25 Degrees in Africa by Media in Africa

Vol 6 Nr 2 2011 – R49

JAPAN’S

NUCLEAR DISASTER

COP 17: CANCUN TO DURBAN • COUNTRY PROFILE: GAMBIA

Contents cover story New uncertainties for the nuclear industry Up until Japan’s tsunami/quake disaster, many country leaders believed that nuclear energy offered a large part of the answers to electricity issues and climate change. Read about how the disaster has changed the way Africa is looking at nuclear energy on page 36.

Enervations

Biofuels

4 Hydrogen cars

40 Disguised sewage

5 Engineering for education

treatment plant

41 Upcoming Jatropha &

Country profile

Microalgae projects

6 An overview on Gambia

CDM Climate change

44 Post Kyoto

10 What are the opportunities? 15 Rules for waste disposal

Electricity

16 COP 17

46 Fears over long-term

20 On the way to Durban

23 Green paper

50 Powering the future

Oil and gas

Energy efficiency

27 Reality check

54 Energy-efficient

28 Joint cooperation

29 Petrosa sketches

58 The “rebound effect”

60 Is the IRP energy-efficient?

gas strategy

coal supply

office space

Renewables

Instant update

30 Wave energy power plant

64 Cape company signs

31 Global wind turbine market

biggest renewable

energy agreement

Nuclear energy

65 Zuma and Calderon

32 Japan’s nuclear meltdown

urge US to step up

35 Japan’s reactors were

on climate change

67 Recent Soltrain workshop

in trouble

36 Viable without subsidies? 38 Strong safety record

Energy events

68 Energy events

for acceptance

www.25degrees.net

Nuclear top of mind worldwide Following the recent earthquake and tsunami in Japan, Japan’s nuclear reactors on the North Eastern coast of the country have come under sharp focus. The Fukushima Daiichi site , one of the country’s 54 reactors providing 30% of the country’s electricity, has been hit hardest of all the country’s nuclear power plants. Some 200 kilometres north of the capital Tokyo, the plant has six reactors. Reactor number 3, which has had the highest radiation leak levels is the only one with plutonium in its core. Reports of increasing radiation levels have led to a 20 km exclusion zone around the site (at time of going to press). Currently, the fears of a meltdown remains acute, though the Japanese authorities are desperately trying to allay fears of a total meltdown happening. Technicians and experts are working around the clock to pump water into the reactor to cool it down. Countries rethink nuclear policy In response to the disaster, several countries around the globe are said to be reconsidering their plans with several countries having called a halt to current construction on nuclear power plants. The EU called a special meeting of its 27 member states’ energy ministers and experts and decided to carry out stress tests on the 143 nuclear power plants in the EU. Germany has suspended their plan to extend the life of its nuclear power plants and have temporarily closed seven nuclear power plants in reaction to the Japanese situation. This has provoked a political row in Germany and questions have been raised over its legality. China has also suspended any approvals for new nuclear power plants and said it will carry out test and checks at existing reactors and those under construction. Locally, Eskom has assuaged the public by assuring us that Koeberg is safe and that South Africa has a “safe nuclear culture”. I think it will still be prudent of us all to review the circumstances and results of Japan’s meltdown and plan for any eventuality we possibly can. Nuclear is by its nature a dangerous source of power generation: best we be equipped and knowledgeable about how to handle any situation it must endure. Read more on the Japanese nuclear situation from page 32. Please bear in mind, this is not a daily publication and all facts were correct at time of going to press.

Marlene E van Rooyen 25º in Africa: Africa’s Independent Energy Publication covers the whole gamut of energy sources, production needs, environmental impacts and the current issues surrounding them. 25º in Africa’s mission is to disseminate information on any and all energy-related issues, with an emphasis on developments in Africa and the impact on the environment. The focus of the publication is on energy, but it carries related information to provide a broad, unbiased and independent view of all the pertinent issues. Copyright: The copyright for all content of this publication is strictly reserved. No part of this may be copied in part or fully without the express written permission of the editor. Disclaimer: Views expressed in this publication are not necessarily those of the publisher, the editorial team or its agents. Although the utmost care is taken to ensure accuracy of the published content, the publisher, editor and journalists cannot be held liable for inaccurate information contributed, supplied or published. Contributions: The editor welcomes contributions and encourages items of interest to our readers in the energy sector. All advertisements and editorials are placed solely at the discretion of the editor and subject to prior approval. 25º in Africa reserves the right to edit, withhold or alter any editorial material to complement the style of the publication. Subscriptions: 25º in Africa is published bi-monthly as a print publication. 25º in Africa is also available as a free web download. For more information, please contact the editor or editor’s assistant on Tel: +27 347 7530 or visit us on www.25degrees.net.

Publisher: Media in Africa (Pty) Ltd www.mediainafrica.co.za • www.25degrees.net International Contact Information: Tel: +27 12 347 7530 • Fax: +27 12 347 7523 E-mail: marlene@25degrees.net Postal Address: PO Box 25260, Monument Park, 0105 Republic of South Africa Physical Address: First Floor, Unit G, Castle Walk Corporate Park Cnr Nossob & Swakop Streets, Erasmuskloof Ext. 3, Pretoria, Republic of South Africa

The 25º In Africa team: Editor Marlene van Rooyen Tel: +27 83 327 3746 E-mail: marlene@25degrees.net Founder Schalk Burger (1943 – 2006) SALES EXECUTIVE Marlene van Rooyen Tel: +27 83 327 3746 E-mail: marlene@25degrees.net Journalist Adrienne Brookbanks Tel: +27 82 468 4566 E-mail: adrienne@25degrees.net business unit coordinator Zuerita Gouws Tel: +27 12 347 7530 E-mail: zuerita@25degrees.net Imbewu Sustainability Andrew Gilder – Climate change and CDM legal specialist Publishing Manager Liezel van der Merwe Financial Manager Fanie Venter Design and Layout Ilze Janse van Rensburg Accountant Gerda Bezuidenhout E-mail: gerda@mediainafrica.co.za Proofreader Elizabeth Kruger Reproduction & Printing Business Print Centre

EN ERVATI O N S

2 5 o i n A fr i c a

ENERVAT IO N S

New fuel cell technology could make hydrogen cars a mass-market reality The Carbon Trust has selected ACAL Energy to receive a £1-million investment by winning the Polymer Fuel Cell Challenge, an initiative with the aim of accelerating access to new markets for fuel cell products. ACAL Energy has developed a new way of reacting to the oxygen in air with hydrogen by using a low-cost liquid catalyst. Conventional polymer fuel cells require expensive platinum catalysts to do this, and the ACAL approach achieves the same performance while offering lower costs and reduced system complexity. According to the trust, ACAL Energy’s solution is potentially simpler and has a lower cost than conventional fuel cell technology. The Carbon Trust did a detailed analysis, which was based on a US Department of Energy model that shoed ACAL’s technology has the potential to cut systems cost by up to 40% once in mass production. “ACAL’s breakthrough technology could make hydrogen fuel cell cars a mass-market reality,” said the Carbon Trust about the technology, which powers electric cars with zero local emissions. “We believe that ACAL Energy’s transformational approach is one of the biggest breakthroughs in fuel cell technology since the 1980s, when fuel cells moved from the space programme to industrial applications,”

said Dr Robert Trezona, Research Accelerator Director at the Carbon Trust. “In one step, ACAL’s technology solves fundamental issues of cost and performance which the fuel cell industry has been trying to overcome for the past 20 years, in particular for automotive products, which are the most challenging applications for fuel cells. Its step-change fuel cell technology can be produced at scale and deliver major cost reductions that could make affordable fuel cell cars a reality for the first time,” said Trezona. The products will initially only be used in stationary power applications, but ACAL’s long-term focus is automotive. “The Carbon Trust’s PEM Challenge programme will enable us to accelerate development of our technology for use in cars”, commented Dr SB Cha, the Chief Executive Officer of ACAL Energy. “We are very grateful for the support given to us by the Carbon Trust, not only in this programme, but over the last several years. We look forward to work with the Carbon Trust to achieve our mutual goal of clean, sustainable and affordable power,” concludes Cha. For more information, visit www.acalenergy.co.uk, to which full acknowledgement and thanks are given.

Military technology applied to latest

York centrifugal chiller range Johnson Controls, an organisation that delivers products, services and solutions that increase energy-efficiency in buildings, has introduced the York magnetic centrifugal chiller (YMC2), which offers superior efficiency and sound performance, and is claimed to be 10% more efficient than conventional, variable-speed chillers. By harnessing magnetic-bearing technology used by Johnson Controls in naval applications for the past decade, mechanical-contact losses in the driveline are eliminated. The industry-leading OptiSpeed variable-speed drive has been improved, and efficiency of the evaporator has been enhanced with an advanced falling-film design. In addition, the features that always made York chillers so efficient have been retained, including the optimised centrifugal compressor that takes advantage of low-temperature cooling-tower water to save energy. As a result, the YMC2 chiller offers the best real-world efficiency in the industry. Neil Cameron, general manager of Johnson Controls Systems & Service Africa, says: “Using energy efficiently within your business can provide a number of benefits. Not only will you help to protect global energy reserves and reduce the environmental impact, but you will also save your business money.”

25 o in Africa

The YMC2 chiller is also quieter than any water-cooled centrifugal or screw chiller in the marketplace. Magnetic-bearing technology eliminates nearly all driveline vibration and the York OptiSound control further reduces noise at off-design conditions. As a result, the YMC2 chiller operates at a maximum of 73 dBA at full-load standard conditions, per AHRI-575. The human ear perceives the YMC2 chiller as about half as loud as other magnetic-bearing chillers. The YMC2 chiller features a sustainable design that uses refrigerant HFC-134a, which has zero ozone-depletion potential. The 10% efficiency improvement dramatically reduces indirect global warming caused by greenhouse gas emissions generated by electric utilities. In addition, 57% percent fewer refrigerant-piping connections drastically reduce the potential for direct global warming caused by refrigerant leakage. “We need to recognise that by introducing energy-efficient equipment, processes and materials, we can reduce energy bills and the harmful emissions associated with energy production,” concludes Cameron. For additional information, visit the website www.johnsoncontrols.com. Johnson Controls Systems & Services Europe & Africa Tel: +32 2 709 4481 E-mail: nanda.aerts@jci.com

EN ERVATI O N S

engineering for education

all. Partnerships between business and government are crucial to the development of our country.”

At the SSI “Engineering for Education” function held in Pretoria during the first week of February, master of ceremonies John Robbie said: “Education is about caring and the Lead SA campaign is about partnerships between the private sector and government, and with this initiative SSI is part of Lead SA.”

Naren Bhojaram, Chief Executive Officer of SSI and headmaster of its Saturday Schools Initiative, believes that education is the soul of our country and that it is vital that we nurture our intellectual capability. When asked why SSI started its Saturday Schools programme, he replied: “Because we care and we are committed.”

Representing the Minister of Basic Education, Mrs Angie Motshekga, at the function, Deputy Director-General for Basic Education, Paddy Padayachee, expressed the Department’s heartfelt gratitude to SSI for the sterling work to date that goes a long way in improving education in South Africa.

SSI’s Saturday Schools Initiative aims to “polish” students from underprivileged backgrounds who have shown potential, with additional mentoring and tutoring provided by qualified engineers from SSI, to achieve university entrance in the subjects of mathematics, science and engineering graphics and design.

He said it was clear that SSI is passionate about uplifting education and skills transfer in the country. He reported that the pupils supported by SSI had gained 39 distinctions and that two students from Soshanguve had achieved three distinctions each in mathematics, science and engineering graphics and design.

Attendance at the Saturday School is free of charge. Attendees are selected in conjunction with day school heads of departments, the school’s principal and the pupil’s parents.

“SSI has risen to the challenge of effectively addressing the country’s technical skills shortage, which is fundamental to the survival of a developing nation,” he said. “This initiative is evidence of how we can work together and SSI has shown this through investment in the young, as mentoring is a critical learning intervention.”

School administrators and teachers are volunteers from SSI’s own ranks of professional engineers, technicians and scientists, and lessons are conducted at the pupils’ day schools in Alexandra, Bloemfontein, Cape Town, Durban, Pietermaritzburg and Pretoria. SSI allocates more than ZAR1-million annually to support the initiative and intends to add more centres in the future.

He also commended SSI’s Chief Executive Officer for setting up and pioneering the programme and congratulated the company on its commitment to education in South Africa. He concluded by stating: “Working together we can do more to achieve quality education for

SSI Tel: +27 11 798 6522 E-mail: robinh@ssi.co.za Website: www.ssi-dhv.com

SSI 2 5 o i n A fr i c a

country pro fil e: gambia

Gambia In 1965, The Gambia gained its independence from the United Kingdom. The country, which is geographically surrounded by Senegal, formed a short-lived federation of Senegambia between 1982 and 1989. In 1991 the two nations signed a friendship and cooperation treaty, but tensions have flared up intermittently since then. In 1994 Yahya AJJ Jammeh led a military coup that overthrew the president and banned political activities. A new constitution and presidential elections in 1996, followed by parliamentary balloting in 1997, completed a nominal return to civilian rule. Jammeh has been elected president in all the subsequent elections including most recently in late 2006. The Gambia has sparse natural resource deposits and a limited agricultural base, and relies in part on remittances from workers overseas and tourist receipts (the country’s natural beauty and proximity to Europe has made it one of the larger markets for tourism in West Africa). Tourism has been boosted by government and private sector investments in eco-tourism and upscale facilities. Approximately three-quarters of the population depend on the agricultural sector for its livelihood. Small-scale manufacturing activities feature the processing of peanuts, fish and hides. In the past few years, The Gambia’s re-export trade – traditionally a major segment of economic activity – has declined, but its banking sector has grown rapidly. Unemployment and underemployment rates remain high; economic progress depends on sustained bilateral and multilateral aid, on responsible government economic management and on continued technical assistance from multilateral and bilateral donors. Location: Western Africa, bordering the North-Atlantic Ocean and Senegal. Climate: Tropical, hot rainy season from June to November; cooler, dry season from November to May.

25 o in Africa

Terrain: Flood plain of The Gambia River flanked by some low hills. Elevation extremes: • Lowest point: Atlantic Ocean 0m. • Highest point: Unnamed elevation 53m. Natural resources: Fish, clay, silica sand, titanium (rutile and ilmenite), tin, zircon. Land use: • Arable land: 27.88%. • Permanent crops: 0.44%. • Other: 71.68% (2005). Natural hazards: Drought (rainfall has dropped by 30% in the last 30 years). Current environmental issues: Deforestation, desertification, water-borne diseases prevalent. GDP (purchasing power parity): US$3.406-billion (2010 est.). GDP (official exchange rate): US$1.04-billion (2010 est.). GDP – real growth rate: 5% (2010 est.). GDP – per capita (PPP): US$1 900 (2010 est.). GDP – composition by sector: • Agriculture: 30.1%. • Industry: 16.3%. • Services: 53.6%% (2010 est.). Population below poverty line: NA Industrial production growth rate: 8.9% *Note: Although The Gambia had the highest industrial growth rate in the world in 2009, this growth is from a tiny industrial base (2010 est.). Electricity production: 160-million kWh (2007 est.).

c o u ntry p ro fi le : ga m b ia

Electricity consumption: 148.8-million kWh (2007 est.). Electricity exports: 0 kWh (2008 est.). Electricity imports: 0 kWh (2008 est.). Oil production: 0 bbl/day (2009 est.). Oil consumption: 2 000 bbl/day (2009 est.). Oil exports: 41.62 bbl/day (2007 est.). Oil imports: 2 266 bbl/day (2007 est.). Oil – proved reserves: 0 bbl (1 January 2010 est.). Natural gas production: 0 cu m (2008 est.). Natural gas consumption: 0 cu m (2008 est.). Natural gas exports: 0 cu m (2008 est.). Natural gas imports: 0 cu m (2008 est.). Natural gas – proved reserves: 0 cu m (1 January 2010 est.). Current account balance: -US$90-million (2010 est.). Exports: US$107-million (2010 est.). Export commodities: Peanut products, fish, cotton lint, palm kernels, re-exports. Import commodities: Foodstuffs, manufactures, fuel, machinery and transport equipment. Imports: US$306-million (2010 est.). Debt external: US$530-million (31 December 2009 est.). Energy issues in The Gambia Total installed electricity capacity (2007): 52 MW. Total primary energy supply (2006): 505.8 ktoe (Kilotonne of oil equivalent) • Biomass: 78%. • Petroleum products: 19%. • Electricity, LPG, renewable: 3%. Conventional electricity in The Gambia is produced mainly by thermal generation, and by the public utilities supplier National Water and Electricity Company (NAWEC), the sole distributor throughout the country. In order to meet petroleum requirements, the country is heavily dependent on imports of Liquefied Petroleum Gas (LPG) as a cooking fuel substitute, and diesel and heavy fuel oil for generating electricity. Petroleum imports accounted for about 18% of the total primary energy needs in 2006. Over 140 450 metric tons of petroleum products (excluding LPG) were imported during 2007. There is currently no domestic oil production, but companies are exploring potential deposits offshore. The complete reliance on imported petroleum fuels has resulted in a balance of payments deficit. The impact has been an acute shortage of electricity supply, with low investments and productivity impacting on the overall economy. Capacity concerns A rural electrification project was started in 2000 to address the lack of electricity access in the country (only 5% of the population had access to electricity in this year). The project consists of the construction of six power plants and transmission lines to supply a large number of towns and villages. According to REEP.org, NAWEC wasn’t operating on a commercial basis and couldn’t generate sufficient financial revenues to maintain and upgrade the system and infrastructure. Problems include the following:

• • • • •

Under-investment. An inflexible tariff system. Rising fuel prices. Distribution and transmission losses nearing 40%. Non-payment of bill arrears (particularly by large commercial and industrial consumers).

As a result of the abovementioned factors, NAWEC has difficulties in meeting its operating costs, investing in generation capacity and replacing obsolete equipment. Generation capacity increased tremendously after the power plant was built in Brikama (4 x 6.5 MW generators running on HFO) in August 2006. The first truly IPP power plant of 25 MW has an output capacity of 22 MW. This new installation adds about 28 MW to the existing installed capacity at the main power station at Kotu, to provide an available capacity of 50 MW in the Greater Banjul area. In January 2010, the Energy Ministry in Banjul announced an unprecedented reduction in electricity tariffs for all consumers in The Gambia. The reduction consists of a 10% electricity tariff reduction for commercial and industrial customers and a 5% reduction for domestic users. The Gambia’s renewable energy sector Solar Potential solar energy in the country is estimated at 4.5–5.3 kW/m²/day – one of the most promising renewable energy sources of the country. PV-installations with a capacity of more than 700 kWp were installed by the end of 2006. Hydropower The Gambia has now hydropower potential – however, it cooperates with Guinea, Senegal and Guinea Bissau to construct two large-scale hydropower generation units at Sambagalo and Kaleta, under The Gambia River Basin Development Organisation (OMVG). Biomass Over 90% of the population rely on wood to meet their energy needs, but the usage of fuel wood and residues from wood processed for electricity generation is not encouraged. The usage of other types of biomass is low due to the limited availability of agricultural waste and other potential sources. A number of biofuels projects, mainly produced from jatropha, were initiated in the 1980s. More recently, 20 biogas digesters were implemented in rural and per-urban areas through the Peri-Urban Project for Agriculture. “At least two of these sites are running satisfactorily,” says REEP.org. Wind Wind speeds across The Gambia is about 3m/s and there are substantial opportunities in coastal areas. A philanthropic pilot 150 kVA generator project was implemented in Batakunka Village in order to provide electricity for the villagers (excess electricity is being pumped into the transmission network). Information courtesy of www.cia.gov, www.reep.org and www.gambianow. com, to which full acknowledgement and thanks are given.

2 5 o i n A fr i c a

climate change

The result of BASF’s corporate carbon footprint: In addition to significant reductions in greenhouse gas emissions from its own production, BASF reduced its customers’ CO2-footprint by 322-million tons through innovative climate protection solutions.

Reducing their customers’ CO2 footprint BASF is currently working on new goals for the reduction of greenhouse gas emissions and is continuously enhancing its reporting on greenhouse gas emissions. For the first time in 2010, BASF takes into account the newly drafted standard of the Greenhouse Gas Protocol for reporting emissions along the value-adding chain. BASF has contributed its know-how to the development of this new standard elaborated by international sustainability experts. The new guidelines aim for more transparency and conformity in corporate carbon reporting.

Chemicals group reduces GHG emissions by On 10 March, the chemicals company BASF published its Report 2010, which shows that it had reached an important goal last year: Specific greenhouse gas emissions have been reduced by 29% compared with 2002, meaning that the company reached its goal for 2020 for the first time.

29%

The report, which meets the internationally recognised Standards of Global Reporting Initiative (GRI) for sustainability reporting, documents BASF’s entrepreneurial performance and shows how sustainability contributes to corporate success. BASF measures its performance on the basis of clearly defined targets for the three areas of economy, ecology and society: In 2010, BASF again earned a premium on its cost of capital with a record premium of €3.5-billion. The proportion of senior managers with international experience rose to 78%.

