Renewable Energy opportunities and electricity in South Africa ... - AIDCaidc.org.za/download/climate-change/04REnergySAlowlogo.pdf · Challenging the State: Renewable Energy opportunities

Challenging the State:

Renewable Energy opportunities and electricity in South

Africa in 2015

A publication of the AIDC

with material drafted by R Worthington.

September 2015

This publication has been made possible

with the support of the Friedrich Ebert Stiftung

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Challenging the State:

Renewable Energy opportunities and electricity in South Africa in 2015

CONteNtS:

Preface 2

Introduction 4

RenewableEnergy 6

Photovoltaic(PV)solarasembeddedgeneration 9

Feed-inTariff(REFiT)forembeddedgeneration 9

Snapshotofthenationalenergysystem 10

Issuesarisingfromtheenergysystem 11

Accesstoenergyservices 14

Jobs/employmentimpacts 16

ClimateChangeandSouthAfrica’sEmissions 19

SouthAfricanlongrangeemissionsintentions 23

EnergyDevelopmentpathwaysforSA 25

HowmuchREgenerationcapacitydoweneed? 27

40%ofelectricitysupplyfromrenewableenergyby2030 29

Theroleofgas 30

EnergySecurity 32

RenewableEnergy&TradeAgreements 33

Finance 35

Immediatecontext 36

Whatmustbedone? 38

Whatcanbedonetoadvancethisagenda? 45

ANNEXURE 47

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RENEWAblEENERgyoPPoRTUNITIESINElECTRICITyIN2015

prefaCe

“Renewable Energy is Peoples’ Power” is a call to action, directed not onlyat government or the captains of industry, but to all people who care aboutthe social dimensions of electricity supply, from persistent energy poverty, tothe intergenerational impacts of burning huge volumes of fossil fuels. It is anaspirational slogan, rather than a statement of fact or material conditions; ithighlights the synergies between the use of available renewable energy and awage-led low carbon development strategy with large job-creation potential,whilerecognisingthatthecurrenthighlycentralisedelectricitysupplysystemhasdevelopedprimarilytoprovidepowertobusinessandindustry.

Thisbookletexploreswhatcouldbedonetorealisethepotentialforpeopletobenefitdirectlyfromrenewableenergy;tobeparticipantsinthetransformationthatis,fartooslowly,startingtomoveenergysystemsawayfromdependenceonconcentratedfossilenergy.Itprovidesabriefaccountofrenewableenergytechnologies,thenationalenergysystemandkeyissuesarisingfromitspresentform.Itdiscussesissuesaffectingemploymentpotentialandapossiblepathwayforelectricitysupply,proposingatargetof40%tobegeneratedfromrenewableresourcesby2030,asthescaleandpacemostconducivetothedevelopmentoflocalRenewableEnergyindustries.

The context of a national electricity crisis makes this a time of immenseopportunityforchangeinSouthAfrica’senergydevelopmentpathway--thoughnotbydesignandwithnotransparentprocessforthedeliberationofkeychoicesthatweface;atimeofdisruptionandofinnovation,inwhichdecisionsofmassivepublicconsequencearebeingmade.Unlesslargenumbersofpeoplemobilisetomakerenewableenergytheirownpower,andtodemandthatitbecomesthefoundationforallpowersupply,wearelikelytomissgreatopportunitiesforbothshortandlongtermpublicbenefits.Currentlyweareseeingmoreinnovationandmovementinthecommodificationofrenewableenergythaninthesocialisationofrenewableenergytechnologiesorenergyservicesingeneral.

There are some relatively simple strategic decisions that should be made atnationalleveltosetusonalowcarbonpathtoasustainableandmoreequitableenergy future, single solution or top-down techno-fix. A more democraticenergysectorisprimarilyabottom-upproject.Thekindofprogrammaticroll-out envisaged in the final section of this booklet will involve many complexrelationships, require concerted public education (including within the publicservice) and a large number of active citizens and social formations. Thereis much that government should be doing to enable social ownership in the

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AlTERNATIVEINFoRMATIoNANDDEVEloPMENTCENTRE

servicessectorandintherapidgrowthofnationalindustriesinrenewableenergytechnologies.Activelyengagedpeoplearethefundamentalcomponentofajusttransition – persistent people patiently taking on responsibilities, enabled bycompetent,adequatelyresourcedinstitutionalsupportfortheimmediatefuture.

Renewableenergyis,invariousways,moreimmediatelychallengingtoutilisethanfossilfuels1,justasparticipatorylocaldevelopmentplanningandsupportingcommunity-based initiatives is more challenging for local government. Itrequiresgreatercapacityandawiderrangeofskills,thancontractingservice-providers or procuring and on-selling electricity. It takes significant time andeffort tobecomeaparticipant inenergyservicedeliveryand/or,managementofhouseholdorcommunityenergyserviceneeds,butformanySouthAfricansthisislessofachallengethangainingcashtopaycorporateserviceproviders.Anincreasingnumberofpeopleeagerforsuchopportunities,rangingfromruralbiogasproductionwithina localisedenergyeconomyorparticipationthroughland ownership in commercial wind farms, to household solar PV systemsor individual operators with micro-finance disseminating stand-alone solarappliancessuchassolarlightswithcell-phonecharging.Aparticularlyvaluableapplicationofoff-gridelectricity,forwhichphotovoltaicpowerisideallysuited,isforirrigationpumpstoincreasetheproductivityandreliabilityofyieldsforthemanysmall-scalefarmerscurrentlyrelyingonlyonrainfall.

Theideaspresentedherefocusonadvocacyforadecisivestate-drivenstrategyand programme of institutional development to enable renewable energydevelopment–withaclearpoliticalcommitment(includinganinter-departmentalmandate)andmobilisationofresourcesandfinance.

It isalsorecognisedthatrealisingthefullpotentialbenefitsof freelyavailablerenewableresourcesrequiresremovingsubsidiesforfossil fuel industriesandplanningnowfora responsiblephaseoutcoal-firedpowergeneration.SouthAfricahasmanymineralsthatwillbeneededinquantityforalow-carboneconomyandtherestof theminingsectorshouldthinktwiceaboutcoalcontinuingtorideontheirmorevaluableandproductiveofferingtosociety.Sometargetsareproposedforaclearandinvestment-mobilisingpoliticalcommitment,buildingontheoneMillionClimateJobsCampaign:

One Million Climate Homes

Five million solar systems

40% of grid-based electricity supply from renewable energy in 2030

1 This is fromashort termenergyservicesperspective-not takingaccountof themassivechallengesofdealingwiththewastelegacyoffossilfueluse;inthebiggerpicture,thechallengesofusingrenewableenergyarefarmoremanageableandlesscostlythancontinuingtoburnfossilfuels.

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INtrOduCtION

SouthAfricaisexperiencingconsiderableupheavalintheenergysectorandparticularlyintheelectricitysupplyindustry,someofwhicharisesfromglobaldevelopments,butmorefromspecificallySouthAfricandynamics.TheEskomcrisis,withinthebroadercrisisofclimatechange,isanindictmentofanenergysystemthatdoesnotmeettheneedsofthemajorityandcreatesaterriblelegacyofwasteandecologicaldegradation–theantithesisofsustainabledevelopment.Hugeinvestmentsarebeingmobilisedforenergydevelopmentthatshouldbedirectedtoinitiateajusttransitiontoalowcarbon,inclusiveandequitableenergysystembasedonrenewableresources,butmayfurtherentrenchourdependenceonconcentratedenergy(fossilandnuclearfuels)inasystemthatprioritisesprofitsoverprovidingenergyservicestopeople.RE is entirely compatible with economic development, as South Africanbusiness,includingmining,isincreasinglydemonstrating.

Kimberleywasthefirstplaceintheworldtoinstallelectricstreetlighting,withsomesupply tohomes,at theendof thenineteenthcentury,usingelectricityavailablefromgenerationequipmentinstalledtopowermining.Whilefuelslikecoalanddieselcanbetruckedanywherewithapassableroad (and road development is often driven by extractive industries),electricity needs a continuous physical connection (wires) between thepoints of generation and use, so decisions to invest in the necessaryinfrastructurerequiredpredictablelarge-scaledemand–particularlyfortheearlyformsofgenerationtechnology.

The subservience of electricity supply development to energy-intensivemineralsextractionandprimaryprocessinghasdecreased,butstillpersists.ThedrawbacksofwhatisoftenreferredtoastheMinerals-Energy-Complex(MEC) are increasingly evident. Nonetheless, massive infrastructureinvestmentscontinuetobemadethatassumemoreofthesame,eventhoughthestructureofthenationaleconomy(particularlyareductionintherelativesizeof theminingsector)hasshifted.This isexemplifiedbyan insistenceon the need for so-called ‘base-load plant’ - large-scale generation plantdesigned to operate around the clock, like the industrial processes thatdominateelectricitydemand.

InSouthAfricatheresidentialsectoraccountsforjust18%oftotalelectricitydemand,thoughitaccountsforamuchhighershareofpeakelectricityuse–duringtheperiodofhighestdemand,occurringintheearlyeveningwhenmosthouseholdelectricityuseisrequired.Designingelectricitysupplyinfrastructure

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primarilytomeettheportionofdemandthatisconstant(thebaseloadrequiredatalltimes)hasallowedforconsiderableeconomiesofscaleforinvestors,butcreatesbarrierstoresource-efficiencyandtheapplicationofmodernsystemmanagementoptions.Theabundanceofcheap-to-delivercoalprovidedthefoundation for the Minerals-Energy-Complex and a development paradigmtreatingelectricityforemostasameansto‘monetise’thiscoalresource2.

Post-apartheidgovernmentshaveadoptedanumberofnewobjectivesfortheenergysector,asreflectedintheWhitePaperonEnergyPolicyforRSA(1998),butthesehaveatbestbeentreatedasadd-ons,ratherthandrivingareviewofnationalenergystrategy.Someattemptstotransformtheelectricitysupplyindustry,includingarationalisationofelectricitydistribution(shiftingthemandatefromlocalgovernmenttofiveorsixRegionalElectricityDistributors)andtheinstitutionofanIndependentSystemandMarketoperator(ISMo)wereabandoned.Whilepolicycallsforintegratedenergyplanningdrivenbydetailedunderstandingofthedemandforenergyservices,governmenthascontinuedtofocusonstrategiesforsupplyingfossilfuelsandnuclearpower.

The most significant change in the electricity industry since 1994 hasbeen the introduction of long-term contracts for buying power fromIndependent Power Producers (IPPs), to implement policy providing forthe use of renewable energy (RE) for electricity generation. This REIPPProcurementProgramme(orREI4P)issuestendersforcompetitivebiddingbyprojectdevelopers,runbyaspecialnewunitthatwasformedinplaceofimplementingapolicytointroduceFeed-inTariffs3forRE.AsEskom’sconstructionofnewcoal-firedpowerplants(MedupiandKusile)hasfailedtodeliver,thisprogrammehasbeengreatlyexpandedasthequickestwayofaddingnewgenerationcapacity,suchthatthegrowingroleofprivate-sectorgenerationisconsideredatleastassignificantastheaccommodationofrenewableresources.

2 Ourenergystrategygrewoutofthecoalindustrystrategy:AsmostofSAcoalislow-grade,thisinvolveshigh-volumedomesticsupplyoflowgradeproductearningalowrateofreturnandsupportingthesupplyofhighgradeproducttointernationalmarketsatahighrateofreturn;thuselectricitygenerationinmassiveplantabletohandlelow-gradecoalandofferthelowest-pricedelectricity intheworld(intotheearlyyearsofthe21stCentury)becameastrongdeterminantofeconomicpolicy.

3 Feed-InTariffsareanopen-endedoffer tobuyanyelectricitysuppliedfromspecificresourcesortechnologiesatspecifiedtariffs,atpreferentialrates–offeringapriceabovetheaveragecostsofgridsupply.

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reNewable eNergy (re)

Renewableenergyresourcesarethosethatareconstantlyreplenishedbynatural processes, whereas fossil fuels are geological deposits in whichorganicmaterials(biomass),containingenergythatwastakenupbyplantgrowthovermanymillionsofyears,hasbeenconvertedbyhightemperatureandpressuretocoal,oilorgas.gasisthe least-dirty-burningfossil fuel,whilecoalhasthehighestlevelsofimpuritiesthatarereleasedaspollutionwhen it is burned, but all fossil fuel use releases greenhouse gassesthat cause global warming, in addition to local air and water pollution.Developinginfrastructuretocollectfreelyavailablerenewableenergyisnotasprofitableastheextractionandsaleoffossilfuels,butREinvolvesfarlesscosttosocietyasawholeoverthelongterm,offeringtheonlytrulysustainableenergysources.

This booklet focuses on renewable energy in electricity supply andspecifically opportunities for realising a range of public benefits throughshiftinggenerationfromconvenientlyconcentratedbutpollutingfossilfuelstothecleanbutdiluteordispersedenergyinsunlightandwind.CurrentlyREprovidesasmalladditiontoEskom’sexistingbutpoorlymaintainedfleetofcoal-firedplants,severalofwhicharedueforretirement inthe2020s.Choicesfacingelectricityplanning(aslaidoutintheIntegratedResourcePlan - IRP2010) include whether to try to extend the life of some agingplantsorreplacethemwithnewpowersupply,whethertoprioritiseREoralsodevelopanewSouthAfricanindustryinnuclearpowerandwhatrolegascouldserve.

Renewableresourcesincludeoceanpower–drawingontheenergyinwaves,tidalflowsandoceancurrents–whichcanmakeasignificantcontributionin future,but the technologiesare far lessmature (havegreaterscope forimprovement) than those for solar and wind. geothermal energy – heatcomingup from thecoreof theearth– isalsoa renewable resource,butthereislittleavailableinSouthAfrica,unlikeKenyawhichisalreadyusingittogenerateelectricity.biomass(e.g.wood,cropresiduesandcowdung)isarenewableresourcewhenproducedsustainablyandcanbeuseddirectly–asafuelforheatandcookingortogenerateelectricity–orbeconvertedtogasinbio-digesters,ortoliquidfuelssuchasbiodiesel.SouthAfricaisawater-scarcecountrywith littlepotential forhydropower,whichuses theenergyinthewatercycle(usuallycaughtindams,thoughrun-of-riverinstallationsarepossible)todriveturbinesforelectricitygenerationandisalarge-scaleoptionintheregion,particularlyintheDemocraticRepublicofCongo.

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Theenergy in sunlightcanbeused inavarietyofwaysandatdifferentscales,fromdirectsolarwaterheating(collectingthesun’sheatinrooftoppanels) and cooking (by concentrating heat at a central spot usingreflectors), togenerationofelectricity fromsunshine inphotovoltaic (PV)panels, or in large heat-collecting installations that generate steam todriveturbines(likeinacoal-firedplant,butusingsolarheatinsteadoffuel)calledConcentrated Solar Power (CSP).ACSPplantcanincludethermalstorage(inhugeinsulatedtanks)sothatelectricitygenerationcancontinueforhoursafterthesunhassetandcouldbedesignedtogeneratepoweraroundtheclock.AsPVrequiressunlightonthesolarcellsinthepanelstoproduceelectricityitisofteninstalledwithbatterypackstostoreelectricityforlateruse,buttherearelossesinsuchstoragesystems,oftenashighas20%,thoughstoragetechnologiesareimprovingrapidly.

officialstatisticsshowthatupto8%ofSouthAfrica’stotalprimaryenergysupply consists of traditional biomass use, which is generally inefficientandresults in indoorairpollutionwithhumanhealthimpacts,particularlyonwomenandchildren,whoarealsotaskedwithcollectingfuel.Ifbiomassisnotsustainablyproduced,itsusealsohasnegativeecologicalimpactssuch as desertification, while sustainable production at a scale thatwould displace some imported oil would compete with food productionforagricultural landandwateruse.Thepotential for renewablebiomassenergydependsonlocalconditionsandisfarsmallerinSAthancountrieslikeTanzania,but small-scaleapplicationscandelivergoodvalueat thelocallevel.

