5.4 Key Mitigation Sector - Energy

 

South Africa’s economy is heavily dependent on coal. According to the World Energy Council, South African coal resources were estimated to be approximately 34 billion tons, accounting for 95% of African coal reserves and 4% of world reserves. Coal provided an estimated 72% share of the country’s total primary energy supply in 2007 and accounts for approximately 85% of electricity generation capacity. Coal is also a major feedstock for the country’s synthetic fuel industry. Energy supply is therefore heavily carbon-intensive.

The energy sector is the largest contributor to greenhouse gas emissions, generating over 80% of South Africa’s emissions.In 2009, the International Energy Agency listed South Africa as the thirteenth highest emitter of carbon dioxide in the world.

Within South Africa’s energy sector, the largest source of emissions is the combustion of fossil fuels. Emission products of fossil fuel combustion processes include CO2, nitrous oxide (N2O) and methane (CH4). The South African economy depends to a large extent on energy production and use, with energy-intensive sectors such as mining, minerals processing, a coal-based electricity and liquid fuel supply sector and energy-intensive beneficiation. Energy industries comprise emissions from fuels combusted by the fuel extraction or energy-producing industries. The main energy industries include electricity and heat production, petroleum refineries and manufacture of solid or liquid fuels. Electricity generation and refineries are the most significant energy industries in South Africa, with electricity production from the national utility company accounting for more than 90% of total electricity generated in the country. The main fuel of power generation is coal, which is abundantly available, accounting for more than 92% of fuel used in electricity generation.

Given the above picture, it is clear that successful climate change mitigation in South Africa must focus on the energy sector. In this regard, energy efficiency measures, the roll out of renewable forms of energy and also a nuclear energy roll out would result in the largest emission reductions. There are however major challenges that must be overcome to realise this, including issues of cost, lead times, and the speed with which low carbon options can be established at a scale that can guarantee the country’s base-load needs.  A further key concern is the impact of this on job creation and destruction and the resultant effects on incomes. A clearer understanding of the opportunities and constraints of the low carbon transition,, including its costs and benefits over time is essential and further work to assess this must be prioritised and undertaken with a view to incorporating its conclusions in the Climate Change Response White Paper.  This work will ensure the alignment of the Climate Policy with inter alia the New Growth Path and also the Industrial Policy Action Plan and will ensure that the key national goal of employment and job creation is central to the climate mitigation strategy.

The historically low cost of electricity in South Africa that resulted from the externalisation of many energy-related costs, such as atmospheric emissions and their associated impacts, means that carbon intensive electricity is cheaper than any other source of power. This has made it difficult for renewable energy and energy efficiency options to compete with coal based power. With the recent announcement of the renewable energy feed-in tariff, as well as the recent implementation of the electricity generation levy on non-renewable electricity, energy from wind, solar, hydro and biomass are becoming increasingly more attractive. There has been a significant amount of activity in the wind and solar industries with tremendous potential for local manufacturing and job creation. Over the longer-term Concentrated Solar Power (CSP) options, with their potential to provide base load, have the potential to be a much larger component of the energy supply mix. CSP alternatives are in their early stages of piloting and improvements in technology as well as expected cost reduction coming from increased market size are expected to improve its competitiveness dramatically over the next five years. Demand side management and energy efficient technologies are also gaining momentum with very strong support from government and industry. The industrial sector promises great opportunities for improving energy efficiency. In this sector improvements in energy efficiency are likely through improved lighting efficiency, compressed air efficiency, motor efficiency, thermal efficiency, steam system efficiency and HVAC efficiency.

Certain renewable energy technologies such as solar water heaters and photovoltaic cells are well developed internationally and are generally readily available in South Africa. The challenge for the country is to identify those technologies that are most suitable for widespread roll-out in the country. South Africa has a high level of renewable energy potential and presently has in place targets of 10,000 GWh of renewable energy by 2013. To contribute towards this target and towards socio-economic and environmentally sustainable growth, and to kick start and stimulate the renewable energy industry in South Africa, there is a need for the rapid implementation of the renewable energy support mechanisms including the Renewable Energy Feed-in Tariff, Clean Development Mechanism projects, Renewable Energy Certificates, Solar Water Heating subsidies and other financial support mechanisms to support the rapid implementation of renewable energy options in South Africa .

In the context of climate change, and especially the international climate change negotiations, this means that, among others –

  • South Africais a significant contributor to greenhouse gas emissions and is one of the largest developing country emitters.

  • Historically our abundant and cheap coal as the main feed stock to power our economy has been a key source of our competitiveness as a nation. Into the future however, continued reliance on this may jeopardise our international competitiveness in a future, carbon-constrained, global economy. In addition, trade barriers on coal and carbon intensity that are being proposed by some developed countries would have serious consequences for our exports.

