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The South African Photovoltaic Industry Association (SAPVIA) welcomes the release of the 2016 update of the long-awaited Integrated Resource Plan (IRP). The updated IRP will give all South Africans the opportunity to interrogate the choices and cost assumptions used by the IRP planners to reach their conclusions regarding technology choices.
The allocation of 17 600 MW for Solar PV in the 2016 IRP update is a step in the right direction, but falls short of the immense potential South Africa has to offer in this sector. Independent modelling, based on up-to-date figures from South Africa’s REIPPPP bidding rounds confirm that renewables are the best policy choice in order to meet South Africa’s energy needs at the least cost, while still maintaining our carbon obligations.
Evidence shows that the least cost path for South Africa to achieve a sustainable, low carbon, high job creating energy mix is one that contains a large renewable energy component, supplemented with gas fire power. This renewables and gas scenario has been repeatedly seen in our BRICS partners and elsewhere globally.
In the current fiscally constrained environment, SAPVIA believes that the additional cost of deviation from this ‘least cost scenario’ should be made public to allow policy makers to make informed value-for-money decisions. Any additional cost to the South African fiscus that will impact on critical social spending programmes should be debated.
SAPVIA believes that the ‘build constraint’ placed on renewables should be removed in the IRP models and scenarios in order to reflect the real potential that solar technology can play, and will examine the rationale for the current artificial cost-ineffective constraints being placed in the IRP models as it prepares its submission for the consultative process.
It is important that the energy debate is one based on facts rather than assumptions and SAPVIA intends to robustly participate in the public participation process.
WWF South Africa welcomes the release of the long-awaited draft Integrated Resource Plan (IRP), and the proposed delay on the nuclear build. However, we echo the sentiment of others that the proposed nuclear build should be taken off the table altogether and more renewable energy should be added into the mix.
It is of concern that on the back of the release of the IRP, state utility Eskom has announced that it will be putting out a Request for Proposals for the proposed nuclear build for submission before the end of 2016.
The draft IRP contains several scenarios which still need to be debated and interrogated through public consultation. For Eskom to pursue a call for proposals at this time, without further consultation and a cabinet-approved IRP in place, is both misplaced and premature.
Saliem Fakir, head of WWF SA’s Policy and Futures Unit, commented: “South Africa has made commitments both internationally and nationally to reduce our carbon emissions, and in order to meet these commitments, we need to install as much clean energy as possible at the most affordable price.
“Nuclear is not the answer. In our view, an unconstrained renewable energy scenario as the base-case would be the most appropriate to meet South Africa’s developmental needs – therefore there should be no cap on this source of energy. The excuse that there is insufficient grid capacity to meet this surge in installations for renewables is true for all other options and part of the plan should be to strengthen the grid to overcome these obstacles.”
There is an increasing global demand for food, water and energy. All three are interlinked, a fact that has increasingly become the focus of attention for policy makers and governments.
One initiative has been the Water-Energy-Food security nexus developed in Bonn by Holger Hoff under the auspices of the international climate change Conference of the Parties (COP). The aim was to improve management of the complex links between water, energy and food systems. It is increasingly being used by international organisations to evaluate whether approaches to meeting development targets set out under the Sustainable Development Goals are coherent.
Understanding the connections between basic food demands and accessibility to water and energy is also important when it comes to climate change and its impact on agriculture and livelihoods. This issue featured prominently at COP22 in Marrakech in 2016.
The approach can play a massive role in reducing resource loss and maximising benefits. For example, countries like South Africa and Tanzania have started using the approach to develop policies around water, energy and food production.
In South Africa, the Water Research Commission has begun to use the model in national discussions on managing the effects of climate change. Tanzania applied integrated water resource management in its water sector and African Union strategy on climate change. But very little progress has trickled down to actual policy development. Regions like southern Africa need to move beyond simply having a framework for understanding the connection between the three. This is only the first step. Now, more case studies are needed to see how the three components interact and also how policies can be successfully implemented.
The problem is that water, energy and food systems are often treated independently. Most countries have isolated water and energy policies. But policies that ignore the link between them can be inefficient and even counterproductive. The nexus approach can help transform isolated policies into integrated development plans.
