Renewable Energy at the Local Government Level SALGA/GIZ Small
Scale Embedded Generation Workshop 18.04.2013 SALGA NATIONAL OFFICE
PRETORIA Slide 2 08:00-08:30ARRIVAL / 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 09:00-09:30Overview 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): 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 TAU
Representative 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 15:00-15:30ClosureSALGA/GIZ
Representative Slide 3 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) Slide 4 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 Responding to the
challenges The Focal Area on Energy and Climate Slide 5 South
African German Energy Programme (SAGEN) Component 2: Energy
Efficiency Objective: The conditions for investments in EE have
improved Component 2: Energy Efficiency Objective: The conditions
for investments in EE have improved Component 1: Renewable Energy
Objective: The conditions for investments in RE have improved
Component 1: Renewable Energy Objective: The conditions for
investments in RE have improved Sub-Component 1.1: Institutional
and regulatory capacities for promotion of RE Sub-Component 1.3:
Technical expertise for wind and solar Sub-Component 1.2: Support
to grid and system integration of RE Sub-Component 2.1:
Institutional capacity development for EE promotion Sub-Component
2.2: Implementation of innovative EE programmes Sub-Component 2.3:
Development of a market for energy service provides Sub-Component
2.4: Technology dissemination and private sector cooperation Slide
6 SAGEN Component 1: Geographic Focus LG (Districts and Province
Level Slide 7 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) Slide 8 ?
Focus RE from a national and local government perspective IRP White
Paper Vision BlueprintLegislation NEA ERA 1 NGR IEP IPP (REI4P)
Constitution of South Africa (1996):Schedule 4B Competency in
relation to electricity and gas reticulation. ERA Schedule 4 NERSA
SC-SSEG Slide 9 Compiled by Giljova S., GIZ, source: Municipal
Integrated Development Plans (2012-2017) Interest by municipalities
to engage in RE-activities Baseline 45 District Municipalities 8
Metros 226 Local Municipalities Push Factors Energy security
Increase in tariffs Pull Factor Climate Change Slide 10 Political
Will Data Collection Strategy Development Institutional Set up
Legal requirements National Climate Change Response White paper
State of Energy Report Energy and Climate Change Strategy/AP RE/EE
Committee ERA MFMA MSA Institutional and Regulatory framework L
RE-regulatory framework for municipalities The Stepping Stones
Compiled by author Slide 11 Current status on RE The metros
perspective Compiled by author. Source of information: State of
Energy in South African Cities 2011, SEA and AURECON NAS, 2012
Slide 12 Solar PV WtE Wind Mixture Overview: Exisiting and Planned
RE-Projects Slide 13 Form of Engagements 1. Public Private
Partnerships (PPP) Slide 14 Management contracts Sub-contracting
Technical assistance contract Supply and Civil Works Contracts
Foundation Determination PPP Leasing BOT Concession BOO Private
Sector Commitment - + - + Duration of Contracts Slide 15 Example 1:
RE PPP Maintenance Contract Slide 16 City of Johannesburg: Waste to
Energy Project (Biogas to Electricity) Example 1: RE Maintenance
Contract Location: Johannesburg Waters Northern Waste Water
Treatment Works near Diepsloot Operational since Nov 2012 Upgrading
sludge digestion facilities (by- product biogas) Product of sewage
treatment Aim: to reduce the electricity consumption by replacing
the Eskom supplied electricity Slide 17 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 to 4MW, which
would be 65% of the sites power requirement, and the plant was
designed to suit the upgrade. City of Johannesburg: Waste to Energy
Project (Biogas to Electricity) Example 1: RE Maintenance Contract
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 to 4MW, which would be 65% of the sites power
requirement, and the plant was designed to suit the upgrade. Slide
18 Example 1: RE Maintenance Contract City of Johannesburg: Waste
to Energy Project Cost of sewage treatment in direct correlation
with tariff development Slide 19 Example 1: Public Electricity
expenditure (eThekwini) Slide 20 Contract duration Etc Ownership
(only at BOO level all other stages imply assets ownership by
public entity) in this sense a BOO would be very difficult
according to section 14 MFMA Municipal Asset transfer regulation.
Not in iterest of munic (e.g. eThekwini Land fill site management)
Management contracts Sub-contracting Technical assistance contract
Supply and Civil Works Contracts Foundation Commitment, data,
strategy, institutional capacity + determination (ERA, section 34)
PPP Leasing BOT Concession BOO Private Sector Commitment - + Slide
21 Example 2: RE PPP BOT Contracts Slide 22 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 Example 2: RE PPP BOT Contracts Slide 23 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 ESCOM- rates (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 PROCON Perceptions about PPP
Slide 24 Form of Engagements 2. Power Purchase Agreements Slide 25
Contract between municipality and EG Foundation Commitment, data,
strategy, institutional capacity + determination (ERA, section 34)
PPA Voluntary Market (PPA between willing Buyer/Willing Seller)
Private Sector Commitment - + Slide 26 Example 3: PPA Contracts
between municipality and EG Slide 27 eThekwini guidelines and forms
Example 3: PPA between Municipality and EG 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 Slide 28
Co-generation eThekwini Example 3: PPA between Municipality and EG
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) Slide 29 PPA Models Example 3 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 (?) PRO CON Perceptions
about PPA Slide 30 Contract between municipality and EG Foundation
Commitment, data, strategy, institutional capacity + determination
(ERA, section 34) PPA Voluntary Market (PPA between willing
Buyer/Willing Seller) Private Sector Commitment - + Slide 31
Example 4: PPA Contracts between willing buyer and willing seller
Slide 32 Example 4: PPA between willing buyer + willing seller
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) Bronkorsspruit Biogas project
BBP Slide 33 Example 4: PPA Contracts between willing buyer and
willing seller Slide 34 Voluntary Market Models Example 4 Existing
(and certified) traders Existing wheeling agreements Market
driven/demand- based (willing buyer willing seller) Market
restricted by willing buyers Municipality only benefits from
wheeling charges PRO CON Observations Slide 35 ? All Solar PV (CSP)
Bioenergy Waste to Energy Biogas to Electricity PPP/PPA Selection
of Pilot Municipalities (Circular) Feasibility Studies Green Tariff
LCOE (Green Tariff for solar PV, business models) Workshop 26.04
Green Tariff Cost of Supply Study (Green Tariff)? Business Models/
Regulatory Framework RE Technology Grid Integration Safety
Standards Impact ??? GIZ/SALGA RE-Activities 1 2 34 Slide 36
Contact: [email protected]
