COP17/CMP7 Energy Sector Progress Report

1. COP17/CMP7 Energy Sector Progress Report to the Select Committee on Economic Development 18 October 2011

2. Presentation Outline • Background • Africa Energy Ministers Conference (AEMC) • Flagship/legacy projects • UNFCCC Side Events • SA CCR Expo Side Events • Partnerships and Collaboration • DoE Delegation and Accreditation • Summary of Progress • Linkages with other Departments

3. Background • Following COP 16 meeting and outcomes, and in preparations for COP 17 in Durban, the Department of Energy approved the establishment of both an internal and External Technical Steering Committee were both established in April 2011. • The purpose of the internal COP 17 steering committee is to ensure that all the energy sources are reflected on based on the vision and mission of the Department based on the policy imperatives. • The External Technical Steering is comprised of the whole energy sector, i.e. Government, SOEs, business/private sector, etc. • The committee is responsible to develop and implement Energy Sector Work Plan for COP 17 to ensure ownership and concurrence by the energy sector as a whole.

4. Background • Three (3) high level thematic panel discussions for energy were submitted for participation in the UNFCCC precinct. • 18 demonstration projects were also coordinated to be showcased at the Climate Change Response Expo – organised and led by the Department of Environmental Affairs. • 24 thematic panel discussions / roundtables are also being developed into fully fledged concepts for the CCR Expo participation (refer to the attached draft energy side event programme) • Panelists for discussions will include Ministers, DG, CEOs and Technical Experts, government and private sector representatives for various organisations from both at national and international level

5. Feed Back: African Energy Ministers’ Conference • The DoE together with the African Union (AU) hosted the African Energy Ministerial Conference on15-16 September 2011 at Sandton Convention Center. • A total of 45 countries, 35 Ministers and Deputy Ministers and more than 200 delegates from government and business sector, both locally and internationally attended the conference. • The aim of the conference was to provide a high level platform for Ministers as decision makers to have an opportunity to deliberate and map a way forward on Access to Energy for Africa in preparation for COP 17. • The main objective was also to promote sustainable energy access for Africa in line with the UN declaration of 2012 as the International Year of Energy access for All.

6. Feed Back: African Energy Ministers’ Conference • Africa contributes less than 4 percent of global CO2 emissions, but it is the continent most vulnerable to climate change and least prepared to deal with its effects. • Climate change will threaten food and energy security through higher temperatures, extreme events, and changes in rainfall. • 585 million people do not have access to modern energy in Sub-Saharan Africa. • Energy poverty is hindering development in Sub-Saharan countries and is a barrier to economic growth and the successful achievement of the Millennium Development Goals.

7. Feed Back: African Energy Ministers’ Conference • The following key topics informed the basis of a detailed deliberation through scientific papers on issues on the ground: • Climate Resilience and Energy Access: A Top priority for Africa • A process toward Universal access to modern household energy services • Illustrating Financial Instruments for low-carbon energy investment in Africa • Path to energy security: Building a sustainable energy portfolio • Regional Power trade: cutting energy costs for Africans • Securing resources for energy investments: climate finance for green growth • A formal report on all the conference proceedings is being finalised.

8. Feed Back: African Energy Ministers’ Conference • This conference was preceded by a capacity building or training side event on 14 September 2011 coordinated by UN Energy and was attended by about 70 participants spread across the continent. • The focus was on training tools for Sustainable Energy for technical teams, project managers, etc and addressed the following key factors: • Capacity building in Energy Planning • Interactive demonstration of the Clean Energy Solutions center • Measuring energy poverty • Technology needs assessment training • Preparing proposals & business plans for financing • Guide to reporting Energy RD&D budget/Expenditure Statistics

9. Key Outcomes of the AEMC • To identify energy solutions that will ensure that Africa has the resources to achieve economic growth and development while simultaneously addressing the dual challenges of mitigation and adaptation to climate change in partnership with the developed world. • To create a sustainable program for universal energy access to advance on the scaling up of energy systems that are less-emissions intensive • Agree on solutions for infrastructure, provision of finance, and the expansion of new and clean technologies for developing countries and in particular Africa in order to meet the Millennium Development Goals (MDGs)

10. Key Outcomes of the AEMC • Parallel to the conference, Minister of Economic Development, Mr Ephraim Patel officially opened a side event on Green Economic Development in South Africa- “Africa Great Opportunity: household cookstoves” which has a potential to create employment while closing the gap on energy access. • The conference built on the work of the Forum of Energy Ministers of Africa (FEMA) and several sub-regional economic communities, notably the Economic Community of West African States (ECOWAS), the East African Community (EAC) and the Economic Community of Central African States (CEMAC), SADC, etc.

