The role of local government in the transition from fossil fuel to - PowerPoint PPT Presentation

Life After Coal: Environmental Rights Seminar, 2016 The role of local government in the transition from fossil fuel to renewable energy

Status Quo

Cities Mitigation Study

Concentrated

Largely fossil fuels

“Dirty” electricity

Intensive

Energy and emissions by sector • Energy largely transport • Emissions largely built environment (residential, commercial, industrial)

Inequality

Inequality

Municipal response

How can municipalities influence energy use? • Building regulations • By-laws, standards, codes • Urban layout • Transport planning (parking requirements, BRT, etc.) • Procurement policies • Budget allocations • Air quality control measures • Tax incentives

How can municipalities influence energy use? • Electricity distribution  52% of customers  12 largest municipalities account for 80% of municipal distribution • Electrification / energy service provision (SWHs, etc.) • Regulator / procurer of embedded renewable energy generation • Awareness (energy efficiency behaviour campaigns, forums) • Lead by example (city facilities, rental units, etc.) • Electricity generation / IPP large-scale procurement (potential)

A response story / timeline • DATA: a new picture, what to manage, what potential EE and RE • STRATEGIES: beginning to define local government role in sustainable energy and institutionalise this • TARGETS: e.g. EMM, CCT - 10% RE… can drive decisions • IMPLEMENTATION: community EE (campaigns, forums), municipal EE, Solar water heating, RE: landfill gas, biogas, rooftop PV, PV array, wheeling, SSEG, Power purchase agreements (?)

Growth in sustainable energy governance

City Renewable Developments and Targets Municipality and RE project engagement Year 2017 (in MWh 2005 2008 2011 2014 pipeline) City of Cape Town: PPA (wind) 7770 7770 7770 City of Cape Town: rooftop PV 15 135 2 City of Cape Town: microhydro Ekurhuleni Metro: PV array 350 350 Ekurhuleni Metro: Landfill gas to electricity 7135 21405 Ekurhuleni Metro: rooftop PV 46 46 Ethekwini Metro: Landfill gas to electricity 6000 45000 45000 45000 City of Johannesburg: wastewater gas to electricity 2331 4662 City of Johannesburg: landfill gas to electricity - 150000 City of Johannesburg: rooftop PV Nelson Mandela Bay Metro: wheeling agreement (wind) 5000 5000 City of Tshwane: wheeling agreement (biowaste gas to elec) 35000 Approx. Total MWh/year 0 6000 52770 67647 269368 Municipal (led or assisted) local RE development 300000 250000 Approx MWh/year 200000 150000 100000 50000 0 2005 2008 2011 2014 2017 (in pipeline)

Solar water heater rollout • Johannesburg: 80 000 low-pressure systems • EThekwini: 20 000 low-pressure systems; have high-pressure campaign (Shisa Solar) • Cape Town: 25 000 high-pressure; 4 500 low-pressure

Landfill gas to electricity More information: www.cityenergy.org.za Municipality Size Project Finance / ownership Ekurhuleni 1 MW Simmer and Jack Municipality developed and owned; O&M contract outsourced; plans to expand to other sites EThekwini 7.5 MW Bisasar and Marion Hill Municipality developed and owned; O&M contract outsourced Johannesburg 11 MW (current) 2 landfill sites (current) Private developer; profit-sharing with CoJ 18.6 MW (planned) 5 landfill sites (planned) via REIPPP; BOOT (Build, Own, Operate and Transfer)

Wastewater biogas to energy More information: www.cityenergy.org.za • City of Johannesburg : 1MW (Diepsloot, northern works); municipal developed and owned, with O&M contract • Opportunities : improved sludge management • Challenges : generation dependent on ‘down line’ water management (city function) – no control over this and thus complex contracting (optimising performance, mitigating risk of contracting company)

Municipal rooftop PV More information: www.cityenergy.org.za • EThekwini Water and Sanitation (Customer Service Building) = 45kW • Cape Town : 167kW March 2015; additional 90kW planned by end 2015 (various locations)

