PRESENTATION TO PPC ON THE OUTCOMES OF COP 17/CMP 7 ENERGY SIDE EVENTS

17 FEBRUARY 2012

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OUTLINE OF THE PRESENTATION

• Departmental participation

• Background to UNFCCC Negotiations

• COP17/CMP7 Expectations

• Energy Sector SA CCR EXPO Side Events

• DoE participation on the DNA Forum

• International collaboration

• Lessons learned

• Way Forward

• Recommendations

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DEPARTMENTAL PARTICIPATION

• The Department of Energy’s presence at the COP17/CMP7 Conference in Durban was in

three fold, namely:

– Firstly, Team Energy was part of the UNFCCC Negotiation Process;

the department’s officials covered issues on Mitigation and Clean Development

Mechanism;

– Secondly, The DoE’s role was coordination and hosting of Energy Side Events within

the SA Climate Change Response (CCR) Expo; and

– Thirdly, managing the Department’s Exhibition Stand within the SA CCR Expo.

• The Energy Sector side events were hosted in partnership with the energy stakeholders

based on a year’s preparations through the COP 17 Energy Technical Steering Committee

comprised of key government Depts, SOEs, Business & Industry, NGOs, etc

• This collaboration involved also some of the International organisations such as the

International Energy Agency (IEA), International Renewable Energy Agency (IRENA),

French Energy and Environment Agency, International Atomic Energy Association (IAEA),

Business & Industry, (BUSA) UNIDO, UNDP, African Union, World Bank and European

Investment Bank.

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OVERVIEW OF CLIMATE CHANGE

• The focus of climate change negotiations was twofold: firstly it was focused on

how to take forward and complete the tasks from COP 16 (i.e. to ensure that the

Adaptation Committee is launched, the Technology Mechanism is

operationalised in 2012, the Green Climate Fund is approved and to provide

more clarity on fast-start finance), and secondly to answer key political

questions relating to the future of the Kyoto Protocol

• South Africa, as the COP presidency sort to ensure that the discussions are held

in a transparent, inclusive, balanced, equitable, binding and the process had to

be party driven.

• The negotiations were complex and very political, especially given the global

socio-economic developments, and the fact that most countries have already

pronounce their un-willingness to adopt the second commitment.

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COP17/CMP7 EXPECTATIONS

• COP 17 /CMP 7 had to take over the COP 17 Presidency and lead the

negotiations processes forward.

• The focus for Durban was on the following:

The adoption of the second commitment period under Kyoto

Operationalisation of the Cancun agreement(Adaptation Committee, the

Technology Mechanism the Green Climate Fund )

Maintaining the multi-lateral rules based system (i.e. using UNFCCC

framework as a basis for climate change mitigation and adaptation)

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ENERGY SECTOR SA CCR EXPO SIDE EVENTS

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DOE’s PARTICIPATION ON THE DNA FORUM

• The Department of Energy and United Nations Framework Convention on Climate

Change (UNFCCC) secretariat co-hosted the 12th Designated National Authority (DNA)

Forum from the 26-27 November 2011 in Durban.

• The objective of the CDM DNA forum was to provide opportunities for DNA

representatives to exchange views share their experiences relating to the CDM and

bring forward common views and issues to the attention of the CDM Executive Board.

• The Minister of Energy, Ms Dipuo Peters officially opened the forum on 26 November

2011.

• As the discussions progressed, it was highlighted that as part of the implementation of

the “Guidelines for the Establishment of Sector Specific Standardized Baselines”, the

secretariat developed general guidelines to ensure the quality of data required for the

establishment.

• The Executive Board emphasized that since the use of standardized baselines is

voluntary, the level of stringency of the standardized baselines should be sufficient to

ensure a high level of environmental integrity.

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DOE’s PARTICIPATION ON THE DNA FORUM CONT’

• Identified Key challenges:

Countries highlighted that lack of data relating to the development of standardized

baseline would certainly pose a big challenge.

The meeting also emphasized that countries will prefer to priorities sectors with

potential in order to optimize standardized methodologies that would have been

developed for these countries. However, involvement of private sectors such as

universities and other players such as the project developers as the custodians of

the projects would alleviate the problem.

It was reported that the UNFCCC secretariat is working on developing sector

specific data templates. Data delivery protocol will have to be established and data

sets to be collected from different countries.

This was identified as a challenge because most DNAs do not have statistical

information. However, a resolution was taken that the Secreteriat should work on

capacity building and financial mechanisms to ensure the desired outputs.