25 o in Africa

BASF Holdings South Africa (Pty) Ltd Tel: +27 11 203 2422 Fax: +27 11 203 2430 E-mail: petra.bezuidenhout@basf.com Website: www.basf.co.za

c li m ate c h ang e

2 5 o i n A fr i c a

climate change

The head of the Environment Agency, Chris Smith, recently warned that corporate Britain is ill-prepared for the impacts of climate change. Smith said that businesses needed to start creating adaption plans now or face severe disruption in the decades ahead. But besides the climate change doomsday speak regarding rising electricity costs, depleting water resources and costly adaptation plans – what are the opportunities for businesses regarding climate change? Danger and opportunity “Climate change poses serious threats to every nation – especially those from Africa. But climate change could also bear some good business for us,” says Dr Godwell Nhamo, Programme Manager for the Exxaro Resources sponsored Chair focusing on business and climate change at the University of South Africa (Unisa). “Over the past few years, people have realised that climate change is real

and it is here to stay. The post-2012 cloud seems to be clearing at last and new business opportunities in the carbon market are continuing to grow,” said Nhamo before quoting US President Barrack Obama: “The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business in the context of climate change.” “The World Bank’s IFC launched a €150-million fund to forward purchase certified emission reductions (CERs or carbon credits) that are expected to be produced from 2013 – 2020 from projects that reduce greenhouse gas emissions. These projects can either be directly financed by the IFC or through partnerships with forward looking local banks,” says Dr Nhamo. “Many people now want to know what they can do both as individuals and corporates to facilitate business transition to greener, low carbon compliance moving forward. The emergency of the global green economy implies that the corporate world should address the key risks associated with climate change and lack of transition to low carbon. The three main risks currently facing the business environment with regards to climate change are regulatory risks, reputational risks and physical risks – which

What are the opportunities for climate change? A local researcher’s perspective

25 o in Africa

c li m ate c h ang e

all boil down to financial risks because they could all affect a company’s bottomline,” says Dr Nhamo. Some of the physical risks that Dr Nhamo mentioned, included the January 2011 damages to infrastructure, crops and agricultural land in South Africa resulting from the burst banks of the Orange River (which were estimated in excess of ZAR2-billion), the reduction of ice cover over Mount Kilimanjaro and the 2010 floods in Pakistan that left a tail of untold destruction and human suffering. “Experts are also predicting wheat shortages across Africa in the next few months as a rusult of the 2010 Russian fires,” says Dr Nhamo. With regards to reputation risks, Dr Nhamo cited the controversial and well-known case of BP. “The oil company BP plc. was removed from the Dow Jones Sustainability Indexes (DJSI) effective 31 May, 2010. As a component of the DJSI World Index, BP was subject to index rules that allow for elimination from the DJSI following extraordinary events. No substitution was made to the DJSI World components,” says Nhamo. “On 5 August 2010, BP said it had paid US$303-million in claim payments to more than 40,000 individuals and businesses impacted by the oil spill in the Gulf of Mexico. On 9 August 2010, BP further announced that it had established a trust and made a US$3-billion initial deposit of the previously-announced US$20-billion escrow account to pay legitimate claims. The CEO also resigned,” adds Dr Nhamo.

Being first with new technologies is key to success “But amidst all these risks, there are five thematic areas where a large amount of business opportunities lay – these are technology, adaption, mitigation, financing, adaptation as well as capacity building and awareness raising. In order to win the fight and the future against climate changes, businesses have to be innovative,” says Dr Nhamo. China, for example, is home to the world’s largest private solar research facility and fastest computer. On 25 January 2011, US President Barrack Obama mentioned the facility during his State of the Union speech, saying how India and China have realised that one can compete in new technology by educating children younger and earlier. He used the centre as an example of how other nations can easily start to lead with technological innovations. America, on the other hand, is aiming to have 1 million electric vehicles on its roads by 2015. “America will invest in what Obama calls ‘tomorrow’s energy’. By 2035, 80% of America’s electricity will come from clean energy sources,” says Dr Nhamo.

Nhamo describes new generation cars (electric vehicles) as a major disruptive technology in transportation.

Regulatory risks include multilateral bilateral and domestic climate regulatory regimes. Among key multilateral climate regulatory regimes are: United Nations Framework Convention on Climate change (UNFCCC), the Kyoto Protocol, Bali Road Map, Copenhagen Accord and the Cancun Agreements. From a local perspective, South Africa has put in place the Long Term Mitigation Scenario, Electricity Levy, Carbon Tax measures and currently consultations are under way regarding the National Climate Change Strategy Green Paper. Other neticeable voluntary regimes include the Carbon Disclosure Project, JSE Socillay Responsible investment Index and the Energy Efficiency Accord.

Nhamo describes new generation cars (electric vehicles) as a major disruptive technology in transportation. “By 2030, we expect the combustion engine to be yesterday’s technology, as electric vehicles are really the only way to cost-effectively achieve a 50-80% reduction in greenhouse gas emissions from transportation over the medium term. One of the most successful IPOs in 2010, Tesla, went public in June raising approximately US$200-million in the process. Tesla’s Model S goes on sale in 2012 for about US$60 000,” said Dr Nhamo.

Locally, the “Ahi Fambeni” (or “A hi Fambeni”, which means “Let’s go” in Tsonga) hydrogen fuel cell powered bicycle was launched on 12 August 2010. The bike was built by students from the Tshwane University of Technology. “E-bikes, which are bicycles with electric motors, already exist in South Africa. What made the Ahi Fambeni special, is that its motor is not powered Continues on page 12

World’s largest solar research facility Applied Materials’ Solar Technology Centre, located in Xi’an, China, is the largest non-governmental solar energy research facility in the world. The 400 000 m² complex is home to the corporate offices, as well as the Applied SunFab thin-film manufacturing line and a crystalline silicon pilot process. Xi’an is a growing centre of energy technology excellence in China. Research and development, product demonstration, testing and training for crystalling silicon and thin-film solar module manufacturing equipment and processes are also done at the Applied Materials’ Solar Technology Centre. “The opening of the centre represents a critical breakthrough for the photovoltaic industry and China and it is a tremendous benefit to our customers,” said Mike Splinter, chairman and CEO of Applied Materials. “Establishing this centre in China is an integral part of Applied’s global strategy and an important step towards the industrialization of the global solar industry.”

2 5 o i n A fr i c a

climate change

Business has always been the leaders when it comes to innovation and technology.

Source: Lovins (2009: 25)

by a battery, but by a fuel cell. The Ahi Fambeni project is a first step with plans to develop a hydrogen fuel cell powered tricycle and car,” says Dr Nhamo.

Dr Godwell Nhamo recently gave a presentation at the 25º in Africa and Imbewu Climate Change Thinkers Forum – This article is based on an insightful presentation by Nhamo and his work with the Exxaro Chair in Business and Climate Change at Unisa.

In June 2010, South Africa also got its first green mobile phone. Vodacom launched a low-cost (it costs only ZAR349.00) solar-powered mobile phone with the unique ability to charge on the go, even when it’s not in direct sunlight. “With this innovation, Vodacom hopes to exploit South Africa’s abundant sunshine and reduce reliance on grid-electricity. Also on local shores, VBV Holdings launched the Phoenix energy-recovery/ slurry pump in October 2010. The unit will not only replace conventional slurry pumps and motors on a typical mine operation, but also results in power savings in excess of 50%. VBV Holdings managing director, Pieter Viljoen, says the pump was designed as a response to “the energy crisis and the emphasis on reducing carbon emissions worldwide. This product is ideal for any mining operation.”

Climate Change

hinkers Forum

net in africa

AFRICA’S INDEPENDENT ENERGY PORTAL

HAVE YOU JOINED OUR ONLINE COMMUNITY? 250 in Africa has extended its online presence, visit www.25degrees.net WHAT CAN YOU EXPECT?

ADVERTISING OPPORTUNITIES

• • • • • •

•

Latest magazine content Insightful articles & live news feeds Interactive content, including forums & blogs Energy events Products Reports

• • •

Gain valuable exposure in front of a community of experts and professionals. Become a featured company Participate in a company directory Advertise your products and events online

25 o in Africa 12 SUBSCRIBE NOW! To subscribe to 25degrees.net’s insightful newsletter Email your details to admin@25degrees.net

c li m ate c h ang e

Local construction firms shifting focus to green projects Camco, an international company specialising in climate change solutions, and Trade & Industrial Policy Strategies (TIPS), an independent economic policy research institution, recently released a case study entitled “The Construction Industry’s Path towards a Low Carbon Trajectory” with funding from the British High Commission. According to the case study, the South African construction industry has been increasingly focused on both the introduction of green practices and on energy-saving technologies. Globally, the building sector is said to contribute more than one-third of the total energy usage and associated greenhouse gas (GHG) emissions in society. Major South African construction companies, such as Group Five and Murray & Roberts, are starting to pursue green practices and projects. This has, in some cases, involved voluntary compliance with the Green Building Council of South Africa’s (GBCSA) Green Star South Africa Office rating tool and the implementation of energyefficiency and demand side management measures. Recent media reports have also indicated that some construction companies (including Group Five and Aveng) are moving quite discernibly into renewable energy (RE) developments in the hope that they can secure a share of the renewables allocation under the Integrated Resource Plan (IRP) for electricity. In this regard, Group Five has set up a specific new unit which deals with RE projects and Aveng has recently appointed an environmental manager for the group. Aveng is particularly positioning itself around wind and solar energy for bids that will emerge in this sector in the near future. Murray & Roberts have also adopted a new environment-friendly asphalt technology (Much Asphalt) that saves energy. “A few key trends currently pertain to the construction sector as set out by Group Five and as observed by other firms in the sector. These are taking place in terms of complex changes, which are setting the scene for changes in construction practices, an increased focus on the environment and the introduction of greener practices and technologies. However, clarity is required from the South African authorities in terms of environmental priorities as these influence the type of interventions, investment and training in which construction firms need to engage,” reads the case study. Camco Global Tel: +27 11 253 3400 E-mail: alex.mcnamara@camcoglobal.com Website: www.camcoglobal.com TIPS Tel: +27 12 431 7900 E-mail: myriam@tips.org.za Website: www.tips.org.za

Do you follow us on

twitter?

• @25 in Africa: carbon money will not be ringfenced. eskom #climatechangethinkersforum • @25 in Africa: which baseline are we going to use going forward? #cctf • @25 in Africa: One of the problems is that nobody knows what “business as usual” will look like in 2020 - Andrew Gilder #cctf#climatechange • @25 in Africa: Getting cheap loans (lWorld Bank-type loans) for coal power isn’t working, we need cheap loans for renewable technology Peet du Plooy #cctf • @25 in Africa: upfront cost for renewable is significantly higher than coal, but is still affordable whith special market mechanisms.#cctf • @25 in Africa: Carbon tax is a market failure – it pays us to kill ourselves Peet du Plooy #cctf • @25 in Africa: 40% of SA’s carbon emissions is not due to the consumption of South Africans Peet du Plooy #cctf • @25 in Africa: Peet du Plooy from @ WWWFSouthAfrica and TIPS speaking about climate risks #cctf • @25 in Africa: government should put in place proper green supply chain management systems and management. #cctf • @25 in Africa: if you do not adjust your business to what is in demand, you will lose out! Dr Godwell #cctf • @25 in Africa: Dr. Godwell Nhamo,Programme Manager for the Exxaro Chair on Business and Climate Change, is discussion Cancun 2 Durban: a business perspective • @25 in Africa: The Stern Report is a Stern Warning about climate change Andrew Gilder, director of Imbewu at #cctf • @25 in Africa: CC 5th assessmemt report will have a much more integrated approach. #cctf 2 5 o i n A fr i c a

climate change

Growing the solar photovoltaic (PV) market in Tanzania Nearly 84% of Tanzanians don’t have access to electricity and the opportunities and improved quality of life that electricity can provide. That figure rises to approximately 98% in rural areas. The Tanzanian government is currently promoting private sector, renewable energy approaches to rural electrification. One of these approaches involves solar energy, specifically the development of the market for solar photovoltaic (PV) technology. The once small Tanzanian solar market is growing exponentially, from 100kWp in 2005 to over 1.5 MW in 2009. However, it is small relative to the size of the country and the needs of the rural population. Much of the transformation of the Tanzanian solar market is the result of donor-funded project activities sponsoring training, awareness raising, marketing and other forms of stimuli. One example is the Sida/MEM Solar PV Project, a national solar PV energy project funded by the Swedish International Development Agency (Sida) through the Ministry of Energy and Minerals (MEM), and implemented by Camco Tanzania. 50% mark-ups on solar products Remaining barriers to increased growth in the sector include cost, financing and quality. Although there is a far-reaching network of solar technology retailers throughout the country, these dealers frequently apply large margins on the systems that they sell in order to compensate for relatively small sales volumes. It is not rare for a retailer to mark-up the cost of solar equipment by 50% or more above wholesale prices. There are also very limited financing options for families or businesses who want to procure solar PV systems. Except for a small number of National Microfinance Bank (NMB) and SACCOS (Savings and Credit Cooperative Societies) loans, available mostly to teachers, the market for solar PV equipment is almost entirely based upon cash sales. Due to Tanzania’s modest per capita income, Tanzanians are also very sensitive about cost and in the absence of good consumer knowledge will purchase the least expensive solar PV equipment for their systems. Knowing this, and limited in their own knowledge and purchasing power, some retailers around the country have begun offering poor quality, substandard solar equipment.

reduce costs, credit-financing and subsidies. Organised labour or farmer groups (minimum a thousand members) engage in annual wholesale procurements through tendering, ensuring value for money and the best possible combination of price and quality. Both local and international solar PV equipment suppliers bid to become providers and suppliers for the Clusters Solar PV Project. Through the tendering process, the systems purchased are standardised into the most popular sizes (30Wp, 60Wp and 100Wp), and thus all users in the area are operating with the same good quality equipment (and have already access to solar technicians who know the equipment). Under the Clusters Project model, Tanzania’s Rural Energy Agency (REA) provides a small subsidy for systems procured. Farmers pay for 80% of the systems that they receive, 20% down and 60% on credit. Currently, the National Microfinance Bank is providing loans to the existing Cluster Groups. Each Cluster Group is a project by itself, owned by the Cluster Group and its farmer/labour members. As quickly as possible, the project transfers skills to managers, technicians and quality control (QC) agents. Local technicians are trained by and become agents of the private sector solar equipment suppliers who win the tenders. QC agents – trained by the project before being managed and remunerated by the Cluster Group managers – monitor the performance of these technicians. The result is thousands of new highquality solar home systems for the groups that are the hardest to provide for, rural communities and especially farmers. The first installations in the Southern Highlands (in Mbinga and Tukuyu) have resulted in many homes with solar electric systems. The solar projects of KiliCafe Mbinga Branch and the Rungwe Smallholder Tea Growers Association (RSTGA) are currently on the brink of sustainability. The potential exists to implement dozens of solar Cluster Groups around Tanzania, benefiting tens-of-thousands of rural households, contributing to greater rates of rural electrification and supporting improved and affordable access to modern energy.

Reducing the market barriers The Clusters Solar PV Project (funded by the World Bank through the MEM and implemented by Camco Tanzania) addresses these remaining market barriers through standardised high-quality systems, bulk purchases to

25 o in Africa

Camco South Africa Tel: +27 11 253 3400 E-mail: jonathan.curren@camcoglobal.com Website: www.camcoglobal.com

c li m ate c h ang e

SA gets new rules for waste disposal South Africa’s long-awaited National Domestic Waste Collection Standard came into effect on 1 February 2011. The standard which is published under the National Environmental Management: Waste Act (Act No. 59 of 2008), aims to provide a uniform framework within which domestic waste should be collected in South Africa. This comes after a consultative process with provinces, municipalities and the general public in order to redress the past imbalances in the provision of waste collection services. The standards aim to guide municipalities on how to provide acceptable, affordable and sustainable waste collection services to the human health and the environment. The National Domestic Waste Collection Standard emphasizes the need to separate recyclable and non-recyclable domestic waste. It covers the levels of service, collection vehicles, receptacles, collection of waste in communal collection points and, most importantly, the frequency of collection. According to the standard, non-recyclable material such as perishable food waste must be collected at least once a week and recyclable material such as paper, plastic, glass etc. must be collected once every two weeks. The National Domestic Waste Collection Standard is applicable to all domestic waste collection services throughout the country. “The viability of recycling relies heavily on economies of scale. It is therefore

important that enough clean recyclables (from separation at source, including households) must be accumulated to justify the cost of transport associated with the collection of recyclables,” said the Minister of Water and Environmental Affairs, Edna Molewa. Molewa said the following issues must be considered: • The use of existing infrastructure (i.e. garden waste centres, landfills) for temporary accumulation and the storage of recyclable waste. This may require an amendment to existing landfill permits. • Bulk waste transfer facilities for recyclable waste by district municipalities. • Regionalisation of collection of recyclables to ensure economies of scale, especially in remote areas. • Collaboration with recycling companies to avoid potential bottlenecks. • If there is no recycling market for source-separated recyclables, wasteto-energy options must be considered prior to disposal. For more information, contact www.environment.gov.za, to which full acknowledgement and thanks are given.

A 20-year track record in providing world-class climate change, energy and sustainable development solutions across Africa and internationally. o Carbon footprinting: over 1,200 organisational and product carbon footprints; accredited CDP alliance partner

o Carbon management: strategic support to the private sector in all aspects of climate change and carbon risk

o Policy development: national, regional, and international policies and

regulatory frameworks on energy, climate change and carbon markets

o Energy management: energy auditing / ‘Carbon Desktop’ - monitoring and targeting software for energy, carbon and water

o Emission reduction project development: industry leader in CDM origination, qualification and commercialisation with over 100 million tonnes of CO2 under contract

o Rural energy, biomass, land use and forestry solutions: promotion of sustainable energy access and livelihoods solutions across Sub-Saharan Africa

For further information: t +27 (0)11 253 3400 • f +27 (0)11 804 1038 • camcoafrica@camcoglobal.com Building 18, Woodlands Office Park, Western Service Road, Woodmead, Johannesburg, South Africa, 2080 o i n A fr i c a 2 5www.camcoglobal.com 15

climate change

COP 17 How are we going to generate more positive reactions?

from cancun Climate Change

hinkers Forum

After the 15th UNFCCC meeting in Copenhagen, there was a general feeling of disappointment and failure. Last year’s COP in Cancun, however, generated more positive reactions. But how are we going to move from Cancun to this year’s COP17 in Durban to ensure success? “With the euphoria over, and the time we have had to digest the events in Cancun, it is now right to “think” about what was achieved. To “think” about how we build momentum towards COP 17 and beyond. And to “think” what our respective roles are to support this” said John Smith, head of the climate change team at the British High Commission, at the Climate Change Thinkers Forum, which was hosted by 25º in Africa and Imbewu Sustainability Lawyers. “From our side, we believe that Cancun exceeded expectations – emissions pledges under the Copenhagen Accord were brought into the UNFCCC process. For the first time, there is an international commitment to ‘deep cuts in global greenhouse gas emissions’ to hold the increase in temperature below 2 degrees, with processes agreed for adopting targets for peaking emissions as soon as possible, and substantially reducing them by 2050. And we have some clear wins on establishing the Green Fund, Developing country access to low-carbon technology, and help with adaptation to climate change,” says Smith. Trust deficits Smith explains that there are trust issues amongst various nations. “There are trust deficits across both developing and developed countries. South Africa and the United Kingdom share the same high end goal of a legally binding equitable global agreement and we both agree that the current emission reduction pledges on the table are insufficient so it makes sense to work together,” says Smith.

25 o in Africa

to Durban Cancun saved the process – not the climate “Cancun generated bold headlines. Durban now has the challenge of ensuring that the details within these agreements are established and implemented. One of the challenges is gaining a collective understanding of what country limits in Cancun mean for achieving a 2ºC limit in global warming. Certain countries made it clear that they would not be signing up for a second period of the Kyoto Protocol. Another challenge is making progress on agreeing on the peaking year (in terms of peak greenhouse gas emissions) and we also need to work on mitigation pledges that will actually keep us on the 2ºC path,” said Smith. In a presentation entitled “Things Are Hotting Up: A 2011 Update On Climate Change Science”, Director of Kulima Integrated Development Solutions, Alec Joubert, said that it might not even be realistic to mitigate climate change to a 2ºC level. “Climate change science has progressed since 2007. Nowadays, there is a growing consensus among climate change scientists that it may not be possible to limit changes to a global average increase of 2ºC, and that it’s increasingly realistic to believe the world will see a rise of 4ºC,” said Joubert. Joubert noted that the regional impacts of a 4ºC are likely to have devastating effects on agriculture throughout sub-saharan Africa. “The length of the growing period for important crops such as maize may decrease by 20% by the end of this century. Under these more extreme climatic conditions, crops may fail approximately half of the time, so there are dire consequences for our agricultural sector,” said Joubert. Although South Africa (as well as other African countries) will be greatly affected by global warming, what’s worrisome is the fact that our carbon emissions aren’t generated for products and services for our own citizens.

c li m ate c h ang e

“About 40% of South Africa’s emissions are not due to the consumption of South Africans. To add insult to injury, these carbon–intensive exports are now at risk from import taxes that target carbon in countries like the US and possibly the EU” says Peet du Plooy, Programme Manager of Sustainable Growth at Trade & Industrial Policy Strategy (TIPS). “The reality about carbon-intensive industry – from coal to smelters – is that it has been big business in South Africa, as oil has been for those few countries who export it. Perversely, it pays to kill ourselves. This is a market failure that should be corrected through pricing mechanisms that reflect the societal (or externalised) costs of carbon in products, from electricity to steel. Either a carbon tax and/or a capand-trade mechanism like the European Trading System can achieve this – both of these options are fundamental in the fight against climate change, but they are not sufficient. Action is also needed in areas like informregulation and standards, like efficiency standards. Du Plooy says that Africa is now in the position where we have to think of the long-term effects of these pricing mechanisms for our own economies’ sake, while also addressing the needs of our neighbours. “We have to innovate in order to help our own country, but we need to cooperate as well. We can learn from the technology and policy experience of other countries. Africa has climate change problems that were created in the US and the North – we need them to take action at home, while there is also an opportunity to take collective, global action in Africa, through direct investment, financial support or participation in carbon crediting schemes like the Clean Development Mechanism.” said du Plooy.