Countries with severe water constraints, particularly in the Middle East and North Africa, have started to develop policy that looks at all three factors. These regions have become testing grounds for the practical application of the nexus approach. Solutions, such as the development of multifunctional productive systems to improve natural resources use, have been implemented.
In Jordan, these have been developed to include water, energy and food. A pilot system has been implemented around the Sahara Forest Project. This includes solar energy farming in water scarce regions.
There are others signs of progress. Awareness about the challenges posed by climate change has led to the better allocation of resources through careful planning, savings and recycling. Some countries have developed national policies around these issues. And governance patterns and language in policy development have started to reflect the linkages between water, energy and food.
But attempts to integrate water, energy and food management still have a long way to go. Most institutions – like the various water, energy and agriculture departments or organisations – operate under a complex system of unclear mandates and obscure funding and don’t consult with others.
This doesn’t mean that efforts to shape resources management are doomed. But there is a clear need to improve how it’s done.
In southern Africa the nexus approach has been discussed by the Southern African Development Community in the water sector. One of the biggest challenges for the region is that water is distributed very unevenly. But it is short of electricity and some countries are highly dependent on hydro-power. What this means for food production is a challenge given that the over-allocation of water resources for food production would have a detrimental impact on energy production.
To integrate water with food and energy, the regional body has taken steps to raise awareness of the issues.
But each member state faces very different challenges. For example, South Africa is a middle-income country and has a fairly developed industrial sector that produces food. This requires concentrated investment in energy and water infrastructure, which the country has maintained partly due to its economy’s size and maturity.
Malawi, on the other hand, lacks the basic infrastructures to supply its population with water and access to energy. It is also much more vulnerable to the impact of drought and flood.
Tanzania’s economy relies heavily on agricultural production. It is therefore particularly vulnerable to changes in weather patterns. In addition, it doesn’t have the capacity to adapt to these changes which limits agricultural productivity.
For a policy to be effective it must take into account what infrastructure is available in a country and a region. It must also be backed up by proper data collection and institutions must be strengthened to overcome bottlenecks. What’s also important is that interventions must be designed with the involvement of all stakeholders, including consumers.
A common mistake is that governments are solely responsible for managing resources. Cooperation is key. Governments, institutes, and consumers must build relationships. Discussing their needs is crucial to success.
There is no one-size-fits-all approach. One common factor is that investment in innovation and technical support is vital so that a range of solutions can be developed.
The nexus approach has the potential to help African countries meet sustainable development goals. This can only happen if the approach is turned into actions, like policy development and implementation.
Although several municipalities have been remiss in paying their electricity bill, the suggestion that power distribution should be shifted from local government hands to Eskom would have serious repercussions on local and state coffers.
This is according to Eyal Shevel, sector head of corporate and public sector ratings at Global Credit Ratings (GCR), in the wake of Eskom interrupting electricity supply to non-paying municipalities in the North West and Northern Cape in January 2017.
“Some people have called for delinquent municipalities to lose control of electricity distribution to consumers,” says Shevel, “This would not be workable, however, because the way the municipal sector in SA has been structured. Electricity distribution comprises a crucial part of income for local authorities.”
He says electricity revenue in South Africa’s eight metropolitan municipalities and 19 secondary cities accounts for 38% of total revenue, on average. For smaller, more rural municipalities, electricity distribution accounts for a smaller share – around 24% revenue on average, but can be well below 20%. Nevertheless, this revenue source is second only to government grants in these locations.
“Controlling the electricity distribution also has another major benefit for local authorities, in that the threat of disconnection can be wielded to ensure payment of all municipal accounts, such as rates and taxes and sewerage.”
“By creating a direct link to Eskom for customers in these smaller municipalities, it would make these local governments almost entirely dependent on the national treasury for income and impair their primary tool for enforcing collections. This is simply unaffordable for our economy,” Shevel says.
It would also place an enormous administrative strain on Eskom, especially at a time when they need to be focussing on power generation and maintenance.
He says there are two possible solutions to the problem of municipalities defaulting on their debts to Eskom, namely a ring-fenced account and/or a guarantee provided by national government.