11. Key Outcomes of the AEMC • It further sort to contribute to the development of energy strategies, aimed at realizing the NEPAD objectives, namely achieving the growth, and success of the African economy in realizing Africa’s great potential in energy. • This conference resulted in a joint declaration as outlined in the slides to follow • The United Nations Energy Programme is currently finalising a book on Climate Change which will include the South African Energy plans (vision to 2030 as per the Integrated Resource Plan) as well as Africa Energy Ministers conference outcomes.

12. Key Outcomes of the AEMC • The aim is to push for developing and developed countries to accelerate the implementation of both climate change adaptation and mitigation interventions in order to address energy needs while building a climate resilience future • To maximize the utilization and taking advantage of the natural resources in scaling up energy access in the continent • To seek ways to harmonize the regional power pools in achieving the growth and success of the African economy and to realize Africa’s great potential in energy • Partnership and financing from the developed world will be critical if Africa will be able to rid itself of serve poverty levels and achieve genuine green growth. • The conference concluded with a declaration that will form part of the UNFCCC deliberations in Durban (refer to attached declaration).

13. African Energy Ministers Conference Declaration (Details contained in the full declaration)

14. Feed Back: African Energy Ministers’ Conference • Recalling the Maputo Declaration adopted by the African Energy Ministers at their inaugural conference held in Maputo, Mozambique, on November 5th, 2010, and reiterating the commitments that resulted, including the formation of the Conference of Energy Ministers of Africa (CEMA); • Welcoming the progress achieved in the establishment of Regional Power Pools and the programs, initiatives and partnerships at both regional and sub-regional level geared towards advancing energy sector development and integration in Africa, and appreciating the support of development partners to Africa’s energy development agenda.

15. Welcoming and Recognizing • Welcoming 2012 as the International Year of Sustainable Energy Access for All, and the sustainable energy goals set forth in the report of the United Nations Secretary-General’s Advisory Group on Energy and Climate Change (AGECC); Energy for a Sustainable Future, The Secretary-General’s Advisory Group on Energy and Climate Change (AGECC), New York, USA, April 28, 2010. • Welcoming the continued emphasis placed by the United Nations Secretary-General and the UN system on sustainable energy as central to achieving sustainable development. And specifically on the Action Agenda that is being designed by a new High-Level Group on Energy around three goals: ensuring universal access to modern forms of energy for all by 2030, improving energy efficiency by 40 per cent by 2030, and doubling the global share of renewable energy by 2030;

16. Welcoming and Recognizing • Recognizing that access to reliable, affordable and sustainable energy service is essential to reduce poverty and promote equitable and sustainable social and economic development, and climate resilience in our continent; • Recognizing that resource efficiency and green growth critically contribute to poverty reduction, job creation, decent work, social development and a better environment;

17. Emphasizing • that inadequate energy systems will jeopardize the achievement of the Millennium Development Goals in Africa and weaken resilience to adverse climate change impacts, as well as hinder opportunities for vulnerable groups, especially women and children; • the vulnerability of Africa to the negative impacts of climate change, the resultant threats to water supply and energy infrastructure, and hence the need to ensure adaptation to climate change; • Emphasizing that Africa, Least Developed Countries (LDCs) and Small Island Developing States (SIDS) should be prioritised for Green Climate Fund as reflected in the COP 15/CMP 5 Copenhagen Accord;

18. Emphasizing • Emphasizing the principles of the United Nations Framework Convention on Climate Change (UNFCCC), • particular the principle of common but differentiated responsibility and respective capability , and • further reinforcing that developing country mitigation and adaptation action is dependent on the provision of finance, technology and capacity building support from developed countries

19. Capacity Building and Finance Capacity Building • The fundamental need to build necessary: • human and institutional capacity developments on a sustainable basis. • Ability to implement bankable projects, • effective policies and regulations, and • negotiate favourable agreements to ensure the provision of sustainable energy for all Finance • Recalling also the COP 15/CMP 5 Copenhagen Accord on Fast Start Financing approaching $30 Billion by 2012 and on long term funding arrangements of up to $100 Billion per year by 2020

20. Ministers assert that: • Expanding access to modern energy services and • energy security are priority to accommodate the basic needs of millions of African citizens, • facilitate human and social development, sustain economic growth, and • contribute to the achievement of the MDGs in Africa thereby building resilience to the impacts of climate change

21. Ministers assert that: • intermediate goal is • To support and complete the currently planned capacity expansion through key transformational projects, • To add an additional 30 GW of capacity within ten years. • To accommodate the needs of an additional 150 million Africans served by grid electricity

22. Ministers assert that: • Building energy security by scaling-up regional power supply and transmission: • The up-scaling and coordination of regional transmission and generation capacity will enable further benefits of scale, security and diversity. • With the support of financing, technology and institutional capacity building from developed countries to enable Africa to enhance its economic, social and environmental development using a diversity of clean energy sources.

