Cleaner Energy Cooler Climate - Developing Sustainable Energy Solutions for South Africa potx

Free download from www.hsrcpress.ac.za Free download from www.hsrcpress.ac.za Free download from www.hsrcpress.ac.za Published by HSRC Press Private Bag X9182, Cape Town, 8000, South Africa www.hsrcpress.ac.za First published 2009 ISBN 978-0-7969-2230-4 © 2009 Human Sciences Research Council The views expressed in this publication are those of the author. They do not necessarily reflect the views or policies of the Human Sciences Research Council (‘the Council’) or indicate that the Council endorses the views of the author. In quoting from this publication, readers are advised to attribute the source of the information to the individual author concerned and not to the Council. 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Free download from www.hsrcpress.ac.za Contents Tables 5 Figures 7 Acknowledgements 9 Abbreviations, acronyms and units 11 1 Introduction 15 Energy, sustainable development and climate change in South Africa 15 Outline of the book 18 2 Sustainable development, energy and climate change 19 Working definition of sustainable development 19 Energy for sustainable development 22 Sustainable development and climate change 23 Sustainable development paths as an approach to mitigation 27 Conclusion 29 3 Starting from development objectives 31 The broader context 31 The policy environment in the energy sector 34 The role of electricity in development 39 Economic and institutional aspects 49 Social dimensions and the residential sector 54 Environmental impacts 58 Conclusions: Comparing and assessing 62 4 Options for energy policy 67 Affordable access to electricity 68 Energy governance – to privatise or not? 72 Managing energy-related environmental impacts 74 Economic development and instruments 77 Securing electricity supply through diversity 87 Conclusion 97 Free download from www.hsrcpress.ac.za 5 Modelling energy policies 99 Focus of policy modelling 100 Drivers of future trends and key assumptions 104 The base case 114 Overview of policy cases 121 Residential energy policies 123 Electricity supply options 133 Conclusion 142 6 Assessing the implications of policies 144 Residential energy policies 144 Electricity supply options 158 Conclusion 167 7 Indicators of sustainable development 169 Sustainable development indicators 169 Economic 172 Environmental 179 Social 186 Comparisons and conclusions 194 8 Developing sustainable energy for national climate policy 204 Implementing sustainable residential energy policies 204 Choosing electricity supply options for sustainability 213 Options for South Africa’s mitigation policy 221 9 Implications for international climate change negotiations 226 Proposals on the future of the climate regime 226 Sustainable development policies and measures 229 Would SD-PAMs make a difference? 233 The future of the climate change framework 235 10 Conclusion 238 References 243 About the author 271 Index 273 Free download from www.hsrcpress.ac.za 5 Tables Table 3.1 South African energy policy priorities and progress 38 Table 3.2 Gap between capacity and peak demand for Eskom 45 Table 3.3 Net electricity sent out (MWh) by fuel type, 2001 48 Table 3.4 Electricity-intensive sectors of the South African economy 52 Table 3.5 Estimated electrification levels of rural/urban households, by income quintile (%) 56 Table 3.6 Emission from Eskom power stations, 2001 59 Table 3.7 Energy sector CO 2 emissions, various measures and time frames 60 Table 3.8 Energy and electricity consumption, 2000 62 Table 3.9 Electrification rates, 2000 63 Table 3.10 National energy intensities, 1993–2000 63 Table 4.1 Changes in mean household expenditure on fuels with poverty tariff 70 Table 4.2 Externalities associated with electricity supply, by class 74 Table 4.3 Summary of external costs of Eskom coal-fired electricity generation per unit 77 Table 4.4 Potential future savings from energy efficiency and demand-side management 83 Table 4.5 International cost data for RETs 89 Table 4.6 Estimates of theoretical potential for renewable energy sources in South Africa 90 Table 4.7 Tools that governments can use to promote renewable electricity 90 Table 4.8 Options for new electricity supply 94 Table 5.1 Action Impact Matrix assessing the impact of policy interventions on development goals 102 Table 5.2 South African population projections from various sources (millions) 107 Table 5.3 Number and share of households 109 Table 5.4 Fuel prices by fuel and for selected years 111 Table 5.5 Cost deflators based on Gross Value Added 113 Table 5.6 TPES by fuel group in the base case 115 Table 5.7 Energy demand (PJ) by household type and end use, selected years 121 Table 5.8 Summary of policy cases in residential demand and electricity supply sectors 122 Table 5.9 Income in urban and non-urban areas in 2000 market values 124 Table 5.10 Numbers and % of rural and urban households, electrified and not 124 Table 5.11 Household types, with total numbers in 2000, shares and assumptions 125 Table 5.12 Energy demand (GJ) by household type for each end use 127 Table 5.13 Key characteristics of energy technologies in the residential sector 128 Table 5.14 Characteristics of electricity supply technologies in policy cases 133 Table 5.15 Technically feasible potential for renewable energy technologies 135 Table 5.16 Current capacity, increases and progress ratios for RETs 137 Free download from www.hsrcpress.ac.za 6 Table 6.1 Overview of results for residential energy policies 145 Table 6.2 Reduction in monthly expenditure on