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

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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

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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 MDGs
• 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 ECO (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)

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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

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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?