Presentation Title: A REVIEW OF RENEWABLE ENERGY POLICY AND INSTITUTIONAL FRAMEWORKS POSSIBLE FOR SADC COUNTRIES. Martin Manuhwa Pr. Eng (Z) SAFEO President Managing Consultant of Zimbabwe Africa Infrastructure Development Group (ZAIDG) mmanuhwa1@yahoo.com
Speaker Background President Southern Africa Federation of Engineering Organisation (SAFEO) Past President Zimbabwe Institution of Engineers Chairman Engineering Council of Zimbabwe Vice President Africa Federation of Engineers (FAEO) Vice President World Council of Civil Engineers (WCCE)
Presentation Outline Introduction and Background to the SADC Energy Scene A Scan of the Region s Energy Policies Salient Features National Renewable Energy Programmes and Targets Major Barriers for Market Development Policy Recommendations Conclusions
The Mission is to Save the Earth by living Sustainably
Introduction and Background to the SADC Renewable Energy Scene SADC Countries are confronted with a rapidly increasing energy demand in the coming decades resulting from a set of demographic, socio-economic and resource related factors. The Region has a large potential for the use of renewable energies particularly solar energy due to its high level of solar radiation. Only a small variety of solar thermal technologies, mainly solar water heaters, is used in the region
SADC AS AN ECONOMIC BLOCK The sub-region s mission is to promote sustainable and equitable economic growth and socioeconomic development through productive systems, deeper cooperation and integration, good governance and durable peace and security This way SADC emerges as a competitive and effective player in international relations and the world economy. This cannot be achieved without sound Regional Renewable Energy Policies among other developmental agendas
A Scan of the Region s Energy Policies Salient Features Many inhabitants of SADC suffer from energy poverty. They are exposed to inadequate, unaffordable, ineffective and environmentally unsustainable energy services that fail to support economic and human development. Energy poverty has an effect on, and is affected by, other aspects of poverty, it is vital to explore issues surrounding it, such as gender, the youth and the underprivilleged in the formulation of energy policies.
This reflects the recognition of the importance of energy in the delivery of basic services and in generating jobs and income. A Scan of the Region s Energy Policies Salient Features Energy plays a vital role in improving people s living conditions. Policy makers must fully understood this role in order to craft policies that contribute to development. Access to clean sustainable energy has become part of the international energy policy agenda in recent years.
A Scan of the Region s Energy Policies Salient Features Energy has a direct impact on the welfare of people, it facilitates the supply of water and fuels agricultural output, helps in the delivery of health and education, creates job and contributes to overall environmental sustainability. In spite of the vital role of the energy sector in the economic and social development of the region, the sector has been faced with several challenges affecting its its contribution to sustainable development.
A Scan of the Region s Energy Policies Salient Features These challenges are: o First, energy accessibility to some segments of the poor and rural population. o Secondly, is the large disparity in per capita energy consumption and energy intensity among those countries, and o Thirdly, the challenge of relying heavily on fossil fuels to energy demand.
A Scan of the Region s Energy Policies Salient Features In recognition of the above challenges, countries in the region have been continuously revising their policy framework aiming at promoting sustainable management of the energy sector. Varying degrees of progress have been achieved regarding the relevant key energy issues o e.g. energy efficiency, cleaner fuels, promoting renewable energy and enhancing regional energy integration through the Southern African Power Pool (SAPP).
A Scan of the Region s Energy Policies Salient Features The political will towards developing a more sustainable energy sector in the region is clearly reflected by the SADC Protocol on Energy which was adopted in 2009. This declaration addresses the regional concerns, priorities and commitments of the SADC countries towards the energy sector s links to sustainable development.
A Scan of the Region s Energy Policies Salient Features The protocol puts particular emphasis on the importance of o achieving sustainable development, o alleviating poverty; o promoting sustainability of the SADC energy sector; o enhancing regional energy integration; o changing the current un-sustainable energy production and consumption patterns, and o education, capacity building and public awareness programmes on energy for Sustainable Development.
A Scan of the Region s Energy Policies Salient Features The efforts devoted by the SADC Countries during the last two decades to develop and promote sustainability of the energy sector were not sufficient, but have created remarkable institutional and human expertise in relevant energy fields. It is the implementation of these policies that makes SADC countries lag behind other regions.