electricity with efficient houses, by household type 148 Table 6.3 Energy saved and costs for cleaner water heating 151 Table 6.4 Fuel consumption (PJ) in the residential sector across policy cases, 2014 and 2025 156 Table 6.5 Energy consumption by end use for household types, 2025 157 Table 6.6 Share of households with access to electricity in 2025 for all policy cases (%) 160 Table 7.1 Indicators of sustainable development for energy policies 171 Table 7.2 Total energy system costs across residential policies 173 Table 7.3 Total cost of energy system for electricity supply options 175 Table 7.4 GWh electricity generated by technology in its policy case 176 Table 7.5 Costs of electricity supply technologies per capacity and unit of generation 176 Table 7.6 Shadow price in c/kWh of electricity for policy cases, 2025 178 Table 7.7 Diversity of fuel mix from domestic sources for electricity supply options by 2025 (%) 179 Table 7.8 Local air pollutants in residential policy cases, 2025 180 Table 7.9 GHG emissions in residential policy cases 180 Table 7.10 Local air pollutants in electricity policy cases, 2025 181 Table 7.11 GHG emissions for electricity supply options 184 Table 7.12 Estimate of abatement cost in policy cases 186 Table 7.13 Residential fuel consumption (PJ) by policy case 187 Table 7.14 Shadow prices of electricity and other fuels across policy cases 189 Table 7.15 Initial investment in technology in its policy case 190 Table 7.16 Electricity consumption by household type 191 Table 7.17 Monthly expenditure on electricity, by household type and policy case 192 Table 7.18 Average annual expenditure for various household types 193 Table 7.19 Derived average annual and monthly expenditure, by household type 193 Table 7.20 Share of monthly household expenditure spent on electricity (%) 194 Table 7.21 Evaluation of all policies across three dimensions of sustainable development 195 Table 8.1 Subsidy required to make efficient housing affordable 207 Table 8.2 Cost of saved energy for SWHs and GBs 208 Table 8.3 Order of magnitude of carbon revenues for different carbon prices 224 Free download from www.hsrcpress.ac.za 7 Figures Figure 2.1 Elements of sustainable development 20 Figure 2.2 Comparison of SRES non-policy emissions scenarios and ‘post-SRES’ mitigation scenarios 26 Figure 2.3 Emissions paths relative to development level and possibility of ‘tunnelling’ 28 Figure 3.1 Energy demand, 1992–2000 40 Figure 3.2 Sectoral contribution to economy, 1967–2003 41 Figure 3.3 Share of total primary energy supply, 1999 42 Figure 3.4 Total saleable production, local sales and exports of South African coal, 1992–2001 42 Figure 3.5 Share of final energy consumption, 2000 43 Figure 3.6 Percentage changes in Eskom electricity sales and changes in real GDP at market prices 44 Figure 3.7 Eskom licensed capacity and peak demand (MW) 46 Figure 3.8 South Africa’s power stations by fuel and ownership 47 Figure 3.9 Energy flow through the electricity supply industry in South Africa 48 Figure 3.10 Share of final energy demand by energy carrier 50 Figure 3.11 Electricity demand, 1986–2000 51 Figure 3.12 Final industrial energy consumption by sub-sector, 2001 53 Figure 3.13 Final residential energy demand by energy carrier, 2001 55 Figure 3.14 Employment in coal-based electricity generation in South Africa, 1980–2000 57 Figure 3.15 South Africa’s GHG inventory by sector, 1994 61 Figure 3.16 Changes in energy intensity, 1993–2000 64 Figure 4.1 Welfare economic basis for poverty tariff 71 Figure 5.1 Trends in GDP, 1946–2000 105 Figure 5.2 Population projections based on the ASSA model 108 Figure 5.3 Learning curves for new and mature energy technologies 110 Figure 5.4 Electricity generation (GWh) in the base case, grouped by fuel 116 Figure 5.5 Electricity capacity (GW) in the base case 117 Figure 5.6 Projected energy demand by sector in the base case 118 Figure 5.7 Trends in electrification of households in South Africa, 1995–2002 119 Figure 5.8 Projected changes of household numbers in the base case, 2001–2025 120 Figure 5.9 Trends in fuel shares in the residential sector in the base case 126 Figure 5.10 Schematic description of assumed PBMR costs in reference and policy cases 138 Free download from www.hsrcpress.ac.za 8 Figure 6.1 Implications of efficient houses on demand for space heating in UHE households 147 Figure 6.2 Changes in lighting technologies in the CFLs policy and base cases 149 Figure 6.3 Investment costs for SWHs and GBs, by household type 151 Figure 6.4 Equivalent of fossil fuel use for solar water heating, by household type (PJ) 152 Figure 6.5 Energy used for water heating by urban low-income electrified households 153 Figure 6.6 Fuel switch to LPG for three household types 154 Figure 6.7 Renewable energy for electricity generation, by policy case 158 Figure 6.8 Contribution of RETs to meeting the target by 2013, and beyond 159 Figure 6.9 Nuclear energy (PBMR) for electricity generation, by policy case 161 Figure 6.10 Unused capacity of the PBMR in the policy case 162 Figure 6.11 Marginal investment required for more PBMR capacity 162 Figure 6.12 Imports of hydroelectricity and import costs in the policy and base cases 163 Figure 6.13 Annualised investment in combined cycle gas in the policy and base cases 164 Figure 6.14 Electricity generation without FBC 165 Figure 7.1 Undiscounted total investment in technologies, supply and demand 172 Figure 7.2 Investment required for residential policies in the policy cases 174 Figure 7.3 Annualised investments in electricity supply technologies, by policy case 