South African Participation in the Kyoto Protocol Flexible Mechanisms

Transcription

1 South African Participation in the Kyoto Protocol Flexible Mechanisms Presentation to the Kyoto Mechanisms Japan Carbon Investors Forum Tokyo, March 2006 Presenter: Kevin Nassiep Chief Director (Energy Planning) Department of Minerals and Energy

2 Overview South Africa and Climate Change Key Government Objectives South African Climate Change Response Strategy Implementation actions by DME in support of Climate Change response strategy South Africa participation in UNFCCC and Kyoto Protocol mechanisms Institutional arrangement to handle CDM Role of Private sector in CDM activities Potential CDM project sectors Current CDM project portfolio Conclusions

3 South Africa and Climate Change Mining and agricultural economy - energy intensive industries, largely coal dependent No investment needed in new power generation in last 20 years Low grade coal to produce cheapest electricity in the world Cheap electricity had negative impact on energy efficiency South Africa rated in the top 20 of emitters of greenhouse gases Apartheid left majority of citizens without electricity Large electrification drive to attain universal access to energy Remote communities too expensive to electrify But. Photovoltaic (SHS) programme - largely unsuccessful (no thermal energy and high maintenance) Paraffin unacceptable deaths, injuries and damage to property

4 Energy Supply Mix in SA Energy resources dominated by coal

5 Energy Demand by Sector 17% 1% Industry Sector Transport Sector 8% 3% 44% Agriculture Commerce and Public Services Residential 27% Non-specified (Other) Source: Digest of Energy Statistics, DME, 2001

6 National Government Objectives Ensure a better life for all through increasing sustainable growth in the economy Must redress past imbalances and hence the disparities between the so-called 1 st and 2 nd economies Deputy President to lead the programme of fastracking economic growth through several strategic projects Accelerated and Shared Growth Initiative of SA (ASGI-SA 2005) Ties in to Government s Plan of Action to improve service delivery Energy related strategic projects selected include Accelerated electrification Biofuels industry development Beneficiation of raw minerals and materials World Class Minerals and Energy sectors for the benefit of all 4

7 Minister of Minerals and Energy s Objectives MANDATE To provide services for effectual governance of minerals and energy industries for economic growth and development thereby improving the quality of life. BROAD STRATEGIC OBJECTIVES To contribute towards effectual and sustainable development of minerals and energy resources. To govern the minerals and energy industries to be safe and healthy working environments. To redress past imbalances by promoting equitable redistribution of benefits from the exploitation of minerals and energy resources. To formulate and implement an overall mineral and energy policy that will ensure optimum utilisation of mineral and energy resources.

8 Departmental Programmes Supporting the Mandate Develop & maintain appropriate administrative measures & systems, enhance efficiency & productivity to ensure attainment of targets set by the Charters and effectively monitor the systems. Sustainable Development Environment issues (trade, internat agts) WSSD Energy Efficiency DNA Low Smoke Domestic Fuels Vehicle Fuels Wind Energy Projects To contribute towards effectual & sustainable development of mineral and energy resources. Cleaner Safer Fuels TRANSFOR- MATION BEE Supplier development Skills Addressing Past Imbalances ALLEVIATING ENERGY POVERTY LPG, ethanol, bio-digesters IECs To govern the minerals and energy industries to be safe and healthy working environments. Departmental Programmes INTERNATIONAL LY COMPETITIVE ENERGY PRICES REGULATION Petroleum Prod Act Gas Act Gas Trade Agreements National Energy Regulator Act To redress the past imbalances, by promoting equitable redistribution of benefits from the exploitation of mineral and energy resources. Security of Supply Integrated Energy Planning Coal Reserves and Resources Security of energy supply Energy Data National Energy Research Institute Energy Information Management Systems DIVERSITY OF SUPPLY Renewable Energy (REMT) Oil stocks Gas infrastructure To implement mineral and energy policies that will ensure optimum utilisation of mineral and energy resources. STATE ENTITIES Strategy & regulations Maintenance & repairs

9 South African Climate Change Response Strategy National Climate Change Response Strategy was formulated in The Strategy is based on: Growing the economy and competitiveness within globally negotiated response to climate change Focusing on areas that promote sustainable development The need to consistently use locally available resources (coal), while exploring other alternative cleaner energy sources Recognizing that South Africa s emissions will continue to increase as development is realized Recognising that adaptation to the adverse impacts of climate change is necessary

10 Implementation Actions by DME in support of Climate Change Response Strategy Establishment of Designated National Authority for Clean Development Mechanism (DNA) Implementation of the White Paper on Renewable Energy (2003) and the Energy Efficiency Strategy (2005) Development of Energy Bill (promulgation in 2007) Development and implementation of appropriate coalmining and utilisation sector mitigation program

