Kuyasa and its scale-up
to a National Sustainable
Settlements Facility
Structures under UNFCCC
Flexible Mechanisms
14th March 2011
Contents
•
•
•
•
Kuyasa intro
Kuyasa implementation
National Sustainable Housing Facility Programme
Conclusions
General Information
South African Export Development Fund (SAEDF)
August 2007
Kuyasacdm@telkomsa.net
The Kuyasa CDM Pilot
The Kuyasa CDM Project: First Gold Standard and
African CDM project registered. Currently being
implemented in Khayelitsha, Cape Town
• 2309 RDP houses
• Solar Water Heaters
• Insulated ceilings
• Energy efficient lighting
Overall view of light and SWH
interventions
7
Sectional view of ceiling
installation
8
Ceiling installation - Public Works
9
steps in design and preparation for implementation
• Selection retrofit of technologies (lighting, water heating
and thermal performance improvements)
• Selection of study sample (10 houses)
• Retrofitting and monitoring housing through winter
• 15 community based meetings
• Project design drafting (using small scale CDM methods)
• Minimum monitoring (are the technologies in place?)
• Validation – good experience
• Project registration
• Fund raising for implementation
• Business plan and transfer to implementers
Implementation and verification
• Trained teams from the community installed
• 50% women in the work force
• Local monitoring (are the SWHs providing warm water?
are the roofs on? Are the CFLs in place?)
• Initial batch of SWHs had mild steel tanks – problem with
the chlorinated water quality
• Verification took long time
• Issues related to extension of the structures which did not
include ceilings
Technology (and
cost excl.
infrastructure)
Solar water
heating (100l)
(Euro 250)
Insulated ceilings
(30 square
metres)
(Euro 125)
Efficient lamps (2
lamps)
(Euro 30)
Tonnes/hh/ye Value
ar
Euro/hh/year
1.3
20
1.3
20
0.2
3
Suppressed demand
• Energy demand is constrained as a result of poverty or
lack of infrastructure
• Suppressed demand can be included if proof of livelihoods
improving can be shown
• Paragraph 46 of the Modalities and Procedures: “The
baseline may include a scenario where future
anthropogenic emissions by sources are projected to rise
above current levels, due to the specific circumstances of
the host Party.”
• Restated in the COP 15 outcomes: para 35 of “Further
guidance related to the CDM.” Encourages the EB to
further explore
• Precedent AMS ID and Kuyasa CDM project #0079
Energy services and energy consumption – business-asusual
___ Energy Service
GHG Emissions
energy service
___ Baseline Energy
time
SUPPRESSED DEMAND INTERVENTIONS
___
Energy Service
___ Baseline Emissions
energy service
GHG emissions
___
time
Energy Service
Intervention
___ Project emissions
Energy Services and Consumption that take Suppressed
Demand for service into account
___ Energy Service
___ Baseline Carbon emissions
___ Energy Service intervention
B
A
time
GHG Emissions
energy service
___ GHG emission after clean
energy service intervention
A are Existing Emissions
B are Existing Emissions + Future
Avoided Emissions
Suppressed Demand: An example of space
heating in low income housing
Outdoor ambient
winter’s day
temperature profile
Thermal power required to reach 21oC
Thermal energy
required without
ceilings and
ceiling insulation
Suppressed
demand for
thermal energy
Thermal energy
required in
houses with
ceilings and
ceiling insulation
Current level of
space heating
Morning
Evening
Key methodological issue
• Taking account of poverty by including suppressed
demand for energy service
• What does this mean?
• How was it argued?