Do you follow us on

twitter?

A 4ºC warming will have dire consequences for our agricultural sector. Approximately half of our crops will fail.

Role of the private sector “The role of the private sector is critical. In China’s latest five-year plan, the country will make it clear that it wants to be the leader in green technology innovation. The US is also making significant strides in this sector. In South Africa, business needs to show leadership in pushing the government – this will force transition to a green economy,” concludes Smith.

• @25 in Africa: Dr. Godwell Nhamo,Programme Manager for the Exxaro Chair on Business and Climate Change, is discussion Cancun 2 Durban: a business perspective • @25 in Africa: The Stern Report is a Stern Warning about climate change Andrew Gilder, director of Imbewu at #cctf • @25 in Africa: CC 5th assessmemt report will have a much more integrated approach. #cctf 2 5 o i n A fr i c a

climate change

Skills shortage:

30% of Eskom engineers are close to retirement South Africa’s nuclear energy building programme suggested that Eskom and its suppliers would require 3 000 scientists and engineers. It would also require 24 000 artisans, but 30% of the state-owned utility Eskom’s engineers are close to retirement.

He said an additional 5 000 young people would be put into training in the near future. Gigaba said his department would pay “serious attention” to transformation.

Almost one third of the artisans, technicians and engineers at Eskom are approaching retirement, said the Minister of Public Enterprises, Malusi Gigaba, at a session with black professionals organised by Durban Invest in March.

“Many companies have paid lip-service to the transformation legislation, implementing it in a half-hearted manner, or selectively, or choosing to ignore it. Companies that are resisting investing in transformation are not just performing a social injustice, but are hindering the development of the economy as a whole,” Gigaba said.

Eskom has invested ZAR780-million in training over the last financial year in order to avert the approaching skills crisis.

State-owned companies needed to be exemplary where transformation was concerned.

“They have established 24 training centres while there are 244 on-job training sites. Presently 5 225 pupils are registered, of which 3 780 are in engineering and technical skills,” said Gigaba.

“If state-owned companies themselves do not comply, it will not inspire the private sector to transform.” Source: SAPA

REEEP to spend €4,5m on clean energy in 2011 The Vienna-based Renewable Energy and Energy Efficiency Partnership (REEEP) has called for proposed clean energy projects targeting Brazil, China, India, Indonesia and South Africa. The partnership expects to fund approximately 30 projects with €4.5-million funding that was contributed from Norway and the UK. “Thanks to the generous financial contributions from the UK and Norway, REEEP is in a position to launch its 8th programme cycle and to pursue its work in low-carbon energy with its partners in developing countries and emerging markets,” said Marianne Osterkom, the Director-general of REEEP. Preference will be given to proposals that address barriers to the uptake of renewable energy (RE) and energy-efficiency (EE). Programmes covering one of the following programme priorities will receive funding priority: • The promotion of successful and innovative business models for clean energy solutions. • Supporting innovative financing approaches, including clean energy finance facilities and instruments. • Clean energy policy support for national and regional governments to accelerate the development of the RE and EE markets.

25 o in Africa

• Strengthening of energy regulatory mechanisms and standards such as building codes, grid codes and appliance standards and labelling. “Through our projects, we are aim to provide an evidence base about global public policy for transition towards a green economy,” said Binu Parthan, REEEP’s Deputy Director-general in charge of programmes. “In addition to the key low-carbon energy technologies of renewable energy and energy-efficiency we also plan to support several projects that address smart grids, low-carbon transportation and fossil-fuel subsidy reforms,” said Parthan. The final project selection will take place at the end of June and the application process is exclusively online via the REEEP Project Management Information System (PMIS), which includes live support for applicants. For more information on application procedures, visit http:// call4proposals.reeep.org, to which full acknowledgement and thanks are given.

c li m ate c h ang e

Nasa

launches climate change satellite

On 24 February, Nasa launched its latest earth-observing satellite from Vanderberg Air Force Base in California. The satellite, which is called Glory, will study tiny airborne particles and their influence on climate change. The US$424-million mission will allow scientists to better understand how the sun and tiny atmospheric particles called aerosols affect the earth’s climate. Both aerosols and solar energy influence the planet’s energy budget – the amount of energy entering and exiting the earth’s atmosphere. “An accurate measurement of these impacts is important to anticipate future changes to our climate,” reads a statement by Nasa. The initial launch was scheduled for 2010, but a problem with the satellite’s solar arrays delayed the launch. For more information, visit www.nasa.gov, to which full acknowledgement and thanks are given.

2 5 o i n A fr i c a

climate change

Durban is to host the Seventeenth Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change and the Seventh Meeting of the Parties (MOP7) to the Kyoto Protocol, scheduled for late November and early December 2011. There is a huge onus on South Africa, as the Chair of the COP, to capitalise on the resuscitation that the Mexicans so succeffully performed on the multi-lateral process during COP16, which ended in Cancun in midDecember 2010. A revival of the process was required after the perceived failure of COP15, held in Copenhagen, Denmark, in 2009, which led to various commentators arguing that the UN had failed in its task to deal with climate change and to begin casting about for alternatives, e.g., regional, bilateral and unilateral action (all of which are necessary, anyway, and notwithstading what may still be achieved at the multi-lateral level). However, the simple and rather uninterrogated view that COP15 was an unmitigated disaster is not without its critics. A strong argument can be made for the position that, particularly in light of the outcomes of COP16, which saw the weak formal result of COP15 (the Copenhagen Accord) strenghtend by its inclusion into the suite of COP16 decisions which have been named the Cancun Agreements, COP15 represents a political seachange. The gist of the argument is that COP15 realigned the path of the negotiations to take account of the contemporary and very complex global

25 o in Africa

realpolitik which has evolved over the past twenty years – the time during which the UNFCCC (and latterly the Kyoto Protcol) has been in existence. A further element of this view is that the UNFCCC and Kyoto stem from a less complicated political era, and the ever-increasing complextiy of the international arena requires that the political premise upon which the negotiations is founded is in need of rennovation. A recent exposition of this view is found in “A Tale of Two Architectures: The Once and Future U.N. Climate Change Regime”, by Daniel Bodansky of Arizona State University’s Sandra Day O’Connor College of Law. In precis Bodansky’s thesis is that: International agreements vary widely in the latitude that they give participating states - some taking a top-down approach, defining particular policies and measures that country Parties must undertake, others adopting a more bottom-up approach, allowing each participating state to define its own commitments unilaterally. In the climate change regime, Kyoto’s quantified emission limitation and reduction objectives (QELROs) reflect a top-down approach and, although the rules undepinning QELROs give states freedom to achieve a QELRO, there is no similar flexibility in defining the form, nature and content of the commitment.

c li m ate c h ang e

number of commentators would view the incremental process suggested by Bodansky as being insufficient to deal with the imminence of the global threat represented by climate change, and that far more urgent action is required. Bodansky’s article can be downloaded from the Social Science Research Network (SSRN) website: papers.ssrn.com Bodansky’s article is timely, especially in light of the imminence of the pending next set of negotiations scheduled to take place in Bangkok, Thailand, from 5 to 8 April 2011, and in Bonn, Germany, from 6 to 17 June 2011. Followers of the negotiations will be aware that the outcome of the annual COP is fairly clear by the time the mid-year session has been completed. This is inter alia for the reason that country Party suggestions for new legal text to be considered by the COP must be submitted six months prior to the date of the COP, in the particular year. This means that the major elements of the COP17 outcome, or at least those elements that will be politically and pragmatically possible, are likely already to be visible during the second part of 2011. As the negotiators participating in the work of the Ad Hoc Working Group on Long Term Cooperative Action under the Convention (AWGLCA) gear-up for their efforts in Bangkok, the following is a select list of issues they will be considering: Global goal for emission reductions and global peaking: COP16 recognized that deep cuts in global greenhouse gas emissions are required according to science with a view to reducing global greenhouse gas emissions so as to hold the increase in global average temperature below 2°C above preindustrial levels, and that Parties should take urgent action to meet this long term goal. In this context the AWG-LCA will initiate preparation of a draft decision for consideration by COP17 relating to the global goal for emission reductions and global peaking.

By contrast, and despite the inadequate level of emissions reduction commitments made by countries, so far,especially when taken in light of the scientific opinion on how deep cuts in greenhouse gas emissions should be to deal with the climate crsis, the bottom-up approach to a new global climate agreement emerging from COPs 15 and 16, makes sense when one takes into account how this approach has contributed to overcoming the impasse in the negotiations that arose in relation to developed country commitment to QELROs after the expiry of Kyoto’s first period at the end of 2012.

Market-based and non-market-based mechanisms: COP16 decided to consider the establishment, at COP17, of one or more market-based mechanisms to enhance the cost effectiveness of, and to promote, greenhouse mitigation actions. In this context the AWG-LCA will initiate the preparation of one or more draft decisions on market-based and nonmarket-based mechanisms for consideration by COP17. Operationalization of the Technology Mechanism: COP16 decided to establish a Technology Mechanism to facilitate the implementation of enhanced action on technology development and transfer to support action on mitigation and adaptation in order to achieve the full implementation of the UNFCCC. In this context the AWG-LCA will initiate the preparation of a draft decision on arrangements to fully operationalize the Technology Mechanism for consideration by COP17.

Bodansky argues that, going forward, the climate change regime faces a choice, either to continue down the road blazed by Kyoto, or to shift to a more bottom-up architecture, focusing on nationally-defined measures; and, although the Copenhagen Accord and Cancun Agreements, at least in theory, leave this question open, they actually embrace a bottom-up approach, allowing countries to make national pledges unilaterally. The author continues: “This bottom-up, incremental approach makes sense politically, in order to provide time for countries to learn from experience and to develop trust in the system. Although it is unlikely, in itself, to produce the necessary level of emissions cuts, it represents a useful step forward, by unblocking an apparently stalemated process and by helping to build a foundation for stronger action in the future”. It might be noted that a

IMBEWU Sustainability Legal Specialists (www.imbewu.co.za) is a specialist sustainability legal consultancy providing professional legal consultancy services in the area of environmental, health & safety and climate change law. IMBEWU runs a Climate Change and CDM Specialist Consultancy Unit with the greatest depth of expertise and experience in the South African carbon market. IMBEWU collaborates with Warburton Attorneys (www. warburtons.co.za) in providing CDM project development and contract advice to clients. This article should not be regarded a comprehensive discussion of the topics addressed, and should not be taken as legal advice or relied upon. Those seeking to participate in climate change-related activities are advised to seek specific legal advice. Contact: andrew@imbewu.co.za 2 5 o i n A fr i c a

climate change

Another 800 MW of geothermal energy for Kenya The Geothermal Development Company (GDC) has called for tenders for eight 100 MW geothermal power plants (a total of 800 MW of geothermal electricity) in the Silali-Bogoria Block. According to GDC, this geothermal-rich block has an estimated potential of 3 000 MWe, of which they will be developing 2 000MW in four phases. The first 800 MW phase is expected to reach the grid by 2017. In January 2012, GDC will start to drill the planned 200 wells. GDC will shortlist potential investors who will develop eight 100 MW geothermal

power plant units. Investors will also have an opportunity to install well-head generators as the drilling continues. The investors will be required to finance, design construction, operate and maintain the power plants. GDC on its part will undertake resource development and management – the development of civil infrastructure, exploration and appraisal drilling, feasibility studies, production drilling, reservoir, condensate and brine system management. GDC will require the selected investors to be partners in financing the steam development. Funds obtained from the investors will be a loan to GDC, which will be repaid from steam sales revenues. Investors are invited to submit proposals – the shortlisting is expected to be completed by September 2011 and the selection of preferred investors will be completed by December 2012. Interested parties need to raise at least US$400-million for each 100 MW development, supported by letters of credit from credible financial institutions. The Silali-Bogoria Block comprises of the Baringo, Bogoria, Paka, Arus, Chepchuk, Korosi and Silali geothermal fields.

The search for geothermal energy started in 1957, but it only yielded a paltry 202 MW against a massive potential of 7 000MW. In 2008, the 100% state-owned Geothermal Development Company (GDC) was created as a “Special purpose vehicle to fast-track the development of geothermal energy” due to the speed of harnessing geothermal resources being too slow. The Kenyan government’s forecast (in Kenya Vision 2030) is to generate 15 000MW of which the geothermal sector is projected to provide more than 5 000MW (currently, electricity generation in Kenya stands at a mere 1 350MW).

For more information, visit www.gdc.co.ke, to which full acknowledgement and thanks are given.

25 o in Africa

c li m ate c h ang e

National climate change response

Green Paper During the Gauteng public consultation workshop on South Africa’s draft Green Paper, the then Environmental Affairs director general Joanne Yawitch urged the public to comment on the national climate change Green Paper.

“South Africa is good with generating policies and strategies, but we struggle with implementing them. Industry and government need to clarify roles, financing, budgets and targets in order to ensure a long-term action plan towards a sustainable future,” said Yawitch.

Green Paper includes a bit on rural small-scale food growers, and speaks of disaster management and technological changes in agriculture, but does not focus sufficiently on food security,” said Naudé. “We believe that in order to reflect the urgency of responding to climate change and moving to a climate-resilient, low carbon economy, the coming White Paper should accelerate South Africa’s response by providing more specific plans, mechanisms and targets than the Green Paper does,” said Naudé.

“The draft Green Paper isn’t an environmental Green Paper – it’s a governmental Green Paper with inputs from all the sectors. It is the result of six years of work, not the beginning of another extended process. We are here today to clarify and engage – not to defend it,” said Yawitch at the Gauteng workshop, which marked the final leg of nationwide public process. The workshops were coordinated by the Department of Environmental Affairs on behalf of the government and representatives from various sectors and companies, such as Earthlife, WWF SA, Eskom and Necsa, were present.

In Section 8 of the Climate Change Response Strategy adopted in 2004, a key recommendation was the development of plans, elaboration of policy and so forth. This Green Paper provides for the Department to “… define review mechanisms as well as process towards a further elaboration of this policy into regulatory and legislative instruments” (Section 9 page 23).

During the proceedings, Eskom’s sustainability manager, Mandy Rambharos, commented that the Green Paper didn’t acknowledge the vulnerability of the electricity sector. “Extreme weather events could lead the energy sector to be unable to supply electricity to the country. Other climate change issues, such as water supply shortages, could mean that Eskom won’t be able to generate electricity. It’s not an issue of asking for money, but there is a need for more to be said about the energy security in the face of climate change,” said Rambharos. Louise Naudé, National Climate Change Officer at WWF South Africa, commented that there was a gap in the Green Paper on food security. “The

“South Africa cannot afford further deferral of concrete plans and institutional development to ensure a coherent and coordinated response to climate change. We believe that in order to reflect the urgency of responding to climate change, the coming White Paper should accelerate South Africa’s response by providing more specific plans, mechanisms and targets than the Green Paper does. Many of our comments are thus directed at contributing more specificity,” says Naudé. Yawitch explained that the government was looking into holding “expert workshops” for specific areas where gaps and inadequacies existed. “One of the main goals of the Green Paper is to establish what the country’s position on climate change is before we start engaging on international levels, which will increase in intensity from the middle of the year, so that we have a clear view of what can be achieved at the COP in Durban,” said Yawitch. 2 5 o i n A fr i c a

climate change

A six-year process The long-awaited Green Paper was first scheduled to be released in 2009, but was eventually released at the end of 2010. The Green Paper is the result of a six-year process, which began in 2004 with the national climate change response strategy. “In 2005, the National Climate Change Conference brought 14 ministers and South Africa’s deputy-president together, which served as a key political statement regarding our county’s position on climate change,” said Yawitch. In October 2007, the draft Long Term Mitigation Strategy was released and in July 2008, this strategy was taken to Cabinet. In March 2009, the Climate Change Policy Summit was held and South Africa brought reduction targets to the table at the UNFCCC Conference of the Parties in Copenhagen. In May 2010, the policy development round table was held and the Draft Green Paper was eventually published in November 2010.

SA needs to prioritise adaption strategies Yawitch also commented that the industry has been largely focusing on greenhouse gas mitigation strategies, but that more adaption strategies need to be prioritised. “The Department felt we needed to do some sort of prioritisation with regards to adaptation strategies and we have prioritised water, agriculture and health as immediate threats,” said Yawitch.

World Bank’s innovative

reconstruction & disaster recovery

competition The World Reconstruction Conference (WRC), together with the Global Platform for Disaster Risk Reduction, will host a global innovation competition. The WRC is organised by the World Bank and the United Nations. Open to individuals, teams and companies, the competition is looking for new approaches to disaster recovery and reconstruction. “New and innovative ways of addressing challenges in disaster recovery and reconstruction play an important role in natural disasters,” reads the competition on the conference’s website (www.wrc-2011.org). The aim is to showcase new solutions developed in the wake of disasters, develop awareness for their use in other and future recovery operations

25 o in Africa

“We as a country need to accept that our emissions will peak during 2020 – 2025, plateau up until 2035 and then only start to decline,” said Yawtich while referring to work derived from the Long Term Mitigation Scenario. At COP15 in Copenhagen, South Africa pledged to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025 below business-as-usual levels (conditional on financial and technical capacity). “We need to break this down to an understanding of what mitigation needs to happen in which sectors of this country. We need mitigation to promote development and competitiveness, which will create jobs and alleviate poverty. We also need to invest in climate change modelling to measure and predict the impacts of climate change. The government sees energy, transport and industry as key sectors where mitigation needs to be promoted,” said Yawitch. One of the issues raised by a youth agriculture ambassador was that the language surrounding climate change and the public process wasn’t accessible to people who were most severely affected by climate change. “We don’t have websites and we have to travel far to attend these workshops. The language used in the Draft Green Paper isn’t accessible to the poorest of the poor,” said one representative. All comments on the draft Green Paper, which can either be submitted via the website, hand-delivered, posted to the Department of Environmental Affairs or made at the public workshops, will be reviewed between February and April. It is likely that the government will host a final national conference in March and that the draft White Paper will be submitted to Cabinet by June 2011. To view the national climate change response draft Green Paper online, visit www.environment.gov.za.

and provide a space to build partnerships to address key challenges in scaling up and replicating. Sectors of interest include (but are not limited to) housing, water and sanitation, energy, environment, governance and health. The competition is being held from February to May 2011 as an integral part of the World Reconstruction Conference and Global Platform for Disaster Risk Reduction, which will be held on 10-13 May in Geneva, Switzerland. The most innovative submissions will win a chance to be presented at the World Reconstruction Conference on 11 May with a free roundtrip to Geneva and hotel accommodation. For more information, visit www.wrc-2011.org, to which full acknowledgement and thanks are given.

c li m ate c h ang e

2 5 o i n A fr i c a

O IL AND GAS

Engen buys Chevron oil assets in Mauritius and Tanzania The African downstream petroleum marketer Engen has purchased operations from Chevron in Africa – Mauritius and Tanzania. This acquisition, which was finalised on 31 January, is part of the company’s expansion programme in a batch of seven agreements to acquire some of Chevron’s interests in sub-Saharan Africa and the Indian Ocean islands. South African-based Engen has already taken over Chevron’s interests in Reunion, Malawi and Zambia, and the company still has to conclude its acquisitions in Zimbabwe and Mozambique. With this batch of acquisitions, Engen has grown its footprint to 22 countries in the region – representing a giant stride forward in its goal to be a major regional player in terms of its 10-year corporate growth strategy, EPIC 2016. Chevron imports about 70% of Tanzania’s petroleum products. “These acquisitions represent major progress in our vision for mutually-beneficial sustainable growth in the region,” says Nizam Salleh, Managing Director

and Chief Executive Officer of Engen Petroleum Limited. “It is an enormous boost to our plans, and we hope to make a meaningful contribution to the region’s economic and industrial development.” Wayne Hartmann, the International Business Division Manager at Engen, says the company will take over Chevron’s retail networks and commercial operations in the three countries and will embark on the re-imaging of service stations as soon as it is practicably possible. Hartmann assures staff, motorists and business partners that the business operations, retail and commercial networks, logistics and storage arrangements will continue as before. “Operations will carry on trading as going concerns, existing staff and relationships will be retained, and in-country supply plans have been developed to ensure uninterrupted product and service supply,” said Hartmann.

