Green Energy for South African Cities: Discussion Forum 19 June 2009

Cape Town, South Africa

2009/06/22

 

Claire Martens of ICLEI Africa recently attended the discussion forum “Green energy for SA Cities). Two cities, Nelson Mandela Bay and Cape Town, discussed their Energy and Climate Change projects to date, and some of the opportunities and threats to Local Government initiated Green Energy projects in South Africa. Various NGOs, local government players, renewable energy companies and various other interested parties attended the brief but informative session.

 

Mr Peter Neilson, on behalf of Nelson Mandela Bay Metropolitan Municipality, spoke about the Energy and Climate Change programme in his city which is, fortunately, well supported by the mayor and city manager. The implementation of the “Going Green” campaign has been very successful, as it has focussed primarily on communication and education of city residents regarding energy efficient measures that can be implemented in households and offices. At the moment, the Municipality has been unable to implement any renewable energy projects, but is in the process of investigating opportunities, such as: landfill-to-gas projects, micro-hydro electricity sites, solar water geyser roll-out and wind-farms. The solar water geyser concept is a new concept in SA which hopes to allow residents of Port Elizabeth to pay for solar water geysers over an 18 month period, through their electricity and water bill. The outcome will be the fitment of 10 000 solar water geysers spread throughout the low and middle income housing sector.

 

Mr Brian Jones, from the City of Cape Town Energy Services Unit, spoke about the Renewable Energy Certificate scheme that the City would like to implement in the near future. The idea behind the scheme is to buy certificates from various projects that produce renewable energy and sell these to people or companies who would like to become “greener”. The certificates themselves represent green energy that has already been produced (such as from the Darling Windfarm) and are “intangible assets” that can be added to a companies list of assets. They also allow producers of green energy to cover the costs of its production. At the present moment, the City is researching various certificate standards, as there are no standards in South Africa. The Department of Minerals and Energy are in the process of creating standards.

 

Threats to SA Local Government renewable and other green projects are extensive. They include:

  • Some legislation in SA is not conducive to renewable energy projects; in particular the Municipal Financial Management Act. This Act does not allow Local Governments to buy electricity that is not in the interests of their residents. This means that they are unable to buy renewable energy, as it is often too expensive,
  • Project funding is often an issue because there is lots of funding for research, but none for implementation. Renewable energy projects are very expensive to start and there are no investors.
  • The REFIT policy (see below) that is being legislated in SA is not going to perform as expected. The tariff fees are too little to make renewable energy projects attractive. Some local governments would prefer to set their own tariff fee, which would be higher than suggested.
  • SA has cheap electricity which does not account for the environmental and societal costs of its production. This makes renewable energy less attractive.
  • “Green Energy” in SA is voluntary and not legislated.
  • The technical side of “feed-in” to the national grid is difficult and requires a regulatory body.
  • Opportunities for SA Local Governments, in terms of renewable energy, are severely limited.

 

In summary, National Government must align its policies with Cities' needs, especially if the SA government plans to reduce Carbon emissions by 60% by 2050, because it is at city level where emission reductions will take place most easily and affectively.

 

South African Renewable Energy Feed-in Tariff (REFIT) Guidelines

The National Energy Regulator of South Africa has recently approved the REFIT guidelines. According to the guidelines, renewable energy produced from landfill gas, wind (on-shore), concentrated solar power and small hydro can be purchased at a tariff that is higher than the price of other electricity. This will allow projects that produce renewable energy to sell their energy to Eskom, and ensure that the costs of the production of energy are recovered. Concentrated solar energy has the highest purchase tariff. CDM projects that produce carbon revenue are excluded from REFIT; however, this tariff may interfere with the “additionality” aspect of the CDM registration process, because CDM project managers may not be able to prove that they cannot get funding for the project from elsewhere. This guideline document is still in the process of being adopted by the national government. It should make the production of renewable energy viable for producers in South Africa.