  • Facing the realities of a carbon constrained world and the likelihood of sustained pressure on large developing country emitters to address their emissions, South Africa’s disproportionate greenhouse gas emission profile is becoming a source of vulnerability.

  • South Africais committed to contributing its fair share to the global greenhouse gas mitigation effort and has committed to its emissions peaking between 2020 and 2025, remaining stable for a decade and declining in absolute terms from around 2035. In December 2009 and in the context of this trajectory, South Africa committed at Copenhagen to reduce its greenhouse gas emissions by 34% by 2020 and 42% by 2025 below business as usual, on condition that it receives the necessary finance, technology and support from the international community that will allow it to achieve this. A mitigation plan for the energy sector is key to achieving these objectives.

  • Fortunately South Africa has a, largely untapped, abundance of renewable energy sources, most notably solar energy. This presents new economic opportunities and potential competitive advantage.

  • Limited availability of international finance for large scale fossil fuel infrastructure in developing countries is emerging as a potential risk for South Africa’s future plans for development of new coal fired power stations.

 In response, South Africa will –

  1. Integrate a climate constraint into its energy planning tools including the Integrated Energy Plan (IEP) and the Integrated Resource Plan for Electricity Generation (IRP).

  2. Ensure that the Integrated Resource Plan for Electricity Generation (IRP) and its future iterations are modelled so as to take account of the peak plateau and decline trajectory described above through the diversification of our energy mix, the implementation of far reaching energy efficiency measures, investments in the development of new and cleaner technologies and industries and the initiation of the transition to a low-carbon economy.

  3. Use market-based policy measures such as an escalating carbon tax to price carbon and internalise the external costs of climate change. The use of such market-based policy measures should be aimed at using the market to motivate or drive the diversification of our energy mix, the implementation of far reaching energy efficiency measures and investments in the development of new and cleaner technologies and industries. Furthermore, some form of partial on-budget funding for specific environmental or social programmes may be considered to promote the long-term benefits of the carbon tax policy and help to minimise potential adverse impacts on low income households and trade exposed sectors.

  4. Establish a business environment that facilitates the development of a local renewable energy technology manufacturing, implementation and export industry and that maximises its job creation potential. This is located within the context of the New Growth Path and the country’s Industrial Policy Action Plan and in particular the national goal of job and employment creation.

  5. Design and roll out ambitious research, development and demonstration programmes that result in new, novel and innovative approaches to the diversification of our energy mix, development of alternative energy sources, energy efficiency, cleaner technologies and industries, carbon capture and storage and the transition to a low-carbon economy. 

  6. Identify and resolve the financial, regulatory and institutional barriers that may impede the implementation of the renewable energy feed-in tariff at a level adequate to incentivise large-scale investment.

  7. Review and scale up the 10,000 GWh 2013 Renewable Energy target in order that it can sustain long term growth in order to promote competitiveness for renewable energy with conventional energies in the medium and long term. Consideration should be given to the feasibility of “fleet” procurement of particular renewable technologies.

  8. Scale-up and accelerate the implementation of the “Working for Energy” programme which seeks to develop human capacity and labour intensive opportunities through renewable energy and energy efficiency technologies as well as energy management type projects which will provide poverty alleviation opportunities for SMMEs, local cooperatives and sustainable local economic development. Activities in this regard include labour intensive projects in respect of : biomass from invasive alien plants and bush encroachment; biogas for rural energy access; biogas generation from farm waste and municipal solid waste and wastewater; bio fuels development and implementation in rural applications; solar thermal energy like solar geyser fabrication, small scale co-generation; mini-grid hybrid systems and mini-hydro systems for both on and off grid applications.

  9. Explore and further develop the potential for nuclear energy in terms of the national Nuclear Energy Policy, as a means to both ensure energy security as well as meeting the country’s climate change mitigation undertakings. To this end, a new nuclear fuel cycle strategy should be implemented that provides for skills development and industrialisation and localisation opportunities with a view to developing a nuclear power station fleet with a potential of up to 10 GWe by 2035 with the first reactors being commissioned from 2022.

  10. Develop renewable energy policy, legal and regulatory frameworks that allow for differentiated but specific targets, parameters and tariffs for all renewable energy technology options (wind, hydro, solar PV, CSP, landfill gas, biomass and biofuels).

  11. Introduce innovative approaches for the establishment of sustainable structures and financing mechanisms for delivering renewable energy including securing funding international climate funding institution and other development finance institutions that fund the renewable energy projects.

  12. Invest in new and clean coal technologies and efficient technologies where coal power is still built and reinforce this through introducing more stringent thermal efficiency and emissions standards for coal fired power stations.

