Renewable Energy at the Local Government Level
SALGA/GIZ Small Scale Embedded Generation Workshop
18.04.2013
SALGA NATIONAL OFFICE PRETORIA
08:00-08:30
ARRIVAL / COFFEE
08:30-08:45
Welcome and introductions
SALGA Representative
08:45-09:00
Agenda overview
SALGA representative
PART 1: Regulatory Framework Conditions, Financing Models and Technical Support
09:00-09:30
Overview on AMEU SSEG Working Group
Gerrit Teunissen,
City Power
09:30-10:45
Areas of support provided by GIZ/SALGA

Regulatory framework (results of needs analysis study).

Technological orientation and possible business models.

Technical aspects: GIZ SAGEN Grid Integration Component.
Fritjof Boerstler,
GIZ/SALGA
10:45-11:15
Areas of support provided by the Technical Assistance Unit (National Treasury):
TAU Representative

Unblocking the regulatory barriers (perceived or real) in the MFMA and PFMA
and developing of innovative financing models of financially viable climate
change related projects
TEA
11:45 – 12:30
Areas of support provided by SEA (REEEP)

Modelling the revenue impacts of the SSEG of small scale PV and developing the
business strategies of small scale PV in the context of city and national priorities
Andrew Janisch, Sustainable
Energy Africa
12:30 – 13:15
Areas of support by Eskom