With a ring-fenced account, electricity consumers could make payments into the special account. Funds in this account would then be paid to Eskom for the bulk electricity consumed, and only once the debts are settled would the municipality be able to access the margin earned for general purposes.
The ring-fenced account could provide Eskom with the first right to the money it is owed, with the remaining margin paid out to the municipality once the debt is settled. The second option of a type of government guarantee, Shevel says, may be a more applicable and practical solution for the smaller municipalities. This would see the national treasury pay Eskom directly for a municipality’s debt and then subtract that figure from government grants to the area.
A government guarantee would provide greater confidence in areas that lack the robust financial controls and levels of investment in economic hubs – a solution which is used in Nigeria’s rural states. “The downside to this solution is that when there is a shortage of funds or money is squandered, it takes available grant funding away from social needs,” says Shevel.
He concludes, “We need to find a mutually beneficial solution to keep the current system of municipal electricity distribution in place, but which also offers Eskom protection on their books.”
With the end of load shedding, government is now more committed to the Independent Power Producers Programme, President Jacob Zuma said on Thursday, 9 February.
Delivering the State of the Nation Address (SONA) during a joint sitting of the National Assembly and National Council of Provinces in Parliament on Thursday night, the president said work is continuing to ensure energy security.
“Government is committed to the overall Independent Power Producers Programme and we are expanding the programme to other sources of energy, including coal and gas, in addition to renewable energy,” he said.
The country’s National Development Plan (NDP) has stressed the importance of a greater mix of energy sources and a greater diversity of independent power producers (IPPs) in South Africa’s energy mix. This has become a reality through the Independent Power Producers Programme that is spearheaded by the Department of Energy.
On Thursday, Zuma said power utility Eskom will sign the outstanding power purchase agreements for renewable energy in line with the procured rounds. On the electrification of households across the country, he said nearly 7-million households have been connected to the grid and now have access to electricity.
“The successful execution of Eskom’s build and maintenance programmes helped ensure stability and an end to load shedding. Work is continuing to ensure energy security. “Renewable energy forms an important part of our energy mix, which also includes electricity generation from gas, nuclear, solar, wind, hydro and coal.”
At its Quarterly System Status media briefing last month, Eskom announced that load shedding was last implemented 17 months ago, with the power system remaining stable. It said plant performance has also improved, while maintenance remains on track.
Sub-Saharan Africa, where more than half a billion people live without electricity, trails the world in government policies that promote sustainable energy, according to a new World Bank report on Wednesday, 15 February.
Much of the rest of the world, however, has made strides towards making energy broadly available, developing renewable power sources and increasing efficiency, the inaugural Regulatory Indicators for Sustainable Energy report said.
In a survey of 111 countries, the World Bank found that through 2015 nearly 80% had begun to adopt policies to expand electrical grids, connecting them to solar and wind generation, and to help make electric utilities creditworthy and financially viable, while keeping energy prices down.
More than a third of countries, home to 96% of the global population, were at an advanced stage and progress was not limited to rich countries.
Kenya, Tanzania and Uganda outperformed their peers in access to energy, while Pakistan made progress on renewable energy, and Vietnam had developed policies on energy efficiency.
Yet the report showed “on the whole those African countries are scoring very poorly on the policy environment for energy access,” said Vivien Foster, the World Bank’s Global Lead for Energy Economics, Markets & Institutions.
“As many as 40% of them are in the red zone, meaning they’ve barely begun to take policy measures to accelerate access to energy.” There were bright spots on the African continent, such as South Africa, Tunisia and Morocco, she noted.
UN member states in 2015 adopted a set of sustainable development goals to reach by 2030, including a guarantee of cheap, reliable, sustainable and modern energy for all people.
The report, which will be updated every two years, said local authorities should use its findings to compare their policies to regional and global peers in efforts to meet the development goals.
Riccardo Puliti, Head of the World Bank’s Energy and Extractive Resources Global Practice, told reporters the global lender currently had a $1.6bn portfolio to support energy access that was mainly focussed in Asia and Latin America. “But we are moving very strongly in Africa as well,” he said.
For the current fiscal year the bank had $260m in new projects for off-grid power generation, in countries including Kenya, Rwanda, Niger and Zambia, he said.