SolarPVtechnologyiswellsuitedtoachievinguniversalaccesstoelectricityas it requires very little maintenance and can be deployed at any scale,thoughthe50Wattsolarhomesystemsthatwereoffered ina largescaleprogrammerunbyconcessionairesaroundadecadeagowere toosmall4to satisfy the beneficiaries and the programme was mostly abandonedbeforeachieving the intendedscale.Aneglectedopportunity for reducingpovertyanddramaticallyimprovingruralliveswithoff-gridelectricityisusingrenewableenergytopumpwatertosupplementrain-fedfarming.Mini-gridsystemsinareasremotefromthenationalgridhaveconsiderablepotentialand invariousareaswindpowercancomplementsolarorbetheprimarybasisofsupply,oftenbeingavailableduringperiodswhenthesundoesn’tshine,andbiomassmayprovidefuel forback-upgeneration.Windpower

4 The‘solarhomesystems’offeredcouldrunafewefficientlightbulbsand“asmallblack-and-whitetelevision”andtheroll-outprogrammedidnotincludeadequatepubliceducationorcommunication;itwasnotlocatedwithinabroaderprogrammeaddressingenergypoverty; therewerealsoproblemswith thecost-recoverymodel forconcessionaires.Thereisstillasuccessfulprogrammeproviding‘solarhomesystems’–anoff-shootfromoneconcessionaireinKwa-ZuluNatal–operatingatasmallscalebutdemonstratingtherealvalueofsuchsystemswhentheyarewellunderstoodandnotperceivedtobethestate’sentireenergyserviceofferingorasubstituteforgridelectrification.

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ismostcost-effectiveusingverylargeturbinesmountedatoptowersupto100metrestall(roughlya25-storeybuilding),ofmorethan1MWcapacity5forgridsupply - feeding into the transmissionsystem.There ison-goinginnovationinthedesignofsmall-scaleturbines(uptoafewthousandWatts(kW)powerrating)andcostscontinuetocomedown.

Whatevermerit theymightoncehavehad,argumentsmountedagainstastrongcommitmenttorenewableenergyforgridsupply,toavertshorttermupwardspressureonelectricityprices,havebeenrenderedredundantbythesharpincreaseinprices(atleastdoublingformostusers)withoutRE,nottomentiontheburgeoningcostsofunservedelectricitydemand.There is no question whether South Africacouldgrow electricity generation capacity from renewable energy sources very rapidly to overcome supply short-falls within a few years – this potential has been clearly demonstrated by the recent procurement programme for independent power producers (REIPPPP) that attracted far more projects, with secured financing, than have been accommodated in the bidding process because of the government’s wary and incremental approach. The expansion of the REIPPPP announced by the Minister of Energy in June 2015 suggests that government is now resolved to realise this short term potential to end supply shortfalls.

Manyofourverybestrenewableresourcesarenotlocatedclosetoexistingtransmissionandotherinfrastructure,butmanylocationswitheasyaccesstothegridhaverobustresources(farhigher insolationthanisbeingutilisedinEurope).Inthecontextofextensiveunserved electricity demand,thevaluepropositionofnewcapacitythatcanbebroughtonlinewithinoneortwoyearsmeansthatwedon’tneedtorestrictourselvestousingtheverybestresourceareas first. There should be a more coherent and transparent transmissionplanningprocess,buttherelevantcostcomparisonforthePVsystemalonewouldbethecostofsupplyfromnewpowerplantsorthedaytimetariff,andforPV-via-storageitwouldbethecostofgenerationbypeakingplant,orthepeakperiodtariff(wheretime-of-usetariffshavebeenintroduced).6

5 Thecapacityratingindicatespoweroutputwhenrunningatfullcapacity(forlargewindturbinesthisgenerallyre-quireswindspeedsof6to8meterspersecond)–onemillionWatts(MW)runningconstantlywouldbesufficienttosupplyupto100affluentorover500low-incomehouseholds.

6 ForsupplypathwayinwhichCSPisaslowerentrant,asalessmaturetechnology,andwindisfavouredintheshortterm,areasonablemixfor2020wouldbe6900MWwind;6693MWofsolarPV(bothcentralisedandinresidentialandcommercialsectors)and690MWCSP(thelattertogrowalotfasterintothe2020s,commensuratewithSAmaintainingourleadingpositioninthisindustryglobally).Thiswouldgenerate28000GWh(fromatotal12385MW,withafurther1898MWtreatedasreservecapacity,whichiffullyutilisedwouldtaketheshareofREabove10%).

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photovoltaic (pV) solar as embedded generation

Asidefromclimatechangeandunemployment,thevaluepropositionofPVsystemsinthehouseholdandcommercial(shops,hotelsetc.)sectorswilldependuponwhenelectricity isrequiredandwhether thedistributorwillacceptthefeed-inofelectricity,sothatthegridcanbeusedassurrogatestorage–insteadofthePVsystembeingconnectedtoadedicatedbatterystoragesystem.Thecostimpactofincludingastoragesystemisnotjustthrough the purchase price, but also a loss of 10-20% of the electricityinconversions toand fromchemicalenergy in thebattery,compared todirectuseordespatchoftheelectricityasitisgenerated(i.e.whenthereissunlight);thereisalsomoremaintenance(PVpanelsjustneedoccasionalcleaning) as currently affordable batteries need to be replaced, perhapseveryfiveyears.Ifmostelectricityisrequiredduringpeakperiods(mostlyaftersunset)andthedistributorischargingatahigherrateforpeakperiodconsumption,thiscouldjustifythecostofdedicatedstorage,evenifthegridwereavailableasasurrogate;whereasifaflatrateispaidforconsumptionand for feed-in to the network, the only advantage of storage is havingelectricityduringload-shedding,foraslongasthechargelasts,whichwilldependonthesizeofthebatterypack.

InthecurrentcontextithasbeensuggestedthatthebillionsofrandsbeingspentbyEskomondiesel(torunopencyclegasturbinesbuiltaspeakingplant) could better be spent installing millions of solar home systemsconnectedto thegrid,whichmakesagoodpoint– it is ridiculous tobeburningdiesel in inefficientpeakingpowerplantwhile thesun isshining–but,withoutstate intervention, it isnotareadilyavailablechoice. Ifwerapidlygrowlarge-scaleREgenerationasweshould,wewilleliminatetheshortageofsupply ina fewyearsand the requirement forpeakingplantwillreturntowhatitwasdesignedfor,asatop-upduringpeakdemand,preferably not running for much more than an hour a day. It still makessense tosupportmassive roll-outofPVsystems,but the relevant cost comparison for the system alone would be the cost of supply from new power plants or the daytime tariff. the relevant comparison for pV-via-storage would be the cost of generation by peaking plant, or the peak period tariff where time-of-use tariffs have been introduced.

feed-in tariff (refit) for embedded generation

ARenewableEnergyFeed-inTariff(REFiT)isessentiallyanagreement(e.g.byautilityorsystemoperator)topayafixedrateforelectricitysuppliedfromspecifiedrenewableresources,asanincentivetouseRE.Adifferent

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tariffratecanbeofferedfordifferentkindsofsuppliers(e.g.commercialorhousehold),technologies,orscalesortimesofsupply.Differentiatedtariffsforconsumptionarealreadyusedasatoolindemand-sidemanagement(toencourageenergyefficiencyandconservationoravoidinguseinpeakdemandperiods)andalldistributorsshouldbeapplyinganincremental(orstepped)tarifftohouseholdsthatincreaseswiththescaleofconsumption,suchthatthoseusingalittlepayproportionatelylessperunitofconsumption.

AsimpleflatrateREFiTavailabletoallwouldbemostfavourabletotheaffluent,whocanaffordtofinancetheirownPVsystemsandcouldsetthemselvesupasminipowerplants,andtherewouldbenoincentivetoavoidpeak-periodconsumption7. IfaREFiTis linkedto improvingaffordableaccesstobasicenergyservices,ahigherfeed-intariffwouldbeofferedtopoorhouseholds,inconjunctionwithsubsidisedsystems,whichmightbeprovidedwithnoup-frontpayment,withownershipofthesystempassingtothehouseholdoveranextendedperiod.Detailedanalysisofelectricitydemandisrequiredtodeterminethemostcost-effectivedesignofsuchaninitiative, includingthe merits of including storage. optimising the specifications of such aprogramme would also benefit from greater clarity on the government’scommitmenttoprovidingFreebasicElectricity(FbE)topoorhouseholds.

DetermininganappropriatesizeofPVsystemwouldlogicallybelinkedtotheabilityofahouseholdtopayforelectricityuseoverandaboveFbE(whichshouldbesubstantially increasedfromthecurrent level)andthisneedstobedeterminedbythehousehold..ThiscanbedonewithoutaREFiT,withsimple two-way metering (the grid serving as surrogate storage), but thiswouldmisstheopportunitytousetheincentivefordecentralisedRE(whichis likely tobe introduced insomeformfairlysoon) toalsosupportenergyaccess,socialisationofelectricitysupplyanddemandsidemanagement.Inthe absence of an effective, large-scale education programme on climatechangeandsocialresponsibility,havinganoptionofsellingunusedhouseholdelectricitymeanshouseholdsarelikelytocloselymonitortheirdemandandmayfindfutureopportunitytoinvestinupgradingtheirsystem.

Snapshot of the national energy system

at the point of use, electricity makes up less than one third of supply, while 58% of energy is used in the form of heat, primarily industrial process heat. according to a June 2015 presentation by the director

7 Sincedistributorsshouldkeeparegisterofallusersthatmayfeedpowerintothenetwork,acertainamountofstoragecouldbecompulsoryforlargersystems,andthemeteringsystemcanbeusedtocheckifthisisreflectedinin-andout-flows.

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general of energy: 68% of primary energy supply is from coal and 19% from imported oil; the balance includes around 1.5% from nuclear, traditional biomass use is reported at 7-8%, natural gas (imported), and a little solar and wind power. South africa is the only country that converts coal into liquid fuels – a dirty and resource-intensive process undertaken by Sasol – to provide about 30% of total liquid fuels used nationally. ‘primary energy’ includes all energy entering the system, before losses in transformation (e.g. in power plants and refineries) and is thus considerably higher than energy demand, which is equivalent to energy supply at the point of use.

For a long time renewableenergyhasbeen regardedby the statusquoas appropriate only for limited applications making a minor contributiontoover-allenergysupply,butthisattitudehasrecentlybeenchangingasthepotentialandvaluepropositionofrenewableenergybecomeshardertodeny.ThisisevidentinthekeyfindingsofarecentstudybytheCouncilforScientificandIndustrialResearch8ofmacro-economicimpactsofthe600MWofwindand1000MWofphotovoltaic(PV)capacitythathasbeenfeedingelectricityintothegrid:

“ This study addressed the questions how much fuel costs the first 1 600 MW of wind & PV have saved during the year 2014, by reducing utilisation of diesel-fired gas turbines and the expensive part of the coal fleet, and how much of “unserved energy” they have avoided that would have been necessary without them. In 2014, renewable energy generated financial benefits in the form of fuel-saving and macroeconomic value of R 5.3 billion (which is 2.42 R per kWh of renewable energy), while they costs only R 4.5 billion in tariff payments to the IPPs (2.08 R/kWh) ”

Issues arising from the energy system

(a) ExternalisationHumanhealthimpactsofpollutionareamongmanynegativeimpactsoftenreferred to as the externalised costs of energy supply and use – coststhatare incurredoutside thechainofcommercial transactionsandhavetraditionallybeenignoredinenergyplanning.Theserangefromimmediateimpacts,suchaslocalairandwaterpollutionandlossoffertilelandthroughcoalmining,tolongtermandcumulativeimpactssuchasclimatechangeandthebuild-upoftoxicmaterialsintheenvironment(bio-accumulation).

8 Bischof-Niemz,DrT.,(2015) Financial benefits of renewables in South Africa in 2014, CSIREnergyCentre,Pretoria,14July2015

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The externalised costs of nuclear power are highly contested, with theindustryclaimingthattheyhavemostlybeeninternalisedandthatroutineemissionshavenosignificanceimpact.Whiletheshort-termexternalisedcostsofroutineoperations(excludingaccidents)maybelowerthanthoseofcoalandoil,thelegacycostsareextensiveanddifficulttoquantify,rangingfrommostlylow-levelbutwide-spreadhealthimpactstothechallengeofcontainingextremelyhazardouswasteformanycenturies.a little-known but increasingly significant levy is charged on non-renewable electricity supply to cover some externalised costs, such as damage to roads by big coal trucks and the health costs arising from air pollution.

Climate change is the global effect of the increased concentration totalgreenhousegas9intheatmosphere.Emissionsoveralongperiodoftime,regardlessofwhereonearththeyarereleased,trapmoreofthesun’senergywithinouratmosphereandheatuptheglobalclimatesystem,theresultsofwhicharedifferentinthevariousclimaticregions.Airpollutionconsistsofsubstancesthataredirectlyharmfultolifewheretheyareencountered,suchasmicroscopicparticulatematter,SoxandNox (varioussulphurousandnitrousoxides),heavymetalsandvolatileorganiccompounds.Airpollutionisprimarilyaproblemforpeopleclosetothesources(unlikegHgs),thoughitcontinuestobeaproblemwhenitreturnstotheground,e.g.inacidrain.

Externalisedcostsarebornemostlybythepoor,particularly thoseclosetosourcesofpollution,ordeferredintothefuture,whichappliesnotonlytotheworstimpactsofclimatechange10,butalsothebio-accumulationofheavymetals(e.g.mercuryanduranium)andvolatileorganiccompoundsreleased during combustion, and legacy impacts such as acid minedrainage.Attemptstoassignamonetaryvaluetolifeandnaturalresourcesare a form of or potential pathway to commodification, but putting amonetary valueonnegative impactsprovidesawayof integrating themin energy planning and macro-economic analysis of options. This doesnotassurethatexternalisedcostswillbeavoidedorminimised–itisjustonetool foramore inclusiveassessmentofvaluepropositions.Full-costaccounting should be applied to the entire life-cycle of energy options,

9 Thegreenhousegasses(GHG)mostresponsibleforclimatechangearecarbondioxide(CO2),mostlyfromfossilfuel

combustion (whichalso forms theGHGnitrousoxide-N2O)andmethane (naturalgas–CH

4) released fromcoal

mines,aswellasrottingbiomasse.g.inlandfills,orleakedfromgassupplysystems.OtherGHGscoveredundertheUNFrameworkConventionincludesulphurhexafluoride(SF

6)andtwogroupsofman-madegasses;HFCs(including

HCFCs),andPFCs.10 Manycommunitiesarealreadysufferingfromimpactsrangingmoreextremeweatherevents(e.g.floods)toshifting

rainfallpatterns,watershortageandincreasedprevalenceofdiseaseslikemalaria,buttheimpactsofchangingouratmosphereunfoldslowlyandcontinuelongaftertheemissionofgreenhousegasses,mostofwhichremainintheatmospheretrappingheatforgenerations.ThislagintheclimatesystemmeansthatwehavetocutemissionsnowtoavoidcatastrophicchangesthatwouldonlyfullymanifestdecadesaftertheGHGsarereleased.