23. Ministers further assert that: • Localizing supply chains: Whilst growing our energy economies, Africa need to ensure that localization of supply chains for not only the supply of equipment and plant, but also the maintenance and operation of our facilities. This will create jobs and grow skills as well as reduce costs • Integrated planning is critical to the sustainability and further development of Africa’s economies and societies. As such Ministers will prioritize integrated planning and the role of the energy sector in developing Africa’s economies, promoting investment and localization, as well as improving education, security and health care.

24. Ministers further assert that: • Integrated planning is critical to the sustainability and further development of Africa’s economies and societies. As such Ministers will prioritise integrated planning and the role of the energy sector in developing Africa’s economies, promoting investment and localization, as well as improving education, security and health care. • Building technology and innovation capacity: Africa need to build its technology base through undertaking appropriate research and development (R&D), developing skills base and facilitating technology transfer to ensure that technologies needs are driven and appropriate for local conditions including undertaking regional resource assessment projects.

25. Ministers assert that: • On securing financial resources • Africa lack of resources for project preparation and development – from concept to financial close and execution • most major energy projects require long term finance with repayments linked with project revenue generation. Which is often inadequate to support the long value chains of comprehensive projects • the financing of these projects needs to be in the form of grants - especially for interregional transmission and renewable energy projects • aim to maximize the flow of green finance and carbon funds as well as the use of mechanisms such as the CDM.

26. Ministers resolve to: • Support the expansion of generation capacity with emphasis on regional projects • Enhance funding for policy and institutional development activities, with emphasis on planning, design and timely implementation • Support a sector wide approach to scale up energy access through energy planning and international cooperation • Enhance regional trade and energy resource development through support from development partners

27. Ministers resolve to: • Urge the COP to ensure that adaptation receives equal weighting to mitigation and in particular that adaptation projects be recognized for support in the Green Climate fund. • Further suggested that templates be developed to facilitate the development of country and regional adaptation plans for the most vulnerable countries and regions – especially in Africa.

28. Ministers commit to: • Ensure the success of these actions, through: • Full cooperation in the achievement of the above actions • Cooperation in developing regional integrated energy plans which will identify priority energy projects across the continent. • Cooperation in the sharing of lessons learnt in the energy field through holding workshops and training programs. • Improving the efficiency of Africa’s Energy operations to reduce emissions and improve affordability • Working in partnership with key stakeholders including business and our Development partners

29. Report on Flagship/Legacy Projects (1) • The Inter Ministerial Committee requested National Departments to determine Top 10 National Flagship projects to be showcased at the COP 17 • The Top 10 projects were selected based on a criteria agreed to by the Inter-Departmental Logistic Committee (IDLC) Chaired by DIRCO • 5 of the top 10 National Flagship projects are from the Energy Sector • The 5 projects are led by the Department of Energy in partnership with the Department of Economic Development, Ethekwini Municipality and Eskom

30. The Criteria

31. The 5 Energy Sector Flagship Projects (1)

32. Options for Energy Seminar Rooms • African Union Pavilion (part of UNFCCC precinct) • AU allocated 2 000 square metre by UNFCCC • SA Climate Change and Response Expo • Preliminary allocations 375 square metre • One seminar room (50 – 100 seats) • 2 x Boardrooms (10 seats) • Durban University of Technology (DUT) in partnership with IRENA (International Renewable Energy Agency) • Exhibition space and capacity building for Journalists and Media Professionals • IRENA will work closely on an Energy Indaba during the COP • NEDBANK Building (in partnership with NBI)

33. DoE Delegation and Accreditation • Delegation of 22 members approved • Negotiation process • Side events and exhibitions (UNFCCC and SA CCR Expo) • Technical support to the Minister, Deputy Minister and DG • Accreditation forms submitted to DEA • Sessions within UNFCCC precinct • SA CCR Expo accreditation process underway