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DOE’s PARTICIPATION ON THE DNA FORUM CONT’

• Guidelines for Demonstrating Additionality of Micro-scale CDM Project:

The objective of this session was to provide an opportunity for the participants

to share latest information of guidelines regarding additionalities for micro

scale CDM projects.

The Executive Board (Decision EB63) approved a list of Grid connected

renewable energy electricity technologies.

The initial list consists of the following technologies of installed capacity of

15MW or less.

Solar PV and solar thermal;

Off shore wind; and

Marine technologies (wave, tidal).

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DOE’s PARTICIPATION ON THE DNA FORUM CONT’

• In terms of Procedures for Submission of CDM Proposals, the Executive

Board submitted the following as part of progress achieved :

– Duly completed submission form/data template;

– Most recent available data, not older than 3 years and percentage

contributions of the proposed specific renewable energy technologies in the

total installed grid-connected power generation capacity in the country; and

– Any additional supporting documentation

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ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS

• The department hosted successfully 25 Energy Sector Side Events at the SA Climate

Change Response (CCR) Expo and the events were hosted in partnership with both

local and international energy stakeholders.

• The side events covered a range of issues / themes, which included but not limited to:

• Building Energy Efficiency; Diversification of Energy Mix Towards a Low-Carbon

Economy; Nuclear Energy; Carbon Capture and Storage; Transport Fuel Efficiency and

Biofuels; Financing Climate Actions in Africa-Instruments and Policy Framework; Clean

Energy Financing-Policy Effectiveness;Energy Efficiency Financing ; CDM Programme

of Activities Development in South Africa; Clean Energy Technology and Financing

Options for SADC; Market Development Seminar for Clean Energy; Meeting the

Millennium Development Goals-Financing Energy Access for All; Lock-in in the Energy

Sector and Cost of Delaying Action; New and Renewable Energy Technologies-

Fostering Sustainable Development and Rural Electrification in Africa; Solar Energy

Seminar; Energy Efficiency Seminar;Capture and Storage Generation; Wind Energy

Awareness and Wind Atlas Launch; Large-Scale Hydro Energy Seminar and Sustainable

Energy Access for All.

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ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS CONT’

• A pilot project on Sustainable Energy Access was also launched by the

President Honourable Mr Jacob Zuma at ILembe District Municipality, where

solar water heaters and efficient cooking stoves were handed over to

community members.

• This is an initiative that was funded by the United Nations Development

Organisations in an effort to assist South Africa in addressing or intensify

Sustainable Access to Energy by All. This initiative involves the roll out of

Solar Water Heaters in Schools and Clinics.

• The Energy Efficiency Campaign Strategy was launched together with Energy

Efficiency Leadership Network and signing of Energy Efficiency Pledges by

the Business further committing to their organisations of being energy

efficient.

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ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS CONT’

• The DoE together with the Department of Environmental Affairs and Soitech Company

contributed towards inaugurating a less than 1 Megawatt Concentrated Photovoltaic

plant (500kW CPV) by the President, at Ndwedwe.

• Jointly with the Department of Trade and Industry, the DoE conducted a Clean

Technology competition to encourage small and medium Enterprises to invest in cleaner

technologies.

• All the panel discussions / events were well attended with the panellists ranging from

both international and nations world leaders/experts in their respective fields.

• Among others, the Chairperson of PPC on Energy, Mr Njikelana moderated the session

on Diversification of Energy mix towards a low carbon economy while the Chairperson

of Select Committee on Economic Development , Mr F Adams chaired the session on

Financing Climate Actions in Africa – Instruments and Policy Framework.

• It should be noted that the side events were prepared as a collective within the energy

sector including government departments, business, state-owned enterprises, civil

society and NGOs and international stakeholders.

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ENERGY SECTOR SIDE EVENTS & EXHIBITION OUTSIDE FORMAL COP NEGOTIATIONS CONT’

• The Wind Energy Awareness was also launched in partnership with the

Danish Embassy.

• In addition, 5 of 10 flagship projects demonstrated at the SA CCR Expo were

from the energy sector. These included the Solar Water Heating, Cere Wind

Concept, Solar Park Concept, Comprehensive Community Solar Energy

Project, Energy Efficiency and Demand Side Management, Energy Efficient

Housing.

• The Department’s Exhibition Stand was shared with Eskom, CEF, PetroSA,

SA Centre for Carbon Capture and Storage (in partnership with Alstom) and

NERSA.