What Engen is buying Mauritius

Malawi

Tanzania

Reunion

28 service stations, commercial relationships, aviation facilities, lubricant sales

16 service stations, commercial relationships, lubricant sales

Commercial relationships, lubricant sales

32 service stations, commercial relationships, lubricant sales

Zambia

Zimbabwe

Mozambique

24 service stations, commercial relationships, lubricant sales

17 service stations, commercial relationships

Commercial relationships

For more information, visit www.engen.co.za, to which full acknowledgement and thanks are given.

chevron ordered to pay $8-billion for dumping oil in the amazon The oil giant Chevron has been ordered to pay over US$8-billion in damages for polluting in Ecuador between 1964 and 1990. The award, which was granted on 14 February 2011, is one of the largest environmental damages claims ever given, but Chevron feels the claim is illegitimate. “The Ecuadorian court’s judgement is illegitimate and unenforceable,” said Chevron in a statement referring to Judge Nicolas Zambrano’s decision. “It is a product of fraud and is contrary to the legitimate scientific evidence.” The Ecuadorian Amazon communities have been involved in an ongoing legal battle with oil giants for over 17 years. The Ecuadorians

25 o in Africa

originally filed a US$27-billion claim in 1993, alleging that Texaco (which was later acquired by Chevron) dumped billions of gallons of toxic waste into the Amazon. According to the 188-page ruling, Chevron is responsible for damages of about US$8.6-billion (and perhaps double that amount if Chevron fails to publicly apologise for its actions within 15 days). A landmark decision David M. Uhlmann, an expert in environmental law at the University of Michigan, said the award against Chevron “is one of the largest judgements ever imposed for environmental contamination in any court”. “It falls well short of the US$20-billion that BP has agreed to pay to compensate victims of

the gulf oil spill, but it is a landmark decision nonetheless. Whether any portion of the claims will be paid by Chevron is less clear.” The decision has opened a new stage of legal battles as both sides have said they would appeal against the ruling. Chevron has said that earlier rulings by international courts and the US will bar enforcement of Judge Zambrano’s decision.The new appeals will set the stage for months and potentially years of more legal wrangling in a case that is closely watched. According to legal experts, the size of the award and the attention the case is getting will likely encourage similar law suits in the future. Sources: www.nytimes.com

OIL AND GAS

Reality check for oil & gas in 2011 & beyond Despite significant progress in developing renewable and other alternative energy sources, and despite the US$35-billion liability that petroleum giant BP’s Deepwater Horizon spill caused early last year, deep-water drilling continues. In a report by financial advisory firm, Deloitte Touche Tohmatsu’s Global Energy & Resources group, entitled 2011 Oil & Gas Reality Check, Deloitte says that oil and gas will constitute most of the world’s energy supply over the next 25 years. “Although increased regulatory scrutiny will be the norm going forward, oil and gas companies are demonstrating the same zeal as before, although they will need to further quantify the risks,” reads the report. BP’s oil spill only temporary pause in oil industry “The tragic Deepwater Horizon blowout accident and subsequent oil spill have given the industry pause, but only a temporary one. As many nations struggle to boost their domestic supplies of oil and gas, they are likely to give the go-ahead for more deepwater exploration and production even in the light of recent events,” says the tax and audit company. While deepwater drilling will go on, many industry observers believe there will be differences. Oil and gas producers around the globe are now re-examining their safety policies in an effort to ensure sustainable operations. Besides identifying and quantifying environmental, health and safety risks, it also entails establishing ultimate accountability and clear roles for responsibility. Insurance issues In the wake of the Deepwater Horizon explosion, global energy premiums have increased up to 30% (Julia Kollewe, “Insurance Costs Set to Soar After Gulf Oil Spill”, The Guardian). Deloitte says that some analysts and underwriters believe that annual aggregate limits of US$10-billion to US$20-billion are now needed for offshore oil exploration and production companies. “These amounts are much higher than the available limits under individual liability policies. This suggests that a new model involving multiple insurers and reinsurers is now required. One possible structure includes a consortium of insurers and reinsurers, each providing uniform prices and conditions and a fixed capacity,” reads the report. Another option is a model that the nuclear industry has used for many years – a member-owned mutual insurance companies. Oil companies not focusing on alternative energy Despite widespread concern about climate change, the future of fossil fuels continues to burn brightly. The United Nations projects that the

world population will increase by two billion people by mid-century. Simultaneously, up to three billion people in developing nations will have bought cars and adopted middle-class consumption patterns by 2030 (according to the United Nations). “Executives and policymakers expect alternative energy sources to increase their market share over time. While many oil and gas producers agree with this concept, a perception is emerging that the pace of this growth will be much slower than originally thought.” “There is also a growing awareness among oil and gas producers that many of the manufacturing capabilities needed for renewable energy production are beyond their scope. Consequently, an increasing number are leaving alternative energy to specialist producers and instead focusing on what they do best: locating, producing and processing hydrocarbons as efficiently as possible. To this end, some are quite satisfied with being a ‘bridge to the new energy economy’, especially since this bridge may be longer and sturdier than expected,” says Deloitte. • Saudi Aramco is growing its reserves and is aiming to raise recovery rates from major oil fields to twice the global average as part of efforts to meet future energy demand. • Qatar is bolstering its natural gas production capacity and LNG infrastructure to meet the rising demand from Asia and elsewhere. • Suncor Energy expects production from Canada’s oil sands to be more than double in the next decade to nearly three million barrels a day. Even after the Obama administration, which wants to spend US$150-billion over the next decade to create a “clean energy future”, it’s questionable whether oil companies have been making the necessary changes. “In my view, nothing has really changed,” said Rex W. Tillerson, chief executive of Exxon Mobil, after the election of President Barack Obama in the United States (www.nytimes.com). “We don’t oppose alternative energy sources and the development of these. But to hang the future of the country’s energy on these alternatives alone belies reality of their size and scale,” said Tillerson. An article in the New York Times points out that although oil companies run advertisements about their interest in new forms of energy, the bulk of their investments still goes to petroleum resources. “The scale of their alternative investments is so mind-numbingly small that it’s hard to find them. These companies don’t feel they have to be on the leading edge of this stuff,” Nathanael Greene, a senior policy analyst at the Natural Resources Defense Council, told the New York Times. Sources: www.deloitte.com and www.nytimes.com

2 5 o i n A fr i c a

O IL AND GAS

JOINT

cooperation on removal of

carbon dioxide from natural gas

New technology enables energy and cost reduction in the removal of carbon dioxide from natural gas under high pressure. This was the result of successful cooperation between the Japanese companies JGC Corporation and INPEX jointly with BASF SE. The performance of this new gas treatment technology enables a reduction of 25-35% in the cost of CO2 recovery and compression.

Alternatively the CO2 can be injected underground for storage after separation from the natural gas. To do that, the CO2 must first be compressed above its high pressure. This has to date required an additional high energy input, which the new process can reduce significantly. The process uses a solvent that is not affected by high pressure levels and elevated temperatures during regeneration, so it remains stable and intact during the capture process.

The so-called “high pressure acid gas capture technology” (HiPACT) was developed by JGC and BASF. The tests for the technology commenced in August 2010, at INPEX’s Koshijihara natural gas plant, one of the largest plants of this type in Japan, located in Nagaoka city. “We greatly appreciate the involvement of INPEX, allowing us to test the new technology in a commercial natural gas plant. Targeting demand in the market, we successfully demonstrated an excellent energy-saving performance,” said Mr Takashi Yasuda, Executive Officer and Senior General Manager of the research and development division at JGC. “INPEX strives to reduce energy consumption as much as possible. This new technology offers a great opportunity to improve energy conservation. It also reduces our carbon footprint and helps to curb greenhouse gas emissions,” added Mr Kazuo Yamamoto, Executive Officer and VicePresident of the technical division at INPEX. “This test was a critical milestone in the commercialisation of a new technology for which the market has been looking for some time,” said Dr Andreas Northemann, head of the Gas Treatment Solutions business unit within BASF’s intermediates division. Saving energy in the removal of carbon dioxide Natural gas, an increasingly important source of energy, often contains CO2 when it is extracted from the well. Most of this CO2 is usually removed directly at the natural-gas source. The removal is achieved by means of an amine-based solvent developed by BASF. The solvent temporarily absorbs the CO2 from the high-pressure natural gas stream, and is then regenerated at low pressure and fed back to the process, but this regeneration requires energy. Traditionally the CO2 released in the regeneration process has been emitted to the environment.

25 o in Africa

Thus, the new technology can be operated at a higher pressure. This reduces the cost of compressing the CO2 for underground re-injection. Moreover, the solvent, which has an excellent CO2 absorption capability compared to the existing solvents, enables reduction of the solvent regeneration energy. BASF Holdings South Africa (Pty) Ltd Tel: +27 11 203 2422 Fax: +27 11 203 2430 E-mail: petra.bezuidenhout@basf.com Website: www.basf.co.za

OIL AND GAS

PetroSA sketches gas strategy PetroSA acting CEO Everton September told members of Parliament’s energy portfolio committee that its main concern is finding enough gas to keep its Mossel Bay gas-to-liquid refinery running. The plant currently produces approximately 5% of South Africa’s fuel needs, but its latest annual report shows that gas production from fields offshore in the southern Cape has declined over the past year. “We are looking at developing new gas fields to extend the refinery’s operations until at least 2020,” said September, before adding that PetroSA is pursuing a four-part strategy – consisting of production optimisation and the development of new fields – to make the Mossel Bay refinery sustainable. One of the new fields that is being developed, includes the so-called F-O Field. According to September, production from the field is expected to start in 2013 and gas will flow from here to the refinery through pipelines tied back into its main platform, about 80km offshore from Mossel Bay. September also addressed MPs’ concerns about Project Mthombo – PetroSA’s plan to build a crude oil refinery within the Coega Industrial Development Zone in the Eastern Cape. The project will be capable

of producing 360 000 – 365 000 barrels per day and is likely to cost approximately $US11-billion. “The cost is obviously related to the size of the plant,” said September. One of the documents presented at the briefing warned that the global recession had led to “a wave of refinery rationalization” that may impact on South Africa, which currently imports about 70% of its crude oil for refining through Durban. “We believe a refinery in Coega could address a growing supply gap,” said September. Nkosemntu Mika, the chief financial officer at PetroSA, told the committee that the intention with Project Mthombo has always been to find a strategic partner. “One of the requirements of bringing in a strategic partner would be that the partner must have to have access to feedstock. Secondly, they must bring in the technical know-how,” commented Mika. Sources: SAPA and TimesLive

More SA businesses converting to piped-gas energy solutions A KwaZulu-Natal based pipeline gas company, Spring Lights Gas, has entrenched itself into the energy market since its inception in 2002. The company has supplied piped-gas solutions to a variety of industrial customers in the region of south Durban and it is currently partnering with activist industrials in Pietermaritzburg, Newcastle, Richards Bay, Phoenix and Verulam. The CEO of Spring Lights Gas, Motsamai Koapeng, says that the company’s continuous growth can be attributed to a number of factors, including uncertainties in the supply of power and companies looking for ways to reduce their carbon footprint while enjoying the benefits of a complete energy solution. “Pipeline gas can be used for various applications in different industries, such as metal, chemicals, food, ceramic and manufacturing as a primary energy source. Various large companies from a myriad of sectors have realised the significant role that energy plays in their business and have converted to pipeline gas in for a superior and reliable energy source,” says Koapeng. Koapeng explains that giving customers high-quality products and solutions is vital in the piped-gas industry. “Our goal is to ensure that our installations and products are reliable in order not to compromise our customers’ products and operations. We also offer tailored technical services before and after the gas installation, such as safety training for our customers who will be working with the gas application. We are in the process of converting a number of companies to gas – we are excited about these opportunities

Dr Johan van Zyl – CEO and President of Toyota SA Motors hands over the award to Motsamai Koapeng , CEO of Spring Lights Gas.

because it proves that the local industry is continuously realising the value that gas brings to its business,” concludes Koapeng. Spring Light Gas Tel: +27 31 266 3865 Fax: +27 31 266 4688 E-mail: info@slgas.co.za Website: www.springlightsgas.co.za

2 5 o i n A fr i c a

rene wab les

Ekurhuleni

approves ZAR500-million for solar-water heaters Thousands of people living in the Ekurhuleni Metropolitan region will benefit from warm water that has been heated by the sun. In February 2011, the Ekurhuleni Municipality approved ZAR500-million to install low pressure solar-water heaters to households that have benefited from the government’s low-cost housing programme (www.allafrica.com). The specific areas that are targeted include Daveyton, Etwatwa, Duduza, Kwa-Thema and Tsakane.

The national programme aims to get one million solar-water heaters set up in homes across South Africa by 2014.

The programme, which started in the first quarter of 2011, will run over three years. The municipality aims to reduce poverty levels by helping residents to save on energy costs, while at the same time contributing to the reduction of carbon emissions.

“By switching to solar-water heating, each of the households in these areas could drastically help to reduce carbon emissions. A 150-litre solar-water heater, which is adequate for two to three people, can save 4.5 kilowatt-hours of electricity per day, or 1.6 tons of carbon dioxide,” commented Gungubele.

This solar-water heater roll-out in the Ekurhuleni Municipality is part of the national solar water heating programme that was launched in April 2010.

“The roll-out of low pressure solar-water heaters to low-cost house owners speaks to the core of our efforts to save expenses in respect of the purchasing of electricity, thereby dealing with poverty and underdevelopment,” said Ekurhuleni executive mayor Mondli Gungubele.

Source: www.allafrica.com

Kenya grants approval for

wave energy power plant In February, SDE Energy announced that Kenya’s Ministry of Energy had granted official approval for them to build a 100 MW power plant on the Kenyan coastline. The plant will be powered by wave power and will be the first of its kind in East Africa.The power plant will be constructed in conjunction with the indigenous firm Sea Wave Gen. The production cost of the electricity will be US$0.02 per 1KW and the produced energy will be bought by the local electric company KPLC with a tariff of US$0.08 per 1KW. “Sea wave energy production is an innovative technology with great potential,” said SDE’s managing director, Shmuel Ovadia. “The waves are created as a result of the winds on the surface of the ocean. Energy production is due to a variety of factors,” said Ovadia. Tel Aviv-based SDEs claims their sea wave energy production has the highest efficiency rate and the lowest installation cost. To date, the

25 o in Africa

company has built eight models that have operated successfully. “The system is considered as the most efficient and offered a competitive price – the price for construction of a 1MW power plant operated by SDE amounts to US$650 000, compared to costs amounting to US$1 500 000 for coal, US$900 000 for gas, US$3 000 000 for solar energy, and $1 500 000 for wind power. SDE offers a rate of 2 cents per kW, compared to 3 cents for coal, 3.5 cents for gas, 12 cents for solar energy, and 3.6 cents for wind power,” said Globalenergymagazine.com. Waveenergytoday.com reported that the cost of the project is US$100-million and the expected revenues from the electricity sold are estimated to be about US1-billion. SDE has also started negotiations with global institutions for insuring the project and providing financial guarantees. Sources: www.globalenergymagazine.com, www.waveenergytoday.com.

renewa b les

New report expects

global wind turbine market to grow by 18% in 2011 MAKE Consulting’s Market Outlook 2011 predicts that the global wind turbine market will expand in 2011, with an estimated growth of 18%, after the global growth in new grid connected wind capacity slowed down in 2010. The report, which was released in March 2011, says that approximately 34 GW of wind-generated power came online in 2010 (3.5% more than in 2009). However, not all wind markets fared equally well. Offshore wind had a banner year, bringing a record 1.2GW online, and accounting for 3.6% of global installations. Nearly half of global installations in 2010 were in China and India, eclipsing the growth rates seen in the North American and European markets. • “Some markets – particularly the US – finally showed in 2010 the full damage brought on by the global recession,” says Steen Broust, director at MAKE Consulting. “But drops in some markets were balanced by growth jumps in other markets. Global growth is set to resume in 2011, but the global wind market is seeing shifts in demand, and strategic positioning in the market to capture growth will be key for companies in this sector in coming years,” says Broust.

• • • •

The report provides a global forecast of annual installations of new gridconnected wind power capacity from 2011 to 2016, based on the analysis of 45 key and emerging wind markets. Some of the key findings of Market Outlook 2011 include: • Based on 2010 installations, MAKE predicts that the global wind market will grow with a CAGR of 11% in the period 2011-2016, with China which

is expected to lead this market growth. Emerging markets, as well as offshore wind power, are expected to gain in strategic importance. Asia Pacific markets are expected to account for more than half of the market growth in 2011, with China and India leading the region. The Americas, Canada, Brazil and Mexico are expected to see significant growth in 2011. Near-term growth in Asia Pacific and the Americas is expected to outpace Europe. Installation levels in Europe are expected to witness positive growth, with the slow-down in mature southern-European markets offset by continued high activity levels in the emerging markets of southern and eastern Europe. With a few offshore projects to reach completion in Europe in 2011, European offshore installations are expected to reach 2010 levels.

For more information, visit www.make-consulting.com, to which full acknowledgement and thanks are given.

2 5 o i n A fr i c a

Nuclear

Japan’s nuclear meltdown Japan was ravaged by an 8.9 magnitude earthquake and subsequent tsunami on 11 March 2011. Besides the massive destruction and death toll in the country, Japan was almost immediately forced to deal with a nuclear crisis. The reactors at the Fukushina Dai-Ichi Nuclear Power Plant shut themselves down, as they were supposed to do after the natural disasters, but the cooling systems of the reactors were compromised after two hydrogen explosions. The electrical systems that provide electricity to cool the nuclear reactor were knocked out in the earthquake, and the dieselpowered back-up system also failed.

Japan’s Nuclear and Industrial Safety Agency (NISA) reported that about 185 000 residents had been evacuated from the towns listed below since 13 March. US evacuating military fleet Three days after the catastrophe, the US Seventh Fleet announced that it had moved its ships and aircraft away from the nuclear power plant after discovering low-level radioactive contamination. According to Associated Press, the fleet said that the radiation was from a plume of smoke and steam released from the plant.

Authorities maintained an emergency shutdown at the site and US President Barack Obama directed Energy Secretary Steven Chu to “provide any assistance that’s necessary, but also to make sure that if in fact there have been breaches in the safety system on these nuclear plants, that they’re dealt with right away”. NHK, the national broadcaster, said it was the first time that a nuclear-emergency evacuation order had been issued in Japan.

The aircraft carrier USS Ronald Reagan was approximately 160 km offshore when its instruments detected radiation (the dose of radiation was about the same as one month’s normal exposure to natural background radiation in the environment).

Japanese authorities informed the International Atomic Energy Agency (IAEA) that reactors Units 1, 2 and 3 of the plant were in cold shutdown status (on 15 March) and that teams of experts from Tokyo Electric Power Company (TEPCO), the plant’s operator, are working to restore cooling in the reactor Unit 4 and bring it to cold shutdown.

Until the disaster, many country leaders believed that nuclear energy offered a large part of the answers to electricity issues and climate change. Towards the end of 2010, South Africa’s Minister of Energy confirmed that nuclear power will be part of the country’s future power mix, along with renewable energy and coal. National Planning Commission member Bobby Godsell also told delegates at a public discussion on energy that “as much as 50% of South Africa’s electricity could be comprised of nuclear energy. Between 10 000 and 20 000 megawatts of the possible 40 000 megawatts the country would need in the future could come from nuclear energy.”

The IAEA offered its Good Offices to Japan – making available the agency’s direct support and coordination of international assistance – which the Japanese government accepted on 15 March.

New uncertainties for the nuclear industry

How nuclear reactors work

Both water and fuel rods made of zirconium and pellets of nuclear fuel (such as uranium) are contained in the core of a nuclear reactor. These liquids set off a controlled nuclear reaction which heats the water, creating a 550-degree Fahrenheit (287.78 Cº) steam that powers the turbine and creates electricity. What is a meltdown? The fuel rods can crack and release radioactive gases if the core of the nuclear reactor gets too hot. In a partial meltdown, only some of the r eactor core or fuel melts, but in the worst case scenario, the fuel pellets can melt and fall to the reactor floor, where the hot, radioactive material may be able to eat through protective barriers and reach the surrounding environment. Why the cold shutdowns in Japan? The reactors at the Fukushina Dai-Ichi Nuclear Power Plant are designed to automatically turn off if a disaster disrupts the electric grid. The shutdown process at the plant worked properly, but even with the shutdown, the fuel still had tremendous heat. The diesel-powered back-up generators are supposed to kick in to cool the fuel, but this system failed in the tsunami that followed the earthquake. Source: www.wsj.com

25 o in Africa

But this confidence may have evaporated as quickly as confidence in Japan’s crippled nuclear reactors – and now many governments and leaders are watching the drama unfold. “I think it calls on us here in the US, naturally, not to stop building nuclear power plants, but to put the brakes on right now until we understand the ramifications of what’s happened in Japan,” said Senator Joseph I. Lieberman, an independent member of Connecticut and of the US Senate’s leading voice on energy on CBS’s “Face of the Nation”. Lieberman noted that the Federal Emergency Management Agency (FEMA) had in recent years upgraded contingency plans for nuclear power plants in the event of a natural disaster and that the crisis in Japan could be instructive in preventing a future crisis (www.cbsnews.com). “We’ve got 104 nuclear power plants in America now. I was informed this morning that about 23 of them are built according to designs that are similar to the nuclear power plants in Japan, which are now the focus of our concern,” said Lieberman. “I’ve been a big supporter of nuclear power because it’s domestic, it’s ours and it’s clean. We’ve had good safety with nuclear power plants here in the United States. . . I don’t want to stop the building of nuclear power plants, but I think we have got to kind of quietly, quickly put the brakes on until we can absorb what has happened in Japan as a result of the earthquake and the tsunami and then see what more, if anything, we can demand of the new power plants that are coming online. What this horrific natural disaster in Japan has to do for all of us is to go back and look at our preparedness for such a catastrophe,” said Lieberman. SA has “nuclear safety culture” – Eskom Commenting on Japan’s nuclear crisis, Eskom’s spokesman for nuclear power, Tony Scott, told SAPA that South Africa is “well-equipped” to have nuclear power stations and has a “nuclear safety culture”. “Clearly we will be looking at what actually happened in Japan, but South Africa has a nuclear safety culture because of the Koeberg power station,” said Scott. “Nuclear power is certainly complex. It requires management depending on the level of risk, but the level of risk in nuclear is low. How many people are killed on the roads every day compared to people killed in the nuclear industry? Obviously if something does go wrong in the nuclear industry the consequences are enormous,” continued Scott. Could this happen in SA? “This is an extremely serious nuclear accident that unfortunately poses as a stark reminder and warning of the inherent dangers and risks of nuclear power,” said Tristen Taylor from Earthlife SA in a statement on 13 March.

