Programme director
Honourable premier
Honourable ministers
Honourable MECs
Honourable mayor and councillors in our midst
Senior government officials
Municipality officials
Distinguished guests
Ladies and gentlemen
Good morning
It is an honour to be launching the Durban Landfill Gas to Electricity Clean Development Mechanism (CDM) project developed and implemented by eThekwini municipality. This really proves that all three spheres of government can accelerate development and deployment of renewable energy technologies and thus contribute to the sustainable development of our beautiful country.
Durban Landfill Gas to Electricity is the fifth project to benefit from the renewable energy subsidy scheme that the department has been providing to renewable energy projects since the subsidy scheme was established in 2005, and the first I am launching as the Minister of Energy, since I could not attend the launch of the Bethlehem Hydro project in October 2009.
One of the primary pre-occupations for many governments around the world today, is energy security. In South Africa, our government recognises and acknowledges that renewable energy will significantly contribute to energy supply security by increasing diversification of energy sources, expanding access to energy services, and contributing to sustainable development through the optimum use of cleaner energy resources. A number of renewable energy sources and technologies are available in South Africa, but most still need to be developed to their full potential.
In seeking to contribute to humanity’s quest for better energy technology, we all recognise the need to diversify energy supply by developing advanced, non-polluting, more efficient, affordable and cost-effective energy technologies to meet the rising global demand for energy, particularly in developing countries.
Cognisant of the threat of climate change, we also recognise that it is important to balance our exploitation of fossil fuel resources with alternative energy options that could help mitigate and even reduce the impact of increasing greenhouse gas emissions. It is for this reason that the Department of Energy has identified clear targets for renewable energy options within the integrated resource plan.
This integrated resource plan merely reaffirms the Renewable Energy White Paper target of 10 000 gigawatt hour (GWh) by 2013. To achieve this goal, I therefore call and encourage all the stakeholders in the energy sector to come on board to make it happen for the benefit of our developing economy so that even the remote areas not connected to power grids can benefit from other green energy projects.
This target can only be achieved through the appropriate development of renewable energy technologies and the Durban Landfill Gas to Electricity is one of those projects that will contribute immensely to the achievement of the modest but important target. It is imperative to note that we are in the process of reviewing Renewable Energy White Paper in order to come up with more ambitious medium term and long term targets.
Programme director; allow me to share information on the significance of the development of the Durban Landfill Gas to Electricity Clean Development Mechanism project from a socio-economic and environmental perspective. This project will generate electricity from waste. This means, it will reduce waste accumulation while at the same time generating electricity and reducing greenhouse gas emissions.
In other words, it will capture methane rich landfill gas from the landfill site to provide fuel for the production of approximately six megawatts of electricity. Programme director eThekwini project augurs well with the Polokwane declaration on waste management where it was declared that amongst others that the government, business and civil society need to join in common efforts towards the accomplishment of the goal for reduction of waste generation and disposal by 50 percent and 25 percent respectively by 2012 and engage in the promotion of clean technology and clean production amongst others.
It is also important for all of us to understand that this kind of green energy project does not only address the waste management goal as well as energy demand and security. But inputs positively to following government priorities:
* Poverty alleviation through creation of employment opportunities which ultimately improves the quality of life
* Improve the health status and air quality by reducing the release of harmful greenhouse gases which normally contribute to respiratory infections and global warming and
* Contribute towards the country’s skills development plan.
As I understand it, the development of this project began as far back as 2002 when the Department of Cleansing and Solid Waste (DSW) here in eThekwini municipality was approached by the World Bank encouraging the municipality to consider participating in clean development mechanism (CDM) initiatives. At this time the Kyoto protocol had not been ratified by South Africa, and there were no certified emission reductions. After some protracted negotiations the eThekwini municipality eventually signed an emissions reductions agreement with the World Bank.
In March 2009 the project was registered as a Clean Development Mechanism and it was the first landfill gas project to be registered in Africa. This was indeed a huge milestone for us. The Designated National Authority division in my department played a significant role in ensuring the successful registration of the project, and I would like to take this opportunity to urge all project developers to continuously liaise with the Designated National Authority to facilitate registration of Clean Development Mechanism projects.
We need to take advantage of the Clean Development Mechanism and I would like to see a significant increase in projects benefiting from this additional revenue stream. Findings of some of the studies that we conducted shows that we have about 57 municipality owned landfill sites that have the potential to generate approximately 1 200 GWh per annum.
