Experience with SWH in CDM Project development

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Experience with SWH in CDM Project development

• Steve Thorne
• SouthSouthNorth
• COP 11 December 2005

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Principles of making lemonade

• Maximising the southern benefits to contribute to
  sustainable development.
• High sustainable development benefits to achieve
  risk reduction.
• Stringency to achieve risk reduction.
• Transparency to achieve efficacy of learning.
• to achieve ownership and risk reduction.
• Etc

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Contents

• SouthSouthNorth - where is it?
• CDM points of departure.
• Examples and lessons low-cost housing, landfill,
  and Industry.
• Some conclusions on doing mitigation in the
  South.
• Some suggestions on how to get more
  socio-economic benefits from doing mitigation.

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SouthSouthNorth

• South-South-North collaboration.
• Maximising developing country benefits.
• Hands-on learning-by-doing.
• Learning organisation.
• Working in Bangladesh, Brazil, Indonesia,
  Mozambique, South Africa and Tanzania.
• SSN2 to end of 2008
• 7 adaptation projects that reduce poverty.
• 5 mitigation projects that reduce poverty.
• Capacity development, technology receptivity and
  policy inputs and lessons.

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The Kuyasa project has champions
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Kuyasa Low-cost Housing Energy Upgrade

• Retrofit 2309 low-cost RDP houses
• in Kuyasa, Khayelitsha Cape Town with
• Insulated ceilings
• solar water heaters and
• compact fluorescent lamps and
• associated infrastructure

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2.8 tonnes CO2/house/year

• 2.8 tonnes CO2e/house/year
• Total 6558 tonnes CO2e/year

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Kuyasa elements

• Public sector led, household owned.
• All carbon income goes to project.
• First CDM project in Africa
• First Gold Standard project in the world.
• Three methodologies applied in bundle.

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Barriers

• Perceptions of technology for the poor.
• Roofs are poorly constructed.
• Houses have no warm water plumbing.
• Standards for SWHs in place but testing rigs and
  labelling not available yet.
• People are living in the houses.
• How to ensure buy-in and not valueless free-bee.

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Financing Kuyasa
(Based on 10 year cash flow and NPVs)

• Current Anticipated Inflows
• Carbon Income R2.5m (price of carbon is 8/CER)
  but could be as high as R4.4m at 14
• Dept Environmental Affairs and Tourism (DEAT)
  Poverty Alleviation Grant R12.4m
• Provincial Housing Dept research grant R4m
• Community repayment scheme R2.4m (R20/hh/month,
  NPV over 5 years)
• Contributions from Electricity de France R0.7m
• Total R22m

Total Cost R20 - 22m
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Key elements

• Status quo batch heating in pots on stoves
  (kerosene and electric).
• No hot water on-demand service in Kuyasa
  households.
• Question how to take account of poverty/ lack of
  infrastucture in a situation of increasing access
  to goods and services?
• Build model of suppressed demand.

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SWH Baseline scenario

• Install 10 systems (with electrical back-up)
• Meter consumption and temperatures.
• Blow down tests.
• Build model based on insolation data.
• Calibrate model for different systems.
• Key assumption all solar heated water (bounded)
  would have been heated by electricity.
• Electricity in SA is 0.9 to 1kgCO2e/kWh

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SWH monitoring

• Model predicts quantity and quality of warm
  water per year.
• Therefore monitoring (for SWHs exclusively) is
  limited to testing whether SWH is operational.

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Kuyasa co-benefits

• Poverty reduction New services and energy
  savings. Saves R600/hh/annum in energy costs
  (Status quo).
• Improves local air quality and health conditions
  for households.
• Employment creation demand management increases
  employment prospects (500 plus person years for
  upstream and installation) - more for maintenance.

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Kuyasa co-benefits

• Prices and risk use of renewable energy
  stabilises future fuel price and availability
  uncertainties.
• Spill over large-scale procurement can drive
  economies-of-scale in price of technologies.
• Potential to reduce/defer electricity peak and
  infrastructure (ADMD).

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Kuyasa co-benefits

• Building on good practice The poor are efficient
  managers of energy services within the
  constraints of the fuel and appliances they have
  access to. The projects builds on this.
• Replicability more than 1 million new low-cost
  houses since 1994 in SA most built without
  insulated ceilings or water heaters.

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Status

• Kuyasa is currently being implemented by the
  City of Cape Town through Agama Energy and
  SouthSouthNorth Africa.
• 10 000 CERs sold to offset G8 summit at nearly
  Euro 15 per CER.
• SSN has now received REEEP funding to undertake
  the replication project for completion by March
  2006.
• Multiple requests for replication greenfields
  applications.
• Considering TRECs .

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Solar water heaters
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Doing CDM in the South

• CDM is not easy it requires specialists
• CDM has very little to do with SD sadly
• Attracting FDI appears to be higher priority that
  SD.
• SD remains merely a gate that may be shut if
  undesirable projects are promoted under CDM.
• CDM can leverage technology leapfrogging.

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Doing CDM in the South

• CDM can address poverty by improving.
  affordability of energy services and creating
  employment on the demand side.
• Possibilities exist for combined
  mitigation-adaptation projects in future.
• SD benefits could be monetized through
  instruments like the Gold Standard if the premium
  is paid.

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Conclusions of experiences

• CO2 projects may increase SD benefits in general
  perhaps argument for a premium for CO2 or
  decreased GWP of other GHGs.
• So can socio-economic benefits really be driven
  in the CDM? Yes, but there is a need for a
  mechanism that enables a sustainable development
  dividend
• There are few points of leverage for the South
  choosing projects, choosing partners, timing
  transactions.

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The installation of .(the interventions) in
homes in Kuyasa has potential to make a
significant impact on the livelihoods and quality
of life of many .The savings in time, energy,
fuels, and money that they bring to the
households are significant in the context of
deepening poverty in South Africa. Fikiswa and
Thomas
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Where is SSN?

• For more information try www.southsouthnorth.org
  
• For assistance in project development try
  www.cdmguide.org or www.cdmguide.com
• Many thanks