Populations of evacuated towns near affected nuclear power plants Hirono-cho

5 387

Naraha-cho

7 851

Tomioka-cho

15 786

Okuma-cho

11 186

Futaba-cho

6 936

Namie-cho

20 695

Tamura-shi

41 428

Minamisouma-shi

70 975

Kawauchi-mura

2 944

Kuzuo-mura

1 482

Total

184 670

Source: www.iaea.org

new nuclear stations in the world use the pressurised system,” said Scott, before adding that Eskom was familiar with pressurised water reactors and would want to stick with that design for future nuclear power stations in the country.

“We cannot discount the risk that exists at the Koeberg power station. Only last year, 91 workers at Koeberg were exposed to excess radiation,” said Taylor.

“We also know that if we do build more, we would buy modern technology, and certainly the events that happened would be looked at and taken into account to see what technology should be used,” said Scott.

Scott explained that Japan’s Fukushina Dai-Ichi Nuclear Power Plant used boiling water reactors, whereas South Africa’s Koeberg uses pressurised water reactors. “About 70% of all

Sources: CBS News, Earthlife, SAPA, Eskom, IAEA, TimesLive 2 5 o i n A fr i c a

nuclear ener gy

International firms cause unrest over uranium in Niger The Azelik mine in Niger produced its first barrel of uranium just before the New Year. The mine, which is 32.7% owned by China Uranium Corp, a unit of China National Nuclear Corp (CNNC), will be the first overseas uranium deposit developed by China once it goes into full operation later in 2011. “The Niger project would produce 700 tonnes per year,” said Chen Yuehui, Deputy-General Manager of China Uranium Corp. The trial operation at Azelik began on 10 December 2010, with the first barrel being produced on 30 December. CNNC previously stated that it hopes to raise production at Azelik, which has reported resources of 13 000 tU at 0.2%, to 2 500 t/yr by 2015 and double that by 2020. On 28 January 2011, Russia’s Gazprombank were awarded the rights to explore and produce uranium in two mining blocks (Toulouk 2 and Toulouk 4) in the northern Agadez region. France’s Areva is Niger’s biggest uranium player, but the country’s resources have also attracted investments from minerals and energy firms in Canada, China, Australia and elsewhere. Unrest at the mine The Tuareg women of Azalik declared war on China when the government leased their land to the China Nuclear International Uranium Corporation (www.wise-uranium.org). The women, who sold salt from an ancestral well in the area, gathered to launch stones at mining machinery.

“Now it is eternal war,” says Tinatina Salah, their 50-year-old leader, who still seeks compensation for the loss of her salt. The largely Tuareg rebel organisation Movement of Nigerians for Justice (MNJ) was unhappy when Nigerian President Mamadou Tandja awarded a fresh round of exploration and operating permits for uranium, gold, silver and oil in the desert of northern Niger. Despite the large amount of money pouring into the country, MNJ accuses Tandja’s administration and mining companies of neglecting development in the north. The group wants local people to have greater control over resources. Uranium in Niger The first uranium discovery at Azelik was made in 1957 by the French Bureau de Recherches Geologiques et Minières (BRGM), looking for copper. Uranium has been produced in Niger since the early 1970s, and its two major operating uranium mines – Arlit and Akouta – provide 7.5% of the world’s mining output from Africa’s highest-grade uranium ores. Niger is the world’s third to fifth-ranking producer of uranium. In 2005, the country produced 3 434 tU, and cumulative production from the country passed 100 000 tU in November 2006. About 56 000 tU of this has been from underground and 44 000 t from open pit. Arlit and Akoka are both 900 km northeast of the capital Niamey (more than 1 200 km by road) on the southern border of the Sahara desert and on the western range of the Air mountains. The concentrates are exported for conversion, mostly to Comurhex in France. Sources: www.cnnc.com.cn, www.af.reuters.com, www.wise-uranium.org, www.vaec.gov.vn.

net in africa

AFRICA’S INDEPENDENT ENERGY PORTAL

HAVE YOU JOINED OUR ONLINE COMMUNITY? 250 in Africa has extended its online presence, visit www.25degrees.net WHAT CAN YOU EXPECT?

ADVERTISING OPPORTUNITIES

• • • • • •

•

Latest magazine content Insightful articles & live news feeds Interactive content, including forums & blogs Energy events Products Reports

• • •

Gain valuable exposure in front of a community of experts and professionals. Become a featured company Participate in a company directory Advertise your products and events online

25 o in Africa 34 SUBSCRIBE NOW! To subscribe to 25degrees.net’s insightful newsletter Email your details to admin@25degrees.net

n u c lear energ y

Clear signals that

Japan’s reactors were in trouble

Frost & Sullivan

Frost & Sullivan’s nuclear expert, Enguerran Ripert, commented today on the energy crisis in Japan following the earthquake and tsunami. “The hydrogen blasts at Japan’s Daiichi 1 and 3 reactors located in the Fukushima province gave clear signals the reactors were in trouble. The explosion created by the exposure of fuel rods to the air, which increased the temperature of the core and set fire to hydrogen, split the outmost structure of the Daiichi 1 and Daiichi 3 reactor, but did not damage the pressure vessel. The water level, which normally covers the fuel rods completely, was too low due to a system failure in the class 1 pumps caused directly by the earthquake tremors. The tsunami, then flooded the backup circuit and generators normally used to stabilise the flow of water, and keep the cooling operational. The sea water now used to increase the water level in the reactors will lead to heavy corrosion within the reactor, and put it out of use indefinitely. These reactors, built in the 70s, were due for retirement but could have gone on for another 5 years. Despite the spectacular blast, the level of radiation is 10 to 15 times below legal limit, and the damage to internals is extremely limited. Rather than an imminent meltdown, it is the cost of repairs, and the indirect cost of a dramatic loss of power supply which Japan and the rest of the world will suffer the consequences of. Currently, major companies such as Toyota, Sony, Matsuchita and Nissan amongst many others, have had to halt their

production for a lack of available electricity. Japan already has very little room to manoeuvre as real interest rates are very close to zero, and its exposure to re-insurance risk is very high, which will likely drag the global economy down with cost repercussions extended to the next 2 to 3 years”.

The hydrogen blasts at Japan’s Daiichi 1 and 3 reactors located in the Fukushima province gave clear signals the reactors were in trouble. If you would like to interview Enguerran Ripert, please contact Chiara Carella, Head of Corporate Communications: Europe, Israel, Africa at +44 (0) 753 301 7689 or e-mail her at chiara.carella@ frost.com. Frost & Sullivan Tel: +27 21 680 3566 Fax: +27 21 680 3296 E-mail: christie.cronje@frost.com Website: www.frost.com 2 5 o i n A fr i c a

nuclear ener gy

While we often read about the potential of nuclear energy to solve global warming and energy security problems, we rarely read about the nuclear industry’s expensive history of taxpayer subsidies and charges to utility ratepayers. “These subsidies not only enabled the nation’s existing reactors to be built in the first place, but have also supported their operation for decades,” said a report by the Union of Concerned Scientists entitled Nuclear Subsidies: Still Not Viable Without Subsidies. South Africa currently operates one nuclear plant – Koeberg – which has a 1 800 MW capacity, but the country has proposed to build six new nuclear plants by 2030 in the draft Integrated Resource Plan (IRP 2). According to Business Report, the last attempt to build a nuclear plant, led by Eskom, was scratched because of funding difficulties (bidders for the project included Westinghouse and Areva). China Guagdong Nuclear Power Corp (CGNPC), China’s second-largest nuclear power developer, said they could build a second-generation reactor within ten years (instead of 13 years). “South Africa is keen to get private investors to help foot the bill for new plants and reduce the strain on Eskom, although the nuclear investment may need to be government-led,” said CGNPC (Business Report). The Union of Concerned Scientists says that although industry and its allies continue to pressure governments for large new subsidies, the support for the industry rests largely on an uncritical acceptance of the nuclear industry’s economic claims and an incomplete understanding of the subsidies that made – and continue to make – the existing nuclear fleet possible.

“Such blind acceptance is an unwarranted, expensive leap of faith that could set back more cost-effective efforts to combat climate change,” says the union, before adding that shifting the coupled waste disposal and safety risks onto the public is the major goal of the new subsidies – not incorporating these costs into its estimates presents a skewed economic picture of nuclear power’s value compared to other low-carbon power sources. According to the report, buying power on the open market and giving it away for free would have been less costly than subsidising the construction and operation of nuclear power plants. Throughout its history, the industry has argued that subsidies were only temporary and a short-term stimulus so that the industry could work through early technical hurdles that prevented economical reactor operation. “A 1954 advertisement from General Electric stated that: ‘In five years – certainly within ten, civilian reactors would be privately financed,

Left: Subsidies to the nuclear fuel cycle often exceed the value of the power produced – Union of Concerned Scientists.

25 o in Africa

n u c lear energ y

Nuclear energy –

viable without

subsidies? built without government subsidy.’ That day never arrived and, despite industry claims to the contrary, remains as elusive as ever,” says the union. According to the report, the most important subsidies to the industry do not involve cash payments. They rather shift construction cost and operating risks from investors to taxpayers and ratepayers, burdening taxpayers with an array of risks ranging from cost overruns and defaults to accidents and nuclear waste management. According to the IAEA, the world´s 441 nuclear power reactors create enough spent fuel to fill a football field to a depth of 1,5 metres – that’s about 10 500 tonnes of heavy metal. In South Africa, the 2008 National Radioactive Waste Disposal Institute Act provided for the establishment of a National Radioactive Waste Disposal Institute, which will manage radioactive waste disposal in South Africa. The responsibility for nuclear waste disposal has been discharged by Necsa until now (the company operates the national repository for low- and intermediate-level wastes at Vaalputs in the Northern Cape province). This was commissioned in 1986 for wastes from Koeberg and is financed by fees paid by Eskom. Low cost or expensive? According to the World Nuclear Association, substantial amounts have been invested in energy R&D over the past few years – much of this has been directed at developing nuclear energy. Today, however, about twice as much R&D investment is spent on renewables rather than nuclear (except in Japan and France), “but with rather less to show for it and with less potential for electricity supply” (www.world.nuclear.org).

“Nowhere in the world is nuclear power subsidised per unit of production. In some countries it is taxed because production costs are so low. Renewables receive heavy direct subsidies in the market and fossil fuels receive indirect subsidies in their waste disposal,” says a statement by the World Nuclear Association regarding energy subsidies and external costs. However, the Union of Concerned Scientists disagrees. “The nuclear industry is only able to portray itself as a low-cost power supplier today because of past government subsidies as write-offs,” says the union when referring to the subsidies given during the inception of nuclear power plants as well as the subsidies to inputs, waste management and accident risks. “These legacy subsidies are estimated to exceed seven cents per kilowatt-hour (c/kWh) – an amount equal to about 140% of the average wholesale price of power from 1960 to 2008, making the subsidies more valuable than the power produced by nuclear plants over that period. Without these subsidies, the industry would have faced a very different market reality – one in which many reactors would never have been built, and utilities that did build reactors would have been forced to charge consumers even higher rates,” says the union. To read the full report, visit http://earthtrack.net/files/uploaded_files/ nuclear%20subsidies_report.pdf, to which full acknowledgement and thanks are given.

2 5 o i n A fr i c a

nuclear ener gy

Nuclear needs a strong Lessons on safety procedures from oil and gas industries If oil and gas companies want to prevent safety lapses like the BP oil spill, they need a self-regulation regime akin to that in nuclear power, said a presidential report released in January 2011. The report to US President Barack Obama, “Deep water, the Gulf oil disaster and future of offshore drilling”, says that both regulation and a safety culture need to be strengthened and supplemented by a peer-led safety organisation for the oil and gas industry. Exxon and Shell are two oil companies who have transformed their own safety standards, but the entire oil industry in America lags behind international safety standards and has not properly managed risk or been prepared for containment and response. The report lists several potentially dangerous industries that have transformed safety levels through peer organisations – amongst these is the potentially catastrophic nuclear industry. “Public and government acceptance based on a strong safety record is an essential component of the business model of each,” reads the report. “Even inherently risky businesses can be made much safer, given the right motivations and systems-safety management practices. Civil aviation and nuclear-fuelled electric power are two good examples of industries that have had to manage the risk of catastrophic failures and losses,” reads the report.

President Barack Obama announced the creation of the National Commission on the BP Deepwater Horizon oil spill and offshore drilling – an independent, nonpartisan entity...

On 22 May 2010, President Barack Obama announced the creation of the National Commission on the BP Deepwater Horizon oil spill and offshore drilling – an independent, nonpartisan entity, directed to provide a thorough analysis and impartial judgement to determine the causes of the disaster and recommend reforms to make this form of energy production safer. “It is the nuclear power example that is expanded at length as a lesson for oil,” says World-nuclear-news.org. Central to this is the Institute of Nuclear Power Operations (INPO), a not-for-profit organisation that was established by the nuclear power industry in December 1979. The Kemeny Commission – set up by President Jimmy Carter to investigate the Three Mile Island nuclear power plant – had recommended that:

25 o in Africa

The (nuclear power) industry should establish a programme that specifies appropriate safety standards, including these for management, quality assurance, and operating procedures and practices, and that conducts independent evaluations. There must be a systematic gathering, review and analysis of operating experience at all nuclear power plants coupled with an industry-wide international communications network to facilitate the speedy flow of this information to affected parties. After the 1986 Chernobyl accident, the INPO was supplemented by an international version – the World Association of Nuclear Operators (WANO), and together with the sister organisations have played a major part in today’s safe use of nuclear energy. “The primary motivation for improving safety in each instance is that neither the public (as consumers and as voters) nor the government would allow such enterprises to operate if they suffered many accidents. People would not board planes if an unacceptable number crashed. The reaction to the contained partial core meltdown at the Three Mile Island power plant in 1979 has kept the industry from expanding in the United States for more than three decades. And, nuclear submarines carry highly skilled crews and are enormously expensive to build (not to mention carrying a fuel source that would pose wide dangers in case of a leak) – all factors that compel the navy to put a premium on safe practices,” continues the report. The nuclear model According to the report, the risk-management challenges presented by nuclear power are in some respects analogous to these presented by deepwater drilling: the dependence on highly sophisticated and complex technologies, the low probability/catastrophic consequences nature of the risks generated, and the related tendency for a culture of complacency to develop over time in the absence of major accidents. “For the nuclear power industry, it took a crisis – the partial meltdown in 1979 of the radioactive core in Unit Two at the Three Mile Island nuclear generating station in 1979 – to prompt a transformation of its safety culture. But that is what industry accomplished and reportedly with significant, positive results. For that reason, the nuclear power industry’s method of transforming business-as-usual practices offers a useful analogue as the oil and gas industry now seeks to do the same more than 30 years later,” says the report. For more information, read the full report at https://s3.amazonaws.com/ pdf_final/DEEPWATER_ReporttothePresident_FINAL.pdf.

n u c lear energ y

safety record for acceptance The logic of self-policing Industry standard-setting and self-policing organisations are widespread in the most industrialised nations – typically for operations marked by technical complexity, such as the chemical, nuclear power, civil aviation and oil and gas industries, where government oversight is also present. These processes coexist where there are, as a practical matter, relatively limited numbers of people with the requisite expertise and experience, making it hard for government to be able to rely solely on its own personnel (especially when government cannot compete with private sector salaries for those experts). Support for standard-setting and selfpolicing also arises in industries whose reputations depend on the performance of each company, and where significant revenues are at stake. The limits of unregulated self-policing Industry self-policing is not a substitute for government, but it serves as an important supplement to government oversight. And the cost of forgetting that essential premise can be calamitous. In the financial sector, for example, the Securities and Exchange Commission’s Consolidated Supervised Entities Programme had in 2004 delegated regulatory risk assessment of global investment bank conglomerates to the banks themselves. The programme was designed to cover a regulatory gap left by Congress amid changes in global finance, but it was entirely voluntary. Four years later, Securities and Exchange Commission Chairman Christopher Cox ended the programme, declaring it a failure – indeed “fundamentally flawed” – after companies like Bear Sterns failed to adequately assess the risk of a sharp downturn in housing prices on their large, leveraged investments in mortgage-backed securities. Presidential report – Deep water, the Gulf oil disaster and future of offshore drilling 2 5 o i n A fr i c a

b iof uels

DISGUISED SEWAGE TREATMENT PLANT to be built in

corporate lobby The San Fransisco Public Utilities Commission, which is going to be home to a number of green building innovations, has commissioned a disguised “green” sewage treatment plant – in the middle of their lobby. The water treatment plant is essentially part of a wetland – filled with lush plantation – which uses a natural biological process to break down pollutants within the black water. While the water won’t be potable water, it’s going to save a lot of water through this efficient process (that also has a small footprint).

New technologies The wastewater re-use technology, called the Living Machine System by Worrell Water Technologies, will be integrated into the lobby and outside landscaping of the 13-story, 277 500 m² building. The system will take all grey and black water from the building and treat the water through ecological engineering. The system is composed of enhanced wetland processes treating up to 5 000 gallons (18 927l) of waste water per day. The wetlands will require approximately 1 000 m² of space, supporting a host of plants. Waste water will flow below the wetland surface in watertight cells so that there are no health hazards, bug habitats or smells in or around the building. How it works The waste water reuse system adapts and enhances tidal cycling – one of the most productive ecosystems in nature. A computer controls drain and fill cycles, alternating anoxic (without oxygen) and aerobic (with oxygen) conditions. The waste water gets introduced to a diverse microbial ecosystem that grows on the surface of a special gravel medium within a series of watertight basins. As the basins fill with water, the micro-organisms begin to consume the nutrients. After a period of time, gravity and pumps are used to drain the basins and atmospheric oxygen passively infuses the medium. This oxygen is needed to consume and convert remaining nutrients.

The sewage treatment plant will be disguised by lush plantation. Pic source: www.livingmachines.com

The water treatment plant is essentially part of a wetland – filled with lush plantation – which uses a natural biological process to break down pollutants within the black water.

The system treats black water sewage and the water will be reused for toilet flushing. According to Will Kirksey, senior vice-president at Worrell Water Technologies, the system will allow the building to save about 750 000 gallons (2.8-million l) of water per year. “The new San Francisco Public Utilities Commission office building shows how we can begin the transition to decentralizing energy and water systems, even in a dense urban area, to create buildings, communities and regions that are resilient, sustainable and able to produce and reuse valuable resources on-site,” said Kirksey. Sources: www.smart-grid.tmcnet.com, www.livingmachine.com.

25 o in Africa

b io fu e l s

Upcoming jatropha microalgae projects in 3 African countries

Professor Patricia Harvey of the University of Greenwich, a leading expert in biofuels who is currently working on projects that will produce green energy from agricultural and food waste in three African countries, recently spoke to 25º in Africa about the project. “We are currently entering the second year of the three-year project. The main aim of the international three-year project is to replace fossil fuels and support alternative power generation markets in South Africa, Ghana and Namibia without damaging local environments or the agricultural production of food crops,” said Harvey, who was attending the Energy Indaba conference at the Sandton Convention Centre in March. The University of Greenwich is leading the European Union, African, Caribbean and Pacific Group of States (ACP) Science & Technology Programme to boost the biofuels industry and its distribution network in the three countries. “Biofuels is still the only renewable energy technology that actually sucks CO2 out of the atmosphere via photosynthesis. Furthermore, liquid biofuels will drive Conbined Cooling Heat and Power (CCHP) engines to deliver energy with high efficiency (38% electricity, 42% heat). CCHP also offers off-grid electricity on demand, low/zero carbon emissions, heat-sterilised water, cold storage, and job security for local communities,” says Harvey. Professor Keith Cowan, Director of the Institute for Environmental Biotechnology

Project details Project: Capacity building in South Africa, Namibia and Ghana to create sustainable, non-food bio-oil supply chains. Grant: FED/2009/217066. Duration: 36 months (from 10/11/2009 to 09/11/2012). Ec funding: €857 055. Total budget: €1 008 300. Website: www.acp-st.eu/content/projects.

at Rhodes University, is working on developing advanced wastewater treatment systems for the project. Jatropha and glycerol from marine microalgae and microalgae growing wastewater effluents from anaerobic digestion of agriculture residues are two of the main biofuels that will be produced from the project. “Marine microalgae thrive in the warm waters off the shores of Namibia, and are among the alternative renewable energy options being investigated. Jatropha is being investigated and researched in Ghana and Namibia, but not in South Africa,” says Harvey, before adding that South Africa is very concerned that jatropha could become an invasive species. “The idea is to create opportunities for farmers that will benefit the local communities. The project will address the lack of necessary technical skills, the limited knowledge of renewable biofuels or CCHP, insufficient investment in agronomic, genetic, technical and ecological research and innovation areas, and insufficient investment in the necessary capital equipment or in supporting new businesses,” says Harvey. Research and ideas emerging from the African biofuel projects will potentially be applied to other parts of the world with similar climates. “During our next meeting, which will take place in Italy, we are going to look at how the ideas from Africa can be applied to the southern regions of Europe. The question that everybody wants answered, is how we are going to manage land use for security in oil, energy resources and food. The ACP team for this project include: Turner & Townsend (SA), the Universities of Greenwich, Namibia, Ghana and Palermo, the Marine Biological Association in the UK, Goldex (SA) and Jatropha Africa. They gratefully acknowledge financial assistance of the European Union. The contents of this article are the sole responsibility of the University of Greenwich and can under no circumstances be regarded as reflecting the position of the European Union. For more information, visit www.greenwich.ac.uk. 2 5 o i n A fr i c a

b iof uels

Agribusiness, investment funds and government agencies have been acquiring long-term rights over large areas of land in Africa over the past few years. Together with applicable national and international law, contracts define the terms of an investment project and the way risks, costs and benefits are distributed. Who has the authority to sign the contract and what process greatly influences the extent to which people can have their voices heard? Yet very little is known about the exact terms of the land deals. In a report entitled Land deals in Africa: What is in the contracts? by the International Institute for Environment and Development (IIED), twelve land deals from different parts of Africa are given legal analysis to discuss the contractual issues for which public scrutiny is most needed. Some of the key issues highlighted in the report relate to the contracting process, economic fairness between investor and host country, the distribution of risks, costs and benefits within the host country, the degree of integration of social and environmental concerns, and the extent to which the balance between economic, social and environmental considerations can evolve over often long contract durations.

