CITY OF CAPE TOWN 27 SEPTEMBER 2017 DRAFT SPEECH BY THE CITY S EXECUTIVE DEPUTY MAYOR, ALDERMAN IAN NEILSON Note: The following is an excerpt of a speech delivered by the Executive Deputy Mayor of the City of Cape Town, Alderman Ian Neilson, at the annual conference of the South African Facilities Management Association, held at the Century City Conference Centre in Cape Town on 27 September 2017. Regional Chair of SAFMA, Mr Ronald Nothnagel Members of the South African Facilities Management Association Panelists, speakers and guests Good morning, and a warm welcome to you all. This conference, with its focus on sustainability and technology in facilities management, is indeed very timely. As I am sure you are all aware, we are currently experiencing the most stubborn, intense and protracted drought in recent history. This has necessitated a new strategic approach to how we view and manage our water supply. At its core, we recognise that we are situated in a water-scarce region characterised by climatic unpredictability. We call this our New Normal.
2 The New Normal applies at home. The New Normal applies at work. The New Normal applies in city and business operations. It has required us to bring significant resources to bear on building water resilience and securing a sustainable supply of water to our City and its residents. For decades, the City of Cape Town has been well served by its water supply infrastructure. This infrastructure, as well as associated water management techniques, enabled us to safely navigate previous drought periods. Prior to the onset of the current drought, the City was using water well under its registered allocation, as determined by the National Department of Water and Sanitation. Despite our population growth almost doubling since 1996, our water demand has remained relatively flat. This drought, however, is far more severe than any we have experienced in the past century. 1 We have had water restrictions in place since 2005, which were intensified in December 2015, and progressively over subsequent months up to the point where we recently introduced Level 5 restrictions. Under Level 5 restrictions, residential properties exceeding 20 000 litres a month will be fined. Commercial properties that do not reduce consumption by 20% compared to the previous year will also be fined for each month this 1 http://www.csag.uct.ac.za/2017/08/28/how-severe-is-this-drought-really/
3 target is exceeded. It should be noted that this sector has not shown the same decline in usage that the other sectors have shown. Water management devices are being installed on the properties of all excessive water users in order to restrict their use and drive down consumption to 500 million litres a day of collective usage. Without this progressive intensification of water restrictions, Cape Town may well have run out of water by now. Up until May this year, the City s approach was based principally on driving down demand and supplementing supply with limited new augmentation schemes, in accordance with international best practice. This approach, based on projections from hydrological and dam modelling, had worked in the past. However, especially due to the protracted nature of this particular drought, it became very apparent that we could no longer rely solely on this approach. Internally, we developed new scenarios based on the most pessimistic view of the drought and likely rainfall. We had to acknowledge that the impacts of climate change added significant uncertainty to existing models. This meant that some decisions needed to be made in the context of unpredictability. It meant making decisions that factor in a greater understanding of risk, and enable us to mitigate against shocks; in particular those that affect the most vulnerable members of our population.
4 It meant constructing The New Normal scenario one in which we do not bank on water scarcity ending, but rather actively plan as if it will continue indefinitely. This requires all of us to redefine our relationship to water. We need to accept that the days of plentiful water supply in Cape Town may very well be over. And we need to build resilience into every aspect of our thinking and planning around water. Resilience is defined as the capacity of individuals, communities, institutions, businesses and systems to survive, adapt and grow and even thrive, no matter what kind of stresses or acute shocks they experience. This means changing our systems and our methodologies if they no longer produce the desired results. It means bringing disruptive thinking and technology to the table. The City recently appointed a Chief Resilience Officer to lead its resilience efforts and engage with various stakeholders and resilience experts to develop a comprehensive resilience strategy. One of the first orders of business for the Chief Resilience Officer was the establishment of a Water Resilience Task Team to revise our approach to water. The task team has been investigating how we can improve our state of readiness in the face of possible acute water shortages, and establish mechanisms to fundamentally rethink our approach to water over the longterm.