3 rd Party Wheeling • Nelson Mandela Bay : Wheeling framework – up to 10% of local demand from privately traded RE energy (80% must be local). • Tshwane : Electricity generated from biogas on an on-site cattle farm wheeled through Eskom and Tshwane’s grids to a private user. • Opportunities : stimulate local renewable industry, • Challenges : must unbundle tariff and establish accurate cost of supply; administrative complexity/burden; Regulatory rules on network charges for 3 rd Party transportation of energy (wheeling) – still under development (municipal concerns relating to risk)

Small-scale embedded generation • Cape Town only NERSA approved tariffs: September 2014: Black River parkway first ‘official’ – 1.2MW • EThekwini solar mapping tool • Johannesburg Parkhurst ‘off - grid’ project

Disruptive forces

The imperative of climate change • NASA: each month in 2016 was the warmest respective month globally in the modern temperature record, which dates to 1880. This trend suggests 2016 will surpass 2015 as the hottest year on record.

Household electricity use Electricity use to meet basic household energy needs (Stats SA 1996, 2001, 2011) Households that use Lighting Cooking Space Heating electricity for… 1996 2001 2011 1996 2001 2011 1996 2001 2011 Buffalo City 47% 63% 81% 42% 43% 74% 39% 36% 41% City of Cape Town 87% 89% 94% 80% 80% 88% 75% 75% 63% City of Johannesburg 85% 85% 91% 80% 79% 87% 79% 77% 82% City of Tshwane 77% 80% 89% 71% 71% 84% 70% 69% 74% Ekurhuleni 75% 75% 82% 64% 66% 79% 60% 62% 66% EThekwini 74% 80% 90% 71% 72% 86% 69% 72% 76% Mangaung 61% 85% 91% 52% 61% 88% 49% 54% 53% Nelson Mandela Bay 71% 75% 90% 65% 65% 86% 60% 59% 54% Metro average 77% 81% 89% 71% 72% 85% 68% 68% 70% National average 58% 70% 85% 47% 51% 74% 44% 49% 59%

Electricity price

Electricity generating technologies

Electricity demand

Electricity demand

Electricity demand uncertainty

Prices of renewable energy decreasing and shift in power system value chain from extraction and generation to distribution and demand Impact on municipal functions: greater role in demand response and distributed/embedded generation

Cross-subsidising low-income electrification Crosssubsidisation (Source: PDG) Rmillion 6,000 5,000 Surplus 4,000 Deficit 3,000 Equitable share 2,000 User charges 1,000 Cost - Revenue Cost Revenue Cost Revenue Cost Low income High income Non-residential CT subsidises R150/month for lifeline customers – R540 million/yr from mid-high residential customers

Australia demand forecasts

Australia electricity retail prices

Australia PV installation – largely small-scale

The future…? And challenges

Business as Usual untenable

What happens if transport shifts to electricity?

Municipality as off-taker: IPP procurement ?

Unclear policy hurts RE economy • SWH: rebate → national programme → on hold • SEGG tariffs: NERSA stating Cape Town and Drakenstein were “pilots” → only recently allowed other municipalities to institute SSEG tariffs • REIPPPP uncertainty: decision by Eskom board to discontinue the signing-on of any PPAs → Presidency Statement that REIPPP is policy and won’t be halted

New approaches • Some cities embracing: rethinking new role as energy service providers, e.g. smarter management of load (supply vs. demand). Basket of measures: dispatchable load (gas, PV), EE, etc. Combination rather than one big supplier. • Proposed thinking: not revenue that matters, but margins. As long as costs go down, revenue can go down. Be more efficient, e.g. meet peak demand differently (rather than incurring loss). Offering storage / grid (grid manager) rather than distributor. Will take time.

Thank you Zanie Cilliers For more information: www.cityenergy.org.za www.sustainable.org.za