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unlike thepracticeof thenuclear industry,which isparticularly adept atdisassociatingtheactivityandsiteofpowersupplyfromupstreamimpactsofuraniumminingandfuelproduction11.

Internalisingall thecostsof currentenergysupply (evenat conservativevaluations) would make electricity prohibitively expensive for manyhouseholds,andvariousindustrialuses,sowecannotrelyonlyonmarketmechanismstodrivethechangesneededintheelectricitysupplyindustry.Energyinvestmentsmustbedirectedbylong-term,holisticandintegratedplanningatthenationallevelthatrulesoutnewprojectsorinvestmentswithunacceptableimpacts,aswellaslocalintegrateddevelopmentplanningtosupportdecentralisedoptions.Suchplanningshouldalsoseeksynergiesinmeetingthevariousobjectivesofenergydevelopment,ratherthanassumingthat“trade-offs”,e.g.betweensocialandenvironmental imperatives,candeliveracceptableoutcomes.

(b) Balance or Faulty OppositionsTheNationalFrameworkforSustainableDevelopmentrecognisestheinter-dependence of social and environmental well-being (and that economicactivityisembeddedwithinanddependentuponboth),yetinenergyplanningtheframeworkofthree“pillars” iscommonlyusedtoproposeabalancingof social, environmental and economic objectives. This serves to set upthesocialandenvironmentalascompetingobjectivesandtoobscurerealsacrificesbeingmadeinthesespheresinthenameof‘economicgrowth’,assupposedlymeasuredbygrossdomesticproduct(gDP).AsarguedbytheoneMillionClimateJobsCampaign,alowcarbonRE-basedeconomyovercomesthesecompetingobjectiveswhilesimultaneouslycreatingmuchneeded jobs. The real compromise being pursued in practice, but notacknowledged,isbetweenlongtermsustainabilityandshorttermoutcomes,betweenimprovingthewell-beingofalllifeversusreturnoninvestment,whilecurrentmarketconditionsandexpectationsofprofitaretreatedasinviolate.

(c) Work Opportunities We are only beginning fully to appreciate all the linkages in supplyingenergy,waterandfoodandtheextenttowhichallhavebecomedependentontheuseoffossilfuels.Differentpeopledrawdifferentconclusionsfromthisdependence,withtheestablishment(thosewhoseinterestsaremostvestedindoingmoreofthesame)claimingthatwehavetoincreasefossilfueluseforwelloveradecadeifwewanttoreducepoverty.Mostofcivilsocietyiscallingforbreakingthisdependenceasamatterofurgency.This

11 InSouthAfricatheimpactsofuraniumminingaremaskedbyitbeingmostlyaby-productofgoldmining,whiletheproduct(yellow-cakeuranium)isexportedforenrichmentandfuelproductionprocesses.

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includesusingecologicalalternativestoindustrialisedandinput-intensiveagricultureandprioritisingwaterconservationandcatchmentmanagementovermoreinfrastructure-intensivewatertransferschemes.

Transformationalchangetocurrentpracticesrequiresstronggovernmentintervention, with improved capacity to enforce regulations and supportlocalised resource management, as well as international progress inremoving perverse subsidies (e.g. for mega-projects and short termproductivitygainsattheexpenseoflandandwaterquality)andscalingupfundingforclimatechangemitigationandadaptation.

The issue of the job creation potential of energy development choices isdealtwithseparatelybelow,butthereisalsogreatpotentialforcreatingworkopportunities,withskillsdevelopment,withininitiativesprimarilyfocusedonimprovingaccesstoandaffordabilityofenergyservices.Amoreprogrammaticandpro-activeapproachtoWorkingforEnergy,undertheExpandedPublicWorksProgramme, shouldofferwidespreadopportunities for community-basedprojectstodevelopandretainvaluelocally.Supportforsustainablebiomassproductionanduseforenergywouldalsohaveknock-onbenefitsofincentivisingandenablingcommunity-basednaturalresourcemanagement.

(d) Gendergenderissuesalsoariseacrosstheenergyvaluechain,particularlyinpoorerhouseholds,wherefemales–womenorgirls-arefrequentlyresponsibleforsecuringmosthouseholdenergy,andarethemostexposedtopollutionfromhouseholdfuel-burning.Theshifttolesscentralisedandmoresustainableenergyoptionsofferssignificantopportunitiesforempoweringwomen,butdoes not assure advancing gender equity and in some situations wouldhave thepotential toentrench inequality (e.g. ifacooperative requiresamandateorlandfromapatriarchalleadership).Indevelopingtheinstitutionalcapacitytosupportlocalisedenergyaccessinitiativesanddisseminationofrenewabletechnologies,asenvisagedbelow,genderdynamicsshouldbeconsideredfromthedesignphase.

access to energy services

Energyaccessisanotherareawheremajorshiftsincost-benefitpropositionshaveoccurredasaresultofthelowercostsofsolartechnologies.HighlyefficientlEDlightinghasfurtherreducedthecostofsolarlighting,whichisnowavailableinself-containedunitswithintegratedstorageandcell-phonecharging capability12. South Africa has several successful community-

12 Insomecommunitiesor‘markets’thecostofsuchsystemsisaboutthesameasoneyear’ssupplyoflightingfuel,

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basedpilotprojects13usingbio-digesterstoproducegasfrombiomass(arangeoforganicmaterialissuitable,fromcropresiduesandkitchenwastetomostanimalwaste–notchickenmanure),toprovidecleanheatinthehome,includingforcooking.

Meetingpeoples’energyserviceneedsshouldnotbereducedtoelectrificationwithsomefreebasicprovision,butstartwithanunderstandingofthevariousenergy services required, from power for light and electronics to heat forcookingandwaterandspaceheating(thoughindecenthousingtheneedforheatingwouldbemuchlessthaninthemajorityofSouthAfricanhomes,soreducingthedemandforheating,withceilingsandappropriatebuildingmaterials,isusuallythemostsensibleplacetostartontheserviceofavoidingfrost-bite in winter). This is recognised in the 1998 energy policy, whichelaboratesthecasefor‘energisation’,andasubsequentpolicyonFreebasicAlternativeEnergy,butisnotreflectedinenergyplanningorservicedelivery.

InSouthAfrica,givenourcoal-basedandailingelectricitygenerationsystem,itmakessensetoconsideralloptionsforsupplyingvariousformsofenergyasandwheretheyareneeded.Thecaseformassroll-outofsolarwaterheatinghasbeenacceptedbygovernmentandprogrammesareunderwaytomakeithappen;theyareinsomedisarrayandtheDepartmentofEnergyhasnotexcelled itself in this regard,norhasEskom,but that isbeyondourscopeinthisbooklet.Electricityhaslongbeenundervaluedandratherindiscriminatelyused. It isnotveryefficientorcost-effective forcookingand thealternatives thatmaybeappropriateandaffordablewill dependonlocalcircumstances,e.g.ifacommunityhaslandforsustainablewoodproduction, the latest small-scale biomass gasifiers14 may offer a bettervaluepropositionthanbuyingorgeneratingelectricityforcooking.

Access tosomeelectricity is regardedasabasic right,butdependenceupon Eskom is not without challenges and a policy provision of just 50kWhperhouseholdpermonthisnotsatisfactory.Inthe1990sthenumberofhouseholdsconnectedtothegridtripledandtheofficialelectrificationfigureisusuallygivenas85%,thoughsomeresearchputsthefigurebelow80%andrecentlyelectrificationdoesnotappeartobekeepingpacewiththeincreaseinhouseholdnumbers.Withthelatesttechnologiesandcosttrends,universalaccesstoanelectricitygridisnolongertheimperativeit

andthesystemshavea5-yearguarantee.13 ThereappeartobenoSouthAfricancasestudiesavailable,thoughtheWorkingforEnergyprogrammehassupported

afewofprojectsandapioneerinthefield-AgamaEnergy–referstooperationalexperienceinpromotingtheirequip-mentofferingsandtheCouncilforScientificandIndustrialResearchhaveasubstantialbiogasdigesterprogramme.

14 Gasificationinvolvespartialcombustionofbiomassundercontrolledconditionstogetcombustiblegassesthatburncleanly; the technology isusedata largescale forelectricitygeneration (e.g. inseveralEuropeancountries)andrecentlysmallversionshavebecomemoreaffordable,atascaletoserveafewhouseholds.

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was.Electricityremainsabasicservicethatshouldbeavailabletoallandmini-grids15independentofthenationaltransmissionnetworkarenowviableatthesmallscale.Smartgridsareanessentialcomponentofasustainableenergyeconomyandempowercitizenstouseenergyresponsibly.

Thereisenormousopportunityforupgradingtheelectricitysupplysystemswhile greatly increasing constructive interaction between energy serviceprovidersandserviceusers (aswellas for transcendingthisseparation).Manymunicipalitiesarefacingdisruptivechangetotheirtraditionalfinancingmodelduetothesharpincreaseinelectricityprices,suchthatraisingrevenuethroughamark-upontheEskomprice(greaterthanthecostofoperatingthe distribution network) is no longer viable. Most municipal distributorsalsohavemaintenanceback-logsandtheextensiveworkneededshouldintegratethemostuser-friendlytechnologiesavailable,withdirectoutreachappropriateforamodernutilityandeffectivelocalgovernment.

Jobs / employment impacts

The employment impacts of energy development choices, particularlyof specific energy projects, programmes or technology choices, aredependentuponawiderangeofvariablesandcannotbereliablypredictedatanationallevel.However,employmenttrendsrelatedtobroadtechnologyand resource options are well-established across the energy sectorinternationally.TheextenttowhichthesetrendscouldberealisedinSouthAfricacanstronglybeinfluencedbypolicyandenergyplanning,particularlythroughchoicesofthescale(andtoalesserdegreethepace)atwhichtopursueparticularoptions.

A clear trend documented in international studies is that the utilisationof diffuse renewable energy resources is more labour-intensive thanthe utilisation of the highly concentrated energy in fossil fuel resources.germany, with far weaker solar resources than South Africa, has clearlyrealisedthejobcreationpotentialofrenewables,asillustratedinthegraphbelow.

labour intensity used to be widely recognised as an impediment forrenewables, including a barrier to investment by way of more extensivecosts of labour making renewable options less profitable than stockenergy options (fossils and nuclear). Employment in coal-fired electricitygeneration, includingassociatedmining,declined fourfoldbetween1980

15 A‘mini-grid’isalocalelectricitysystemincludinggenerationanddistribution(withthenecessaryequipmentforloadandvoltagemanagement);itwilltypicallyincludesomestorage(batteries)andsomeback-upcapacity–usuallyadiesel-poweredgenerator.

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and200016andthelabour-intensityofcoalmininghascontinuedtodecline.Sincecreationofemploymenthasbecomethemajorpoliticalimperativeforallparliamentaryparties,proponentsoffossilandnuclearenergyprojectsincreasinglyresortto‘multipliereffects’toclaimhighjob-creationnumbersfor specific projects or programmes, with very generic projections ofindirectjobs.Thispracticeofpromisingjobshasbecomecommonplace,but,intheenergysector,thefossilfuelproponentsrelyfarmorethantheirREcounterpartsonprojectedandspeculativedownstreamimpacts.

Amajorchallengetoassessingtheemploymentimpactsofenergychoicesistheimpactofemploymentwithintheenergysectorrelativetotheimpactsofresultingenergypricesonjob-creationpotentialwithintheeconomyasa whole, particularly as anticipated over the short term. The potentiallynegativeeconomy-wideimpactsofanincreaseinpriceofelectricityismorepronouncedwithinanenergy-intensiveeconomylikeSouthAfrica’s.Thisisalliedtothedominantassumptionthatcheaplyconvertingabundantcoalintoelectricity forenergy-intensive industriesprovidesglobalcompetitiveadvantagefortheforeseeablefuture,withthisinturnpresumedtodeliverhigheremployment,thoughmanifestationofthishasnotbeenborneoutbyexperience.Thereissomebasisfortheargumentthatcoalispositivefor

16 AGAMAEnergy.2003.EmploymentPotentialofRenewableEnergyinSouthAfricapublishedbyEarthlifeAfricaJohan-nesburg.

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quickereconomicgrowth,whenthisisequatedwithrisinggDP,howeverthedownstreamfactor,whichhaslongbeenusedtojustifybroadereffortsto keepenergyprices low,hasnotbeendecisiveor evendemonstrablyconducivetoaddressingSouthAfrica’sunemploymentcrisis.

Toassesstheemploymentimpactsofenergydevelopmentoptionswithanydegreeofconfidence requiresamoreholisticapproach thanproject-by-projectprojections,withtheexceptionofsmallerbiomassanddecentralisedenergy access options with almost entirely local impacts. In the grid-basedelectricitysupplyindustry,themostreliablewaytoensurepositiveemploymentimpactswillbetoworkwiththewell-establishedtrendsandconsiderhowbesttocapitaliseonthepositiveonesatanationalandevenataregionallevel.onthisbasis,SouthAfricashouldhaveclearpolicyandplans todeployrenewableenergy technologiesatascale that justifiesaveryhighleveloflocalisation,aswellasamoreprogrammaticapproachtoprocurementthanjusttheincrementalandserialbiddingapproachthathasbeendevelopedtosuccessfullyinitiatetheuptakeofrenewables.

Thegreatest socialbenefits that areavailable through renewableenergydevelopmentareinoff-gridapplicationswherethereisinadequateaccesstoenergyservices,butresponsible‘energisation’17willrequireabottom-upapproachwithchoicesstronglydeterminedby localcircumstances, thusdefyinggeneralisationsabouttechnologiesthatarevalidforgrid-basedorpurelycommercialsupply.Afast-trackapproachisnotappropriatetosoundpracticeinenergisation,wherekeyfactorsforsuccessareeffectivelocalgovernmentandparticipatorylocalIntegratedDevelopmentPlanning.Therearehugepotentialsocio-economicgainsavailable throughenergisation18andheretooaprogrammaticapproachisdesirable,especiallyforbuildingpublic awareness of energy options and developing relevant capacity inlocalgovernment,butcommunity-basedinitiativesshouldnotberequiredtoconformtonationaltargets.TheprospectsforrealisingthispotentialwillbegreatlyenhancedifthrivinglocalindustriesinREtechnologiesaredriven,orrathertheir localisationispulled,bystrongdemandinthecommercialandgrid-feedingsectors.

DecentraliseddeploymentofREtechnologieswillbemorelabour-intensivethancentralisedprojectsdesignedtoservethegrid,withorwithoutusingthe grid for surrogate storage, but more so where dedicated storage isrequired. Solar PV technology is already being used as a substitute for

17 See1998WhitePaper18 Thisisanareawhereitiseasytojustifyveryhighnumbersinprojectionsofworkopportunities,whichmaybea

necessaryprecursor todecent jobswithinsuchanascent industry;onecanconceiveofmunicipaland/orcom-munity-basedenterprises;apeople-centredapproachtomeetingenergyserviceneedsmayinvariouscontextsorcircumstancesnotneedtobepremisedonthegenerationofcash-flow,ormayembraceconceptslikelocalcurrency.

