Green Electricity a new paradigm for more sustainable energy service provision

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Green Electricity a new paradigm for more
sustainable energy service provision?

• City Energy Strategies Conference
• Cape Town
• 19th 21st November 2003
• Glynn Morris, AGAMA Energy

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Green electricity what is it?

• Green electricity, or Green Power, is electricity
  which is certified to be different from normal
  electricity on the basis of how it is generated
  and supplied to customers
• The certification ensures integrity that the
  generation is
• from renewable energy resources, such as
• Solar energy
• Wind energy
• Biomass energy
• Hydro energy
• Wave or tidal energy
• the manner which is sustainable

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Why is Green Power of interest?

• We need energy services, including those provided
  by means of the electricity system
• The differing climate change implications of
  electricity production indicate the need to
  differentiate the quality of different types of
  electricity
• Green power is less environmentally damaging than
  non-green (conventional) power
• Resource consumption
• Emissions / waste
• It offers a mechanism for delivering more
  sustainable energy services which actually create
• New long-term employment opportunities
• Decentralized economic development

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Electricity generation in South Africa
Source ESKOM
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Generation capacity and investment requirements
in SA

• In the absence of DSM or SAPP imports, South
  Africa needs
• a continuous investment programme for new
  electricity generation capacity
• Approx. 1000 MW per annum by 2007 (1 billion
  p.a.)
• a strategy for replacement of 25 GW of existing
  capacity by 2020 (25 billion)
• Based on the comparative social and environmental
  benefits, renewable energy technologies should
  comprise at least 15 of this new investment (
  minimum of 150 million p.a.)

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Employment in coal-generated electricity sector
Source Own analysis, based on data from Eskom
(1989), Eskom (2002), Statistics SA (1995),
Statistics SA (2002), NER (2000), DME (2003c).
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An employment scenario for 2020

• Based on
• 15 by 2020 and 100 local manufacture
• projected electricity requirement of 267 TWh in
  2020
• current coal-based electricity consumption of 182
  GWh in 2000 employing 59,987 people
• there will be a net increase in both production
  and employment in the coal-based generation
  sector. There will be 36,373 new RET-related
  jobs in 2020.

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What is the international experience with Green
Power?

• Approx. 10 years of experience in Europe, USA and
  Australia
• USA
• About 40 of retail customers in the United
  States now have an option of purchasing a green
  power product directly from their electricity
  supplier.
• 15 marketers now sell "Green-e" certified TRCs
  nationally
• lt 1 of US consumers are buying Green Power
• Similarly, in Germany and the United Kingdom this
  percentage is less then 1 of the households.

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Green electricity in the Netherlands

• Over 13 of the Dutch households use renewable
  energy
• The amount of customers in The Netherlands is
  still growing fast
• Soon there will be 1 million of Dutch households
  using green energy

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Typical announcement

• Federal Green Power Purchasing Soars
• The U.S. Department of Energy's Federal Energy
  Management Program reports that federal purchases
  of green power have surged in recent months. Over
  the last year, federal purchases increased from
  125 million kWh to more than 300 million kWh-the
  Department of Defense alone has at least 19
  agreements to purchase renewable energy or
  renewable energy credits, totaling approximately
  200 millionkWh annually. Green power purchases
  represent nearly one-half of the renewable energy
  resources acquired by the federal government
  since 1990 to meet the intent of Executive Order
  13123, which is to encourage greater use of
  renewable energy by the federal government.
• http//www.eere.energy.gov/greenpower/0903_femp.
  shtml

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Is green electricity relevant in a developing
country like SA?

• YES
• In addition to DSM/conservation gains, we need
  new generation capacity
• Green Power opens the door for
• political commitments to RE ( mandatory quotas
  some Green Electricity for ALL)
• consumer choice ( the voluntary market 100
  Green Electricity for those who wish to pay for
  it)
• It offers excellent opportunities for moderating
  the heavy dependence on coal and nuclear
  generated electricity in the southern African
  region diversification of the mix
• Diversification brings with it
• Potential employment
• Risk adjustment of the economic costs of
  generation
• Technical considerations include
• Distributed generation
• Efficiency lower transmission and distribution
  losses
• Greater flexibility and stability in the
  generation mix
• Energy security

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What is the cost of Green Electricity?

