PDDS for all registered projects are available on the websites(www.energy.gov.zaand www.unfccc.int). • The registered 21 PDD’s have emission reductions potential of 4,7 million tCO2e per annum. 7 of the 21 have been issued with Certified Emissions Reductions • The issued projects have emission reductions potential of 1,9 million tCO2e per annum.

  29. SUCCESSES AND CHALLENGES • Given the huge untapped potential of renewable sources of energy, increased production and use of renewable energy and improved energy use efficiency become key priorities of the country's energy strategy. • Although renewable sources of energy have been promoted by the South African government, the production and consumption of energy based on the renewable energy technologies in the country has however been low. • Awareness and understanding of the potential of renewable energy is still limited in the country. • South Africa is endowed with excellent solar radiation that can be used to provide energy services such as space and water heating, thermal energy for industrial processes, and power generation. • However, appreciation of the potential for harnessing solar energy to provide useful energy services is low and therefore solar energy application remains limited. • Compounding the issue is the comparatively low price of electricity and the immaturity of the industry capacity in manufacture, installation, maintenance, marketing and financing.

  30. SUCCESSES AND CHALLENGES CONT… • Major challenges remain the high capital costs and capacity building to deal with installation, maintenance, and development of local market and business • Government has so far created potential opportunities for skilling people and ensuring that they get absorbed into the energy sector market either through energy auditing, in particular the localisation value chain, i.e. manufacturing, supply and maintenance of energy technologies. • This was done through various stakeholders, such as government departments, Business and Civil Society, as well as Academia through scientific and technological research, education and training • However, continued support and proactive participation and partnerships between various actors from business, all spheres of government, civil society and international community is still required.

  31. Thank You For Your Attention http://www.energy.gov.za

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