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griddependence,sometimes indefianceofgovernment regulations.ThevaluepropositionforPVintegratedwithindistributionnetworksiscurrentlydeterminedmostlyby the reliabilityandthepricingofcentralisedsupply,whileinthemediumtermitwillbedeterminedmorebytheregulatoryregimeandlocalgovernmentdynamics(includingfinancingmodels).ThepricingofPVpanels-especiallyrelativelysmallunits–hasrecentlybeenquitevolatileandastate-supportedorpubliclyowned facilityorprogrammeof large-scalelocalproductionwouldgreatlyenhancetheprospectsforlocalisation.

To have confidence in positive employment impacts arising from energydevelopmentchoicesrequiresanactiveroleforthestate,notjustimposingtermsonIPPs,suchastherequirementsforlocaleconomicdevelopment(lED)undertheREIPPprogramme,butpro-activeengagement,withon-goinganditerativeplanningandtheenablingofdecentraliseddevelopment.Torealisethebenefitsofhigherlabour-intensityofrenewableenergyoptionsinSouthAfricarequiresclearcommitmenttohighlevelsofdeploymentaswellasothermeasurescontemplatedbelow.

Climate Change and South africa’s emissions

SouthAfricaisrankedaround12thamongsttheworld’shighestemittersofcarbondioxide,howeverrankingssometimechangeasaresultofimproveddatacollectionratherthanactualchangesinemissions–andwithinthetop15whenallgHgsaretakenintoaccount.Wehavethemostcarbon-intensiveof theworld’s top20economies.Emissionspercapita– i.e. totalnationalemissions divided by the total population, ignoring massive differencesin individual carbon footprint and how much of our emissions may beembodied inexportedproduct -aresimilar to industrialisedcountries liketheUnitedKingdom.SouthAfricaclaimstoplayaleadingandprogressiverole in international negotiations under the United Nations FrameworkConvention on Climate Change (UNFCCC), championing the Adaptationagenda,insistinguponequitablecontributionsincludingdevelopedcountrysupportfordevelopingcountriesandsupportingtheAfricagrouppositioncallingforstabilisationofglobaltemperatureatnomorethan1.5°Cabovethepre-industrialaverage,butthispositioninghasnottranslatedintoambitiousdomesticmitigationaction.

The National Climate Change Response White Paper (NCCRWP) waspromulgatedinNovember2011,justbeforeSAhostedthe17thConferenceof Parties (CoP) to the UNFCCC, and lays out a somewhat ambitiousprogrammeofwork thathasbeenslowtomaterialise.onMitigation thepolicystipulatesawiderangewithinwhichournationalemissionstrajectory

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shouldremainto2050,knownas‘Peak,PlateauandDecline’orthePPDrange,whichisconsistentwiththeinternationalcommitmentmadein2009:tobringnationalemissionsbelowa‘business-As-Usual’(bAU)trajectoryby34%in2020and42%in2025.TheoriginalbAUtrajectorywasdevelopedby thelongTermMitigationScenariosprocess thatstarted in2006andanticipatedemissionsgrowthmuchhigherthanhasactuallyoccurred.

Towards theendof2013 theDepartmentofEnvironmentalAffairs (DEA)published an elaboration of the PPD Range, stipulated in policy, whichincludedabsoluteannual emissionsfigures forlow,MidandHighPPD,accompanying the following graphic depiction – the vertical axis (line)representsannualemissions, inMega tonnes,with thegraphshowingarangefortheentireperiodof2010to2050(seegraphbelow).

Thissuggestsaplateauinemissionsfrom2025to2035,anywherebetween400and614Mtperannum,but tobeconsistentwiththeglobalgoalouremissionsshouldbedecliningstronglyinthisperiod,tobewellbelow400Mtby2035.Thebottomoftherangein2050isgivenas212Mt,whichwouldbe roughly 3 tCo2e per capita for the projected population of 70 million,whenglobalaverageannualemissionsshouldbenomorethan1tpercapita.Thecumulativetotalemissionsofthelow-PPD(thebottomoftherange)is14830Mt–justunder15gt–whichsomemightconsiderafairshareforSouthAfricaofanacceptableglobalcarbonbudgetconsistent with keeping global warming within 2°C.

In November 2014 DEA published a revised and official National gHgInventory2000–2010,which recordsnetnationalemissions in2010as

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518 Mt Co2equivalent (all the gHgs are rendered in this unit, based onglobalwarmingimpactequivalenttocarbondioxide).TheInventoryreportstotalemissionsin2010of544Mt,asinthegraphabove,withthedifferencetonet emissionsbeing theamountofCo2 takenoutof theatmospherethroughforestryandotherlanduse.

Since electricity generation accounts for about half of total nationalemissions(almosttwothirdsoftheemissionsshownforenergy),shiftingtorenewableenergyoffersbyfarthelargestmitigationopportunity,otherthannuclearpower,whichisnotanacceptableoption.AstudypublishedbyDEA,TheMitigationPotentialAnalysis(MPA–November2014)providesin-depthanalysisofalargesetof“abatementoptions”–actionstoavoidanticipated emissions – with modelling to 2050 of the socio-economicimpactsofimplementation19.

Adaptationrequiresdevelopingresiliencetotheimpactsofclimatechangeandheretoorenewableenergycanmakeacontribution,withinapackage

19 TheMPAdoesnotcoverthefullscopeofnationalmitigationpotential;inparticularitconsidersmitigationorabate-mentoflessthan50%ofelectricitygenerationemissions,thoughwecouldcompletelydecarboniseelectricitysupplyby2050.Italsodoesnotconsiderevenhalfofthemitigationpotentialavailablethroughelectrificationoftransport.

Energy accounts for about 80% of emissions – with the remainder being emitted by Industrial Processes and Product Use (IPPU), Agriculture, Forestry and Other Land Use (AFOLU) and from Waste. The graph shows total annual emissions over the decade in the unit Giga gram, which is the same as a kilotonne.

4 - Waste

3 - AFOLU (Excl. Land)

2 - IPPU

1 - Energy

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ofactionsforlocaliseddevelopment,butthishasnotbeenassessedasyetandisfairlymarginalrelativetotheroleofrenewables inmitigation.Atalocallevelthevalueofdecentralisedpowersupplyissignificantandresilientcommunitiesneedtounderstandthefullrangeofenergyoptionsavailabletothem.Thermalpowerplantsthatgeneratesteamtodriveturbinesneedagreatdealofcooling,whichrequireslargevolumesofwater,thusinawater-scarcecountrytheearlyretirementofcoal-firedplantsusingwet-coolingwouldhelptoadapttodiminishingandmoreerraticrainfall.(‘Drycooling’asappliedatthemostrecentlycompletedmega-plantandMedupiusesfarlesswater,thoughstillsignificantquantities.)

Thereisalagintheclimatesystembetweenwhenemissionsoccur,andthe impact of the increased atmospheric concentration of gHgs is fullymanifest.Thismeansthattheimpactsweareexperiencingtodayaredrivenmostlybytheemissionsofthepreviousgeneration,whilethebenefitsofhaltingemissionsgrowthandasubsequentdeclinewilltakesomedecadestomanifest.Somecomponentsof theclimatesystemhavemoreof thisinertiathanothers,thusexpansionoftheoceansduetowarming,whichtakes decades to penetrate the depths, will continue for centuries nomatterhowsteeplyemissionsarereduced.Uncertaintyregardingtherateofresponseiswhydifferentglobalemissionspathwaysorcumulativetotalsare rated with different probabilities of keeping global average warmingbelow2degreesletalonestayingbelow1.5degrees.

The publication in 2014 of the Fifth Assessment Report (AR5) of theIntergovernmentalPanelonClimateChange(IPCC)providesahighdegreeofconfidenceregardingtheatmosphericgHgconcentrationsthatwillresultfromfurtheremissionsandtheamountofwarmingthatwillfollow.Thereforewecandeterminewhatamountoftotalemissions,orglobalcarbonbudget,wouldgiveusastrongprobabilityofstayingwithin2degrees.Suchcalculationshavebeencarriedoutbymanyinstitutions,includingtheInternationalEnergyAgency(oncebetterknownforscepticismofclimatechange).Itisclearthathumanityneedstobecomecarbonneutralwellbeforetheendofthiscentury,i.e.toensurethatallourgHgemissionsaddingtoatmosphericcarbonarebalancedoroff-setbyactivitiesthattakecarbonfromtheatmosphere,suchas reforestation and ecological agriculture. The longer we take to makeglobalemissionsstarttodecline,thesoonerwewillhavetoachievecarbonneutrality,foragivenprobabilityofachievingthegoal.

Usingwell-roundedor‘ball-park’figures,tohavemorethanhalfachanceofstayingbelow2degrees,aglobalcarbonallowanceorbudgetfor2010-2050willbewellbelow1000gtCo2e–thuslessthan20years’worthatourcurrentrateofemissions-andthisleavesverylittlebudgetforafter2050.

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Some industrialisedcountriesarealreadyreducingtheiremissions,whilevirtuallyalldevelopingcountriesexpecttheiremissionstocontinuegrowingfor some time. Allocation of an acceptable amount of global emissionsamongstnationsshouldbebasedon their responsibility (totalemissionsto date) and capability, but international negotiations are not seekingagreementonamethodologyforthis.Inthemeantimewehavetoconsiderallocationofapossiblenationalallowancewithintheeconomy,regardingwhichtheNationalDevelopmentPlan(2011)states:“Thecarbonbudgetingapproachtomitigationmustefficientlyandappropriatelyapportioncarbonspace to the sectors and activities that add the greatest value, using atransparentsetofindicatorsthatincludedevelopmentindicators.”

South african long range emissions intentions

ThePPDRangeisnothelpfulinconsideringanoptimalemissionstrajectoryforSouthAfrica. Ifallcountries’mitigationeffortswereonaparwiththeHigh-PPDforSouthAfrica(whichhasacumulativetotalof23gt),we’dbeheadingfor4degreesofglobalwarming,whichinvolvesaboutdoublethatinmuchoftheinlandareaofSouthernAfrica.Thereisnoconsensusamongstcivilsocietyonanappropriatenational trajectory (emissionspathway)ora target carbon budget (cumulative total of emissions) to 2050, thoughit is common cause that the PPD Range is too high. The determinationof what should be considered a fair contribution is an intenselypoliticalissueinvolvingclassinterests,asarebroaderquestionsofclimatechangeresponseprioritiesnationallyandglobally,asdifferentstrategieswillhavedifferentimpactsacrossthesocialspectrum.

on the issue of climate change mitigation (avoidance and reduction ofemissionsandabsorbingcarbondioxidefromtheatmosphere,e.g.throughreforestation),therehasbeenextensiveinternationalanalysisofwhatcouldorshouldbeexpectedofdifferentcountries,someofwhichisavailableintheformofon-linetools,suchastheClimateEquityReferenceCalculator20(CERC).ReviewofsuchanalysesindicatesthatacarbonbudgetforSouthAfricathat isconsistentwithsomechanceofstabilisationat1.5degreesandastrongprospectofkeepingwarmingbelow2degreeswouldbeabout12gt21fortheperiod2010to2050

20 TheClimateEquityReferenceCalculator(CERC)wasdevelopedbyEcoEquity(buildingontheirGreenhouseDevelop-mentRightsapproach)withtheStockholmEnvironmentalInstitute:http://calculator.climateequityreference.org/

21 Relatinganationalemissionstrajectoryorbudgettoaglobalwarmingoutcomerequiresmakingassumptionsaboutwhatallothercountrieswillbedoing,whichrequiresconsiderationofcountries’responsibilityforemissionstodateandcapabilityformitigation.Toequateanationalemissionstrajectoryorbudgetwithaglobaloutcomesassumesequivalent effort on thepart of all countries, basedon their responsibility and capability,which canbeassessedagainstarangeofcriteria,withdifferentcriteriaproducingdifferentreckoningsforaparticularcountry.Theproposalof

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TheDepartmentofEnvironmentalAffairshasproposedMid-PPDasthepointofreferenceforsettingDesiredEmissionsReductionoutcomes(DERos-asprovidedforinpolicy),butdoesnotexplainhowtoreconcilethistrajectory,depictedas473Mtin2010to480Mtin2015,withreportedemissionsof512 Mt in 2010. one approach is to plot a trajectory starting at reportedemissionsandreachingthesamecumulativetotalby2050,whichishowthe‘Mid’pathwayshownbelow,withacumulativetotaljustshortof19gt,wasgenerated(seegraphicabove).

The upper trajectory is very broadly indicative of propositions mooted bysome industry stakeholders with reference to the Mitigation PotentialAnalysis,thoughorganisedbusinesshasnottabledanyformalpropositionforDERosandtherehasnotbeenoppositiontoemissionsstartingtodeclinefrom2035,assuggestedbythePPDRange.

TheDEAhasa2050PathwayCalculatorforSA,anon-linetoolavailableviatheirwebsite thatallowsusers toexperimentwith38 levers formitigationactions,whichareappliedtoareferencecaseprojectionofenergydemandandsupplyandgHgemissions.Thisisofferedasaneducationalandnotaplanningtoolanditisveryusefulfordevelopingfamiliaritywiththebigpictureandrangeofnecessaryinterventions,particularlythefullscopeofmitigationpotential in electricity supply, but even with all levers set to maximum

anemissionsoutcomeforSouthAfricaof12GtisbasedoncriteriaappliedbytheClimateEquityReferenceCalculatorandislowerthanwhatsuchcriteriasuggestwouldbea‘fairshare’forSouthAfrica.Itisanemissionsoutcomethatisproposedwillbeachievedwithinternationalsupport,sincethemostdevelopedcountriesareresponsibleformoremitigationthantheycanpossiblyachievedomestically(astheir‘fairshares’willbeusedupwellbefore2030)withoutsubstantialchangestothepoliticaleconomyofthemajorindustrialpowers.

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mitigationitisnotabletocreateanemissionstrajectorysignificantlylowerthantheextrapolationofMid-PPDabove.Thispaperdoesnotproposea12gtpathwayasSouthAfrica’sfairshareofglobalemissions(takingintoaccountournationalresponsibilityandcapabilityrelativetoothercountries),asthismayimplyfurthercompromisingtherightsofthepoor, ifassuminglittlechangetothecurrentpoliticaleconomy.Someorganisationsaddressthisbyadvocatinga12gtbudgetthatshouldbeconditionalonmitigationsupported by ‘developed’ or more industrialised countries, additional tobringingtheirnationalemissionsclosetozerobefore2040.

energy development pathways for Sa

A number of global scenarios for moving entirely to renewable energyhave been produced; some highly theoretical, including a plan for doingthisby2030,somemoredetailedandpragmatic,withregionalorcountry-by-country scenarios considering physical resource constraints, spacialdevelopmentpatterns,etc.Whatwasoncewidely renouncedas idealisticandunachievableisincreasinglybeingembracedbymainstreaminstitutions:humancivilisationrunningentirelyonrenewableenergy.Thereisstillwide-spread scepticism about achieving this by 2050, but arguments invoking“realism”increasinglyrestontheinertiaoftheglobaleconomicsystemandvestedinterests(essentiallyageo-politicalvaluejudgement)ratherthananytechnologicalorresourceconstraints.