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LESSONS LEARNED FROM ENERGY SECTOR SIDE EVENTS

• The lessons were learned from the side events interactions:

• Scaling up of the RE Vs Financing: There was a general consensus that

access to financial resources is a key factor in scaling up renewables and

infrastructure development. This remains central to Sustainable Access to

modern energy services.

• Regulatory Framework: Proper incentives are needed to stimulate markets

and enable investments in the RE and EE sector. There was also a general

agreement that governments need to create a stable policies and regulatory

frameworks that will encourage investors (i.e. clear the uncertainties by being

predictive and address long term goals) while at the same time lowering the

cost curve through the support of renewable energy entrepreneurs.

• It was also demonstrated that several factors could enable the successful

deployment of clean energy solutions, namely, supportive policy, legal and

institutional framework, active public sector engagement including research

funding and government procurement.15

LESSONS LEARNED FROM ENERGY SECTOR SIDE EVENTS CONT’

• The lessons were learned from the side events interactions:

• Capacity Building: It emerged that the developed and developing countries

need to build a strong human and institutional resources to implement

effective policies, market based-mechanisms, business models, investment

tools and regulations with regard to energy.

• Additional capacity is also needed on the ground to support innovative bottom

up solutions and to finance, deliver, operate and maintain new energy

systems towards achieving low carbon economy and green jobs.

• Communication and Awareness: It became clear that it is important that all

stakeholders need to understand not only the challenge, but also the

opportunity. It was emphasised that Access to information and knowledge

facilitates policy-making, guides investment decision and orients individual

choices and behaviours.

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LESSONS LEARNED FROM ENERGY SECTOR SIDE EVENTS CONT’

• The lessons were learned from the side events interactions:

• Innovation: Government and private sector need to increase support for

research and development in order to reduce the costs and improve the

performance of clean energy technologies and ensure that they are designed

to meet the needs of consumers.

• With research and development, most clean technologies could be cost be

more cost effective and easy to implement in developing countries.

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INTERNATIONAL COLLABORATION ON CLIMATE RELATED INTIATIVES

• South Africa government through the DoE has signed the Declaration of Intent (DoI)

with international partners on the South African Renewable Initiative (SARi) which

from inception was led by the DTI through IPAP since its inception.

• The international partners are: Germany, Norway, Denmark, UK, European

Investment bank and is still open for other potential partners.

• Prior to UNFCCC, COP 17/CMP SARi PSC was established based on Cabinet

approval.

• The PSC comprised of all key Government Departments such as Energy, National

Treasury, Economic Development, Public Enterprises, Environmental Affairs, etc

• The PSC mainly will conceptualise the operationalisation of SARi as well as

ensuring alignment on all cross cutting issues and mandates

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WAY FORWARD (IMPLICATIONS FOR ENERGY SECTOR)

• Following the promulgation of the National Response Climate Change White

Paper Policy, the department should also increase its focus on assessing

the risk of climate change on its activities.

• To this effect, Department should gear itself up for developing Carbon

mitigation, as national mitigation targets (or strategy) for the sector, which

would in turn require rigorous monitoring, reporting and verification systems

to be implemented along with carbon mitigation efforts.

• The department should continue to engage commercial, insurance and

banking industries to begin to clarify how the private sector is expected to

engage and contribute to achieving the targets that will be set in the strategy

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WAY FORWARD (IMPLICATIONS FOR ENERGY SECTOR)

• Based on the recent announcement of the first 28 preferred bidders for the

renewable energy programme to provide some 1 415.52 MW of power to the

South African national grid from wind and solar projects.

• With further plans for some 3 700MW of renewable energy as part of the

Integrated Resource Plan for South Africa, the department will continue to

work with international partners to implement this ambitious programme.

• The technologies were disaggregated as follows: Solar (631.53 MW), Wind

(633.99 MW), and CSP (150 MW).

• Further to the first IPP procurement phase, other windows of opportunities

will open in March and August 2012 respectively.

• This will intensify the South African efforts of scaling up the renewables as

well as enhancing the roll out of Energy Efficiency programmes.

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RECOMMENDATIONS

• It is recommended that PPC on Energy :

(1) Notes that DoE participated in COP 17 negotiations, however the

DEA/DIRCO will be submitting a detailed report to Cabinet;

(2) Notes that the DoE is required to develop an Energy sector/subsector

strategy in line with the National Climate Change White Paper Policy

approved by cabinet in October 2011.

(3) Notes the partnership the department has forged together with international

and national partners in achieving energy initiatives.

(4) Notes the outcome of Energy Sector Side Events held at the CCR Expo and

lessons learned thereof.

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Thank you

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