In several of the contracts reviewed, local people appear to have been marginalised in decision-making – it is the government that usually calls the shots in contracting and land allocation procedures. “In relation to many of these issues, a number of the contracts reviewed appear not to be fit for their purpose: some are short, unspecific documents that grant enforceable, long-term rights to extensive areas of land, and in some cases priority rights over water, in exchange for little public revenue and apparently vague and potentially unenforceable promises of investment and/or jobs,” reads the report. “Also, a number of the deals are being negotiated in legal contexts where safeguards for local interests are weak, and some contracts do not properly address social and environmental issues. As a result, there is a substantial

25 o in Africa

risk that local people internalise costs without adequately participating in benefits, and major environmental issues are not properly factored in,” continues the report. Although some of the contracts featured better terms (notably a deal from Cameroon that features higher and better distributed revenues and a contract from Mali that involves a sophisticated partnership with the host government and local farmers and applies international environmental standards), the report from the IIED emphasises that the process of the contract is critical – irrespective of the contract terms.

b io fu e l s

â&#x20AC;&#x153;In several of the contracts reviewed, local people appear to have been marginalised in decision-making â&#x20AC;&#x201C; it is the government that usually calls the shots in contracting and land allocation procedures. So even in the better negotiated contracts, the gap between legality (whereby the government may formally own the land and freely allocate it to investors) and legitimacy (whereby local people feel the land they have used for generations is theirs) exposes local groups to the risk of dispossession and investors to that of contestation,â&#x20AC;? says the report.

The report warns that current decisions will have major repercussions for the livelihoods and food security of many people for decades to come. Land deal negotiations are unfolding fast and behind closed doors. But secrecy and haste are no friends of good deals. Rather than rushing into land contracts, governments should promote transparent, vigorous public debate about the future of agriculture in their countries. To read the full report, visit http://pubs.iied.org/pdfs/12568IIED.pdf, to which full acknowledgement and thanks are given.

2 5 o i n A fr i c a

CDM

Post Kyoto:

will CDM demand deeper mitigation targets? The second commitment period of the Kyoto Protocol, which sets emission reduction targets for developed countries and not developing countries, is under a cloud. With 2012 quickly approaching (and the end of the initial commitment period coming to an end), the future of the clean development mechanism (CDM) raises a number of questions. “CDM is a work in progress,” Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC), told a select group of journalists during a meeting in February 2011. “CDM is important because if industrialized countries have to take deeper emission cuts, they will need flexibility. The debate is how to go about CDM and evolve it into a stronger instrument to achieve larger mitigation targets.” Will the CDM continue after 2012? Last year, a leading Indian clean-energy project developer and advisory firm, EVI (Emergent Ventures India), polled 63 project developers on the post-2012 market for offsets under the CDM. According to the poll, nearly 60% of clean-energy developers in India expect markets in the US, Japan and Australia to accept tradeable carbon offsets from their projects. Despite growing concerns over the shape or even existence of the CDM after 2012, nearly 90% of the respondents were confident or reasonably confident that their CERs would have a market value after 2012.

25 o in Africa

Fake carbon credits A European Commission proposal to ban the use of HFC-23 and N2O credits in Phase III of the EU’s emissions trading scheme (ETS) – which runs from 2013-2020 – was approved on 21 January 2011 by the climate change committee. However, instead of coming into force from 1 January 2013, as proposed by the Commission, the prohibition will be delayed until May 2013 after the original deadline was strongly resisted by a small number of powerful industry players who have persuaded some governments, including Italy and Spain, of the need to stall the ban. “Despite the delay, which may allow further use of about 50-million carbon credits, this is indeed a historic day,” said EIA global environment campaign leader Fionnuala Walravens. “Less than a year after NGOs exposed the fraudulent and problematic nature of industrial gas credits, the world’s biggest carbon market has banned their use.” EIA has been at the forefront of efforts to expose and halt these hugely lucrative dodgy credits, widely awarded to companies in return for the destruction of greenhouse gases manufactured solely for that purpose. “These deeply flawed HFC-23 offsets have no legitimate place in the market – all they’ve done is subsidise Chinese and Indian chemical producers and dominate the ETS to the detriment of truly sustainable offset projects in least developed Countries,” said Walravens.

CDM

The CDM is often associated only with the first commitment period of the Kyoto Protocol (which stretches from 1 January 2008 to 31 December 2012).

The CDM is often associated only with the first commitment period of the Kyoto Protocol (which stretches from 1 January 2008 to 31 December 2012). The UNFCCC addresses post-2012 CDM issues on their website stating that “although the emission targets of Annex I parties are negotiated on a commitment period by commitment period basis, the CDM itself is a long-term mechanism that continues from one period to the next, and is not tied to specific commitment periods.” With regards to how emission targets for a second period will be determined, the UNFCCC says these targets are currently being negotiated under the ad hoc working group on further commitments for Annex I parties under the Kyoto Protocol (AWGKP) and the ad hoc working group on long-term cooperative action under the convention (AWG-LCA), but that the outcomes of both these groups, including the form for expressing emission targets beyond 2012, are not yet clear. Carbon credit fraud There have been allegations about corporations gaming the CDM market, leading the UN to become more stringent with industrial gas projects that claim carbon credits for reducing hydrofluorocarbons or HFCs and nitrous oxide (N20). The UN sentiment is now more in favour of clean-energy projects than large industrial gas projects. “The UNFCCC board is trying to make it more stringent to ensure environmental integrity. It cannot be ensured by taking up single large projects alone. The CDM has to enlarge its scope and develop benchmarks in diversified areas,” said Figueres. Figueres admitted that there is a tendency in the EU to give preference to the least developed countries and small island developing states, but denied that there is any multilateral attempt to shift the market away from leading players like China and India. Sources: www.eia-international.org, www.cdm.unfccc.int and www.financialexpress.com. 2 5 o i n A fr i c a

electricity

FEARS

over long-term coal supply

ESKOM

Eskom has been implementing a coal supply strategy over the past three years in order to ensure security of supply for its power stations. Eskom faces substantial challenges to secure the long-term coal supplies it requires for existing and new power stations, Chief Commercial Officer Dan Marokane told a coal conference in Cape Town on 2 February 2011.

Most of Eskom’s coal is sourced from Mpumalanga. “However, Mpumalanga does not have sufficient coal to supply Eskom under a 60-year life-of-station scenario and risks to coal supply have increased because of delays in developing major new long-term sources. In addition, strong demand for coal exports, including for these grades of coal which in the past were used only by Eskom, has put upward pressure on domestic coal prices,” said Marokane.

• • • • • • • • • • • • • • • •

Historically, lower-grade coal was used for electricity generation at South Africa’s power stations. Eskom now faces the risk of losing even this low-grade coal to countries like China and India. Marokane said Eskom is concerned that these risks will raise the cost of coal and then lead to increases in the cost of electricity, which would have a negative impact on South Africa’s economy.

“Eskom has a portfolio of contracts with each of the suppliers, which meets its requirements of 121,2 million tons per annum for the Eskom system. All coal requirements in excess of these supplied by the longterm agreements are procured through short- to medium-term contracts,” said the South African Minister of Public Enterprises, Mr MKN Gigaba, when questioned by representatives of the Democratic Alliance last year.

“We have choices to make as a country if we want to find the optimal balance between coal exports and domestic energy security. We are concerned that the market on its own may not ensure that balance,” said Marokane.

From whom is Eskom procuring its coal stock?

25 o in Africa

Anglo Coal South Africa (Pty) Ltd BHP Billiton Energy Coal South Africa (Pty) Ltd Blackwattle Colliery (Pty) Ltd Eyethu Coal (Pty) Ltd Exxaro Coal (Pty) Ltd (Exxaro) Imbabala Coal (Pty) Ltd Ingcambu Investments (Pty) Ltd Kuyasa Mining (Pty) Ltd Liketh Investments (Pty) Ltd Mashala Resources Nu Coal Mining (Pty) Ltd Optimum Coal Mine (Pty) Ltd Shanduka Coal (Pty) Ltd Sudor Coal (Pty) Ltd Umcebo Mining (Pty) Ltd Xtsrata/Zingisa Joint Venture

e le c tri c it y

The amount of electricity produced by coal-fired power stations, and the quantities of coal burnt from 2005 – 2009: Financial year

Electricity produced by coal-fired power stations (GWh)

Coal burnt (Mt)

2005*

251 914

136,4

2006

206 606

112,1

2007

215 211

119,1

2008

222 908

125,3

2009

211 941

121,2

*2005 – change from calendar to financial year, it reflects 15 month’s data. Source: www.dpe.gov.za

National plan is needed Marokane proposed that South Africa implements a national plan whereby the country’s coal resources are developed and exploited in the national interest. This national primary energy coal development plan needs to provide a framework for investment in the industry. “Eskom also proposes that mechanisms should be put in place to ensure domestic energy needs are met at prices based on efficient costs with fair returns for coal producers. Eskom will engage on this proposal with government through its shareholder ministry. Coal is going to remain a significant proportion of South Africa’s energy mix for a long time to come. We want to work in partnership with the industry and our stakeholders to secure the country’s future requirements in a way that supports growth and development,” concludes Marokane. Key elements of Eskom’s long-term coal supply strategy • Optimal portfolio of long-, medium- and short-term coal sources:

The Eskom portfolio of contracts will consist of long-, medium- and a small portion of short-term coal sources to meet electricity demand requirements. All three types of contracts are included as there is no single “best” contract type. • Prices based on efficient costs plus a fair return: The prices of future coal contracts will be based on efficient costs, appropriate risk sharing and fair returns. This is to ensure sustainable coal procurement. • Risk-based stock management: Power station stock levels will be based on coal supply risks and will be periodically re-evaluated as risks change. • Quality management and selective benefication to reduce the total cost of ownership: This is required to address the impact of the deteriorating resource base, which has resulted in many stations receiving coal below the design quality levels. For more information, visit www.eskom.co.za and www.dpe.gov.za, to which full acknowledgement and thanks are given.

2 5 o i n A fr i c a

electricity

how kusile-financing is affecting american mining companies Bucyrus says will take 30 months to manufacture at a cost of approximately US$120-billion). “We know the mine will need a dragline. If the Export-Import Bank processes this decision the way we hope they will, it means jobs in Milwaukee one way or the other,” said CEO Tim Sullivan.

The Journal Sentinal (a Milwaukee-based newspaper) recently reported that an environmental group is urging the US Export-Import Bank to deny finance to South Africa’s coal-fired Kusile powerstation project. The environmental groups are asking the bank to deny financing for Kusile, saying the power plant annually would spew greenhouse gases with a global warming potential equal to 36.8-million tons of carbon dioxide. “The Export-Import Bank should resolve to end its fossil-fuel binge and reject the massive Kusile plant,” said Karen Orenstein, international policy coordinator for Friends of the Earth in Washington. Milwaukee mining companies are waiting Bucyrus International and Joy Global, which are two giant mining machine companies in Milwaukee, want to know if the bank will finance the South African coal-fired power plant because either company would likely win a contract to build a coal mining dragline (a huge machine that

Bucyrus and Joy Global make the world’s largest mining machines, dominating the market for draglines and electric mining shovels used in many countries. The financing they are waiting on for Kusile is similar to a recent Export-Import Bank decision that provides loan guarantees for a power plant and coal mine in India. The Export-Import Bank has given some early approvals for the Kusile project due to some of the environmentally-friendly features (such as water conservation and pollution abatement technologies). At a press conference in Johannesburg, Bank Chairman Fred Hochberg said: “By working together, we can help South Africa to ramp up its energy production.” * The bank could take another 3 – 6 months to make its final decision on Kusile financing. Source: www.jsonline.com

the ups and downs of electricity in zimbabwe Mining and industry in Zimbabwe have been hurt by power shortages over recent years. In an economy which is only starting to recover from hyperinflation that crushed the economy about two years ago, its power shortages have left many businesses in shambles. In January 2011, it was reported that the Zimbabwe Electricity Supply Authority (ZESA) cut off electricity to thousands of residents of cities and towns across the country, leaving even the Bulawayo City Council in total darkness over an unpaid US$9.2-million electricity bill. “The utility has asked the municipality to pay at least US$4-million before reconnecting power to critical entities,” said Bulawayo Mayor Thaba Patrick Moyo. According to residents and officials, ZESA was cutting off customers on a massive scale for non-payment of 2009 estimated bills that ZESA was supposed to have written off. “Some bills from 2009 were as high as US$600 per household and most residents are not paying them. Most residents earn no more than US$225 a month, so meeting such bills is highly problematic,” said Bulawayo Residents Association Chairman Winos Dube. Zimbabwe licenses five independent power producers In February 2011, Zimbabwe licensed five independent power producers whose projects are aimed at doubling current electricity output to 4 450 MW.

25 o in Africa

“Zimbabwe has also secured US$30-million from the African Development Bank (ADB) to fund maintenance at the country’s main Hwange power station,” Energy and Power Development Minister Elton Mangoma told Reuters.com. While Hwange’s six generating units have a 960 MW capacity, the whole station is currently producing only about 40% of that. “We still have to sit with ADB to decide other areas where the money will have the greatest impact, but as I see it, there is a critical shortage of skills and we need more money for spares,” said Mangoma. Zimbabwe’s other major energy plant, Kariba Hydro Power Station, has a capacity of 750 MW, but is undergoing maintenance that has reduced its capacity by half. Zimbabwe currently needs about 2 700 MW and imports an average of 300 MW from neighbouring countries. “We have one of the most advanced legislations on the continent on power management, but our political and economic situation was in such a state that it was hard to attract any investment,” said Mangoma. Sources: www.talkzimbabwe.com, af.reuters.com, www.voanews.com

e le c tri c it y

Malawi gets US$350-million to upgrade power supply Malawi’s energy sector, which had 63 days of power outages in 2009, has received a significant boost from the US. The Millennium Challenge Corporation has given Malawi a US350million grant to upgrade the country’s power supply, whose dire condition is a major brake on the nation’s economic growth. Malawi’s electricity demand is estimated to be 344 MW, but its current installed electricity capacity is only 282.5 MW. Of the 13-million population, 7% have access to electricity, with the rest relying on firewood and charcoal for energy. The $350-million will be given to the country as part of a fiveyear grant. Malawi’s erratic power supply is believed to cost the country approximately US215-million a year and deters new investment. Despite unreliable electricity, Malawi has been one of the world’s fastest growing economies in the last few years, due in large part to a fertilizer subsidy programme that has boosted farm yields. According to the International Monetary Fund (IMF), farming output in Malawi was flattening off – a cause for concern – but it still raised its 2010 growth forecast to 7% (from 6.3%) to reflect the expansion of the mining sector, especially the opening of a uranium mine in the north of the country. Despite strong growth, Malawi remains heavily dependent on foreign aid, with donors underwriting as much as 40% of its budget. Source: www.af.reuters.com; www.mining-technology.com

About Malawi’s new uranium mine Location: Malawi, southern Africa. Ownership: Paladin Energy (85%) and Malawi government (15%). Geology: Sandstone hosted uranium deposit, roll-front style. Mineral types: Uranium. Reserves: 10.5Mt at 0.11% U3O8. Production: 1.5-million t/yr ore. Mining: Open pit (800 x 600 x 140m, length x width x depth), strip ratio = 3.2:1, contractor mining. The Kayelekera Uranium Deposit is located in northern Malawi. The mine’s deposit is covered by an exclusive prospecting license (EPL), covering 157 km². The project is held by Paladin Africa Ltd, a Malawi-registered company and a wholly-owned subsidiary of Paladin Energy Ltd. It will be Paladin’s (who is listed on the Australian and Toronto stock exchanges) second-largest uranium mine and its second in Africa. Road to uranium? The project has had several challenges, including delays to construction of the crucial Karonga-Chitipa road (the mine is 8km south of a road that connects two townships – Chitipa and Karonga – and it is accessible via a dirt road from Karonga). The road was initially funded by Taiwan, but Malawi has since severed ties with the island state in favour of China, who has now promised to complete it. While the Malawian government approved the mine, civil social organisations slowed the process with a court action regarding allegations of poor environmental practices and corruption.

2 5 o i n A fr i c a

electricity

Powering the future The IRP 2010 isn’t an “energy plan” or an “infrastructure plan”, it’s a electricity generation capacity expansion plan. It is required by law and is the accountability of the Minister of Energy. “This plan needs to be updated regularly and it needs to take a variety of challenges into consideration, such as the expected electricity demand as well as emission and capacity constraints – then you can figure out how the gap needs to be filled,” says Kannan Lakmeeharan, Divisional Executive of Systems Operations and Planning at Eskom. Lakmeeharan was speaking at the Low Carbon Future Conference in Johannesburg in February. According to him, over 5 000 formal individual comments were received after nationwide public hearings.

25 o in Africa

Without external financing, there will have to be a balancing of objectives between emissions targets, an affordable price trajectory and security of supply.

e le c tri c it y

The IRP is a medium- to long-term plan that will help to direct the expansion of electricity supply – including private and own generation and power purchases from regional projects – and demand initiatives in South Africa over the given horizon, typically 20 years. What are 3rd generation reactors? Generation 3 nuclear technology refers to newer, advanced reactors which have simpler designs that reduce capital cost. They are more fuel-efficient and, according to the World Nuclear Association, inherently safer. The first 3rd generation advanced reactors have been operating in Japan since 1996 and others are in construction and waiting to be ordered. Generation IV designs are still on the drawing board and will not be operational before 2020 at the earliest. Why 3rd generation reactors would make a difference to IRP scenarios: • The reactors have a standardised design for each type to expedite licensing, reduce capital cost and reduce construction time. • The design is more simple and rugged, making them easier to operate and less vulnerable to operational upsets. • Higher availability and longer operating life – typically 60 years. • A reduced possibility of core melt accidents. • Resistance to serious damage that would allow radiological release from an aircraft impact. • Higher burn-up to reduce fuel usage and the amount of waste. • Burnable absorbers (“poisons”) to extend fuel life. Source: www.world-nuclear.org

“The IRP is a medium- to long-term plan that will help to direct the expansion of electricity supply – including private and own generation and power purchases from regional projects – and demand initiatives in South Africa over the given horizon, typically 20 years. The IRP plan determines the timing and mix of the above projects and will form the basis by which the National Energy Regulator of South Africa (NERSA) will license such projects,” says Lakmeeharan. The Inter-Ministerial Committee (IMC) on Energy has approved the release of the draft IRP based on a balanced scenario for public consultation in October 2010. The final plan is scheduled for release in the first quarter of 2011. “The IRP started out with about 50 scenarios, which were narrowed down to the 9 scenarios that were published,” says Lakmeeharan. The scenarios that Lakmeeharan was referring to include the Base Case Scenario (which assumes unchanged variabilities – such as technology, knowledge and demand – and only attempts to find a balance between cost and supply), as well as the Emissions 1 Scenario (which enforces an emissions cap of 275Mt per annum as an assumed constraint) and so forth. Lakmeeharan commented that future power stations will be constrained by access to and the availability of water. While South Africa’s energy mix currently consists of 80% coal, the draft IPR plan’s is to decrease this amount to approximately 47% by 2030. “The draft IRP still assumes coal 2 5 o i n A fr i c a

electricity

Future power station developments will be constrained by the availability of and accessibility to water resources.

after 2025, but it will be in the form of cleaner coal technologies, such as carbon capture and storage, underground coal gasification and supercritical coal technologies,” says Lakmeeharan. What comments did the Department of Energy receive regarding the draft IRP? At the nationwide public consultations about the draft IRP between the Department of Energy and the public, there was a common theme that learning rates for renewable technologies had to be considered. “There were also different views of nuclear costs with many indicating that nuclear costs had to be escalated in the modelling. The technology strategy has to be considered – i.e. when to shift to Generation 3 technology,” said Lakmeeharan. During the public consultation process, there were several views that demand may be over and under-estimated. “There was a request to check the sensitivity of plans to a lower electricity demand trajectory. There were also different views on the appropriate level of demand-side modelling to be included in the modelling,” said Lakmeeharan. “There was a request to consider scenarios which completely excluded nuclear technologies and to replace it with renewable energy generation. There was a particular emphasis on re-looking at the photovoltaic technology costs and choice,” says Lakmeeharan. “An entity or entities have to be commissioned to undertake feasibility studies for the Minister of Energy to determine who should build the capacity identified in the plan. It is possible that some choices may not require such studies – for example the extension of the renewable energy feed-in tariff programme and own or co-generation options,” says Lakmeeharan.