34. Partners and Collaboration • DoE is working closely with Eskom on COP17/CMP7 on energy matters to prevent duplication of processes and also to speak as a country instead of individual organisations hence the energy sector representation. • IRENA is partnering with the DoE to coordinate and support RE, Capacity Building and Training events (i.e. speakers, concept, programme, etc). • IEA through the DoE-IEA MOU is working with DoE to coordinate and support the Energy Policy, Clean Energy Financing, Capacity Building and Training events (i.e. speakers, concept, programme, etc). • SANEDI and French Agency for Energy and Environment (ADEME) are coordinating energy efficiency and Carbon Capture and Storage (CCS) events (i.e. Speakers, concept, programme, etc)

35. Partners and Collaboration • European Investment Bank (EIB) proposed collaboration on clean energy financing which the DoE is considering. • Department of Public Works, Swiss Agency for Development and Cooperation and Green Building Council of SA are partnering on Building Energy Efficiency and EE Monitoring • Departments of Public Enterprise, Economic Development, and Trade and Industry are partnering on renewable energy technologies. • DoE is partnering with DEA and UNIDO (Donor) on Greening the COP 17 programme: The roll of Solar Water Heating programme in 20 clinics within eThekhwini Municipality. UNDP has been appointed as the implementing agent for the roll out.

36. Greening COP 17: SWH Programme for Clinics • The aim of the project is to promote local economic and social development in the host region and; • To showcase during COP 17 the initiatives of energy poverty alleviation through rolling out Solar Water Heating programme to 20 identified clinics • The project is being implemented in three areas as follows: • Illempe in Groutville, 17 clinics • Hilton in Pietermaritzburg, 1 clinins and • Hill Crest in Durban, 2 clinics • Consultants have been appointed and work has commenced and will be concluded before COP

37. Greening COP 17: SWH Programme for Clinics • The Illembe areas has been identified for High Level side visit is scheduled for 8 December 2011 • The project will be launched by President Zuma and UN general Secretary Ban ki-Moon, and the Minister of Energy in partnership with DEA and UNIDO Director General

38. Summary and Progress of events Green: Work completed; Yellow/Amber: Work in Progress and Red: Work within critical path and urgent

39. Summary of Progress Green: Work completed; Yellow/Amber: Work in Progress and Red: Work within critical path and urgent

40. Key Linkages with Other Projects: Best Practices • Provision of clean energy through Witsand iEEECO Human Settlement Development Model, in Low income household in Cape Town • Implementation of green economic development through clean energy intervention in domestic sector in partnership with Economic Development Department • DoE is also working with other stakeholders the Implementation of South African Renewable Energy Initiatives (SARi), Industrial Energy Efficiency (IEE) and Clean Technology Competition in partnership with Trade and Industry

41. Key Linkages with Other Projects: Draft National Climate Change White Paper Policy • The Department of Environmental Affairs is currently consulting on the draft National Climate Change White Paper Policy which is expected to be launched the COP 17. • Energy remains core contributor into the draft National Climate Change White Paper policy due to emissions reductions. • The following are some of the comments are forwarded for consideration on the draft paper before its finalisation/approval: • To disaggregate all the sectors and subsectors in accordance with the Copenhagen pledges (i.e. 34% by 2020 and 42% by 2025).

42. Key Linkages with Other Projects: Draft National Climate Change White Paper Policy • The disaggregation will give us a comprehensive picture for the whole sector and delineation of roles and responsibilities, development of plans and strategies, resource allocation, executing specific programmes and set timeframes in terms of aligning the Copenhagen target to the disaggregated sector targets not excluding proper monitoring and evaluation how the energy sector is performing in totality. • The cost of meeting the proposed target versus the deliverables /outputs to be clearly outlined in order to answer the “SMART” principle during the implementation of the White Paper.

43. Key Linkages with Other Projects: Draft National Climate Change White Paper Policy • The policy to consider the socio-economic impact assessment (e.g. to make sure that the service providers do not pass the cost of mitigation to the consumers), particularly on of the analysis on economic wide impacts. Cost benefit analysis will inform the ultimate decision while allowing us to protect the consumers as the end users without putting a financial strain on them. • The policy to be implemented starting with the existing flagship programmes which are already addressing climate change. For example: Integrated Resource Plan, Independent Power Producers (IPPs) procurement programme, Energy Efficiency and Demand Side Management, Working for Energy, etc.

44. Recommendations • It is recommended that the Select Committee on Economic Development notes the following: • Progress made on the COP 17 / CMP 7 preparations as a sector department, partnership with other stakeholders • Final Declaration made at the Africa Energy Ministers Conference held on 15-16 September 2011 • Draft programme for the Energy Side events