177 Figure 7.4 Sulphur dioxide emissions in electricity policy cases over time 182 Figure 7.5 Carbon dioxide emissions for all cases over time 185 Figure 7.6 Renewable energy use in residential policy cases 188 Figure 7.7 Shadow prices of energy carriers over time 190 Figure 7.8 Electricity supply options ranked by economic, social and environmental indicators 201 Figure 7.9 Electricity supply options ranked against more indicators 202 Figure 7.10 Residential policies ranked by economic, social and environmental indicators 203 Figure 8.1 Marginal investments required for efficient houses at 30% and 10% discount rates 207 Figure 8.2 Diversity of fuel mix from domestic sources for electricity supply options by 2025 218 Figure 8.3 Total capacity for electricity generation and additions per year 220 Figure 8.4 Wedges of electricity capacity equivalent to one ‘six-pack’ each over 20 years 221 Figure 8.5 GHG emissions avoided in residential policy cases 222 Figure 8.6 GHG emissions avoided in electricity policy cases 223 Figure 9.1 Alternative global CO 2 emission pathways for 400 ppmv 234 Free download from www.hsrcpress.ac.za [...]... lower-income electrified RLN Rural lower-income non-electrified UHE Urban higher-income electrified ULE Urban lower-income electrified ULN Urban lower-income non-electrified 13 Free download from www.hsrcpress.ac.za For Janet, Kristy and Alexandra 1 Introduction Energy, sustainable development and climate change in South Africa Making energy supply and use more sustainable is a central challenge in South. .. findings of this book might mean for multilateral climate negotiations Chapter 10 provides a brief conclusion 18 2 Sustainable development, energy and climate change This chapter explores how sustainable development can be applied to South Africa s energy, through a review of the literature relating the concept to both energy and climate change Sustainable development for the residential and electricity... by employment and income distribution Sustainable development for the sector must therefore reduce energy poverty2 by promoting affordable access to modern energy services Free download from www.hsrcpress.ac.za Sustainable energy development is more than sustainable energy growth An energy growth path may deliver an increase in energy consumption per capita, but energy development should also improve... are clearly unsustainable In this sense, a working definition of energy for sustainable development is needed for the book 21 C L E A N E R E N E R G Y C O O L E R C L I M AT E Energy for sustainable development Sustainable development has as its primary aim the search for a path of economic progress which does not impair the welfare of future generations (Pearce et al 1989) A sustainable energy development... development or both – will be needed Climate and sustainable development policy are mentioned in the same breath The argument put forward in this book is that sustainable development policies are an appropriate and effective starting point for a developing country like South Africa The focus of this book is therefore on non -climate policies, with GHG emission reductions as a co-benefit Supply options are examined... make electricity generation more sustainable The South African electricity sector accounted for 40 per cent of South Africa s GHG emissions in 1994 (calculated from RSA 2004), implying that the potential for climate co-benefits of cleaner electricity development is large On the demand side, residential energy policies are examined that make social development more sustainable This will entail not only... diagram), South Africa perhaps already lies above such a limit, on segment BC South Africa s per capita emissions were 6.91 t CO2 (1.88 t C) per person in 2000, which is well above the global average of 3.89 t CO2 (1.06 t C) (IEA 2002a) Even more than for other developing countries, South Africa needs to de-couple emissions from economic growth The main opportunities for de-coupling lie in using energy. .. a distinction between climate and non -climate policies (Morita & Robinson 2001) Climate policies have GHG emission reductions as a primary goal, while non -climate policies do not aim at this The confusion arises when non -climate policies nonetheless reduce emissions Sustainable development policies are a classic example: energy efficiency in lowcost housing may be motivated by sustainable development,... working definition of sustainable development, firstly in the context of energy and secondly in relation to climate change It lays the conceptual basis for developing indicators of energy for sustainable development, which are used to evaluate different energy policies in the remainder of this book Free download from www.hsrcpress.ac.za Working definition of sustainable development Sustainable development’... demonstrating at a national level that energy policies can both promote local sustainable development and reduce GHGs can make a major contribution to climate change mitigation This book seeks to demonstrate energy policies for sustainable development in South Africa Are there obvious solutions that solve both energy and climate change problems, or do priorities have to be traded off – and if so, where? . www.hsrcpress.ac.za 15 Introduction Energy, sustainable development and climate change in South Africa Making energy supply and use more sustainable is a central challenge in South Africa s. from making energy development more sustainable in local terms – is viable for South Africa and could form the basis for both future energy and climate change