• Difficulty – real and measurable emissions reductions
• Difficulty – rigour versus simplicity
Some notes on Kuyasa
• Many small sources of emissions make transaction costs
high
• Cost R30m in implementation costs
• R200 000 for verification (awaiting completion)
• 100% completion awaiting final DEA payment – moving to
2nd phase
• Suppressed demand needs to be included in
methodological approach for replication
• NAMAs may be more appropriate (perhaps in
combination with CDM)
The National Sustainable Housing Facility
VISION: A clearing house which enables and incentivises access to
financing for clean energy services in all low income housing in South
Africa
MISSION: To establish a Facility which 1) administers a CDM
programme, and 2) leverages and manages access to the additional
upfront financing required for the incremental capital costs of
sustainable energy interventions in low income housing
NSHF progress to date (led by consortium Genesis
Analytics and SouthSouthNorth Africa
1. SSN together with the CTCC developed Kuyasa as a pilot
2. REEEP funding to explore viable models for replication at scale,
with a focus on financing
3. Programmatic CDM approved, providing avenue for carbon finance
4. Drafting Group established to provide guidance and legitimacy
5. Kuyasa being implement with DEAT grant finance, by SAEDF
6. Danida funded development of a Business Plan for the NSHF
7. South African Export Development Fund (SAEDF) and Energy
Development Corp. funding the development of a SWH
programmatic methodology
8. DBSA funding the development of thermal efficiency methodology
and programme/s
9. Danida funding a work plan to achieve government endorsement
and appointment of an incubator
National Sustainable Housing Facility
• Institutional and Financial architecture
• Methodological and Programmatic issues
• Interface with housing developers
Institutional and financial issues
• Currently leadership through a drafting Group established
to provide guidance and legitimacy.
• Includes: DBSA, SANERI, DHS, DoE, Eskom, NHFC,
DNA, SSN, municipalities
• Where should the Facility be situated institutionally?
• The income from carbon, demand side management,
Renewable energy certificates, other externality interests..
A Low Income Housing Programme for South Africa
2,500
2,000
How to bring carbon finance forward?
Rand (in Millions)
1,500
1,000
500
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Assumptions
-500
Years
Carbon price €15
Ongoing 50% equity investment
How to bring intervention costs down?
R1000 beneficiary contribution
Only Greenfield housing included
No financing
The National Sustainable Housing Facility
International Carbon
Markets
CDM Programme of Activities
Thermal
Efficiency
Methodology
Energy Efficient
Lighting
Methodology
SWH
Methodology
Loan
Facility
Equity
National Sustainable
Housing Facility
Housing
Project
25
Housing
Project
Housing
Project
Housing
Project
Methodological approach
• Two new large scale methods
• Solar Water Heating
• Thermal Performance improvements (retrofit and “green
field”) for publicly funded structures
Solar Water Heater Method
•
•
•
•
Small Scale <45MW equivalent
Problems with monitoring
Current submitted method includes:
Monitoring water temperatures, water flow rates, back-up
heating, or
• Establishing SWH efficiency and solar radiation
• Second option simple monitoring only whether system is
in use
• Emissions from fuel to provide same amount of warm
water
The logic of the thermal performance approach
•Size
•Orientation and internal
arrangements
•Form – standalone house;
walkup; row housing
•Foundations
•Floors and slab insulation
•Wall
•Fenestration
•Roofs and ceiling insulation
•Shading
•Sealing (control of air
changes)
(specifications)
(O&M regime)
Solar radiation
No of occupants
Wind
Appliance ownership
Temp
Access to
energy/affordability
Precipitation
High level Benefits
Social
• Respiratory health burden reduced
• Provision of hot water – health / comfort
• Household cost savings due to energy efficiency
• Employment opportunities (EPWP)
Economic
• Peak demand reduced – defers new installed
capacity
• Leadership for low cost housing / energy industry
• Entrepreneurial opportunities
Environmental
• Largest project of its kind in Africa - Leadership
• City SWH target – 10% by 2010 (ie 80 000
houses) Project assists this target
• Implementing global commitments
Governance
• Local participation and decision-making
29
National Sustainable Housing Facility (NSHF)
Key Conclusions
• Carbon finance for low income housing requires a long
term investment view
• But the returns to a programme are highly significant,
both carbon revenues and co-benefits
• Risks are manageable
• The issue is around availability of upfront financing for
capital interventions and identifying an entity to drive
the programme
• There is strong interest from CC community
internationally, especially in Gold Standard programme
Conclusions into the future
• NSHF Model is replicable for other sub-sectoral mitigation
approaches using projects to head to programmes to subsectors to future developing country commitments
http://www.southsouthnorth.org