• Green electricity costs more or less the same as
  normal electricity, BUT
• the full costs of normal electricity are not
  included in the price we pay per unit of
  electricity
• We pay the hidden costs (or external costs) of
  normal electricity through our taxes (say, for
  example, to cover the costs of mining / nuclear
  accidents or oil spills) and the depletion of the
  quality of our health and the environment
• present cost of normal electricity can range
  between 15 40 c/kWh
• At the WSSD, the NER approved a voluntary tariff
  of 50 c/kWh

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Costs - contd

• Overall it is expected that the costs of Green
  Electricity will fall (in real terms), as
  economies of scale kick in and with technical
  developments, whereas conventional electricity
  costs are predicted to rise to reflect the full
  economic costs of production and also due to
  increased input costs for land, water, fuel(s)
  and risk

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What are the benefits of Green Electricity?

• It is less damaging to peoples health and to the
  local and global environment
• It asserts the positive value of more sustainable
  electricity generation and utilisation
• It provides more long-term employment creation
  than conventional energy systems
• It can be implemented at any scale from 1 kW to
  1 GW
• It can be implemented quickly with shorter lead
  times (less risk) than large conventional power
  stations
• It offers economic empowerment opportunities
  because it can be owned by individuals and SMEs,
  in addition to large corporations or parastatals

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What are the benefits of Green Electricity
contd?

• It can be implemented anywhere on (or off) the
  national grid and hence provide for more
  decentralised economic development
• It offers an easy, but meaningful, way for public
  authorities and businesses to demonstrate their
  commitment to more sustainable operating policies
  and more equitable triple bottom line reporting
• It assists the government objectives of
  increasing the amount of renewable energy in the
  South African Energy economy as set out in the
  1998 White Paper on Energy Policy and Draft White
  Paper on Renewable Energy (www.dme.gov.za/energy/)
  

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What are the constraints on Green Electricity

• Higher average cost (at present) to the consumer
  per unit of electricity
• Lack of familiarity consumer and political
  awareness
• Lack of support infrastructure for implementing
  and operating green electricity systems
• Green electricity cannot immediately replace all
  the more conventional electricity generation and
  supply systems this will be a gradual process
  which will have to start somewhere and grow
  systematically

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Is there a market for Green Power in South Africa?

• We dont know
• Market surveys have been undertaken in Cape Town
  (2002) and Johannesburg (in progress)
• Indications are promising but are not tested or
  proven

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What is the available capacity in the region?

• There is currently more than 200MW of existing
  generation capacity in SA which meets the NER
  draft criteria
• Includes
• Biomass CHP
• Small sustainable hydro
• Wind
• Solar PV both grid-connected and off-grid
• The real objective of Green Power is to stimulate
  investment in NEW green generation capacity

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Eskom wind demo site - Klipheuwel
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Grid-connected PV systems
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Wind and solar in Kimberley
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Temaruru Community Managed Wind Powered Mini
Grid, Zimbabwe
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Policy and Regulatory context

• The White Paper on Energy and Draft White Paper
  on RE both support the development of the RE
  sector
• The key to a meaningful Green Power sector is the
  integrity of the certification and regulatory
  framework
• In 2002, the Green Power for the WSSD Project
  supplied 845MWh of green power to the World
  Summit venues pioneered a regulatory and trading
  framework (using a TREC mechanism) which was
  endorsed by the National Electricity Regulator in
  SA
• The Regional Electricity Regulators Association
  (RERA) in southern Africa is supportive of
  regional trade of Green Power
• The FCO in UK is supporting a study into the role
  for TRECs for regional trade of Green Power in
  southern Africa
• The REEEP has identified Green Power as a key
  opportunity for accelerating the development of
  RE technologies

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Green Power for the WSSD

• a project grant under the DEAT climate change
  program funded by USAID
• 845MWh of Green Power supplied to the two main
  venues of the WSSD
• In association with NER, CityPower, green
  generators, UBUNTU Village (JOWSCO) and NASREC
  Expocentre

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Eight good reasons to choose Green Electricity

• Reduce the negative resource consumption and
  Climate Change effects of electricity use
• Demonstrate environmental responsibility
• Provide competitive advantages
• Valuing energy and achieving energy savings
• Hedging against present and future financial
  uncertainties
• Stabilise volatility in operating costs
• Enhance relations with employees
• Strengthen relations with local communities
• Adapted from WWF 2002

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Links

• EUGENE www.greenelectricitynetwork.org
• Global Warming www.climatehotmap.org
• Green Energy in Europe www.greenprices.org
• International Panel on Climate Change
  www.ipcc.ch
• International Council for Local Environment
  Initiatives www.iclei.org
• European Sustainable Cities and Towns Campaign
  www.sustainable-cities.org
• REEEP www.reeep.org
• AGAMA Energy www.agama.co.za

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Thank you !
AGAMA Energy (Pty) LtdP O Box 606, Constantia,
7848South Africatel 27 21 701 7052fax 27
21 701 7056cell 27 83 780 9460glynn_at_agama.co.z
awww.agama.co.za