25 o in Africa

Clear execution strategy Lakmeeharan explains that execution strategies for certain programmes need to be determined. “The nuclear and concentrating solar programmes could be examples that need clear execution strategies to ensure the supporting infrastructure and resources are developed in time and that the expected socio-economic benefits are realised,” said Lakmeeharan. Lakmeeharan emphasised that the tariff trajectory to support the implementation of the plan will need to be supported. Affordability for certain sectors of society and certain sectors of the economy will have to be considered upfront. The mechanisms of supporting particular programmes within the plan, such as government guarantees, will also have to be determined upfront,” said Lakmeeharan.

Decisions are needed soon to ensure that security of supply can be assured post-2018. “Decisions are needed soon to ensure that security of supply can be assured post-2018 and that good long-term choices are made rather than being forced to make bad choices as no other options exist to ensure security of supply,” concludes Lakmeeharan. 25º in Africa would like to give thanks and acknowledgement to Kannan Lakmeeharan and Eskom, who generously contributed information for this article.

e le c tri c it y

Colour tunable oled lighting at Fuori Salone Verbatim will reveal the world’s first commercially available organic LED (OLED) lighting panels that are colour tunable, white tone tunable and dimmable during the Fuori Salone show in Milan from 12-17 April. The company’s OLED display will be created in partnership with lighting designer Satoshi Uchihara, who has designed World Heritage Site installations such as Kinkakuji, in Kyoto, Japan. The display will incorporate one of the world’s largest OLED panels at 14cm x 14cm. Called VELVE, Verbatim OLEDs produce high quality, soft and colourful lighting with a luxurious feel. They enable lighting designers to express their creativity in many different physical forms, including walls of light. By tuning the colour and intensity of light, the emotional impact of the lighting scheme can be changed to reflect the mood required for the environment. For example, bright white light may be desirable in the morning but more subdued relaxing lighting with muted colours may be preferable towards the end of the day. The OLEDs are based on unique materials technology developed by

Verbatim’s parent company, Mitsubishi Chemical Holding Group. More details of the printable hole injecting material (HIM) technology will be announced at the show. In partnership with the Roman design school ISIA, Verbatim will also be announcing the results of a design competition during the event. Called “6th Sense” the project was set up in September 2010 to help Italian design students think about lighting in new ways and to help them understand the emotional, as well as the technical, possibilities that OLED lighting is going to bring to the world of interior design. The winning design will form part of the Verbatim display at the Fuori Salone event and the winner will be awarded the competition prize, yet to be announced, at a dinner in the Design Library on April 13th.

2 5 o i n A fr i c a

eNER GY EFFICIE NCY

will

companies

energy-efficient office space An increasing number of corporate real estate executives are willing to pay more to lease green office space. These real estate executives also say they consider sustainability issues when making decisions about locations, says research from CoreNet Global (an organisation for real estate professionals) and Lang LaSalle (a commercial real estate company), which was released in February 2011. The results from CoreNet Global and Lang LaSalle’s fourth annual sustainability survey reveal a corporate real estate industry in the process of reconciling the focus on reducing environmental impacts of buildings with the need to control costs and support corporate financial performance. Half of the respondents, who come from around the world, say they are willing to pay more to lease green office space in contrast to 37% who said the same in 2009. An additional 23% said they would pay more in rent if it were offset by lower energy costs, reinforcing the idea that green space has financial benefits. executives would rather invest in their own buildings In general, corporate executives are more willing to invest in space they own than they are willing to pay extra for leased space. 57% of respondents confirmed anecdotal consensus of one to three years as an acceptable payback period for energy-efficiency measures in owned space. Only 4% said they expect strategies to pay for themselves during the first year.

23% said they would pay more in rent if it were offset by lower energy costs, reinforcing the idea that green space has financial benefits. Although a lot of energy management strategies pay for themselves during the first year, many companies have exhausted these opportunities and want to go to the next level,” said Dan Probst, Chairman of Energy and Sustainability Services at Jones Lang LaSalle. “By replacing lighting systems or putting in smart systems, companies may see their investment pay off within three years. A more extensive retrofit or a solar power installation usually will take longer to pay for itself, but still makes sense in some situations for financial reasons, or as a way for a company to demonstrate a commitment to sustainability,” said Probst. Other key sustainability findings of the report:

Green building certifications are considered by 88% and energy labels by 87% in administering their portfolio. • 48% of occupiers would pay up to 10% premium for sustainable space, while 2% expect to pay over 10%. • Respondents still focus on energy-efficiency programmes (65%) and waste recycling (61%). To read the full report, visit www.corenetglobal.org, to which full acknowledgement and thanks are given.

25 o in Africa

SWH market in South Africa poised for strong growth

e N ER GY EFF I C I EN CY

During the past four years, the South African solar water heater market has experienced phenomenal growth and the market is currently preparing for a second high-growth phase that will be larger than the previous growth surge, says global consultancy Frost & Sullivan (F&S). “The shift from conventional geysers to more energy-efficient measures is due to the fact that domestic water heating accounts for approximately 40% of a household’s electricity bill,” said energy and power research analyst Dominic Goncalves. Eskom subsequently developed a demand-side management programme, propagating solar water heaters as a prime mechanism to conserve energy off the strained national grid. The Eskom Rebate Programme was established and a target set for the installation of one million solar water heaters by 2014. “The rationale was that such demand-side management could relieve up to 578 gigawatt hours of electricity from the grid, the equivalent of building a 2 000 megawatt power station,” explains Goncalves. “Furthermore, solar water heaters are often used during peak times (early morning and evening), the precise time when strained power stations are struggling to produce the required peak-time power. However, between 2007 and 2010, the market experienced volatile growth, plagued by malfunctioning products, fly-by-night companies, and incorrect installation and application of the products. Nevertheless, market growth continued, albeit slower than expected, as many suppliers experienced a hush after this initial boom. “This was caused by the negative reputation that solar water heaters were receiving, due to conflicting information and incorrect product application, as well as initial challenges in the development of the rebate programme,” comments Goncalves. The market began to stabilise somewhat during the second half of 2010 – many fly-by-night companies selling cheap, imported Chinese products out-of-the-box left the market or changed their strategy, while established companies with a good word-of-mouth reputation formed efficient distribution networks, franchises and partnerships. As these suppliers and installers began to grasp the intricacies of South African climatic conditions such as solar irradiation and the myriad different applications of installing a solar water heater, market development has proceeded in a more ordered manner. However, Frost & Sullivan believes that this slow-down in sales is misleading. New building codes have been announced that will change the face of the market and conventional plumbing as we know it. Once the new building regulations are officially instated, buildings undergoing refurbishments as well as new buildings will have to account for at least 50% of their hot water consumption to be generated by energy-efficient methods. The demand pressure that this will place on the market to manufacture and install these products is exciting, says the global research company. Goncalves explains that solar water heater installation is approximately four times more labour-intensive than installing a conventional geyser. “The key challenge facing the development of the solar water heater market is installation. Solar water heaters require a mix of plumbing and electrical skills, as well as unique solar installation skills, which must be learned. In addition to this, many skills variables of installing products in different applications needed to be acquired, some of which can only be learned practically: different roofs, roof-restructuring, buildings, piping, latitudinal tilt irradiation, heating, temperature and other variables. The plumbing industry is currently operating at full capacity and Goncalves says that a pool of 3 000 skilled plumbers need to be bolstered by an additional 8 000 if the market wants to cope with mass demand of solar water heaters in the next 4-6 years. The transformation of skills from conventional plumbing to energy-efficient plumbing also requires a different set of skills in order to install heat pumps. These skills are similar to that required for air-conditioning and refrigeration technology. “To facilitate the transformation of this market, government and industry should maintain a steady flow of communication by way of an indepth pre-mortem so that government can best assist the industry and anticipate any possible shortcomings that could impede market development,” comments Goncalves. Frost & Sullivan Tel: +27 21 680 3261 Fax: +27 21 680 3296 Website: www.frost.com 2 5 o i n A fr i c a

eNER GY EFFICIE NCY

A green bill of

health by Dr LJ Grobler and Gustav Radloff, Energy Cybernetics

So, your building sports the latest and greatest “green gadgets”. Your air-conditioning system is in the top echelon of energy-efficiency ratings, most of your lamps have been replaced with CFLs, and so the list goes on. You have done your bit. But, do you know if you are winning or losing money on your “green gadget” installation? Even if you have top-notch technology installed, but somebody leaves the lights on 24/7, is your lighting system still efficient? Our buildings and facilities might have the potential to be efficient, we certainly have the technology available, but we are not efficient because our buildings are not “managed” the way they should be. Energy-efficiency is driven by technology and management – the management of people and processes within your building. Technology alone won’t bring you the energy-savings it is designed to do. However, implementing successful energy-efficiency initiatives in commercial buildings has unique challenges. It’s the landlord’s problem Commercial buildings use 40% of the total fossil fuel energy worldwide. This sector has the largest potential savings to contribute to the country’s future energy stability. However, most commercial buildings are tenanted, not owner-occupied. For instance, with a shopping centre you have a landlord and tenants – when the landlord gets the electricity bill, he simply passes the cost on to the tenant as part of the operational cost. On the tenant’s side the attitude is, well what can I do about it, it’s not my property, it’s the landlord’s problem. Where does that leave South Africa’s huge window of opportunity to save energy in its commercial buildings? This is where the energy barometer comes in. It’s like a GPS for your building. It will tell you where you were, where you are and where you could be going with an energy-efficiency strategy. It can help to make a difference by putting pressure on the right people to become energy-efficient. You can start an energy-efficiency initiative by just managing your building better – it will already deliver results.

Not only will the landlord’s property value be enhanced, but the tenant also saves on electricity bills. An energy management strategy that incorporates the energy barometer with a system that can measure and verify energy savings is a very powerful combination. Savings that can be proved, and that meet the requirements of Eskom, will allow the landlord to negotiate and get new connections. The value of being able to grow and build more buildings will far exceed the energy-saving possibilities. With the proposed regulations to govern energy-efficiency tax rebates, you can claim a substantial tax rebate for every kWh of energy saved – again, provided the savings can be proved. Tax rebates will quickly increase the return on your “green gadget” investment. Maths based on apples? The Energy Barometer is based on US Energy Star building methodology: The methodology, the models, the scientific and mathematical logic behind it has been applied and adapted for local use. Because buildings vary greatly in size, location, climatic conditions, type of use, service delivery, etc, this is all evaluated and normalized for each industry. The values are fed into the energy barometer system to even out the playing field in order to compare “apples-to-apples”. The energy barometer assesses all participants in each category’s energy bills – the average in industry then becomes the benchmark to which your building’s energy usage can be compared to see whether it uses more or less energy than the industry average. This allows you to make informed decisions on where to start with an energy-efficiency strategy. Over time you can track your performance, either for your individual building, or your portfolio of buildings. It lets you monitor whether you are improving: After all, you should know whether you are winning or losing on your energy efficiency investment.

The solution lays within the landlord-tenant relationship

Know your status

An integrated energy management strategy where the tenant and landlord share the responsibility of energy-efficiency promises benefits for both that are just too vast to ignore.

Some participants in the previous survey have been pleasantly surprised to find that their efforts have been worth it, others have been disappointed but have been able to set a strategy in place to improve.

25 o in Africa

e N ER GY m ana ge m ent

To know your status, you can join the energy barometer survey for 2010 – participate by completing a two-page questionnaire. So if you operate or occupy a building – whether it is a shopping centre, corporate headquarters, a general office building, a hotel or a hospital – join the survey before May 2011 to know your status.

Enquiries: barometer@energycybernetics.com or www.energybarometer.com. Energy Cybernetics Tel: +27 12 369 9880 Fax: +27 12 348 9175 E-mail: info@energycybernetics.com Website: www.energycybernetics.com 2 5 o i n A fr i c a

eNER GY EFFICIE NCY

The “rebound effect” of energy-efficiency Are we overestimating energy-efficiency’s effect on reducing carbon emissions?

Energy-efficiency technologies and strategies are generally considered to be a win-win situation. You reduce your electricity bill (and your carbon footprint) and the technologies pay for themselves over a period of time. Besides the initial required capital – a company, homeowner or organisation will be able to see the effects of their savings almost instantly.

Does energy-efficiency increase our consumption? The paradoxical notion that energy-efficiency increases energy consumption at the macro-economic level is not new. In 1865, British economist William Stanley Jevons pointed out that Watt’s more efficient steam engine and other technological improvements that increased the efficiency of coal consumption actually increased rather than decreased the demand for coal.

However, a new report by the Breakthrough Institute (an advocacy group in Oakland, California), is challenging this consensus. The report, entitled “Energy emergency: Rebound and backfire as emergent phenomenon”, suggests that the “rebound effect” that negates some of the gains from energy-efficiency is often much larger than expected.

The UK Energy Research Centre (UKERC) conducted a similar large review of the literature and evidence for rebound in 2007. The study, which was commissioned by the British government, came to a similar conclusion as the Breakthrough Institute’s “Energy Emergence” report.

Electricity-savings can encourage people to use more energy. “A large amount of the energy-savings from below-cost energy-efficiency is eroded by demand rebound,” says Breakthrough Institute founders Ted Nordhaus and Michael Shellenberger. “In some cases the rebounds exceed the savings, resulting in increased energy-consumption from efficiency, known as backfire.”

“Rebound effects have been neglected by both experts and policymakers – for example, they do not feature in the recent Stern and IPCC reports or in the government’s Energy White Paper. This is a mistake. If we do not make sufficient allowance for rebound effects, we will overestimate the contribution that energy-efficiency can make to reduce carbon emissions,” the paper concluded.

The lead author of the report, Jesse Jenkings, who is also Breakthrough’s Director of Energy and Climate Policy, says that while energy-efficiency should still be vigorously pursued, rosy assumptions about emission reductions should be treated with caution.

While truly cost-effective energy-efficiency measures should be pursued as no-regrets policies with benefits for economic welfare, if rebound effects are not rigorously considered in energy and climate analysis and policymaking, climate mitigation efforts are likely to over-rely on efficiency measures, while underestimating the need for new, affordable low-carbon energy supplies. “The result could be climate mitigation efforts that routinely fall short of emission reductions objectives,” reads the report.

Leading government and international agencies, including the International Energy Agency and the United Nations Intergovernmental Panel on Climate, have ignored or dismissed the strong evidence for rebound and even backfire in peer-reviewed academic literature, resulting in climate mitigation scenarios that conclude that large emission reductions can be achieved through greater efficiency.

To read the full report, visit http://thebreakthrough.org/blog/Energy_ Emergence.pdf, to which full acknowledgement and thanks are given. in africa

net

AFRICA’S INDEPENDENT ENERGY PORTAL

HAVE YOU JOINED OUR ONLINE COMMUNITY? 250 in Africa has extended its online presence, visit www.25degrees.net WHAT CAN YOU EXPECT?

ADVERTISING OPPORTUNITIES

• • • • • •

•

Latest magazine content Insightful articles & live news feeds Interactive content, including forums & blogs Energy events Products Reports

• • •

Gain valuable exposure in front of a community of experts and professionals. Become a featured company Participate in a company directory Advertise your products and events online

25 o in Africa 58SUBSCRIBE NOW! To subscribe to 25degrees.net’s insightful newsletter Email your details to admin@25degrees.net

e N ER GY EFF I C I EN CY

2 5 o i n A fr i c a

eNER GY EFFICIE NCY

Is the

IRPfocusing

on energy-efficiency?

South Africa continues along a carbon-intensive energy strategy, ranking us the 14th largest emitter on the planet. Our emissions are about 1/8th of the total emissions of the European Union (EU). Eskom is also the 2nd most carbon-intensive electricity utility on the planet, ranking only behind Huaneng Power in China on emissions. “We need to go back to the basics and energy-efficiency is what I regard as a basic,” says Barry Bredenkamp, General Operations Manager at the National Energy Efficiency Agency (NEEA), a pending division of SANEDI.

Bredenkamp was speaking at A Low Carbon Future Conference, which was held at Gallagher Estate on 23 February. Participants from the government, power utilities, municipalities and investors came together to discuss the Integrated Resource Plan (IRP 2010), its implications and challenges, as well as coordinated strategies which will need to be followed in order to facilitate a sustainable and secure energy future. “We need to take a step back and focus on prioritising energy-efficiency implementation in order to ensure energy security and sustainability – an

Above: World energy demand expands by 45% between now and 2030 – an average rate of increase of 1.6% per year – with coal accounting for more than a third of the overall rise.

immense amount of work lies before us, but we have shown that South Africa is capable of such tasks. We got it right with the FIFA Soccer World Cup – we managed to upgrade certain stadiums, build new stadiums, and construct the massive Gautrain infrastructure – but we had to look at the entire event strategically and the same applies with the IRP,” explains Bredenkamp. “I think the Department of Energy and Eskom has tried to go about the IRP in a strategic manner. We’ve held public hearings, but it leaves one wondering if anyone is really listening, because if you look at what comes out of the hearings, you get the feeling that decisions have already been made anyway,” says Bredenkamp.

25 o in Africa

e N ER GY EFF I C I EN CY

“We need to involve and listen to all stakeholders, weigh up the options, prioritise, integrate activities, optimise initiatives and, most of all, we need clear deadlines. Saying that the situation or options are going to be discussed internally just isn’t good enough anymore – we are past this stage and we need clear deadlines, if we want to keep the lights on for the next 20 years,” says Bredenkamp. Where to focus energy-efficiency initiatives? “As you can see in the graphics, the manufacturing sector is using the most electricity – 49%, followed by the residential market using 20% of electricity. There are many improvements that can be made to reduce their energy consumption: energy-efficiency itself is a major ‘resource’ to achieve this,” says Bredenkamp. “Energy-efficiency is a relatively under-researched field in comparison with its importance. Tackling climate change is an area that receives great policy interest, but there is very limited systematic gathering of information on energy-efficiency beyond national or regional boundaries,” says Bredenkamp. The hype about energy technologies There is much hype about energy-efficiency technologies and new ways to save energy. In Energy Technology Perspectives 2008, the IEA identified energy-efficiency as the cheapest and, in the short- to medium term, the most effective way to combat climate change. Not only does energyefficiency combat climate change, it also alleviates the need to build new capacity in the short and medium term. “Energy-efficiency offers a triple-win outcome: it reduces CO2 emissions, reduces electricity costs and saves our scarce natural resources. The IRP does not take price elasticity into account – some people are going to be forced to save electricity, whether they want to or not,” says Bredenkamp. The boxes that need to be ticked to make this work include the following: • Legal and regulatory framework. • Financial instruments. • Market-based incentives. • Voluntary agreements (such as the NBI’s Energy Efficiency Accord). • Energy audits. • Consumer education and information provision (including accurate billing, regulation and smart metering).

Energy-efficiency in buildings “Buildings have a long lifetime – the construction of new buildings on existing sites proceeds slowly – typically less than 2% per year are replaced. Retrofitting is crucial, because 80% of the buildings which will exist in 2020 have already been built,” says Bredenkamp. When one looks at the bigger picture, says Bredenkamp, one needs to focus on the core strategies and concerns, such as: • Environmental protection. • Economic growth. • Job creation. • Diversity of fuel supply. • Rapid deployment. • Global potential for technology transfer and innovation. Who’s taking action? The biggest pitfall, says Bredenkamp, is that industry isn’t taking action at the required rate. “According to a recent survey, 92% of executives recognise the importance of sustainability to their organisations. However, less than half are taking action,” says Bredenkamp. “For climate change mitigation and energy security goals, nothing beats energy-efficiency. Energy-efficiency can and should support other national priorities 25º in Africa would like to give thanks and acknowledgement to Barry Bredenkamp and CEF Group, who generously contributed information for this article.

2 5 o i n A fr i c a

eNER GY EFFICIE NCY

of the base station to realise operational savings without incurring additional capital outlay. The cooling system is obviously a good starting point because it represents as much as 35% of the total electricity consumption of the base station. This proportion can increase to 50% if there are fewer transmitters in use. Mobile operators like Vodacom, Orange and MTN have started to experiment with “free cooling system” technology in conjunction or not, for example with introducing higher operating temperature in the base station. While the report describes in details the various approaches implemented by mobile operators to run their base stations more efficiently, it also looks at the renewable energy solutions that are currently available on the market for mobile operators to further reduce their energy bill. There is a growing choice of green solutions available (solar energy, wind power, biofuel powered base station, hydrogen fuel cells), but they all require a substantial initial capital investment. The report defines the business case for rolling out “green” base stations and gives examples of African mobile operators that have started to implement renewable energy projects to power their base stations. The

Too few green energy base stations projects in Africa, says new report In a report published by Balancing Act, an online publishing and consultancy business covering broadcast, telecoms, Internet and computing in Africa, it was stated that the number of green mobile base stations deployed in Africa remains small, representing a mere 3.1% of the total number of deployments worldwide (9 558).