  13. Set ambitious and mandatory targets for energy efficiency and in other sub-national sectors. Current energy efficiency and electricity demand-side management initiatives and interventions should be scaled-up, made mandatory through available regulatory instruments and other appropriate mechanisms.

  14. Improve energy efficiency knowledge and understanding in the various sectors via awareness campaigns, demonstration programmes, audits and education, and publicise corporate commitment programmes, and public building sector energy efficiency implementation.

  15. Develop and implement mandatory appliance labelling for household appliances.

  16. Introduce Minimum Energy Performance Standards (MEPS) for appliances and equipment, as well as proposals for mandatory energy rating labelling.

  17. Legislate requirements for the installation of energy-management systems in large-scale office buildings.

  18. Replace older demand technologies or reduce their energy consumption. These technologies include energy efficient HVAC systems, heat pumps, variable speed drives, efficient motors and efficient boilers. The standards, retrofits and other management actions implemented to improve the energy efficiency of the commercial sector impact on either the useful energy intensity of demand or the energy efficiency of the technology meeting the demand. Thermal design of buildings and design measures that reduce lighting demand will have an impact on energy intensity and will reduce the useful energy demand to be met by HVAC systems, heating systems and lighting.

  19. Develop, implement and maintain a greenhouse gas emissions information management system in respect of the energy sector that provides accurate, up to date and complete information to the South African Air Quality Information System’s National Greenhouse Gas Inventory hosted by the South African Weather Service.

  20. Ensure that the greenhouse gas emissions information management system provides measurable, reportable and verifiable information on all significant interventions (i.e. interventions that reduce greenhouse gases by greater than 0.1% of emissions from the sector).

  21. Develop an initiative to roll-out an Energy Management training and awareness programme to be implemented within the industry and mining sectors.

  22. Promote the development and implementation of appropriate standards and guidelines and codes of practice for the appropriate use of renewable energy, energy efficient and low carbon technologies.

  23. Develop a legislative policy and regulatory framework to support carbon capture and storage.

  24. Extend research, development and demonstration efforts on new construction materials, housing design, and energy efficient buildings.

Comments

Make Renewable Energy Cheaper!

The biggest problem facing renewable energy generation at the moment is its cost. The Refit program is a good idea - but it is currently unaffordable and will only result in a few contracts or 'PPAs' for a few developers and then grind to a halt! The country cannot afford to be paying 3-8X time the cost (admittedly without including the externalities) of Coal-fired electricity. And yet if we do not find a way - we will destroy our planet.
We need Government to lead the way in setting up processes that bring those prices down rapidly - to allow for extensive application of these alternative technologies. It is no good just expressing the desire for local manfucturing and R&D to drive down prices - this needs to be simulated and incentivised and driven by govenrment to ensure it happens.
The promised global funds to subsidise alternative growth paths in the developing countries (to try and avoid exacerbating the problems we all face) must be mobilised and used effectively. If Government managed to use COP17 to push for the money to build large generating facilities in each major technology - say on the scale of around 1GW per technology - to stimulate this process of innovation and local production - it could make a significant impact. These funds would have to be provided free - or with no interest for at least 20 years - to allow for these projects to be built and contribute to teh cost reduction being sought after.
The idea would be to build this generation capacity locally (using international technology partners where necessary) with the aim of ensuring that by the end of that build process, we have both the capacity and the experience and the localised low-cost base to then build whatever we need at the new low cost!
This could launch a number of local industries that could then keep driving the roll-out of the kind of capacity that would replace the need for GHG emitting technologies - and replace the need for nuclear with all its attendent problems.

Emissions standards for coal fired power stations

While I would agree that there should be "more stringent thermal efficiency standards" for coal fired power stations (point 5.4.12) as this has a direct effect on how much coal they burn and hence how much CO2 is produced, a review of emission standards will have very little impact on Climate Change. If you burn coal you get CO2. To adress PM, SOx under Climate Change policy would be incorrect and should be done via other policy documents or Regulations as these are not acknowledged Greenhouse Gases.

Reduction of greenhouse gas emissions by 34% by 2020

It could be contended that this target is unrealistic based on the fact that SA is investing billions of Rand into coal fired power stations that will be coming on line at approximately the same date. To recover the investment poured into these power stations they would need to sell all of the electricity they can produce (ie. they need to operate at maximum capacity). If they operate at maximum capacity and the industry per se is responsible for ~80% of all CO2 generation then how could we possibly achieve a 34% reduction in GHG emissions? Should an "escalating carbon tax to price carbon" (point 5.4.3) be used to force the electricy generator to produce less CO2 (and inherently less electricy from the coal fired power stations) then they would need to price electricity much higher to offset their lower revenues. This would impact all areas of production in SA as much of SA's development plans were and still are based on having access to cheap electricity.