However, I am told that issues such as lack of tariff at appropriate level and clauses in Municipal Finance Management Act (MFMA) hindered investment especially in landfill projects. However programme director, I am encouraged to see that eThekwini municipality managed to overcome this and I am hoping that other municipalities will be able to learn from this.
The Department of Energy through its renewable energy finance and subsidy office provided a subsidy to the value of R6 million. It is expected that about 12 000 tons of carbon dioxide emissions will be reduced through the project, which is significant for us when considering that we are among the biggest carbon dioxide emitters in the world even though we are a developing country. This is mainly as a result of the electricity and hydrocarbons industries that are predominantly coal based.
As many of you would know, South Africa ratified the Kyoto protocol in 2002 (Kyoto protocol is a global instrument which seeks to ensure that global greenhouse gas emissions are reduced by at least five percent below 1990 levels between 1998 and 2012). Therefore, it is encouraging observing more projects which give effect and meaning to this commitment, being developed and commissioned here at home.
Despite the disappointing outcome of the 2009 Copenhagen meetings, optimism still prevails that during this 2010 we will see more countries adopting binding targets going forward. There is therefore a need for our energy sector to be diversified by ensuring that our electricity is also produced from cleaner alternative energy sources.
I am happy that the National Energy Regulator of South Africa (NERSA) approved the first and second phase of renewable energy feed in tariffs, including the one for landfill gas to electricity like this one. This is one of the biggest milestones we have achieved on the renewable energy front.
You may also recall that in my budget vote speech of 2009/10, I announced the need for the establishment of the independent systems operator (ISO). The independent systems operator is intended to level the playing field between producers and consumers of electricity in a manner that protects the smaller players from potential market abuse by the bigger players. I am glad to announce that the process of establishing the ISO is underway.
The generation license, renewable energy feed in tariffs, independent systems operator, the power purchase agreements and the liquidity of the independent system operator are the essential characteristics of viable independent power producers. We are currently working on parallel processes. Our ultimate objective is to ensure that all these systems are in place as quickly possible. NERSA is currently putting together procurement guidelines as prescribed in the new generation regulation and through collaboration between the Department of Energy, NERSA and the National Treasury there will be a standardised power purchase agreements.
Programme director, special gratitude goes to the eThekwini municipality for initiating and constructing a project that managed to create about 14 skilled associated jobs, 38 semi-skilled and 57 unskilled jobs during construction. This augurs well with our government’s objective as it clearly demonstrates what we can achieve when we work together as government and a nation. I hope this will serve as an inspiration to other municipalities across the country.
It will be essential that landfill gas projects do not only produce electricity but also become a breeding ground for local skills development in the areas of maintenance and operations. We do envisage that in future there will also be the continuation of using existing skills in future expansion of projects within municipalities. This is what we mean by the creation of descent and sustainable jobs.
It is also befitting to extend our gratitude to our sister department, the Department of Trade and Industry for providing financial support to the project. Our gratitude goes to the French Development Bank (FDB) who ensured that Durban Landfill to Electricity project becomes a reality by also providing funding.
Going forward, we expect that commercial banks will also come to the party since we have introduced the renewable energy feed in tariffs which will assist in lowering the risk associated with deployment of renewable energy technologies. We have also promulgated new generation capacity regulation and the integrated resource plan. We are now at the final stages of creating the required conducive environment for independent power producers to enter the market as a result we anticipate that investment will begin start flowing early this year.
Programme director, I am happy to confirm government’s commitment on renewable energy sources by announcing that South Africa has officially joined the International Renewable Energy Agency (IRENA) as a member state on 17 January 2010 in Abu Dhabi. As a member state, we are ready to benefit from full participation on IRENA’s comprehensive work programme which seeks to address the following objectives:
* Promote a rapid transition towards the widespread and sustainable use of renewable energy on a global scale
* Facilitate access to all relevant information including reliable data on the potential of renewable energy, best practices, effective financial mechanisms and state of the art technological expertise
* Forecast all types of renewable energy and considering various renewable energy policies on the local, regional and national level and
* Improve regulatory framework and build capacity.
To conclude, programme director, as we respond to the global issues of climate change, renewable energy should contribute more to South Africa’s energy mix, and we anticipate that we shall continue to see more and larger projects being commissioned. The department will continue supporting renewable energy project developers in order to scale up the development of these technologies as rapidly as possible. We will also continue investigating and implementing initiatives that will ensure that we achieve our renewable energy aspiration.
The time for renewable energy has arrived.
I thank you.
Issued by: Department of Energy
28 January 2010