National Renewable Energy Programmes and Targets More recently, national renewable energy targets have emerged as a political context for promoting specific combinations of policies to promote renewable energy. Targets may specify total primary energy from renewable and/or minimum renewable energy shares of electricity generation.
National Renewable Energy Programmes and Targets In addition, most of the SADC Countries have initiated specific renewable energy programmes that combine awareness raising, capacity building and research & development with some activities for deployment of renewable energy technologies. There are no Energy Master Plans which provides a clear and comprehensive vision for the development of the energy sector in most SADC Countries.
Major Barriers for Market Development A set of barriers to the development of renewable energy market exists world wide; the SADC region is no exception. The most notably identified barrier is the lack of level playing field for renewable energy technologies. This includes: o heavy subsidies for competing conventional energy technologies, o insufficient incentives provided by governments to support renewable energy development, o unreasonably costly financing, and o lacking of technology standards.
Policy and institutional barriers Policy, legislative and institutional barriers for promotion of renewable energy in general and solar thermal in particular in the SADC Countries include: o Lack of or weak political will both at the government and private sector level. o Lack of national targets or strategies for promoting renewable energy resources within the national energy policy framework.
Policy and institutional barriers Lack of or weak legal and institutional frameworks. Except for South Africa and Zimbabwe, the rest of SADC Countries have no legislative framework to promote renewable energy technologies. o This includes lack of legal framework for independent power producers (IPPs). In many countries, power utilities still control a monopoly on electricity production and distribution. In these circumstances, independent power producers may not be able to invest in renewable energy facilities and sell power to the utility or to third parties under the so-called power purchase agreements. Weak or Lack of domestic R&D programs and low government expenditures in R&D
Market barriers Renewable energy market in the region is distorted due to: o Weak capacity of information flow. This is due to lack of industry and professional associations, which promote renewable energy technologies, disseminate information, and undertake advocacy activities. o Low level of consumer awareness leading to low market demand. This is due to lack of information about technologies, their availability, and their performance.
Market barriers Difficulties to change consumer's behaviors and attitudes which normally take long time. Lack of national standards, testing and certification schemes that led in the past to installations of poor quality solar water heaters causing a variety of technical problems. Weak capacity of local assembly/manufacturing, distribution, installation and maintenance of solar thermal technologies.
Market barriers Lack of training programs for renewable energy professionals, and lack of university level education in issues of renewable energy. Low level of awareness of local banking sector on renewable energy, and lack of proper financing schemes. Subsidies have been playing a critical role in development of rural areas and increasing access to modern energy services to the poor.
Economic barriers Economically, the renewable energy technologies often face unfair competition in the market due to some economic barriers. These include: The subsidies provided by governments for oil and gas especially in the oil producing countries. Even though lower fuel and operating costs may make renewable energy costcompetitive on a life-cycle basis, higher initial capital costs can mean that renewable energy provides less installed capacity per initial dollar invested than conventional energy technologies. High custom duties on renewable energy technologies adding to their high initial costs, and impairing their economic feasibility.
Economic barriers High initial costs of solar water heaters that face strong competition from the gas and electric heating systems which is still more economically attractive option to consumers. This is especially valid in oil producing countries, and exacerbated by low level of awareness about the concepts of Life Cycle Analysis of investments The external costs to societies due to heavy reliance on fossil fuels are not considered compared to clean renewable energy technologies. The environmental impacts of fossil fuels often result in real costs to society, in terms of human health (i.e., loss of work days, health care costs), infrastructure decay (i.e., from acid rain), declines in forests and fisheries, and perhaps ultimately, the costs associated with climate change. Dollar costs of environmental externalities are difficult to evaluate and depend on assumptions that can be subject to wide interpretation and discretion.
Policy Recommendations Based on the above analysis, policy recommendations have been prposed to be adopted and implemented in the SADC Countries. It should be noted, however, that each of those countries should select the appropriate policy package according to individual national contexts.
Policy Recommendations Promotion of efficient, effective and sustainable use of energy resources Removal Key Barriers by bring down the costs of RETs as well as abolishing market distortions that discriminate against these technologies, such as direct subsidies. Implement legal and regulatory reforms that promote the renewable energy deployment. o The policy framework should foster opening up the market for competition and private sector participation. Examples are laws and regulations for inclusion of renewable energy technologies in energy sector, laws for demand side management, allocate budget for institutions working in renewable energy field and include R&D in various renewable energy programmes.