The real debate has shifted from whether it is possible, to how best itwouldbeachieved (e.g.determiningthepotential forsustainablebiomassenergysupplywithoutcompromising foodandwatersecurity),witha justtransitionawayfromthefossilfuelsuponwhichsomanyarecurrentlyheavilydependent.Thebalanceofanalysisshowsthatphasingoutfossilfuelsisnotonlypossible,butofferspracticalopportunitiesforpeople-centred,bottom-updevelopmentwithmoreequitableaccesstonaturalresources,andindeedwillhavetoincorporatereversingthegrowthofinequality.22

SouthAfricaandour region’svast renewableenergy resourcesareordersofmagnitudegreaterthaneventhemostoptimisticestimationsofourfossilresourcesandincludealargeshareoftheworld’sbestsolarresource.Theland required to harvest all the renewable energy we could need is wellbelow1%ofourtotallandarea,andislessthanthetotalfootprintofmeetingour needs with fossil fuels, when considering entire life-cycles of supplyand use23. The material requirements (such as for steel and various less

22 Forfurtherreading,seeThisChangesEverything,NaomiKlein(2014)23 ThosedenyingthepotentialofREliketocomparethephysicalfootprintofpowerplants/generationfacilities,on

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commonmetals) foralloftheextensive infrastructurenecessarytocollectREhavebeenstudiedataglobalscaleandfoundtobemanageable,thoughinternational planning and cooperation will greatly enhance the prospectsformobilisingrequiredresourcesbothrapidlyandresponsibly.Intheareaofthematerialrequirementsofsustainableenergysolutions,SouthAfricahasaverygenerousendowmentofamajorityofrelevantmaterials.

MovingelectricitygenerationtoREwillbeeasier thanshifting fromfossil-basedliquidfuels,predominantlyusedintransportaspetrolanddiesel.Thiswill require reducing the use of internal combustion engines to only theirmostappropriatenicheapplications,whileincreasingtheshareofelectricityin the SA mix of energy carriers to replace liquid fuels wherever feasible.Theremainingliquidfuelrequirementscouldthenbesuppliedfrombiomass.Therearesomespecialisedapplicationsof fossil fuels,e.g.ofhighqualitycokingcoal,forwhichwedonotyethavealternatives,buthowwewillmeetthefinal5%ofthetransitionto100%REisnotpertinenttothechoiceswecurrentlyface.Theessentialinitialstepisacleardecisiontodoallwecantodeveloprenewableenergyindustriesandstopputtingnewmoneyintotheoldparadigmandwastingscarceresourcesoninfrastructurethatwillhavetoberetiredearly,i.e.islikelytobecomestrandedassets.

IntegratedEnergyPlanning(IEP)is,asdetailedinpolicyandlegislation,theappropriate forumandnecessaryprocess toassess thebigdecisions forenergy development. Theoretically this is in progress, with a stakeholderengagementprocesshavingbeen launchedby theDepartmentofEnergy(DoE) in May 2012 and a Draft Report serving as the basis for provincialworkshopsinthelatterpartof2013,butthereisnoevidenceofthisprojecthavingrealtractionondecision-making.ForelectricitysupplytheDoEstillusestheIntegratedResourcePlan(IRP)2010(havingrejectedtheIRP2010-2030UpdateReport)andappearstohaveabandonedanycommitmenttopublic engagementondeveloping thenext iterationof thisplan,which issupposedtobeanon-goingprocesswitha2-yearcycle.Currentlythereisnomeaningfulpublicdeliberationofourlongtermenergystrategy.

Theailingstateofmanyexistingcoal-firedplantshas ledtoproposalsformajorrefurbishments,underthebannerof‘life-extension’asasupply-sidestrategy, but the value proposition of such a strategy cannot be publiclydebatedastheconditionoftheplantsistreatedasproprietaryinformation(tradesecrets)incasethestatemaychoosetoselloffanysuchassets.longtermplansorstrategieshavebeendeveloped for liquid fuels investmentsand gas utilisation, though they have not been officially finalised, while aCoalRoadMap (SACRM) released in2013 isbeingusedby the industry

which basis using concentrated fossil fuels requires less space than collecting dilute renewable energy, but thisignoresthelandfootprintoffuelsupply,wastemanagementetc.

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tomotivateon-goinggrowthindomesticcoalconsumptionintothe2030s.Itremainstobeseenwhetherresponsetothecurrentelectricitycrisiswillbe confined to shoring up the existing system or take the opportunity toembraceasustainableenergyparadigm.

A 2008 research study24 established the viability of renewable energyproviding15%ofelectricitysupplyby202025with longtermcostsavings.Subsequently the costs of RE technologies have declined far faster thanassumedinthatstudy.Fromourpresentsituationweareunlikelytoachievemuchmorethan10%by2020,atleastifseekingadecentbalancebetweenspeedandmaximisingsocio-economicimpacts,particularlythepotentialforjobcreation.Thiswouldbesufficient toprovideagood foundation foranindustry-drivingobjectiveof40%electricityfromREby2030asillustratedintheprojectiononpage21below:

oneof thesuccessfulprojects in the fourthbidding roundof theREIPPPPsetsapositiveprecedent,theJustEnergyprojectwithsocialownershipinawindfarmatWesley,intheCiskei.JustEnergyisthefirstnotforprofitprojectdevelopertosuccessfullycompeteinthebiddingprocesstosecureapowerpurchaseagreementforconnectingarenewableenergyprojecttothenationalgrid and the first such project in a former ‘homeland’ area. Just Energy’sbusinessmodelwasdesigned tocreateprojectopportunities incorporatingsocialownershipandkeepingsomeoftheincomecreatedinthelocaleconomy,soitprovidesforre-investingasubstantialportionoftherevenuesitearnsfromtheprojectbackintoequityforthelocalcommunitytoown.

How much re generation capacity do we need?

Atpresent inSouthAfricaweneedallwecangetasquicklyaspossible,up to apoint - until the two very large (6-pack) coal-firedpower stationsMedupiandKusile26aremostlyoperational-andthenwemayhavemorethanweneed, forawhile. beyondgrid-basedsupply,weneedasmuchascanresponsiblybedelivered–therateofdisseminationonthegroundwill depend on energy end-users (households and businesses) and theinstitutionalsupportandfinanceavailabletothem,ratherthanonavailabilityoftherenewableenergytechnologyhardware.

24 ‘50%by2030–RenewableEnergyinaJustTransitiontoSustainableElectricitySupply’–WWF-SAReport,201025 Asabove,thisreferstotheproportionofGWhrdespatched,ratherthantotheratedcapacityofgenerationinstalled

(MW),whichistheunitpreferredbygovernment,e.g. inpublicisingIRP2010concessiontoRE,butdoesnottakeaccountofdifferentavailabilityfactorsfordifferenttechnologies.

26 ThereisacasetobemadethatKusileshouldbestopped,ordown-scaledtofewerunits,butnotenoughisknowninthepublicdomainregardingwhathasbeencommittedtoorconstructed,oraboutthestatusoftheailingoldercoal-firedpowerstations,tobeabletoassessthemeritsofsuchaproposition.

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Energydemand isgenerally inferred fromsupply,while there ismorethanenough supply, but in South Africa there have been electricity shortageconditions since 2008 and we have no reliable indication of short termdemandgrowthaswebegintocatchupandestablishareservemargin–thetargetistohave15%moreratedcapacitythanthepeakdemandlevel,whichiscurrentlyaround36gigaWatts(gW).Whilethenominalnationalcapacityavailableisabout42gW,includingpeakingplant,theoverallavailabilityoftheexistingfleetofpowerplanthasrecentlybeenbelow70%,primarilydueto inadequatemaintenance.Theprevailingplan forelectricity supply is toroughlydoubleexistingcapacity27by2030.

AwiderangeofdemandprojectionshavebeenofferedrecentlyandthereisalonghistoryofSouthAfrica/Eskomfailingtoalignelectricitysupplywithdemand.Thisamplifiesakeyadvantageofrenewableenergytechnologies:theycanbedeployedatanyscale,withashortleadtime.Inthesouthwestof theUSAtherearesolarfieldsthatareasbigasminedumps,orrathercoveringasmuchland.giventheailingstateofmanyofourdirtyoldcoal-firedplants, ifwebuild renewableenergycapacityaheadofdemandandtheirdueretirementdates,earlyretirementmaybeabettervaluepropositionforsocietythantryingtogetthemcompliantwithairqualitystandards-earlyretirementwillbecomeaby-wordinthecoalindustrysoonerorlater.

The Department of Energy is considering bids from Independent PowerProducers (IPPs) for 2 400 MW of coal-fired plant (additional to the 4 800MW each of Medupi and Kusile) and several projects are being assessedforfluidisedbedcombustionoflowgradecoalattheminemouth.Thecoaldepositsconcernedcouldonlybeeconomicallyviablewiththistechnology,appliedattheendofconveyorbelts,anditisnotcleariftheywillbewithallthepollutioncontrolequipmentandwaterandmaterialssupplythatwillberequiredtocomplywithairqualitystandards.Thisisinaregionalcontextwhereseveralminesareswitchingtheirelectricitysupply torenewableenergy (inplaceofdieselgenerators)andcoalminingcompaniesareinvestinginREIPPs.

Thefollowinggraphshowsanelectricitysupply‘scenario’forSouthAfricaintheenergyunitPetaJoules(PJ),withtotalsupplygrowingfromjustover900PJin2006toabout1330PJby2030,whichassumesaggressiveimplementationofenergyefficiencyanddemandsidemanagementmeasures.Thisprojection,

27 Plantcapacityratingsindicatethemaximumoutput,sotheelectricitysuppliedperMWinstalleddependsonplantavail-ability,whichisdifferentfordifferentresourcesandtechnologies;coal-firedplantisdesignedfor85%availability,whilenewsolarandwindpowergenerallyhasavailabilityof30-35%(theelectricitysuppliedperannumisaboutonethirdoftheratedmaximumcapacitymultipliedbythe8760hoursinayear),thustotalinstalledcapacitynumbersneedtobehigherforrenewableenergytechnologiesthanplantsrunningonfuel

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producedwiththe2050PathwayCalculator28looksatapossiblefuturethathasnotbeenconsideredinourenergyplanningandurgentlyshouldbe.Inthisprojection,supplyfromMedupiandKusileareincludedearlier–closertotheirplannedavailabilitydates–thanisactuallyhappeningandsomeexistingcoal-firedplantwouldbephasedoutaheadof itsplannedretirementdate, fromaround2020,whichmayberatheroptimistic.

Inrealitythingswillnotrunassmoothlyasthis–wecanexpectaspikeinsupplystartingasthelatestrenewableIPPprojectsandoneunitofMedupicomeon line,aswellasmuch lumpiershiftswithinthesupplymixasoldplantisretired.Thegrowthofgas-firedpowermaybecontentious,whilethedecline incoal-firedpower isslowerthandesirablefromanenvironmentalperspectiveandispredicatedonarelativelygradualgrowthpathfordomesticrenewableenergyindustries,avoidingarushtoimportthecheapestavailablehardware.

Theelectricitysupplymixin2030wouldbemadeupasfollows:SolarandWind 40% (535 PJ in 2030 out of total 1327 PJ); Hydro: 2.8%; Nuclear(Koeberg):3.6%;Coal:47%;gas:6%;withDemand:1273PJ(54PJavailabletoexport,asthemodellingofcapacityincorporatesareservemargin).

28 Thereisafullanddetailedmodelofthenationalenergysystemthatgeneratedthispicture,withthelatesteconomicgrowthprojections,whichisfreelyavailableinasimplifiedformatasaseriesofExcelspreadsheetsandwherealltheinputdataandassumptionscanbeexamined.

Pathwayfor40%ElectricityfromREby2030

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the role of gas

Naturalgas(methane)burnscleanlyatthepointofuse29providinganefficientuseoffossilenergyforcookingandheating,thoughtheover-allefficiencyofthefuelcyclewilldependonthedetailsofthesupplychain.Wheregasisreadilyavailableitoffersanenvironmentallyfriendlyoptionrelativetocoaloroil-derivedproductsandisthuswidelyseenasamajorstepinatransitiontosustainableenergy.Conventionalgasproductioninvolveslittlemorethandrillingintoafieldandcollectinggasalreadyunderpressure,while‘enhancedrecovery’usuallyreferstopumpingair (orcarbondioxide) intothefieldtokeepdrivinggasout.‘Unconventionalgas’requiresafarmoreintrusiveandresource-intensiveprocesstoextract,suchashydraulicfracturing–fracking–ofdeepshaleformations,theimpactsofwhichmayrendertheentirefuelcyclejustasdamagingasusingcoal,potentiallymoreso.

greenhouse gas emissions from gas-fired electricity generation in largecombined-cycleplant(alotmoreefficientthantheopen-cycleturbinesthatcanbeturnedonandoffquicklyforpeakingpowersupply)aregenerallyabouthalfthoseofcoal-firedplant,perunitofelectricitysupplied,buttheemissionsof the fuelcycle include leaks from theextractionandsupplychain.Methane(CH4)isamorepowerfulgreenhousegasthanCo2,causingwarmingata rateusuallygivenas23 timegreater (in theshort termtheimpactismoresignificant30)andaleakageatarateofabout3%fromsourcetouseissufficienttooff-settheloweremissionsatthepointofgeneration.Forlong-haultransportnaturalgasispipedorconvertedunderveryhighpressure to a liquid (lNg), which must be re-gasified to be used or fedintosupplychains,andtheseconversionsinvolvesomefugitiveemissions,thoughthereislittlerobustdataongeneraltrends.

gas-to-liquids(gTl), isonly lesspollutingandwater-intensivethancoal-to-liquids(CTl,undertakenbySasol),withsuchapoorlife-cycleefficiencyandextensiveecologicalfootprint,worsethanconventionaloilproductionandrefiningthat it isseldompresentedaspartofapotential transitionalroleforgas.Alowcarboneconomyrequiresrestrictingtheuseofinefficientinternal combustion engines requiring liquid hydro-carbon fuels and forthe remaining liquid fuels needs to be met with sustainably producedbiofuels,sonewinvestmentingTlcannotbereconciledwithsustainabledevelopment. The conversion of conventional vehicle engines to run ongas is a relatively cheap and simple retrofit (available through SANEDI)

29 Itdoesnotproducesignificantquantitiesoflocalairpollutants,thoughcombustiondoesemitcarbondioxide,atalowerratethanotherfossilfuels.

30 ThelatestAssessmentReportoftheIPCChasrevisedtheclimateforcingfactortobeappliedtomethaneto35timesthatofcarbondioxide,overthestandard100-yeartimeframeusedforCO2equivalence

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thatoffersaninterimmeasureforimprovingover-allenergyefficiencyandreducinglocalairpollution,aswellashavinglowergHgemissions.