A large number of African mobile base stations require two sets of generators and in some cases up to three months’ supply of costly fuel in their tanks. More remote base stations may require fuelling by boat and hand-cart and in the larger markets, operators run large fleets of oil tankers to keep base stations supplied. Isabelle Gross, the author of the report called “Energy for Cellular Base Stations in Africa: The quick fix approach and the long-term perspective to saving energy” says: “Mobile operators shouldn’t take the lack of technical expertise as an excuse to do nothing. African mobile operators have to shift their focus towards the cost side of the business that they are running. Energy expenditures are among the top items on their list.” Gross makes the point that “voice ARPU will carry on decreasing due to reducing prices on voice calls and the acquisition of new customers with a much lower disposable income”. This will put more pressure on mobile operators’ revenue. For example, in Ghana voice ARPU went down from US$17 in 2006 to US$7 in 2010. The report also outlines that when it comes to saving on the energy bills, there is not an “out of the box” solution but it can be done. The best approach is to first look at how to run existing base stations more efficiently. In other words, the “quick fix” which consists of tweaking various elements

25 o in Africa

report establishes that “at the low end in terms of capital investment first comes a combination of solar energy power combined to a diesel battery hybrid powering system. Operating costs like diesel are reduced, but not totally eliminated. At the high end in terms of capital investment comes a combination of wind and solar power system backed by batteries, which provides the maximum reduction in operating costs”. According to the report’s author, “the “quick fixes” will help to reduce operating costs, but only to a certain point. A further reduction in operating costs will require some capital investment because it implies purchasing more energy-efficient equipment or switching to renewable energy power solutions. Ultimately the financial decision lies with the mobile operator and depends on its capital investment strategy and its positioning in the market in the long term. The 45-page report called “Energy for cellular base stations in Africa: The quick fix approach and the long-term perspective to saving energy” contains 5 illustrated boxes, 4 tables, 8 charts and 4 maps. It ends with a directory that has useful details on companies offering services and products to improve the energy-efficiency of a base station or solution to roll renewable energy powered base station. Details are available at http://www.balancingact-africa.com/reports/ telecoms-and-interne/energy-for-cellular. Balancing Act Isabelle Gross Tel: + 44 207 582 5220 E-mail: igross@balancingact-africa.com Website: www.balancingingact-africa.com

e N ER GY EFF I C I EN CY

INDUSTRIAL ENERGY EFFICIENCY improvement project in sa - WORKSHOPS 2011 • Become more Energy Efficient • Cut Energy Costs • Reduce Carbon Emissions • Improve Operational Reliability and Control The Industrial Energy Efficiency Improvement Project in SA will be hosting the following workshops in Johannesburg, Pretoria, Cape Town and Durban during 2011: • Energy Management Systems (a methodological, organised approach to managing energy usage) • Energy Systems Optimisation, with individual courses on the following: • Compressed Air Systems • Motor Systems • Pump Systems • Fan Systems • Steam Systems • Process Heating Systems

- Workshops are presented at three levels Introductory workshops Duration: Five to eight hours Cost: Free Training workshops for users Duration: Two days Cost: R900 per person Expert-level training workshops Duration: The consists of theoretical and in-company practical modules spread over a number of months Cost: R9 000 per person All workshops are presented by internationally recognised, UNIDO-approved trainers with in-depth practical experience

- WHO SHOULD ATTEND • • • • • •

Energy managers Plant and facility engineers Maintenance staff Engineering consultants Service providers to industry Suitably qualified candidates interested in training-the-trainer opportunities

- what others say • • • •

A good balance of examples, science and practical ways to improve systems and reduce loss Very practical, and excellent lecturers Anecdotes from the presenters assisted in bringing in real-life experiences and what can happen in the field Very informative. Highly recommended!

ENQUIRIES (also refer to the latest 25 Degrees e-newsletter) For bookings, more information and regular updates on future training events, please contact us on: 012 841 2768 (Pretoria) • 021 658 2776 (Cape Town) • Email: info@ncpc.co.za

2 5 o i n A fr i c a

INS INS TANT TANT UPDATE UPDATE

Cape company signs biggest renewable energy agreement Cape Town-based Mulilo Renewable Energy (MRE) and the China Longyuan Corporation has signed the biggest private partnership agreement for the provision of renewable energy in South Africa. China Longyuan Corporation is the largest wind-farm developer in Asia, and the fifth largest worldwide. The new company resulting from the agreement, which will be called Longyuan-Mulilo Green Energy, also includes the China Africa Development Fund. South African Energy Minister Dipuo Peters and Chinese Energy Minister Zhang Guobao were present to witness the signing of the agreement by MRE

Chairman Chris Aberdien and Xie Changjun, the president of China Longyuan Corporation. “The formal shareholder agreement between Longyuan and Mulilo cemented an already strong relationship and was in preparation of the national bidding process that will start next year for the provision of wind power in South Africa,” said Mulilo Renewable Energy Director, Johnny Cullum. The projects on which the alliance intended bidding will be fully funded by the Chinese. “We can demonstrate a strong state of preparedness to tackle the projects and we believe this is a powerful motivation to government in the bidding process. Once we get the green light, we can produce energy within 12 months,” concludes Cullum.

Trends in Chinese funding for Angola According to a study by the United Nations (UN), the New Economic Partnership for African Development (NEPAD) and the Organisation for Economic Cooperation and Development (OECD), Angola could see a surge in Chinese investment by developing economic projects for specific areas. Angola provides China with 10 000 barrels of crude oil per day in exchange for US$2-billion credit that China provided for the development of infrastructure that was destroyed during Angola’s civil war. According to the report, entitled “Economic Diversification in Africa”, Angola is making innovative uses of its natural resources for reconstruction, but there has been a gap including big initiatives. Read the full report at http://www.un.org/africa/osaa/reports/ economic_diversification_africa_2011Jan.pdf Source: www.ae-africa.com

I N S TA N T No emergency meeting for $100 needed, says Libya top official The chairman of the National Oil Corporation of Libya, Shokri Ghanem, was recently quoted saying that oil prices at US$100 a barrel would not harm the world economy and there is no need for OPEC to hold an emergency meeting or add supplies. “We think there is enough supplies and there should not be any meeting at this point in time,” said Ghanem. Source: www.af.reuters.com

25 o in Africa

I N S TAN T UPD AT E

Sasol halts coalto-liquids project in Indonesia The South African petrochemical giant Sasol has confirmed that it will not continue with a planned coal-to-liquids plant project in Indonesia. Company spokeswoman, Jacqui O’Sullivan, said that Sasol will be focusing on more gas-to-liquids opportunities. In 2009, the government of the Republic of Indonesia signed a Memorandum of Understanding (MoU) with

Zuma and Calderon urge US to step up on climate change The South African president, Jacob Zuma, and the Mexican president, Felipe Calderon, has urged the United States to take stronger action on the issue of climate change. Both presidents, who are hosts of COP16 and COP17 respectively, have been working together and agreed that US president Barack Obama faces domestic political opposition to his taking the lead on emissions cutting agenda, and both called for faster action from Washington. “It’s the biggest economy in the world and the first or the second carbon emitter,” said Calderon during a debate before business leaders at the World Economic Forum in Davos. Zuma, who has been working with Calderon and who will host the next UN-backed climate summit in Durban this year, agreed, saying: “We need action in the context of what the world has agreed to do.” Source: www.greenwala.com

African economic growth on its way back to pre-crisis level The world’s poorest continent will see gross domestic product growth of 6% this year and, potentially, between 6.2% and 6.5% in 2012. While the African Development Bank won’t be giving its formal economic forecasts for 2012

Sasol, which facilitated the commencement of a screening study into the availability of a coal-to-liquids project using Sasol’s technology. In January 2011, however, Sasol released a statement saying that the company has “taken the decision to accelerate its focus on business development of new gas-to-liquids opportunities and limit its focus on the development of coal-to-liquids opportunities beyond current opportunities (China and India), which are already at advanced stages of development”. Source: www.greencarcongress.com

DR Congo signs US$367-milllion deal

$120-million wind power project for Tanzania Tanzania’s National Development Corp. (NDC) signed a deal worth US$120-million with a wind energy company. Tanzania’s first wind farm, which will add an estimated 50 MW of energy to the national power grid, will begin construction early next year in the Singida region. Most of the East African country’s electricity is produced from hydropower, but prolonged drought and rising fuel prices have resulted in acute energy shortfalls. “It’s a 15-month project, so we expect the first 50 MW of electricity to start being generated by the year 2012,” said Lazaro Nyalandu, Tanzania’s Deputy-Minister of Industry and Trade. Source: www.tradearabia.com

for a few more months, chief economist Mthuli Ncube told reporters at the World Economic Forum in Davos it was clear that African economies were picking up and are on track to hit the peak growth levels of more than 6% seen before 2009.

In February, the Chinese embassy in the Democratic Republic of Congo announced that China has signed a US$376-million deal to build a hydroelectric dam in the central-African country. The work is expected to create 2 000 jobs during its three-year construction phase and is funded using preferential loans from the China Exim Bank. According to a news release from the embassy, China’s ambassador to Congo signed off on the contract with the Congolese government on 29 January. The Central Zongo II project in Bas-Congo province will be undertaken by Sinohydro, the company behind the Three Gorges Dam in China. When completed, it is hoped that the dam will produce 860 GWs of electricity per annum. Congo – which is trying to rebuild after decades of political misrule and conflict – entered into a US$6-billion minerals-forinfrastructure deal with China last year. Source: www.ghanabusinessnews.com

up nicely for now, as well as the diversified economies like Ethiopia,” commented Ncube. Source: www.reuters.com

The growth in African economies is propelled by strong demand from local resources and increased “South-South” investment, notably from China. “The resources side is still holding 2 5 o i n A fr i c a

INS TANT UPDATE

Recent Soltrain workshop a huge success Now in its third year, the Southern African Solar Thermal Training and Demonstration Initiative (Soltrain) recently ran a train-the-trainer workshop focussing on advanced solar cooling, which can be applied for the cooling of buildings, products and industrial processes. This technology is very relevant in southern Africa, where most cooling is required while sunshine is most intensive and the peak load on the national system is critical. The workshop was attended by 35 leading solar experts from academia and industry. Experienced instructors Rudi Moschik and Alexander ThĂźr of AEE Intec in Austria were assisted by Prof Dieter Holm, with the SESSA SWH Division and the University of Pretoria also standing by with organisational aspects in coordinating the visits from South Africa, Namibia, Mozambique and Zimbabwe.

and medium enterprises (SMEs) in the participating countries of South Africa, Namibia, Mozambique and Zimbabwe (nine workshops in total). This training programme is now well in its stride; financed by the Austrian Development Agency (ADA) and it aims to assist southern Africa in transitioning from fossils to renewable energies, thereby creating jobs, addressing the energy crisis and protecting the environment. The universities and SMEs obtain the latest technology and specialist advice in designing, manufacturing and installing solar thermal systems, and are monitored and improved by Austrian experts. More than 50 improved systems will be installed at social institutions like old age homes and HIV/Aids orphanages.

Soltrain has already trained 400 university lecturers and industry leaders who disseminated their special expertise to more than 400 solar thermal specialists, the lionâ&#x20AC;&#x2122;s share being in Gauteng. The event was overbooked, but those who could not attend will be accommodated in dissemination workshops to be held by trainers whose names are listed under www.soltrain.co.za (see: Frequently Asked Questions). After a series of lectures on solar water heater testing and test facilities presented by Karel Deist and Herman Strauss (SABS), Prof OD Dintchev (TUT) and Andrew de Wet (University of Stellenbosch), the workshop covered details of designing larger solar cooling systems and using the specialist solar thermal simulation programme T-Sol. Soltrainâ&#x20AC;&#x2122;s train-the-trainer programme provides advanced solar thermal training and capacity building to tertiary educational institutions and small

25 o in Africa

A solar water heating test centre is also sponsored to improve the quality, performance, lifetime and affordability of solar water systems in southern Africa. Project partner SESSA SWH (Sustainable Energy Society of Southern Africa: Solar Water Heating Division) targets 1m2/capita by 2020, thereby creating more than 200 000 new and sustainable jobs, annually saving 30 500 GWh electricity (replacing 3 Koeberg nuclear plants), 49 523 billion litres water, 19 130 kilotonnes coal, 5 636 kilotonnes ash as well as 46 521 kilotonnes of carbon dioxide equivalent greenhouse gases. Soltrain has already trained 400 university lecturers and industry leaders

I N S TAN T UPD AT E

who disseminated their special expertise to more than 400 solar thermal specialists, the lion’s share being in Gauteng. Nine policy decision-maker workshops informed authorities and financial institutions in South Africa Namibia, Mozambique and Zimbabwe about international best practices in advancing renewables and solar water heating. While southern Africa is endowed with 59% of the world’s best sunshine, South Africa ranks only at number 35 worldwide with solar application. Soltrain sponsors an outdoor test centre for the University of Stellenbosch, which is likely to be placed in Upington where it is less cloudy. This centre will provide training to students as well as feedback to industry. Apart from being financed by the Austrian Development Agency (ADA), Soltrain is implemented by the Austrian Institute for Sustainable Technologies with project partners from South Africa (Sustainable Energy Society of Southern Africa and Stellenbosch University), Namibia (Polytechnic of Namibia), Mozambique (Eduardo Mondlane University and N&M Logotech Lda.) and Zimbabwe (Domestic Solar Heating). To date, sixty Soltrain-sponsored applications for social institutions have been approved, mostly in the Western Cape. The launch of the final tranche of solar water heating bids for social institutions (like HIV/Aids orphanages and old-age homes) took place during the workshop. Submissions have to integrate lessons learnt during the previous workshops. Hence, bids may only be submitted by previous Soltrain participants, and should have a high demonstration value. Systems should be advanced designs not smaller than 15-20 m2 collector fields, at less than €650/m² total installed system cost. Of this, a maximum of 50% will be subsidised by the Soltrain project, which is sponsored by the Austrian Development Agency. Batches of bids will be processed as received, with the closing date being 30 June 2011. For further information on this invaluable initiative, contact:

Joanne Yawitch appointed as the new NBI CEO Joanne Yawitch has been appointed as the new Chief Executive Officer of the National Business Initiative (NBI). Yawitch, who was the Deputy DirectorGeneral of Climate Change at the Department of Environmental Affairs, has led the climate change talks on behalf of the government. She therefore has a deep understanding of the issue and through this will bring tremendous value to the work of the NBI. Yawitch has also worked on the issues of air quality, pollution and waste management, environmental law enforcement and environment impact management within this department. “This is an exciting appointment for the NBI as Joanne has through her long civil service career developed an in-depth understanding of the need for a partnership between the private sector and government in achieving the country’s developmental objectives. Her work has also given her the insight into the challenges that the country faces in its move towards a more sustainable future,” said Gillian Hutchings, the NBI’s Membership Director who has been serving as acting Chief Executive Officer. The NBI is a business coalition of leading South African national and multinational companies, working together towards sustainable growth and development in South Africa through partnerships, practical programmes and policy engagement. “The NBI has a proud track record of mobilising responsible business leadership and action for a sustainable future. It’s a great honour to join its leadership team and have the opportunity to build on its success,” commented Yawitch. For more information, visit www.nbi.org.za, to which full acknowledgement and thanks are given. NBI Tel: +27 861 123 624 E-mail: info.new@nbi.org.za Website: www.nbi.org.za

Dieter Holm Tel: +27 12 371 3389 Cell: +27 83 278 3220 E-mail: dieterholm@worldonline.co.za

net in africa

AFRICA’S INDEPENDENT ENERGY PORTAL

HAVE YOU JOINED OUR ONLINE COMMUNITY? 250 in Africa has extended its online presence, visit www.25degrees.net WHAT CAN YOU EXPECT?

ADVERTISING OPPORTUNITIES

• • • • • •

•

Latest magazine content Insightful articles & live news feeds Interactive content, including forums & blogs Energy events Products Reports

SUBSCRIBE NOW!

• • •

Gain valuable exposure in front of a community of experts and professionals. Become a featured company Participate in a company directory Advertise your products and events online

2 5 o i n A fr i c a To subscribe to 25degrees.net’s insightful newsletter Email your details to admin@25degrees.net 67

ENERGY EVENTS march Hydro Power World Africa 2011 Date: 28 – 31 March 2011 Location: Johannesburg, South Africa Contact: Sean Testa Tel: +27 11 516 4048 Fax: +27 11 463 6903 E-mail: sean.testa@terrapinn.co.za www.terrapinn.com Smart Electricity World Africa 2011 Date: 29 – 31 March 2011 Location: Johannesburg, South Africa Contact: Sean Testa Tel: +27 11 516 4048 Fax: +27 11 463 6903 E-mail: sean.testa@terrapinn.co.za www.terrapinn.com Energy Efficiency World Africa 2011 Date: 29 – 30 March 2011 Location: Johannesburg, South Africa Contact: Sean Testa Tel: +27 11 516 4048 Fax: +27 11 463 6903 E-mail: sean.testa@terrapinn.co.za www.terrapinn.com On-site Power World Africa 2011 Date: 29 – 30 March 2011 Location: Johannesburg, South Africa Contact: Taryn van Zanten Tel: +27 11 516 4026 Fax: +27 11 707 8359 E-mail: taryn.vanzanten@terrapinn.co.za www.terrapinn.com Power Generation World Africa Date: 30 – 31 March 2011 Location: Johannesburg, South Africa Contact: Brian Shabangu Tel: +27 11 463 6001 E-mail: enquiry.za@terrapinn.com www.terrapinn.com BioEnergy World Africa 2011 Date: 30 – 31 March 2011 Location: Johannesburg, South Africa Contact: Sean Testa Tel: +27 11 516 4048 Fax: +27 11 463 6903 E-mail: sean.testa@terrapinn.co.za www.terrapinn.com

Africa Energy Awards 2011 Date: 31 March 2011 Location: Johannesburg, South Africa Contact: Sean Testa Tel: +27 11 516 4048 Fax: +27 11 463 6903 E-mail: sean.testa@terrapinn.co.za www.terrapinn.com Power & Electricity World Africa 2011 Date: 28 March – 1 April 2011 Location: Johannesburg, South Africa Contact: Taryn van Zanten Tel: +27 11 516 4026 Fax: +27 11 707 8359 E-mail: taryn.vanzanten@terrapinn.co.za www.terrapinn.com Clean Technology World Africa 2011 Date: 28 March – 1 April 2011 Location: Johannesburg, South Africa Contact: Sean Testa Tel: +27 11 516 4048 Fax: +27 11 463 6903 E-mail: sean.testa@terrapinn.co.za www.terrapinn.com Green Building World Africa 2011 Date: 28 March – 1 April 2011 Location: Johannesburg, South Africa Contact: Brian Shabangu Tel: +27 11 463 6001 E-mail: enquiry.za@terrapinn.com www.terrapinn.com Africa Energy Awards 2011 Date: 31st March 2011 Location: Johannesburg, South Africa Contact: Brian Shabangu Tel: +27 11 463 6001 E-mail: enquiry.za@terrapinn.com www.terrapinn.com Solar World Africa 2011 Date: 30-31 March 2011 Location: Johannesburg, South Africa Contact: Brian Shabangu Tel: +27 11 463 6001 E-mail: enquiry.za@terrapinn.com www.terrapinn.com IPP World Africa Date: Exhibition: 30th – 31st March 2011 Date: Conference: 1st April 2011 Location: Johannesburg, South Africa Contact: Brian Shabangu

Tel: +27 11 463 6001 E-mail: enquiry.za@terrapinn.com www.terrapinn.com

may 3rd Wind Power Africa Date: 9 – 11 May 2011 Location: Cape Town, South Africa Contact: Fatima Saban Tel: +27 21 406 6330 E-mail: fatima.saban@uct.ac.za Website: www.afriwea.org/events/wpa2011 2nd Eastern Africa oil, gas & energy week Date: 16 – 18 May 2011 Location: Nairobi, Kenya Contact: Rue Limekhaya Tel: +27 21 700 3500 Fax: +27 86 551 8811 E-mail: rue.limekhaya@spintelligent.com www.glopac-partners.com/welcome/

june Solar South Africa Date: 21 -22 June 2011 Location: Johannesburg, South Africa Contact: James Brady Tel: +44 (0)20 3355 4205 www.greenpowerconferences.com

july Renewable Energy Africa (REA) Conference and Expo Date: 27 – 29 July 2011 Location: Johannesburg, South Africa Contact: Nomsa Radebe, Alphabeta Communications Tel: + 27 11 706 6085 Fax: + 27 11 463 1082 E-mail: nomsa@alpha-beta.co.za www.reafrica.co.za

november South African Energy Efficiency Convention 2011 Date: 16 – 17 November 2011 Location: Johannesburg, South Africa Contact: Erika Kruger Tel: +27 18 290 5130 E-mail: convention@saee.org.za www.saeec2011.org.za

New

water MagaziNe! 25º in Africa is expanding from the middle of the year you will be able to find all the latest water news on the flipside of this magazine. Get the latest information, reviews and coverage on africa’s water crisis, hydro energy and acid mine drainage from your

leading energy magazine!

InternatIonal ContaCt InformatIon: Tel: +27 12 347 7530 • Fax: +27 12 347 7523 Cell: +27 83 327 3746 • E-mail: marlene@25degrees.net