Energy Efficiency Financing Mechanisms

As per point 11 of South Africa's responses, the development of sustainable structures and financing mechanisms should not only be developed for renewable energy, but also for energy efficiency projects.

Nuclear Energy Only If Safety and Environmental Constraints Met

As per point 9 of the South African responses, the large-scale development of nuclear energy plants should only take place given that all safety and environmental issues are comprehensively addressed (eg: recycling of all waste fuel, otherwise appropriate disposal of radioactive waste that will not impact on future generations adversely, etc).

Inclusion of COFiT

As per point 6 of the South African responses, the identification and resolution of the financial, regulatory and institutional barriers to REFiT should also be carried out for COFiT.

IRP Renewable Energy Commitments

As per point 2 of the South African responses, the amendments to the Integrated Resource Plan for electricity will have to be carried out regularly based on the current version which only allows for 200MW of renewable power generation in the next two years respectively, and after that allows for nothing. If South Africa is to move meaningfully towards a low carbon economy then greater allowances for renewable power generation need to be made.

capacity building

• Training should also include behavioral changes and all organisations should include a Key performance area for employee evaluation on supporting energy efficiency and reduction in consumption through modifications in behavior.

building energy efficiency

• Energy management systems should not be limited large-scaled office buildings as the circumstances that relate to high use of lighting and HVAC systems are relevant to the entire built environment.
• Furthermore construction materials and products for development of new/ existing buildings which do not support low carbon environment should not be phased out of the market. This is the most appropriate way of ensuring that energy efficient appliances are used, and limits the costs and time required for post monitoring.

green products

• Labelling should not be limited to household products
• Products that are not energy efficient should be removed/phased out from the market
• Government should subsidise energy efficient products

RE at home

Feed in tariffs should also include small scale generation i.e. <1MW of installed capacity in future so as to not exclude generation from homes, which are the main consumers of electricity during peak times. Small scale generation of wind energy in homes that are located in already built up and degraded urban environments is also beneficial and may be more appropriate than large wind farms in rural/biodiverse areas that support large numbers of bird species.
We would caution against the use of biofuels where the production impacts on further agricultural expansion and thus further water usage and biodiversity loss, that does not necessarily support food, climate or water security and impacts on ecosystems.

behavior change and standards

There has been no mention of reduction of carbon emissions through behavioural changes in this document.

We would urge that not only financial, regulatory and institutional barriers are identified and resolved but also ENVIRONMENTAL barriers. Although the conservation sector supports the application of RE such a solar and wind, we are also aware of the environmental implications should these RE plants be placed in areas of threatened ecosystems or for example along migratory flight paths for birds. The construction of wind farms also has a large environmental footprint, especially during construction that will require restoration and maintenance and therefore careful consideration of critical biodiversity areas and ecological support areas as outlined in our national biodiversity maps is required. We would urge that this information also be integrated into planning for example in the national wind atlas which is currently under development.

CAP supports the use of robust and internationally recognised standards in the land use sector and renewable energy (RE) sector. CAP uses the Community, climate and biodiversity standard (CCBS) in all projects which are to be used as offsets and as part of the planning and design of new reforestation/restoration projects. We have also been working closely with the Gold standard to see if we can link in more robust social, environmental and biodiversity criteria from the CCBS into this RE standard so that as wind or solar farms for example are developed the social and biodiversity benefits are highlighted and any negative impacts are mitigated. We would very much advocate for the use of CCBS and Gold standard in our projects or that the EIA process is able to pick up potential threat or opportunities for communities and biodiversity with renewable energy project and provide recommendations for these.

market mechanisms

Scenarios based on using the market to drive a low carbon economy, show it to be the most successful approach. While taxation on carbon intensive approaches is supported, there should also be pro-poor policies which need be made implicit in the strategy. Tax deductions for clean energy and energy efficiency technologies should be included, as well as for companies that provide these as benefits to their employees.

mitigation through land use

Although it is agreed that the energy sector should be the focus of mitigation efforts, emissions resulting from deforestation and degradation of environments are substantial and can only be expected to increase as urban environments expand and population grows. The REDD mechanism (Reduced emissions from Deforestation and Degradation) has not been mentioned in this document. It is important to bridge the links with the REDD concept and how it aids with sustainable land management practices and the services that proper functioning ecosystems provide

REFIT & PPA

This page is the most exciting page on this entire green paper.But implementation of policy and opening the market MUST be done soon.There is plenty of investment available from all over the World but without PPA's and REFIT in place these remain pie-in-the-sky.Ease of process to set-up a PPA & its subsequent REFIT are essential to driving this market.Eskom can come on board if that's what its going to take, but we cannot continue to invest in coal when their are other alternatives that have sustainable inputs (sun, wind, waste...etc).Make these changes in the green paper and there is billions of dollars worth of investment out there,I should know!