Themostappropriateroleforgasinajusttransitiontoarenewableenergyfuture in South Africa will be smaller than in countries that have alreadyinvestedheavilyingasinfrastructureand/ordonotenjoytheworld-leadingsolarresourcesthatwehave.Mozambiquehasrecentlyconfirmedverylargeconventional gas reserves in the far north and is developing liquefactionfacilities tobeable to supply theglobalmarketand thecountryalsohasextensive coal resources, as do botswana and Zimbabwe. The value ofnaturalgasasa“bridgingfuel”or“transitional”optionisespeciallycontext-specific forSouthAfrica,as therearebelieved tobe largeunconventionalgasdepositsinshaleformationsabout3kmbelowtheKaroo,whichwouldrequirefracking(hydraulicfracturing)toextract–apracticebannedinseveralcountriesdue to the impactsand risks.Some investorsandothervestedinterests believe the prospect of shale gas offers an attractive alternativetoimportingoil,whichprovides19%ofprimaryenergy.Therisksinvolvedjust in exploration of the resource are considered by some stakeholdersto be unacceptable and from a climate change perspective investing indevelopment of possible unconventional gas in South Africa would becounter-productive.oilimportationcanbereducedwithoutshalegasandifsomegas-firedelectricitycapacityisconsiderednecessaryasback-upforrenewablecapacity,perhapsthisshouldbebuiltinMozambique.

For Southern Africa the main question regarding gas is how large acommitmenttomaketogasforelectricitysupplytocomplimenttheshifttorenewablesandtoavoidnewcoal-firedelectricity investments,and inSouthAfricaperhapsfacilitatingtheearlyretirementofexistingplant.Thereis a real risk that enthusiasm for gas will present a barrier to the timelytake-upofrenewables,ratherthanbeingconstrainedtoasupportiverole,whichisoneofmanyreasonsthatweshouldbedevelopingenergystrategy(andnotionsofenergysecurity)ona regionalbasis,aswell asensuringthat renewable energy technologies are readily available and affordable.Mozambiquemaybeaninstancewheregovernmentrevenuesfromgasarerequiredandplayapivotalroleinfinancingrenewableenergyinfrastructure,iftherewereacoherentstrategybackedbystrongpoliticalwill.

In South Africa the minerals-energy-complex should be investing inrenewableenergy(andalotmoreinenergyefficiency),butthewaythisisaddressed intheNationalDevelopmentPlan isvaguewithnoassurancethat further investment infossil fuelswillbeanythingbutcompetitionforrenewable options. The question of whether South Africa should importlNgtoreplacedieselinpeakingplantsshouldbeassessedinlightofthe

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infrastructure costs (and realistic timing) of delivering gas to the plants,compared to theprospects for radically reducing theiruseas renewablegeneration capacity is built. government has been considering thedevelopmentofanlNg import terminalatvariouscoastal locationsandthereisalsotheoptionofprocuringorleasingafloatingregasificationplant,involvinglesslock-intofossilfuelinfrastructure.TherecentexpansionoftheREprocurementprogramme(toatotalof12.6gW)maybesufficienttoavertunnecessaryinvestmentinmassivelNginfrastructure.

energy Security

The notion of energy security is often invoked to justify continuationof the status quo, for fear that disruptive change would result in majordiscontinuityofsupply.Whilethereisgrowingacceptancethattheremustbeinternationalconstraintontheburningoffossilfuels,atanationallevelthere is still an assumption that coal is the mainstay of energy security,not least as this concept has not been well distinguished from energysovereignty–beingfreeoftheneedforimportingenergy.Nuclearpower,despite major discontinuities and a diminishing role internationally, ispromotedinthenameofenergysecurityonthebasisthatSouthAfricahassubstantial uranium reserves and thus a theoretical potential to developa domestic industry covering the entire nuclear fuel chain, though notsurprisinglythosehopingtosellusafleetofnuclearreactorswouldprefertoalsosupplythefuel.

Aswehaveseen,continuityofelectricitysupplyhasalotmoretodowithtimely planning and good maintenance of existing systems, than withexploitinganendowmentofconcentratedenergy.Energysecurityhasalsobeeninvokedtosupportbuildingmorevery-large-scalegenerationplantinthenameof‘base-loadcapacity’,wheninpracticeithasbeenthefailingsof suchplants,compoundedbydelays indeliveringmoreof theseplants(Medupi and Kusile), that are responsible for extensive energy shortages.Furthermore, with the on-going globalisation of markets, there are nowcallstoforegoexportearningoncoalinfavourofkeepingdomesticpricesartificiallylow,thusfurtherentrenchingourdependenceoncoal.

The variable nature of renewable resources, which are to varying degreesdependentonweatherpatterns,iscommonlyreferredtoas‘intermittency’,buttheresourceavailabilitydoesnotstopandstartrandomlyandcanbepredictedwith increasing accuracy to facilitate optimal utilisation. The challenges ofmeeting constant baseload demand with an increasing share of RE areunderstoodandmanageable,sothereisnoinherentenergysecuritybenefitto

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avoidingvariableresources,whilethereisabenefitfromusingnaturalresourceendowmentsthatarefreelyavailable,constantlyreplenishedandnotsubjecttothevolatilityofglobalenergymarkets.Inaglobaltransitiontosustainableenergy,adesirefornationalenergysovereigntywill,forsomecountries,beatoddswithsustainabilityorregionalenergysecurity.Thismakesinternationalcooperation a necessary component of energy security, but South andSouthernAfricaareintheenviablepositionofhavingplentifulREresources.

Thelocaldimensionofenergysecurityisgenerallyignoredatnationallevel.Nevertheless, it is a significant issue for the majority of South Africans,forwhomitisboundupwiththeissueofaffordability,asthepoorspenda far higher proportion of household income on energy services thantheaffluent.Decentralisationofenergysupplywillbepositive forenergysecurityinmovingtoamorerobust,flexibleandinter-activesystem,butforthepoortobenefitwillrequireconcertedeffortsatlocalgovernmentlevel,supportingactiveengagementbyhouseholdsandlocalresourceutilisation.

renewable energy & trade agreements

REisbothanationalresponsetotheshort-termenergycrisiscreatedbyEskom and the international response to the long-term crisis of climatechange.SouthAfrica’svarioustradeagreements,however,are,potentially,a major impediment to what would otherwise be the government’sactive promotion and protection of a local RE manufacturing industrythat isrequiredtomeetbothcrises,alongwithathirdone: thecrisisofunemploymentinSouthAfrica.

InthewordsofthethenMinisterofFinance,TrevorManuel

The problem is not that international trade is inherently opposed to the needs and interests of the poor but that the rules that govern it are rigged in favour of the rich.31

ThefollowingaresomeofthewaysinwhichaSouthAfricanREindustrywouldhavetoconfronttherules‘riggedinfavouroftherich’:

y Foreign‘intellectualproperty’rightsarethefirstobstacle.Thesearesocentraltomaintainingthedominanceoftheworld’salreadyestablishedTransNationalCorporations(TNCs)thattheyareprotectedbytheirownspecific trade agreement, the Agreement on Trade-Related AspectsofIntellectualPropertyRights(TRIPS).TRIPScovers,amongstotherthings,copyright,industrydesigns,patents,thelayoutanddesignofintegrated circuits and even undisclosed information such as trade

31 Mail&Guardian21/1/05

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secrets and test date. This is to say, TRIPS makes much of thetechnologyandscienceaninfantindustrywouldneedsubjecttoveryexpensivelicencefees,which,inturn,wouldmakethelocalproductsuncompetitivelyexpensive.

y CloselyrelatedtoTRIPS,isTRIMs,TradeRelatedInvestmentMeasures.TRIMsbansmeasuressuchas localcontent requirements thathavetraditionallybeenusedtopromotetheinterestsofdomesticindustries

y A local RE manufacturing industry requires initial subsidies to localproducers and/or import tariffs to help make foreign productsuncompetitive. both the subsidies and the tariffs would be non-compliantwithahostoftradeagreementsbecausetheydiscriminateagainstforeigncompaniesandinvestments.

y governmentprocurementthatfavourslocalcompanieswouldalsobeindangerofbeingchallenged

y Renewableenergyrequires theminingofa rangeofexoticminerals,manyofwhichareavailableinSouthAfrica.Topreventordiscouragetheir export and to promote (and thereby necessarily protect) theirtransformationintomorefinishedproducts–beneficiation–willrequiresubsidiesandorexporttariffsthataretrade-proscribed

y Evenmeasuresthatdon’tdiscriminateagainstforeigncompaniesareinconsistentwithsome tradeagreements. Publicsectorpreference,forinstance,wouldbechallengeableeventhoughitwouldaffectlocalandforeign-ownedbusinessesequally.

Therearealreadymanycasesfromaroundtheworldmakingitclearthatneither climate change nor national sovereignty takes precedence overthesanctityoftradeagreements.Perhapsthemostrelevantonesinthiscontextis,first,thecasebroughtbytheEU&JapanagainsttheCanadianProvinceofontario. TheWTo’sappellatebodyconfirmed, in2013,thatontario’sprogramtoencouragethedevelopmentofthelocalmanufactureofwindandsolar componentsdiscriminatesagainst foreignfirms.32 ThesecondcaseistheoneconcludedasrecentlyasAugustthisyearbroughtagainstIndiabytheUS.TheWToruledIndia’ssubsidiestopromoteitslocal solar energy industry by requiring minimum local content ‘unfairly’discriminatedagainstUSsuppliers.33

Noneofthismeansthatgovernmentcandonothing,ifitwishestoact.Thereis,however,nomeritindenyingthetradebarrierstonationalsovereigntyortoeffectivelyaddressingclimatechange.Thesebarriersremindusofthe

32 :http://www.wto.org/english/tratop_e/dispu_e/412_426abr_e.pdf33 WTOrulesagainstIndiainsolardisputewithU.S-http://in.reuters.com/article/2015/08/27/usa-india-solar-idINKC-

N0QV2FD20150827

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interconnectednessof thingsand that addressing theelectricity crisis inanysubstantialandintegratedwayunavoidablymeansaddressingarangeofotherbigissues.

WecantakeencouragementfromtheTreatmentActionCampaign’ssuccessagainst the transnational corporations that sought to maximise profit outoftheHIV/AIDSpandemic.Amobilisedpopulation,aidedbyinternationalsolidarity,canforcegovernmentstosayNotounjusttradeagreements.

finance

Therehavebeensignificantchanges inpublicandpoliticalunderstandingofthefinancingofenergydevelopment,atleastataninternationallevel,asreflectedinarecentreportsfromseveralmainstreaminstitutionsrecognisingthatsubsidiesbenefittingfossilfuelindustries,oftensoentrenchedastohavebecome ‘invisible’, far exceed more explicit subsidies to renewables. TheInternationalEnergyAgencyhasconcludedthat“in2014fossilfuelsubsidiesexceededUS$500billion:fourtimesthesubsidiesforrenewableenergy.”34Addressingthemanywaysinwhichtheexistingsystemissubsidised,tothedetrimentof sustainability, is acomplex long-termchallenge that requiresadedicatedprogrammeofsubsidyreforminparallelwithon-goingenergyplanning. Nonetheless, there is no shortage of available finance eithernationallyorglobally.

InSeptember2014TheglobalCommissionontheEconomyandClimateissuedthereport:Better Growth, Better Climate –TheNewClimateEconomySynthesisReport,whichestimated “the infrastructurecapitalneeded fora low-carbon transitionwouldbeonly5%higher than inabusiness-as-usual scenario, helping to limit future climate impacts and adaptationcosts.”Thereporthighlightstheshortcomingsofanalysesthatassertthatactiontotackleclimatechangewouldinevitablydamageeconomicgrowth:“Thereisaperceptionthatthereisatrade-offintheshort-tomedium-termbetweeneconomicgrowthandclimateaction,butthisisduelargelytoamisconception(builtintomanymodel-basedassessments)thateconomiesarestatic,unchangingandperfectlyefficient.Anyreformorpolicywhichforcesaneconomy todeviate from thiscounterfactual incursa trade-offorcost, soanyclimatepolicy isoften found to impose largeshort-andmedium-termcosts.”

34 ExecutiveDirectoroftheIEA,MariavanderHoeven,quotedinABriefingNoteoftheSideEventon“Fos-silFuelSubsidyReformandInvestmentsinCleanandAffordableEnergy”,publishedbytheInternationalInstituteforSustainableDevelopment(IISD),Volume172,Number23,27May2015:http://www.iisd.ca/climate/fossil-fuel-subsidy-reform/

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Ways can be found to finance renewable energy within any energysystem.Howevertheabsenceofacoherentanddecisivevisionforenergydevelopmentandfinancing,orobjectivesforpricingandmarketstructure,whiledetrimentaltoallenergyprojectfinancing,ismostparticularlyabarriertoalternativestothestatusquo.

Creatingconfidenceorpolicycertaintytosupportmobilisationoffinanceis a key strategic considerationof thepropositionsbelow for advancingrenewablesandenergydemocracy,includingamotivationforsettingexplicitandambitioustargetsandestablishingadedicatedindustrialprogrammeandinstitutionalhomeforsolarenergyoptions.Asthecostsofcapitalaretypicallyonethirdofthetotalcostofrenewableenergyprojects(havingnofuelcosts,theyareverycapital-intensive)thereisneedandopportunityforinnovationinmakingvery-low-costcapitalavailabletocommunity-basedinitiativesandSMMEs,includingmicro-finance.

Immediate context

In mid-June 2015 the DoE made what should have been an historicannouncement:anexpansionoftheprocurementprogrammeforrenewableenergy (RE) from independentpowerproducers (IPP), effectivelydoublingthe determination, bringing the total short term commitment to contractfor12600MWofcapacityfromsolarandwind.Thevastmajorityofsuchcapacitycouldbeoperatingwithinthreetofouryears,toprovideroughly10%oftotalgrid-basedelectricitysupplyfromrenewableresourcesbefore2020.While it isapitythatsuchcommitmentwasnottheresponsetothe2008electricitysupplycrisis,weshouldnotoverlooktheopportunityitprovidesasaplatformforscalinguprenewableenergymorebroadly.

To realise this opportunity will require a concerted state initiative to developmanufacturing capacity in RETs. This has already been considered underprojectsofwhichlittlehasrecentlybeenheard,namelytheSolarParkandtheSouthAfricanRenewablesInitiative(SARi--focusingonmobilisingdomesticandinternationalfinance),whichwereboth internationally ‘launched’ inDurban in2011).TheSolarParkideabecamealesscentralisedcorridor,whichhasbeensomewhateclipsedbytheREIPPprogramme,whilesomeoftheintenthasbeentakenupintheStrategicEnvironmentalAssessment(SEA)beingundertakenbyDEAtofacilitatetheconsiderationoflocationofsolarfacilitiesandwindfarms.ItisunderstoodthatrecentstudieshaveidentifiedareasprovidingthebestoverlapofREresourcesandaccesstothetransmissionsystem.

TheMinisterofEnergyhaspromisedan‘EnergyMasterPlan’,whileanIEPFinalReport isbeingconsideredforapprovalbyCabinetclustersbeforeit

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isreleasedandworkisunderwayinanIRP2015,whichcouldbereleasedwithan IEP in2015.Procurementofa largefleetofnuclearpowerplants(governmentalsowants todevelop fuelproductioncapacity)wasgivenamandatethroughtheIRP2010andamorecautiousapproachrecommendedintheIRPUpdateReporthasseenthisdocumentside-lined.Providingfortheenormouscapitalcostsofanuclearfleetprocurement,whichonewayoranothermustbeunderwrittenbythestate,wouldpresentaninsurmountablebarriertorenewableenergydevelopmentatascaleconducivetolocalisation.