11 South African participation in UNFCCC and Kyoto Protocol Mechanisms SA acceded to UNFCCC on 29 th August 1997, ratified the KP 31 st July 2002 South Africa s DNA became operational in December 2004 DNA is approving projects based on SA s sustainable development criteria i.e in accordance with section 40(a) of the Marakech Accords. and to ensure that the mechanism is in the national interest

12 Institutional Arrangement to Handle CDM in SA 1. DTI 2. DME 3. DEAT 4. DST 5. DoT 6. NT 7. DoA 8. DWAF Oversight Steering Committee 1. DTI 2. DME 3. Private Sector Promotions Sub-Committee Designated National Authority (Director General of DME)

13 Designated National Authority for CDM in South Africa Cabinet approved establishment of DNA at DME to perform the following functions: Regulation function: Project approval based on SA s sustainable development criteria. Promotion function: To promote and facilitate the development of CDM projects in South Africa Ensure that the mechanism is in the national interest CDM promotions committee is being established to promote CDM projects in certain sectors

14 Sustainable Development Criteria Social Environment Economic Opportunities to facilitate gender equality, Stimulate Socio-economic development, job creation and poverty alleviation, Offers BEE investment opportunities, Improved health for all. RE helps reduce GHG emissions (climate change mitigation), Helps reduce environmental pollution and associated adverse health effects, Provides diversity of supply and thus energy security Job creation, Community & industrial economic dev. Off-sets energy imports (BOP), Contribute to new generation capacity, Helps with DSM

15 Designated Operational Entities PricewaterhouseCoopers South Africa, successfully passed the on-site assessment for Designated Operational Entity status under the Kyoto Protocol. PWH Coopers is officially competent for validation and verification of CDM projects across all 15 sectors under the CDM framework. The first witness project is the PetroSA biogas to energy project and, if successful, will cover the energy related CDM project sectors. This will, in turn, result in a recommendation to the next CDM Executive Board meeting to issue PWH Coopers with designated status as an operating entity.

16 Cooperation Agreements SA is in the process of entering into a number of Cooperation agreements with various countries. Japan: Proposed Cooperation Agreement between South Africa and Japan Bank for International Cooperation Objective of the agreement: to establish and facilitate information sharing among DNA and JBIC and To explore and create more CDM project opportunities to be supported by various financial instruments of JBIC Other Agreements are with Denmark, Canada, France Process of signing all the cooperation agreements is in progress and be finalised in April 2006

17 Private sector participation in CDM activities Plan and propose and implement projects Financial engineering of projects Monitor emissions and baselines Report on successful projects and problem areas Provide feedback on efficiency of procedures Institutions that play a role in CDM are NEDLAC, NCCC, NBI and BUSA

18 CDM Potential Project Areas Energy supply and demand Methane recovery Housing energy efficiency Biomass recovery Transport and automotive sectors Chemical and mining industries Energy efficiency in commercial and public buildings Biofuels industry development

19 Current CDM Project Profile PROJECT TYPE GAS TARGETED PROJECTED ANNUAL tco 2 e REDUCTION CREDICTING PERIOD (years) APPROVAL STATUS N 2 O Reduction N 2 O 420, Letter of no Objection Renewable energy generation CO 2 26, Letter of no Objection Energy Efficiency CO 2 170, Letter of no Objection Fuel Switching CO 2 6,490, Letter of no Objection Waste Gas Reduction N 2 O 250, Letter of no Objection Renewable energy generation N 2 O, CO 2, CH 4 30, Letter of no Objection Waste Gas Reduction N 2 O 610, Letter of no Objection Renewable energy generation CO 2 30, Letter of no Objection Land-filling CH 4 140,000 7 Letter of no Objection Fuel Switching CO 2 53,246 7 Letter of no Objection Fuel Switching CO 2 28, Letter of no Objection Energy Efficiency CO 2, H 2 & N Letter of no Objection Renewable Energy CO 2 105, Letter of no Objection Energy efficiency CO 2 44, Approved and Registered with EB August 2005 Fuel Switching CO 2 107,403 7 Approved Fuel Switching CO 2 121, Approved Fuel Switching CO 2 21, Approved Hydro-power energy generation CO 2 25, Approved Cogeneration CH 4 & CO 2 30, Approved Cogeneration CO 2 763, Approved

20 Conclusions Coal-dominated economy with limited options for economically attractive diversification Strong policy support for renewable energy and energy efficiency clear and defined targets Sustainable development criteria in place focus to be shifted to stronger social and gender participation Wide array of projects under development, including small hydro, landfill gas, fuel switching and N 2 0 reduction MoUs offer opportunities for developed countries to work closely with SA DNA in identifying and developing further CDM projects Additional power requirement in the next decade provides opportunity for developers to enter market as IPPs Low-cost energy efficient housing project offers replicable results and opportunities to integrate local government priorities with industrial participation

21 Thank you Contact details Kevin Nassiep Chief Director (Energy Planning) Department of Minerals and Energy Private Bag X59, Pretoria 001 Tel. (+27 12) Cell. (+27)