Policy Recommendations Establish national targets for renewable energy o It is advisable that those countries which have not set up national targets to specify a minimum percentage of future energy that would come from renewable sources. Improve the overall investment climate o To enable the private sector to invest in the energy sector, private sector participation could include various forms of concessions and management contracts, private independent power and water producers, contracting out operation and maintenance, billing, metering and bill collection and other services as well as other forms of public- private partnerships.
Policy Recommendations Develop proper financing schemes o Proper financing schemes should be devised, taking into consideration the national socio-economic contexts. o These schemes should involve government, private sector (investors, local banks), and international financial institutions. o This could also include the creation of a national renewable energy fund for supporting the early market development. o Donors, bilateral and multilateral agencies should explicitly consider renewable energy for development projects and choose them when they are the least cost options on a life cycle basis. o Another means is to establish dedicated loan facilities with low interest rates to provide microfinance for RET on preferential terms.
Policy Recommendations Make use of the potential for carbon finance in the region. o In many countries of the region, awareness of the Clean Development Mechanism (CDM) is still relatively low. o Given the complexity of this new instrument, substantial capacity building will be needed among businesses and stakeholders including strengthening of the regulatory framework for the CDM. o Governments could give clear preference to renewable energy CDM projects.
Policy Recommendations Provide financial incentives o The characteristics and benefits of renewable energy are not always adequately and fairly addressed in energy policy frameworks. A package of financial incentives need to be developed and offered to promote market development. Establish Renewable Portfolio Standards o As said earlier, it is advisable that each country should specify a national target of Renewable Energies that encourage electricity generation from renewable resources.the Renewable Portfolio Standards specify what percentage of generated electricity must come from renewable sources
Policy Recommendations Improve energy efficiency and reduce energy intensity Apart from the introduction of appropriate incentives, this includes, but not limited to: o facilitating the introduction of standards for energy efficient equipment; o establishment of energy services companies (ESCOs) and development of appropriate financing mechanisms; o Introducing energy building codes and load management practices for large energy consumers.
Policy Recommendations Facilitate technology transfer from developed countries to SADC Countries Encourage the creation of industry associations o Industry associations play a vital role in market development, networking and matchmaking between manufacturers, installers, importers and consumers. They also catalyze cooperation and public-private partnerships with regulatory agencies and other government agencies. Raise public awareness of using the renewable energy technologies
Conclusions This RETs review shows that the SADC Countries are confronted with a rapidly increasing energy demand in the coming decades resulting from demographic, socio-economic and resource related factors. The region has large potential for the use of renewable energies particularly solar due to its high level of solar radiation. Only a small variety of solar thermal technologies, mainly solar water heaters, is used in the region. The degree of dissemination of solar thermal technologies and the state of such technologies vary considerably across the region.
Conclusions Hydro electricity is the dominant renewable energy resource in some countries. Wind resource assessments indicate that large areas in the region have an average annual wind speeds that are very promising to generate electricity such as in South Africa and Lesotho. Biomass fuels are being utilized in rural areas in some countries.
Conclusions The region is blessed with an abundance of solar energy which has been used for electricity generation in several stand-alone applications with the largest penetration in Namibia and South Africa. Solar thermal technology in the form of water heaters is achieving different degrees of market penetration. The market potential of the concentrated solar power (CSP) for power generation in the region is still to be tried in this region.
Conclusions This is the time to re-view our energy policies to eliminate poverty and other ills to ensure sustainable socio-economic development for our people Now is the time to unleash the skills of our engineers, policy makers and other stakeholders for them to: build an a sustainable energy policy framework in SADC with a focus on implementation of agreed targets on renewables build and maintain a critical energy infrastructure for SADC Now is the time to deliver good renewable energy policies and ensure meticulous implementation by all stake-holders!
WITHOUT PROPER RENEWABLE ENERGY POLICIES WE WILL HAVE DESERTS, POVERTY AND LOTS OF SUFFERING FOR PEOPLE IN SADC!
Creating a Renewable Energy Culture is a daunting task but not Impossible if we Work as a Region