The crisis within Eskom as well as in financing the electricity supplyindustry,aftermanyyearsofunder-pricingelectricity,particularlytoheavyindustry,meansthatrealisingthepotentialofrenewableenergytoprovidepeoples’ power requires institutional innovation additional to what hasbeenachievedwith thespecialunitestablished toadminister theREIPPprogramme. The prospects for realising the full potential of renewablesinSouthAfricashouldnotbecontingentupontheoutcomesofcurrentlycontested‘restructuring’ofEskomoritsfinances.Someseparationofthemanagement and functions of generation, transmission and distributionwould greatly enhance the prospects for municipal distributors taking amoreproactiveandforward-lookingroleinenergyaccess(offaswellasongrid)andtheadoptionofsmartgridtechnologies

Eskom’smandatealready includesrenewableenergy,but thishastodatebeentothedetrimentofREdevelopmentinSouthAfrica.Initialconsiderationofwhetherthisshouldorcouldrapidlychange,orhowanyreformofEskommay deepen or loosen lock-in to coal dependence, involves too muchspeculationtodevelopacoherentopinion.TheimmediateissuesofwhetherEskom could or should be ‘rescued’ or transformed as a public-benefit-oriented state-owned entity and how that may be financed, are not thefocusof thisbooklet,whichmakesacase for fast-tracking localisationofREindustriesthattakesthecrisisintoaccountandadvocatesinterventionsthat avoid speculative assumptions. A number of these interventions willneedfirminstitutionalandpoliticalgroundingandmightbepackagedasaninnovative‘socially-owned’enterpriseorspecialpurposevehicle-an ideathatisexploredinannexureA.

Theoptionofraisingmunicipalrevenuethroughtheon-sellingofelectricitysuppliedbyEskom,withamark-upgreater than thecostsofdistribution,is not an appropriate or viable model for municipal finance under currentconditionsandtrendsorforthe longterm.It isalso, inmanyinstances,aregressiveformofrevenueraisingthatundulyimpactsthepoor,whoanywaypaya farhigherproportionof their incomeforenergyservices,aswellasfrequentlyhigherratesperunitofenergy.

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what must be done?

AnoperationPhakisaonMining–anintensiveandmulti-stakeholderexerciseinstrategicplanningforfastimplementation,asundertakenfirstfortheoceanseconomy- isexpected togetunderway thisyear,underanewMinisterofMineralResources.Thecoal industryhasbeenpushing theSACoalRoadMapandwillseektoretaindominance,claimingasociallicenseinthenameofpovertyandeconomicgrowththatisnotvalidin2015.oilandgashavedirectsupport through the ‘oceansPhakisa’,butcoal (additional to itsemissionscrowdingoutotherindustriesintermsoflocalpollutantsaswellasgreenhousegasses)isstartingtobecomealiabilityfortheminingsector.oureconomicandindustrialstrategyshouldwakeuptothegreatervaluethatcanbederivedforsocietyasawholefromamineralssectorthatisnotbeholdentothedirtiestmineralthatdeliversthelowestnetvalueoveritsfulllifecycle.

In the first section of the booklet we have outlined what we think arecompellingargumentsshowingthatitistechnicallypossibletomovemuchfastertoanenergysectordominatedbyrenewableenergy.Thisisvitalforfourkey reasons– itwill increasesupplyandsodealwith theelectricitysupplycrisiswearenowdealingwith; itwillcontribute toa reduction ingreenhousegasses;itwillincreaseaccesstoelectricityanditwillincreasetherateofemploymentinenergysupply.

Ifweagreethatmorerenewableenergy,fast,isnecessary,thenweneedto start lookingat importantquestionsabouthow the renewableenergyshouldbegeneratedanddistributed;whereownershipandcontrolshouldlie; and how social justice imperatives of reducing inequity, poverty andunemploymentcanbestbemet.

Inthissectionwesetoutarangeofpossibleanswerstothesequestions.Wehopethatorganisationswilltakeuptheseissues,discussanddevelopthemand so create a campaign which builds energy democracy and renewableenergyasapubliclydriven,ownedandcontrolledsector.

Anationalstrategyandsocialprogrammeneedstobedevelopedwithalong-termcommitmenttosupportingactivecitizenshipandreducinginequality,withdualobjectivesofeliminatingenergypovertyanddevelopingdomestic(andregional)industriesinrenewableenergytechnologies;variouselementsare enumerated below, starting with actions required of government:

A:Clearcommitmentandstrategicdirection

1. government must make a clear national commitment to maximise the use of renewable energy as rapidly as can be done with a high

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level of localisation of manufacturing;detailssuchaswhichcoal-fired plants should retire rather than be refurbished will need to beinformed by both integrated resource planning and trade union andaffectedcommunityconsultations.However,nofurtherstudyisneededto support setting a target of 40% electricity from re by 2030;similarlySouthAfricacancomfortablyaimforfulldecarbonisationofelectricitysupply,preferablyby205035.Acorollaryofthisisaparallelcommitmenttotransitionawayfromfossilfuels,butthisbegsquestionsoftimingthatshouldbedeliberatedwithintransparentandparticipatoryIntegratedEnergyPlanning.(see11below)

2. procurement of nuclear power must be set asideforprioritisationofrenewableenergydevelopment.

b:ProgrammeofAction

3. an urgent, coherent, comprehensive and ambitious state-driven programme, that includes input from civil society, to develop manufacturing capacity in a range of solar technologies– a specially designed entity, inter alia raising finance based onprocurementcommitments36,foraverylarge-scalesolarPVproductionfacility,andforacceleratedresearch,developmentanddeploymentofconcentratedsolarpower(CSP)andstoragetechnologies,includingastrategytoremainaworldleaderinthisfield;-thisisenvisagedasthecoreofanewSolarSocialEnterprise,assketchedbelow.

4. an energy access programme for socialisation37 of household-scale roof-top pV for low-income householdswithaninitialcommitmentto at least one million systems with electricity storage, as part of amorecomprehensiveinterventionfor‘ClimateHomes’(Seeboxp.28)andseveralmillion‘entry-level’grid-connectedPVsystems(designedandinstalledtobecompatiblewithaddingstorageandadditionalPVcapacity);thisprogrammemustlearnfromandavoidthemistakesoftheoriginalSWHprogramme (suspendedat the timeofwriting)andincludepubliceducationaloutreachonenergyserviceoptions.

35 ThistimingwouldnotaccommodatetheoperationofMedupiandKusileasplannedfor50years36 Forexampleanexecutivedecisiontoprocureseveralmillionsystemsofatleast400Wcapacity(withinasetperiod

oftime)foruseinadvancingaccesstoenergyservices,couldbematchedbyaTreasurybudgetallocation(someofwhichmaycomefromorsubstitutefordisbursementstolocalgovernment)andacontractualcommitmenttopur-chaseataparticularminimumprice(subjecttomeetingSABSstandards)

37 Socialisationherehastwodimensions,avoidingcommodificationofenergyservicesanddevelopingcollectivesocialunderstandingofandresponsibilityforenergysupplyanduse–itincludesdevelopingpublicparticipationinenergysupplyandmanagement.

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5. a programme of support to local governmentforimprovingcapacity(internally–seealsosectionDbelow)toenableandfacilitateenergyaccessinitiatives,includingtheoptionofmunicipalpowergeneration,and encourage public participation in local integrated developmentplanning,workingwithlocalgovernmenttocommunicateandengagedirectlywithcommunities;

6. Adoptandfinancea programmatic approach to enabling localised energy development through the working for energy programme– specifically the biomass component for biogas production insmall-scale digesters - that will enable social ownership, as well ascommunity-basednaturalresourcemanagement;

7. package a national programme of renewable energy interventions that could be presented for international financial support - thiscouldbeintheformofclimatefinanceorenergysubsidyreform:Quantifytheclimatechangemitigationcontribution (emissionsavoided)38ofaconcertedsetof renewableenergy interventions,sothatwecangetthepolluterswithanecologicaldebttopay,e.g.forthePVsystems,oraportionofthem,asameansofmeetingthemitigationresponsibilitiestheyhavebeyondwhattheycanachievedomestically,

8. Introduction of a national feed-in tariff that pays a premium for small-scale embedded regeneration,administeredbydistributors,butfinancedatnationalleveltoavoidnegativeimpactsonmunicipalrevenue;thisshouldbedesignedprimarilytobenefitpoorhouseholdsand small businesses and include preferential arrangements forcooperatives, with appropriate criteria restricting eligibility39 – forexampletoPVsystemsuptoamaximumsizeperconnection(perhaps2000Wattpowerratingperhousehold)oracapontheamountofpowerforwhichthepremiumwillbepaid;

9. modernisation of the grid: A dedicated national plan must bedeveloped for modernisation of the electricity grid utilising smartgrid technologies40 and conducive to decentralisation, incorporatingeducationofthepublicandrelevantlocalgovernmentofficials.

38 Thisdoesnotrequireorendorsethecommodificationofcarbonormarketmechanismsforcarbontrading.39 Thismeasureisintendedasameansforsocialisingownershipofenergyinfrastructure,withapotentialsourceof

financeforhouseholdstoupgradesystemsprovidedbythestate;giventhepotentialforFeed-inTariffstoentrenchcommodificationofenergyservices,thesystemshouldbedesignedtoavoidprofiteeringbytheaffluent.

40 Gridmodernisationmustnotbeusedasanexcuseormeansforimposingunjustelectricitymeteringsystemsoras-sociatedtariffsandnotbepremisedonliberalisationoftheelectricitysupplyindustry,butoptimaloperationofnationalelectricitynetworksasapublicgood/service.

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C:Complementaryandsupportiveactions

10. Campaigning for both the rejection of the reI4p modelbeyondthe12,600MWsetbytheMinisteranditsapplicationtofossil-firedpowerplants.Whetherbydesignoreffect,theIPPprocurementmodelmanifeststhegovernment’sneoliberalabdicationofboth itsdevelopmentalandclimate change responsibilities. Handing over South Africa’s entirerenewable energy programme to (overwhelmingly) Trans-NationalCorporations (TNCs) driven by the imperatives of profit maximisationandtheexpectationofguaranteesovercapitalsecurityandthefreeflowofprofitoutofSouthAfricacannotbeinthebest,longterminterestsofmostSouthAfricans.Apublicly-owned renewableenergyprogrammeshouldbeinitiatedtotakeforwardscalingupbeyondthemostrecentMinisterialdeterminationofatotalof12600MWofREcapacitytobeprocuredintheshortterm.

11. revise the weighting of criteria applied in any energy procurementprogramme,tosupportlabourintensityandbetterrecognisethevalueofsocialownership-amongstworkers,landowners,service-providers-recognisingthattheexistingIPPprocurementprogrammeisnotanidealorsufficientmechanism41forenablingthescalingupofrenewableenergy,andthattherationaleforstate‘underwriting’ofprivatesectorfinancebywayofpowerpurchaseagreementsisnotjustifiableorappropriateforfossilfuelprojects.

12. the South african Coal road map (SACRM)shouldberecognisedas a self-serving product of the corporate coal lobby that is not anappropriate foundation for integrated energy planning and is notconsistent with the National Climate Change Response Policy andthe over-arching goal of keeping global warming below 2 degrees;transparent and holistic scoping of the long term prospects fordomestic coal use (to 2050) is required, includingdevelopmentof ascenario fordomesticcoal consumptionboundbyacarbonbudgetfrom2010oflessthan8gigatonnesCo2;acomprehensivestrategicassessmentof theexpansionof coalminingmustbeundertaken toidentifyareastobedeclaredofflimitstocoalmining,suchasincrucialwatercatchmentsandprimeagriculturalland.

13. Institutionalise proper planning: Implement the provisions of theNationalEnergyAct(2008)withregardtoIntegratedEnergyPlanning(IEP) on an on-going and iterative basis, including accounting forexternalised costs, recognising the value of labour intensity and

41 FordetailsofhowtheREIPPprogrammeisnotconducivetodevelopinglocalindustries,seeBaker,LandWlokas,HL.(2015)SouthAfrica’srenewableenergyprocurement:Anewfrontier?EnergyResearchCentre,UniversityofCapeTown,availableatwww.erc.uct.ac.za

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improving transparencyandpublicparticipation; this alsoapplies toIntegratedResourcePlanningforelectricity;

14. Undertake a national review of the subsidisation of fossil fuels(including indirect subsidisation through provision of infrastructuree.g. railways and water transfer schemes) and implement subsidy reform, includingintroducingsupportmeasuresfortrulyalternative42basicenergyservices forall, thatempowerandenableparticipationofhouseholds/communitiesinenergyservicedelivery;thisshouldbelinkedtoconsiderationofthereindustrialisationrequirementsofalowcarboneconomyandhowtoshiftthebulkofinvestmentsawayfromconcentratedfossilornuclearenergy.

15. Reintroduceprovisionsforprescribed assetsinwhichvariousinvestorsarerequiredtoholdstakes;thisshouldbecomplementedbydevelopmentofecologicallysoundincentivestoencourageorrewardlabour-intensity.

d. municipalities:

16. localgovernmentmustre-establishpublicworksdepartmentsandreversethe normalisation of outsourcing, developing dedicated competence inenergyplanningandfacilitatingthecreationofclimatejobs;

17. local Integrated Development Planning must be used to encourageandenableanactivecitizenshipandexploreandutilisethesynergiesbetweenenergyaccessandclimatechangeresponse;

18. Municipalities that distribute electricity should prioritise a utilityapproach to energy services, with an emphasis on the value andfunctionality offered to end users – a utility43 that delivers electricityfrom a range of public /not for profit suppliers and potentially owngenerationcapacity(andwhereappropriateotherenergycarriers,suchas gas and biomass) – ensuring access and delivering on the righttofreebasicenergyservicesfor itsconstituency, includingprovidinginteractiveaccesstoanelectricitygrid.

19. Municipalities must recognise that the practice of raising municipalrevenuethroughtheon-sellingofelectricitysuppliedbyEskom,withamark-upgreaterthanthecostsofdistribution,isnotanappropriateorviablemodelformunicipalfinanceundercurrentconditionsandtrends–a21stcenturyfinancingmodelmustbedeveloped.Itisalso,inmany

42 There isaFreeBasicAlternativeEnergypolicy (2007)thathashadvery little impact;noprovisionwasmadeforresourcingtheactionsrequiredoflocalgovernment;onlyfouralternativefuelsarelistedformunicipalitiestoconsider:Paraffin;LiquidPetroleumGas(LPGor‘bottlegas’),Coal(processedforcleanerburning)andBio-EthanolGel.

43 Thismustnotbeconfusedwithanapproachthatisdriventogenerateprofit;theterm‘Utility’isincreasinglyappliedtocorporateentitiesengagedindeliveringservices,wherethecoremandateofpublicutility(usefulness)becomessecondarytotheinterestsofthecorporateentity.

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instances,aregressiveformofrevenueraisingthatundulyimpactsthepoor,whoanywaypayafarhigherproportionoftheirincomeforenergyservices,aswellasfrequentlyhigherratesperunitofenergy44

20. localgovernmentmustundertakedirectoutreachandpubliceducationregardingalloptionsforenergyservicedelivery,includingundertakingparticipatorylocalresourceanalysis.