5 As a result, a portfolio response has been developed and supported by professional consultants, some of whom have experience in responding to droughts in other parts of the world, including Australia and California. Various programmes, each with associated initiatives, have been established over the emergency and tactical phases, which run until the end of June next year, and the strategic phase, which runs from July next year onwards. These initiatives build on the drought response initiatives since late 2015, which include pressure reduction, increasing restrictions, and heightened enforcement. We have already put in place various small-scale augmentation schemes to increase non-surface supply options. These include drawing water from the Table Mountain Group aquifer, the Cape Flats aquifer, the Oranjezicht Spring and small-scale desalination at Koeberg, among other things. A variety of technologies will also be introduced to augment the system. Up until now, we have relied on surface water in our dam system for more than 90% of our potable water requirements. This model is no longer sustainable. While our dams may fill up again over time, our future will have to include an improved ratio of non-surface water to surface water options. In June, the City released a Request for Ideas (RFI) to the market for proposed solutions that will enable us to temporarily establish several small, intermediate and possibly even large plants to supply potable water. By the closing date of 10 July, over 100 submissions had been received. The proposed solutions offered were varied, including desalination at various scales, inclusive of container solutions, barges and ships, water reuse technology at various scales, aquifer and borehole options, engineering and
6 infrastructure options, and water demand management options, among others. Our technical experts scrutinised the submissions to determine the feasibility of commissioning various options, and the time it would take, if procured, to deliver the options. Importantly, the technical experts were also able to improve understanding of the costs involved. An extensive procurement plan is now in place and procurement has commenced, with the first tender issued on 16 August, and new emergency augmentation tenders scheduled for release approximately every two weeks. It is hoped that the first water produced from this procurement process will become available in November. We must accept, however, that this comes at a cost. Bringing so many new technologies online simultaneously at multiple sites around the city is expensive. Under the Municipal Finance Management Act (MFMA), budgetary provisions for augmentation will need to be increased and reprioritised. Tariffs, inclusive of water and rates, are already established for 2017/2018 and cannot be adjusted. For this reason, consumers will not face any new costs for the remainder of this financial year. Our finance team is working on making funding sources available, including cash, reprioritisation of existing water projects, a concessionary loan from an external funder, and curtailing expenditure elsewhere in the administration.
7 Inevitably, however, we will need to develop new water and rates tariffs based on new modelling over the coming months, which will then be put to Council for decision in May 2018, for implementation in July 2018. While the City will do everything in its power to curb expenditure across the administration to reduce the impact on future tariffs, we can expect tariff increases significantly above inflation in the 2018/2019 financial year. We all need to be asking ourselves the following questions: Are we doing everything we can to cut down consumption, and improve efficiencies? Have we investigated all the technical and behaviour change options available for doing so, and are we disseminating this information and encouraging action as widely and effectively as possible? Are we ensuring that the facilities for which we are responsible are implementing the necessary measures? All residents need to weigh up the costs of running out of water and the damage that will be inflicted on the economy and human health, against the costs of installing resilience measures to ensure that the city can adapt, survive and thrive no matter the extent of the drought. The next few months will be critical. We need to bring the City s consumption down to a maximum of 500 million litres of water a day, and produce additional water through the emergency schemes to get us through as much of the summer as possible, towards winter 2018. I will say it again: Reducing consumption remains absolutely vital. We are still not achieving our target of 500 million litres consumption a day, which requires each resident to consume no more than 87 litres a day whether at home or work or elsewhere.
8 The majority of our residents have heeded the call and are going to extraordinary lengths to reduce their consumption. I would like to use this opportunity to thank every individual for their efforts, and encourage you to continue. Collectively, your individual efforts are making a difference. We are moving towards much more aggressive demand management initiatives. Over the coming weeks, advanced pressure reduction programmes will be rolled out across the metro. Further details will be communicated soon. The City s communications campaign to our residents on how to save water has been extensive. Much of the focus has been on behavioural change. We have offered a number of resources across various communication platforms, with recent additions including an online personal water use calculator, videos on how residents can reduce their home water flow at their stopcocks and install reduced-flow showerheads, a guide on finding and fixing leaks, and information on alternative and recycled water sources for businesses and organisations. Although the increased population of the city during the holiday period is commonly offset by a reduction in business and industrial consumption, a campaign targeting visitors over the holiday season will also be instituted shortly. The City has also been communicating directly with large consumers, like the industrial, commercial and construction sectors, on ways to manage their water use, and they have been offered the option of using treated effluent water to reduce their use of municipal drinking water for operational use. The City already supplies 7% of treated effluent water from some wastewater treatment plants to large consumers to reduce or offset the use of potable water. This figure is rising fast. Current clients include schools, golf courses,
9 parks, sports facilities, gated residential complexes, commerce and industry. The treated effluent is used primarily for irrigation, industrial operations, dust control, washing of bins and cleaning of outside surfaces. I would like to urge you to investigate whether any of your facilities could benefit from this option as well. Remember, the tariff for treated effluent water is much lower than that of drinking quality water. I would also encourage you to visit the City s and GreenCape s websites for useful resources and information that can be sent to your staff and clients, or made up into posters or notices for your offices and facilities. Behaviour change is highly effective in reducing water consumption. When reviewing your opportunities for reducing water consumption, don't forget to consider water used within your offices. Simple measures to reduce consumption are relatively inexpensive and highly effective, such as converting to waterless urinals, low-flow tap aerators and low -flush toilets. Staff in your offices and facilities can be trained on the importance of reducing the wastage of water, and processes can be adapted to be more efficient. Behaviour change programmes could be linked to performance measures and targets. Conduct regular water audits to understand and reduce operational and supply chain water footprints, and produce and implement water management plans. Set water efficiency targets and gain the support of suppliers, customers and staff.