ESKOM Standard Offer Programme: status and developments
Danie Pienaar
ESKOM
Lunch
PART 2: Way Forward
13:45-15:00
Mapping of interfaces, division of responsibilities and Way Forward
ALL
15:00-15:30
Closure
SALGA/GIZ Representative
Renewable Energy and the Role of Local Government
SALGA/GIZ Small Scale Embedded Generation Workshop
18.04.2013
Dr Fritjof Boerstler
GIZ-Advisor RE
South African Local Government Association (SALGA)
Responding to the challenges – The Focal Area on Energy and Climate
•
Technical cooperation (GIZ): 3 Programmes
•
South African German Energy Programme (SAGEN)
•
Climate Support Programme
•
Skills Development for Green Jobs
•
Financial cooperation (KfW): 6 Projects in total, for example The Green Energy Efficiency
Fund implemented by IDC for EE/RE; SHS in rural areas, co-financing of a 100 MW
concentrated solar power plant in the Northern Cape
•
Scientific and Technological cooperation projects, for example the Enerkey project
South African – German Energy Programme (SAGEN)
Component 1: Renewable Energy
Component 2: Energy Efficiency
Objective: The conditions for investments in
Objective: The conditions for investments in
RE have improved
EE have improved
Sub-Component 1.1: Institutional and
regulatory capacities for promotion of RE
Sub-Component 2.1: Institutional capacity
development for EE promotion
Sub-Component 1.2: Support to grid and
system integration of RE
Sub-Component 2.2: Implementation of
innovative EE programmes
Sub-Component 1.3: Technical expertise for
Sub-Component 2.3: Development of a
market for energy service provides
wind and solar
Sub-Component 2.4: Technology
dissemination and private sector
cooperation
SAGEN Component 1: Geographic Focus LG (Districts and
Province Level
Siyanda District
DA-selection in progress
Activities: LED
Cacadu District
Planned for end 2013
Activities to be selected
EC-Provincial Government
Dr. Carola Hantelmann
Activities: RE One-Stop-Shop, RE-resource mapping,
RE Pilot Projects
Renewable Energy and the Role of Local Government
SALGA/GIZ – An Overview
18.04.2013
Dr Fritjof Boerstler
GIZ-Advisor RE
South African Local Government Association (SALGA)
1
Focus RE – from a national and local government perspective
IPP
(REI4P)
?
ERA
Schedule 4
NERSA
SC-SSEG
Vision
Blueprint
Legislation
Constitution of South Africa (1996):Schedule 4B
Competency in relation to electricity and gas reticulation.
Interest by municipalities to engage in RE-activities
Renewable Energy mentioned as Priority
in the IDPs of…
Baseline
45 District
Municipalities
8 Metros
226 Local
Municipalities
100%
Push Factors
• Energy security
• Increase in tariffs
90%
80%
70%
60%
Pull Factor
Climate Change
50%
40%
30%
20%
10%
0%
District
Municipalities
Metropolitan
Municipalities
Local
Municipalities
Compiled by Giljova S., GIZ, source: Municipal Integrated Development Plans (2012-2017)
RE-regulatory framework for municipalities
„The Stepping Stones“
•National
Climate
Change
Response
White
paper
State of
Energy
Report
Data Collection
Energy and
Climate
Change
Strategy/AP
Strategy
Development
•ERA
•MFMA
• MSA
RE/EE
Committee
Institutional
Set up
Legal
requirements
Institutional
and
Regulatory
framework
Political Will
Compiled by author
Current status on RE
The metros’ perspective
Analysis, Data
collection
8
7
6
5
4
Pilot projects
3
Strategy
2
1
0
Institutional
capacity
Policy
Compiled by author. Source of information:
State of Energy in South African Cities 2011, SEA
and AURECON NAS, 2012
Overview: Exisiting and Planned RE-Projects
Solar PV
WtE
City of Johannesburg
WtE
Landfill
(in progress)
City of Tshwane
WtE (agricultural waste)
(in progress)
City of Johannesburg
WtE
Sewage
Operational
Ekurhuleni
Solar PV
Operational
uMlalazi
WtE (landfill)
Operational
Mogale City
WtE
Landfill
(in progress)
Wind
Mixture
Drakenstein
WtE
Landfill
(in progress)
City of Cape Town
WtE
Landfill
(Planned)
City of Cape Town
Wind Energy
Operational
eThekwini
solar PV (commercial + residential)
(Research based)
Buffalo City
WtE
Landfill
(in progress)
NMBM
Wind Energy
Operational
City of Cape Town
Solar PV - residential
(Research based)
eThekwini
WtE
Landfill
Operational
eThekwini
Co-generation
(bagasse-based)
Operational
Form of Engagements
1. Public Private Partnerships (PPP)
PPP
+
BOT
Concession
Leasing
Management contracts
Sub-contracting
Duration of Contracts
Private Sector Commitment
+
BOO
Technical assistance contract
-
Supply and Civil Works Contracts
Foundation
Determination
Example 1: RE PPP – Maintenance Contract
City of Johannesburg
WtE (Biogas to Electricity)
1.1 MW - Own Use
PPP - O&M
eThekwini
WtE (Landfill gas to Electricity)
8 MW - Grid Connected
PPP - O&M
Example 1: RE Maintenance Contract
City of Johannesburg: Waste to Energy Project
(Biogas to Electricity)
•
Location: Johannesburg Water’s Northern
Waste Water Treatment Works near
Diepsloot
•
Operational since Nov 2012
•
Upgrading sludge digestion facilities (byproduct biogas)
•
Product of sewage treatment
•
Aim: to reduce the electricity consumption
by replacing the Eskom supplied electricity
Example 1: RE Maintenance Contract
City of Johannesburg: Waste to Energy Project
(Biogas to Electricity)
•
Power plant is capable of
producing 1.1MW of power
for the treatment plant,
which is 18% of its power
requirements.
•
• Plans to ramp up the project
Power plant is capable of
producing 1.1MW of power for to 4MW, which would be 65%
the treatment plant, which is 18%of
the
site’s
power
of its power requirements.
requirement, and the plant
•
Plans to ramp up the project to was designed to suit the
4MW, which would be 65% of the upgrade.
