Cape Town and Renewable Energy

1
Cape Town and Renewable Energy
Presented by Brian Jones Date Thursday, October
08, 2009
2
Overview

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

3
The Imperative

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

25 of RSAs energy is consumed in the 6 largest
Cities
4
How can an ostrich fly from New York to a Pork
Sausage?
It cant because it aint got no wings!
How can the City increase its use of renewable
energy?
5
The Missing Imperatives

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

6
Renewable Energy Potential in the Western Cape
7
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
• 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

8
Challenges regarding Renewable Energy contd

• Lack of corporate home RE in the City
• Environmental Resource Management? Not their
  competence
• Electricity? Not their mandate.
• Corporate Services (Facilities management)? No
  capacity.
• Lack of capacity
• Understanding of RE issues
• Project Management
• Financial conservatism

9
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

10
Where was the first apple tree planted?
In the ground!
Where do cities start in increasing their
renewable energy mix?
Where they can!
11
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

12
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

13
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
• Audited Green Energy certificates will be
  provided to prove green energy consumption
• Green Electricity to be charged at initial 25c
  per kWh surcharge over normal monthly bill (cost
  plus minimal mark-up)

14
Project Location
Darling Wind Farm
Intake Point, Atlantis
15
Darling Wind Farm
16
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

17
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
18
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
• Efficient Water pumping projects
• Sewerage biodigestors
• Waste to Energy

19
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

20
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

21
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

22
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)

23
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

24
In Summary

• How can the City increase its use of renewable
  energy?
• Short answer- It cant because it aint got no
  wings.
• We are doing what we can with what we have, but
  need supportive legislation and financial support
  and strengthened institutional capacity to make a
  significant difference.

25

• Let us work togetherfor a greener City