10 Build long-term resilience by implementing green building and water-sensitive urban design principles. Prepare for the possibility of intermittent supply and low water pressures by ensuring sufficient onsite storage and effective operation of pumping systems. This should include consulting your fire prevention specialists to ensure that you are covered even if there is very low water pressure, and how not to waste water when testing fire prevention systems. This is your New Normal. The City is in the process of developing guidelines for the installation of alternative water systems, which will be communicated in due course. The Energy Efficiency Forum, which has been a City partnership since 2009, is now evolving to address broader resource-efficiency issues. It is now going to henceforth be called the Energy, Water and Waste Forum for business. The next Forum event is set for the morning of 19 October 2017 at the CTICC. Water resilience will be the main focus, with companies sharing best practices and lessons learned, a panel discussion and exhibition of 30 waterrelated products and service providers. We need to acknowledge that the road ahead is going to be very challenging. However, the City is throwing every available resource at ensuring that acute water shortages are avoided. Building water resilience is our number one priority. I hope that we can count on you as the managers of the buildings where so many people work, live and play to make it your top priority as well.
11 As a city, we are managing the situation with absolutely every drought intervention that we have at our disposal. We have not let Cape Town down before and we do not intend to do so now. We need our residents and business partners to stand with us, to support us during these trying times, and to be constructive partners. We will only get through this by working together. Energy Another key area that we cannot afford to neglect is the energy sector. New technologies and innovations seem set to completely transform this sector over the next 10 to 20 years. Precisely how these technologies are adopted could have significant impacts on our cities, on our transport, and on our buildings. The City of Cape Town has set itself the ambitious target of procuring 20% of its energy from renewable energy sources by 2020. We aim to achieve this through greater energy efficiency, small-scale embedded generation and the procurement of renewable energy directly from independent power producers (IPPs), as well as introducing clean transport options such as electric vehicles. The City is in the process of developing a strategy to enable electric vehicles and mitigate risks. We are looking at incorporating EVs into our fleets, making charging stations available for public use, and to capitalise on the use of EV batter storage potential. We are also undertaking feasibility assessments for procuring energy from waste water and landfill sites. A 1.7 MW waste to energy plant on the Cape Flats is already in the planning stages for 2020.
12 We have already seen savings of over R50 million a year by making our municipal operations more energy efficient. All of the City s traffic lights and 40% of our street lights have been retrofitted with LEDs or EE bulbs, and 57% of City-owned buildings have been EE retrofitted. Rooftop PV panels are being installed progressively, with 247 KW being generated to date. The City s solar water heater programme has been very well received, with 46 000 heaters installed by 2015 by accredited service providers. Our 130-year-old system of electricity provision is set to be transformed by renewable energy tech, such as PV panels, along with low cost batteries. In many cases, where it is done at scale, such as on large commercial buildings, it is already cheaper to produce your own electricity than to buy it from the grid. As the costs change each year, the viable systems are moving down scale, and it seems likely electricity production will become cheaper at household scale in the not too distant future. We anticipate a very rapid increase in the growth of rooftop PV in the commercial industrial and residential sectors. The City is actively promoting small-scale embedded generation through education and information campaigns, and working with banks and financiers on financing options. A pool of accredited PV installers is being established through third party quality assurance programmes, and SSEG tariffs are being reviewed to assess the possibility of creating incentives and limiting risk. This has very significant implications for those of us who run electricity distribution systems, because the risk now arises of investing in assets that will
13 be stranded before the end of their envisaged economic life. Responses that need to be made are partially about restructuring electricity tariffs, essentially to separate out the cost of the grid from that of the energy supply, and also about incorporation of these new technologies locally at the utility scale. Disruptive change is becoming the norm, and all of us need to acknowledge this and make sure that we, too, take the steps required to become more adaptive and resilient. I hope that you will make use of this opportunity today to share information and best practices with each other, and work together to find the solutions that will enables us to meet the numerous challenges we face. Please avail yourselves of all the resources the City has to offer: http://www.capetown.gov.za/thinkwater https://www.greencape.co.za/content/focusarea/business-support Thank you very much. [end]