site’s power requirement, and the
plant was designed to suit the
upgrade.
Example 1: RE Maintenance Contract
City of Johannesburg: Waste to Energy Project
Cost of sewage treatment in direct correlation with tariff development
80
75
70
Cost in c / m3
65
60
55
50
45
40
35
30
2002
2003
2004
2005
2006
2007
Year
2008
2009
2010
2011
2012
Example 1: Public Electricity expenditure (eThekwini)
Housing-Dept
Libraries
Flats / Residences
1%
Health 1% Parks
1%
Department
1%
Swimming Pools
2%
Informal
Trade / Unlocated
Markets
5%
2%
Municipal Offices
10%
Hostels
18%
2011
Other
9%
Streetlights &
Traffic Signals
35%
Water and
Sanitation
15%
Private Sector Commitment
+
PPP
BOO
Contract duration
Etc
Ownership (only at BOO
BOTlevel
all other stages imply
assets
Concession
ownership by public entity) in
this sense a BOO would be very
difficult according toLeasing
section 14
MFMA Municipal Asset transfer
regulation. Not in iterest of
Management
contracts
munic (e.g. eThekwini
Land
fill
site management)
Sub-contracting
Technical assistance contract
Supply and Civil Works Contracts
Foundation
Commitment , data, strategy, institutional capacity + determination (ERA, section 34)
Example 2: RE PPP BOT Contracts
City of Johannesburg
WtE (landfill gas to electricity)
Capacity not yet defined, on-grid
PPP - BOT - Feasibility Stage
Mogale City
WtE (solid waste gasification)
8 MW (FInal 72) on-grid
PPP - BOT - Feasibility Stage
(EIA)
Drakenstein
WtE (landfill gas to electricity)
Capacity not yet defined, on-grid
PPP - BOT, Feasibility Stage
City of Cape Town
WtE PPP - BOT
PLANNED
Buffalo City
WtE (solid waste gasification)
PPP - BOT
PLANNED
Example 2: RE PPP BOT Contracts
• Total 32 of registered projects (3 RE-projects)
• Standardized PPP provisions and PPP manual
• Growing interest by municipalities and private
sector to engage in PPP
Perceptions about PPP
PRO
CON
•
•
PPP Models
Example 1/2
•
•
•
Service can often be
delivered more efficient
and cheaper by IPP
Less
financial/technical
risks for munics
Projects seem to be
bankable using ESCOMrates (tariffs)
Support by NT “along the
entire way”
•
•
•
•
•
Onerous
and
costly
process (minimum of 2
years)
Lack
of
awareness
(process and eligible
technologies)
On-grid
feed-in
specifications not clear
Two legislations to be
followed?
Credit risk
Provisions
of
loans
difficult
Form of Engagements
2. Power Purchase Agreements
Private Sector Commitment
+
PPA
Voluntary Market
(PPA between willing Buyer/Willing Seller)
Contract between municipality and EG
Foundation
Commitment , data, strategy, institutional capacity + determination (ERA, section 34)
Example 3: PPA Contracts between
municipality and EG
eThekwini
PPA Munic - EG
On-Grid
Example 3: PPA between Municipality and EG
eThekwini – guidelines and forms
Registration
Form
PPA
•
eThekwini first municipality
in SA to establish a formal
application process for
grid-tied energy generation
•
Currently 6 EPGs have
followed procedure and
are in operation
Example 3: PPA between Municipality and EG
Co-generation eThekwini
•
NCP Alcohols (Co-generation)
•
2.8 MW of electricity is
generated, of which 2.4 MW
is used up on site with 0,4
MW being sold back to the
grid
•
NCP has signed a PPA with
eThekwini (3 years)
•
ESCOM Megaflex rates used
(capital cost low)
Perceptions about PPA
PPA Models
Example 3
PRO
CON
•
•
•
•
Control of SSEG-activity by
municipality
Existing projects and
layouts
•
•
MFMA (Section 33)
Expensive
and
time
consuming tender process
Security of investment not
guaranteed
Feed-in tariff (?)
Private Sector Commitment
+
PPA
Voluntary Market
(PPA between willing Buyer/Willing Seller)
Contract between municipality and EG
Foundation
Commitment , data, strategy, institutional capacity + determination (ERA, section 34)
Example 4: PPA Contracts between
willing buyer and willing seller
Bronkhorstspruit
Voluntary Market
Bronkhorstspruit Biogas Project
3 MW
On-Grid
uMhlathuze
Voluntary Market
Landfill Gas Project
0,4 MW
On-Grid
City of Cape Town
Voluntary Market
Darling Wind Farm
4.8 MW
On-Grid
NMBM
Municipal Voluntary Market Scheme
(Amatola Green Power (Pty) LTD)
10% RE-Cap (65 MW)
On-Grid
Example 4: PPA between willing buyer + willing seller
Bronkorsspruit Biogas project BBP
•
Location: premises of the Beefcor at
Bronkhorstspruit
•
10 year PPA between generator (Bio2Watt)
and user (BMW)
•
3 MW biogas to electricity plant (60,000 tons
of biowaste per annum)
•
Electricity to be sold at ZAR 0.96/kWh
•
Wheeling agreements with ESKOM and
Tswhane Municipality (40 km distance)
Example 4: PPA Contracts between
willing buyer and willing seller
Bronkhorstspruit
Voluntary Market
Bronkhorstspruit Biogas Project
3 MW
On-Grid
uMhlathuze
Voluntary Market
Landfill Gas Project
0,4 MW
On-Grid
City of Cape Town
Voluntary Market
Darling Wind Farm
4.8 MW
On-Grid
NMBM
Municipal Voluntary Market Scheme
(Amatola Green Power (Pty) LTD)
10% RE-Cap (65 MW)
On-Grid
Observations
PRO
Voluntary Market
Models
Example 4
•
•
•
Existing (and certified)
traders
Existing
wheeling
agreements
Market driven/demandbased
(willing
buyer
willing seller)
CON
•
•
Market
restricted
by
“willing buyers”
Municipality
“only”
benefits from wheeling
charges
GIZ/SALGA RE-Activities
1
RE Technology
Business
Models/
Regulatory
Framework
Grid Integration
Bioenergy
Waste to Energy
Biogas to
Electricity
PPP/PPA
Selection of
Pilot
Municipalities
(Circular)
Feasibility
Studies
2
3
Solar PV
(CSP)
Green Tariff
LCOE (Green
Tariff for solar
PV, business
models)
Workshop 26.04
All
Green Tariff
Cost of Supply
Study (Green
Tariff)
Safety Standards
Impact
???
4
?
?
Contact:
Fboerstler@salga.org.za