Supporting the Central Energy Fund in its actions against global warming
Background
South Africa is a country with high energy intensity and a major emitter of greenhouse gases, due to the important part its industry sector plays in the formation of its GDP, the predominance of coal in its energy balance (more than 80 % of energy consumed) and lastly the low energy efficiency in various sectors (industry, housing, transport, electricity) - a result of low electricity prices, which does not encourage energy conservation.
The state, municipalities and businesses are now aware of the need to pay attention to their energy consumption.
The country is thus equipped with a renewable energy strategy with a target of 10,000 GWh of renewable energy by 2013, representing 4% of energy production. Moreover, in March 2005 the Department of Energy launched a national plan for energy efficiency over the period 2005-2015, which aims amongst other things to improve energy efficiency in industry by 15% and to increase the performance of the housing sector.A regulatory framework and national legislature is thus established to encourage improved energy efficiency in the industry and residential sectors (tax cuts, tax incentives). This is in addition to potential international financing sources such as the Clean Development Mechanism (CDM).
The Central Energy Fund (CEF) is a public holding company consisting of several public companies in the energy sector (PetroSA, iGas etc.). The CEF is responsible for promoting and funding the development of projects dealing with renewable energy and energy efficiency. The Minister of Energy is its sole shareholder.
In line with the commitments of the international community to fight against global warming, and in the tradition of public priorities in terms of French official development assistance, the AFD has significantly increased its commitment to environmental protection since 2004, especially regarding the control of energy in all the countries of its operations. This is one of its priority areas of intervention in South Africa.
Objective
The project aims to increase energy efficiency and the share of renewable energy in the South African economy, in order to reduce the pressure placed on fossil fuels and to reduce CO2 emissions.
Project description
The project involves providing technical assistance to the CEF and the Department of Energy by on the one hand implementing policies for energy efficiency and renewable energy, and on the other hand preparing investment programmes for these two themes. It includes:
· Making a team of experts available for two years, one based in South Africa and one an international consultant with expertise in energy efficiency;
· The mobilisation of short-term experts in specific fields to support the preparation of sectoral energy audits or for setting up investment programmes;
· The organisation of training sessions and seminars targeted at sub-sectors of energy efficiency, to promote an exchange of experience in particular between Europe and South Africa.
The areas of application specifically aimed at are the establishment of a solar water heating industry, energy efficiency in the industry and construction sectors, electricity cogeneration and lastly the development of Biofuels.
Impact
The project will provide:
- Pre-feasibility studies of energy conservation investment projects;
- Proposed energy conservation programmes or energy control projects, which feed into the programming of this type of investment in South Africa (likely to support non-sovereign competition or PROPARCO);
- Exchange of know-how in setting up these programmes and strengthening of our expertise on this topic which remains innovative in emerging countries. The cooperation entered into could serve as an example for further cooperation in renewable energy and energy efficiency in the sub region and Africa
After a year and a half, this project has enabled the AFD to initiate a directive for a proposed solar water heating project in the municipalities of Nelson Mandela Bay (Port Elizabeth) and eKhuruleni, to identify a recovery and processing project for landfill methane electricity from 4 municipalities in South Africa, and to pre-identify an energy efficiency project in South African universities. In addition, the partnership with the CEF has been strengthened through the participation of the AFD Carbon Capture Storage Centre (CCS Centre) whose objective is to develop research on CCS and to explore the capacity of storage South Africa.
Date and amount
Date: Technical assistance agreement effective from February 20, 2008 to January 31, 2010.
Amount: Grant of € 0.75 million