Cape Town and Renewable Energy

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Cape Town and Renewable Energy
From New York to a Pork Sausage
Presented by Brian Jones Date Sunday, November
15, 2009
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Overview

• The Imperatives
• The Challenges
• The Possibilities
• Current Initiatives
• Institutional Arrangements

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The Imperatives for Renewable Energy

• Security of Electricity Supply
• Electricity Price Increases
• Peak Oil- fuel shortages
• Cost of CO2
• Climate Change
• Job Creation

25 of RSAs energy is consumed in the 6 largest
Cities
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Renewable Energy Potential in the Western Cape
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What Mandate should Cities have to address the
risks?

• Mandates to mitigate their risks by
• Diversifying energy sources for energy security?
• Reducing City CO2 emissions?
• Sheltering/hedging against huge future energy
  price increases?
• Or
• Leave it in the hands of Eskom?

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The Financial Challenge

• Cape Town has a 10 renewable energy target for
  2020
• Cigarette box calculation
• Present average cost of Eskom electricity to the
  City 20c per kWh
• Cost of large scale R/E about R1.00 per kWh
• Cape Town pays R2.6 Billion for electrical energy
  per year
• Therefore present cost to green 10 of Cape
  Towns electricity
• R1 billion per year
• (govt. national support R9m and R55m)

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The Missing Imperatives

• Clear Mandate
• Good Legislation
• Financial Support
• To quote a Municipal CFO
• I have no mandate to spend one cent more on
  anything because it is green

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Challenges regarding Renewable Energy

• Low cost of coal sourced electricity
• R.E. generally much more expensive
• Without financial support, R.E. projects will not
  happen on a large scale (REFIT and
  municipalities?)
• Lack of clear regulatory framework
• Inhibiting legislation governs Local Government
  procurement and expenditure e.g. MFMA Section 33-
  contracts gt 3 years must be of significant
  financial or financial economic benefit to the
  city
• NERSA generation licenses- cannot spread premium
  of R/E across all consumers- must sell into
  voluntary market
• Carbon trading

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Cities Potential Roles

• Leading by example with regard to its efficient
  use of energy and the use of alternative forms of
  energy efficiency and in particular renewable
  energy.
• Local Government legislation to promote energy
  efficiency and renewable energy
• Financial support for the wider use of renewable
  energy both through direct financial support, tax
  breaks and the provision of other incentives.
• Communication and awareness.
• Provide an enabling framework to facilitate
  energy efficiency and renewable energy projects
  instituted by others through the creation of a
  supportive administrative environment.
• Advocacy

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Where was the first apple tree planted?
In the ground!
Where do cities start in increasing their
renewable energy mix?
Where they can!
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Cape Towns Energy and Climate Change Strategy

• 10 of energy to be sourced from renewable
  sources by 2020
• 10 of houses fitted with solar water heaters by
  2013
• Primary role of City is to be facilitative
• Create enabling framework for investment and
  project development

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Darling Wind Farm -Project Goals

• The project is a National Demonstration Pilot
  Project designed to
• explore the technical, commercial and
  environmental viability of converting wind energy
  into electricity in the Western Cape and other
  regions
• It is funded jointly by
• The Central Energy Fund (CEF)
• The Development Bank of South Africa
• The Danish Government (Danida)
• A private developer Darling Independent Power
  Producer

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The Darling Wind Farm

• SAs first commercial wind farm
• 4 x1.3 MW wind turbines North West of Darling
• Generate - 13.2 GWh of green/clean electricity
  per year
• City of Cape Town will purchase entire production
  for 20 years
• Electricity wheeled over Eskoms network to the
  City
• Generator license conditions preclude this
  premium being spread across all consumers.
• Green power therefore to be sold into voluntary
  green market in the form of Green Electricity
  certificates.
• Green Electricity Certificates to be sold at
  initial 25c per kWh surcharge (cost)
• GEF production subsidy for 2- 5 years.

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Darling Wind Farm

• With MFMA and cabinets Eskom sole purchaser
  announcement, this type of project is very
  unlikely to be repeated

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Project Location
Darling Wind Farm
Intake Point, Atlantis
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Darling Wind Farm
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City Initiatives

• Efficient Water Heating by-law being prepared
  to go out for public participation
• SWH in reserves / other council facilities
• Landfill gas MoU with CEF to do
  scoping/feasibility
• Efficient Water pumping projects
• Sewerage biodigestors
• Waste to Energy

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City Initiatives

• Grid Connection of Small Scale Renewable
  Generation
• Interim technical spec, no reverse feed
• National working group
• Net metering tariff direction required from NERSA
• Communication campaign- Sustainable City
• Green Buildings Guidelines
• Greening of Procurement Policy fuel efficiency
  in fleet tenders etc
• Energy efficiency in Council Buildings Programme
  
• 200 Council buildings now priority 16 blgs being
  assessed for retrofitting

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City Initiatives

• Low income housing projects
• Kuyasa first CDM project in Africa, only
  housing one? 2300 units with ceilings, ee
  lighting, low-flow, SWH
• Council rental stock upgrade (CRU project) 40
  000 units resource efficiency ee lighting, low
  flow, ceiling insulation, SWH .
• Greenfields developments tender to green the
  housing spec
• Programmatic CDM potential under investigation

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City Initiatives

• Carbon Work Group
• Cross-departmental (20 members) including legal
  and finance departments!!
• Carbon Projects Manager
• Activities
• Carbon projects scoping
• Preparation for all projects with carbon
  mitigation potential to be traded
• Where appropriate
• CDM
• Programmatic CDM
• Voluntary trading

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Institutionalising Sustainable Energy Practices

• Far reaching institutional change introduced
  early 2008
• Strategic Focus Area 3 Energy for a
  Sustainable City
• Energy Committee (Section 80 advises Mayor and
  Mayoral Committee)
• Cross-council work streams headed by Executive
  Directors
• IDP, scorecards
• Low budget priority

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Energy Committee Section 80
Institutional Developments to Address ECC
EMT Sub-committee
Work stream 1 Energy Climate Change Strategy
Work stream 3 Adaptation and Climate Proofing
Work stream 2 Energy Security and Carbon
Mitigation
Work stream 4 Communication and education
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Critical issues for development of ECC sector

• Institutional
• Cross cutting sector need great deal of
  coordination between departments
• New area for the City to engage in no blue
  print
• Lack clarity re EDI/REDS restructuring process
• Support for City initiatives from Province and
  National
• Legal
• MFMA and associated procurement complexities
• City mandates re energy
• Dependence on national developments
  (feed-in-tariff, subsidies for renewables etc)

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Critical issues for development of ECC sector

• Human capacity
• Need dedicated staff in a number of positions and
  departments
• Complex and new sector variety of specialist
  skills needed
• Finance
• New area for City to finance, but also an area
  which can realise significant savings and income
  ring fencing of carbon income and energy
  savings?
• City dependent on income from electricity sales
  for cash flow and to subsidise activities
• Business model for widespread retro-fitting of
  SWHs

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In Summary

• The City is facing major energy related
  challenges/catastrophes
• The Citys mandates regarding energy related
  mitigation steps are weak and unclear.
• The City is doing what it can with what it has,
  but needs clear mandates, good supportive
  legislation, financial support and strengthened
  institutional capacity to make a significant
  difference- it needs an enabling environment

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How can an ostrich fly from New York to a Pork
Sausage?
It cant because it aint got no wings!
How can the City significantly increase its use
of renewable energy?
So what are you going to do about it?
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• Let us work togetherfor a sustainable City