Some principlesemploying synergies:energyaccessandclimatechangeresponseshouldbetreatedasanintegratedsocialwelfarevaluepropositionthatwarrantsinvestment in people (knowledge and skills development) and financingthe up-front capital costs of renewable energy technologies, requiringinstitutional innovation to enable the poor to participate in low carbondevelopment.

transparency and accountability: Public interest must be allowedto over-ride private commercial interests – more robust burden of proofrequirements should be applied to those claiming a right to protection

44 Unitcostsforhouseholdsthatuselittlemorethantheirfreebasicallocationofelectricity(forthosewhogetit),stayingwithinthefirsttierorblockofconsumptionoftheincrementaltariffrates,willbelowerthanforaffluenthouseholds,thoughhigherthantheratessecuredby‘contestablecustomers’(large-scale industrialuserswith long-termcon-tracts).Fuelcostsaregenerallyhigherforsmall-scaleusersbuyingatlocaloutlets.

A ‘Climate Home’ intervention would,forexample,includeeducationinenergymanagement(aswellasrecyclingandwaterconservation),withahouseholdenergyneedsassessment;energyefficiencyupgrades,includingceilingsandinsulation;asolarwaterheater(thismayfallunderaseparateSWHprogramme);provisionofasolarPVroofarrayofperhaps400to800Wattpowerratingwithdedicatedbatterystorage(providingonaverageroughly3to6kWhperday).FulltransferofownershipoftheembeddedhouseholdPVsystems(e.g.installedbyasocialsolarenterprise)wouldtakeplaceoveraperiodofperhaps5-7years.Includingstorage,whileitrequiresmoremaintenance,addsthepublicbenefitofreducingpeakdemand.overtimehouseholdscouldchoosetoaugmentthesesystemsattheirowncost(assumingwereducepovertyandaffordablefinanceismadeavailable)inpreferencetobuyingfromthegrid–theprogrammedesignshouldanticipatepotentialupgrades.

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of proprietary information. The Public Access to Information Act shouldbestrengthened to improveaccess to information, including informationheldby thestate,particularlywheresuch information is relevant to localintegrateddevelopmentplanningortherightsofcommunities.

pro-active communication to communities:Informationregardingenergydevelopmentprospects,suchasgatheredfortheStrategicEnvironmentalAssessment being undertaken for solar and wind power projects, thepotentialforsustainablebiomassproductionandplansforthedevelopmentof transmission and distribution networks, should be pro-actively andaccessiblycommunicatedtothepublic.

energy security: Solar energy should be recognised as the appropriatecornerstoneofnational,regionalandlocalenergysecurityoverthemediumtermandlongterm;

Note: All the items listed above are predicated on a full engagementwithcivil society, including tradeunions, faith-basedgroups,communityorganisations, energy & environment-linked Ngo’s, research institutionsanduniversities

Trades Unions:Unions’ investment vehicles and pension fund managers and trusteesshouldprioritiseinvestmentsinrenewableenergyandotheropportunitiesconducive to a just transition to a low carbon economy and precludeinvestmentsinfossilfuelandnuclearpowerprojects;

The creation of climate jobs should be explicitly addressed in internalplanningandinallnegotiations;

organised labour should develop specific and detailed propositions forgiving effect to a just transition to a low carbon economy and energydemocracy,includingscopingandplanningforthephasingoutofcoal-firedpowergenerationinthemediumterm,withpracticalprovisionsforworkerswho are displaced - an issue that should be pursued with the SectoralEducationandTrainingAgency-theEnergyandWaterSETA;

Communities / households:Communitiesshouldorganisearoundenergyandclimateissues,assessingopportunities for local energy development and creating climate jobs(withoutwaiting for IPPsor localgovernment tocall for the formationofcooperativesorcommittees), includingdemandingsupport inthisregardthatisenabledbyadedicatednationalfacilitywithamandatetoadvancesocialownershipintheprovisionofenergyservices;

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Participation inlocal IntegratedDevelopmentPlanning (lIDP)shouldbeutilised tosecuresustainedengagementwithandaccountabilityof localgovernment and access to resources for community-based initiatives;in many localities this requires concerted pressure for meaningfulimplementationoflIDP,which isafundamentalrequirementfor inclusivedevelopmentandgoodgovernance.

Participation in social/community movements, ratepayers associations,etc. should encourage their taking initiative and playing leading roles incommunityownedrenewableenergy

what can be done to advance this agenda

Theseissuesandideasneedtobepromotedaswidelyaspossibletobuildpopularsupport,withaviewtoformulatingaconcisecampaigningplatformformasssupport.

oncecivilsocietydevelopsthisagenda,advocatingstrategyandactionssuchastheaboveshouldbetakentolocalaswellasnationalgovernment,promoted to SAlgA, amongst organised labour and through massmobilisation…etc.,

Civilsocietypublicoutreachworkonenergyservicesoptionsandclimatejobsshouldbescaledup,interaliawithfundingfromtheNationallottery,which shouldhaveadedicatedwindow to supportbottom-up initiativesincludingenergycooperatives.

Demandingactionfordivestmentfromfossilfuelassetsshouldbeadvancedbyallinourindividual,socialandprofessionalcapacities.

The items under b above could be the basis of a proposal that ispresentedunderasinglebanner,withoutinsistingthattheyshouldallbeaccommodatedinasingleinstitutionalhome,andasapropositionandaprogrammethatshouldnotbelimitedorentrustedsolelytotheDepartmentofEnergy.TheDepartmentofEconomicDevelopmentwould logicallybeanappropriateplatformforsuchaprogramme;theDepartmentofScienceand Technology have relevant expertise and partnered with DoE on theSolarTechnologyRoadMaps;theDepartmentofTradeandIndustryshoulddrivethedevelopmentofanindustrialstrategyforsolarmanufacturingandthe Department of Cooperative governance should elaborate the rolesofdifferentlevelsofgovernment,overseetheallocationofresourcesandfacilitate the development and sharing of relevant skills and information(e.g.onenergytechnologies,resourceavailabilityandmaintenanceneedsandcapacity)

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refereNCeS:

AgAMAEnergy.2003.EmploymentPotentialofRenewableEnergyinSouthAfricapublishedbyEarthlifeAfricaJohannesburg.

Ahlfeldt,C.(2013).The localisation potential of photo voltaics and a strategy to support large scale roll-out in South Africa. SAPVIA,WWF,DTI.

baker, l and Wlokas, H l. 2015. South Africa’s renewable energyprocurement:Anewfrontier?EnergyResearchCentre,UniversityofCapeTown

banks,D.I.&Schäffler,J.l.2006.ThepotentialcontributionofrenewableenergyinSouthAfrica,2ndEd,PreparedforSustainableEnergy&ClimateChangeProject,EarthlifeAfricaJohannesburg,February2006.

bischof-Niemz, Dr T., (2015) Financial benefits of renewables in South Africa in 2014, CSIREnergyCentre,Pretoria,14July2015

burton, J & Winkler, H. 2014. South Africa’s planned coal infrastructureexpansion:Drivers,dynamicsandimpactsongreenhousegasemissions.Energy Research Centre, University of Cape Town, Cape Town, SouthAfrica.

Ferroukhi, R. et al (2013) Renewable Energy and Jobs, InternationalRenewableEnergyAgency(IRENA)

Klein,Naomi(2014)This Changes Everything:Capitalism vs. the Climate,Allenlane,Penguingroup,london

National Planning Commission (2011) National Development Plan –Electricity produced and available for distribution,publicationreleased5February2014

StatsSA:StatisticalreleaseP4141:Electricitygeneratedandavailablefordistribution(Preliminary)June2015

TheglobalCommissionon theEconomyandClimate issued the report:Better Growth, Better Climate – The New Climate Economy SynthesisReport-September2014

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aNNeXure a

The following is an attempt to package many of the above suggestionsunderasinglebannerorconceptualframework,asanationalundertakingtoadvancepeople’spowerthroughrenewableenergy.

Sketch of the proposition

a. Tobeinitiatedasastate-ownedenterprise,withparticipationoflocalgovernment (to support an energy services approach to the localgovernmentmandateonenergyservices),todrivethedevelopmentoflocalindustriesinsolarenergytechnologies.

b. FinanceforthemanufacturingarmofsuchaSocialSolarEnterprise,orpublicutility, istocomefromacombinationoftaxesonbothcarbonemissionsandfinancialtransactionsamongstarangeofotherpossiblesources,includingprescribedassets.

c. ToadvanceopportunitiesforSouthAfricainconcentratingsolarpower(CSP)technologywiththermalstorage,bothfordomesticsupplyandtomaintainagloballeadershipposition;thisrequiresdedicatedlong-termsupportandshould includeconsiderationofasocialenterprisebecomingatechnologyvendorinthisfield.

d. Tobeempoweredto implement/enable implementationofafeed-intariff for embedded generation such as rooftop PV installations, thatis centrally financed (preferably integrated into municipally managedservicedelivery,butfinancedfromthenationalfiscus)andisrecognisedasanavenueforthereformoffossilfuelsubsidies.

e. localgovernmentsthatareelectricitydistributersmust improvetheircapacityforupgradingandmaintainingtherelevantinfrastructureandimproving service delivery working off an asset base (perhaps as apartnerinsuchanenterprise)largeenoughtosupportasoundlongterminvestment and modernisation strategy, including adoption of ‘smartgrid’technologiesthatsupportallusers’participationindemand-sidemanagementandtheadoptionofrenewableenergyoptions.

f. Todrawuponusefulfoundationalwork, includingthatundertakenforSARi-theSouthAfricanRenewablesInitiativelaunchedinDurbaninDecember2011-andlearningfromtheshortcomingsinimplementationoftheWorkingforEnergyandIntegratedEnergyCentresprogrammesfor further innovation in pursuing universal access to adequate,appropriateandacceptableenergyservices.

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Some pertinent contextual developments:

SolarPVelectricitysupply–atthepointofgeneration–isbecomingcheaperthannewcoal-firedpowergeneration,evenbeforeimplementationofthecarbontax,whilelarge-scalewindpowerinresource-richareasisalreadycheaper. InstalledPVpower supply asembeddedgeneration (within thedistribution system, e.g. at businesses and households) is approaching‘gridparity’inSouthAfrica,atleastforsometariffrates(e.g.beingcheaperthanpeaktariffsforhigh-useconsumers).

Theelectricitysupplyindustrygloballyandnationallyisalreadyinastateofupheaval45.Transitionfromatraditionalcentralisedsupplymodel,withone-way electricity flow, to a services-oriented and decentralised approach;thisprovidesopportunitytoavoidfurtherlock-inofthestatusquothroughmassivegenerationplantandtobemoreresponsivetoevolvingdemandandtopublic-interestregulations(fromairqualitystandardstomandatedfuel-switchingandpriceregulation).

We need local government to adopt more of a utility approach to energyservices–aslongasthisisnotconfused,ortreatedassynonymous,withanapproachthatisdriventogenerateprofit.Autilitythatprocureselectricity(andpotentiallyotherenergycarriers,suchasbiomass,eventuallyperhapsalsohydrogen)fromarangeofgenerators,deliversenergyservicestoauserbaseandprovidesinteractiveaccesstoanelectricitygrid,withtheconcomitantresponsibilityofdeliveringontherighttofreebasicenergyservices.

Popular perceptions of solar power, as well as of the pros and cons ofgrid-basedpowersupply,aregraduallychanging,withstakeholderswhowere previously only focused on grid electrification now starting to callforrenewableenergyforpeoples’powerandexploringcommunity-basedproject development; the Soweto Electricity Crisis Committee has beenactivelyexploringthepotentialofsolarPVforpoorhouseholds.Whilethepreviousattempttoroll-outsolarhomesystems,throughconcessionstobigenergycompanies(incl.SasolandTotal),wasnotapopularsuccess,therelativevalueofsolarhomesystemshasincreasedconsiderablyevenascostshavedeclined,improvingtheprospectsforaprogrammaticapproachthatisnotdependentonorbeholdentobigenergycorporations.

International initiatives toaddressenergypoverty inAfrica (suchas theUNSE4All)haslargelybeenthepreserveoflargeinternationalplayersandtoooftenpremised on large-scale infrastructure designed around anchor customers(industrialusers),withlittleattentiontothedetailofthe“longvaluechain”that

45SeeforexamplePwC’s Africa Power and Utilities Sector Survey 2015,publishedbyPriceWaterhouseCoopers

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issupposedtosupportuniversalaccess.ShortcomingsofthisapproachareincreasinglyrecognisedandrenewableenergyoptionshavebeenembracedatthelevelofSADC–theSouthernAfricanDevelopmentCommunity.

Thesociallicenseofcoalhasrunitscourse-theonlyrationaleforusingcoal is our current dependence (including infrastructure lock-in throughmammothprojects) -even theWorldbankhas renounced theargumentthatnewcoal-firedpowerisrequiredfordevelopment,rejectinganyclaimthatnewcoalprojectswouldmakeanetpositivecontributiontoreducingpoverty.WithvariousminingoperationsacrossAfricastartingtoinvestinrenewable energy for their own energy supply, a forward looking miningstrategywouldanticipatecoalbeingadiminishingsourofrevenueandadisproportionateuseofecologicalcarryingcapacity.

How to proceed

Whether or not the current government and institutional capacity is wellplaced and capacitated to innovate or initiate such a social enterprise, itwillbeneededasakeyparticipant.Theuncertaintiesaroundthefutureandstructureoftheelectricitysupplyindustry,asexemplifiedintheshelvingofthe IndependentSystemsandMarketoperator (ISMo)bill, urgentlyneedtobeaddressedandthepotential,mandateandarrangementsforsuchavehicleshouldbeconsideredwithindeliberationsontheindustryasawhole.

Thefoundationalrationaleshouldbe:

y ThestateshouldprovidethemajorityofhouseholdswithPVsystemsas a way of socialising (de-commodifying) energy services as partof extending access and extracting the maximum social value fromthe technology – optimising the public benefits of solar power withprioritisationofreducinginequality.

y There is immense opportunity and need for a national programmethat has the dual objectives of moving to RE electricity generation(particularly embedded generation) and reducing poverty, whileenablingactivecitizenship,includingengagementwithservicedeliveryandlocalIntegratedDevelopmentPlanning(lIDP).

y Whiletheaboveshouldnotbeconditionalonforeignfunding,amassivesocialprogrammeshouldbe formulatedandpresented forfinancingfrominternationalclimatechangemitigationfunding(DEAandDIRComust be tasked with finding a way of mobilising funding, under thegreenClimateFundgCForsimilar).Thisshouldbelinkedtoanationalmanufacturing initiative, such as might be undertaken by a specialpurposevehicle(withmajoritypublic/governmentownership,includinglocalgovernmentdistributors).

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notes

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notes

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notes

Other AIDC booklets available on request

· ChallengingApartheid’sForeignDebt

· ClimateChange&Climatejobs–EasyAnswersto56ImportantQuestions

· OneMillionClimateJobs–Ajusttransitiontoalowcarboneconomytocombatunemploymentandclimatechange

· YouthWageSubsidy–DifficultQuestionswithEasyAnswers

· PersonalIncomeTaxationandtheStruggleAgainstInequality&Poverty–TaxpolicyandpersonalincometaxationinSouthAfricasince1994

· TheNationalDevelopmentPlan:7CriticalAppraisals

· GreenEconomy:TheLongSuicide–Thedifferentworldsofgreenjobsandclimatejobs

· Wages,Profits&UnemploymentinPost-ApartheidSouthAfrica

· TheStateofLabour20YearsAfterDemocracy

· TheBermudaConnection:Profitshifting,inequalityandunaffordabilityatLonmin1999-2012

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P.O. Box 12943, Mowbray 7705, South Africa

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