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South Africa

Brief description:

ENERGY & CLIMATE CHANGE - POLICY AND PROGRESS

Emissions

South Africa is a Non-Annex I Party to the Kyoto Protocol, and is one of the largest developing country emitters. It recognises the need to move towards a low-carbon society and, in December 2009, committed at Copenhagen to reduce GHG emissions by 34% by 2020 and 42% by 2025 on condition that it received the necessary finance, technology and support from the international community.

In 2000 total emissions were estimated to be 461 million tonnes of CO2 equivalent, with 83% associated with energy supply and consumption. Around 7% derived from industrial processes, 8% from agriculture and 2% from the waste sector. These figures, provided by the country's second national communication to the UNFCCC, exclude emissions from LULUCF activities. Forestry and other land uses provide a net sink for greenhouse gases, reducing land-derived emissions to about 5% when included in the inventory. Read the second national communication here.

Energy sector

South Africa’s economy is heavily dependent on coal. According to the World Energy Council, its coal resources were estimated at around 34 billion tonnes – 95% of African coal reserves and 4% of world reserves. Coal provided an estimated 72% share of the country’s total primary energy supply in 2007 and accounts for about 85% of electricity generation capacity. Coal is also a major feedstock for the country’s synthetic fuel industry. Energy supply is therefore heavily carbon-intensive.

State-owned utility Eskom generates about 96% of South Africa’s electricity.

The country's development strategy for electricity supply between 2010 and 2030 includes 9.6GW from nuclear power, 6.3GW from coal (in addition to 10GW already under construction), 17.8GW from renewables and 8.9GW from imported hydro and gas turbines. By 2030, this will increase South Africa’s electricity generation capacity from 260 TWh to 454 TWh.

In its National Climate Change Response, the government gives a commitment to invest in clean coal technologies and efficient technologies where coal is still used, backed by stringent thermal efficiency and emissions standards for coal-fired power stations.

A report prepared for the Department of Minerals and Energy (DME) by CSIR suggested that the highly concentrated CO2 streams currently produced by synthetic fuels producer Sasol are well suited for CO2 sequestration, as they require little further processing, except for pressuring.

Challenges

To meet energy needs sustainably

The African continent has contributed a small percentage to global CO2 emissions but it is expected to be one of the hardest hit by the effects of climate change, including droughts, floods, water stress and food shortages. Modelling has shown that some areas along the coastline will be more susceptible to sea level rise than others, but the understanding is as yet incomplete. Future warming due to increased global emissions is expected to be greatest in the interior of the country.

The government estimates that at least 30% of the population is highly vulnerable to sudden and harmful effects if climate change, including disease and impact on housing, food supply and livelihoods.

The Republic of South Africa is a leading economic and political power in the region. It also uses 70% of all electricity generated within the continent, excluding Egypt. The country’s economy is based on indigenous fossil fuels, mainly coal – which provides electricity and liquid fuels and is a foundation for most of its industries. Coal is also one of the country’s chief exports.

This reliance on coal – currently providing 80% of electricity needs – stems from the era of apartheid, when the country had to be self-sufficient in the face of international sanctions. Several large-scale coal and nuclear power stations were built then, but just one nuclear plant still operates. The synfuel industry is crucial, producing about 30% of the national liquid fuel requirements. It is the second largest CO2 emitter but also practices carbon capture as part of the process.

Since regime change in 1994, there have been major changes in policy but South Africa has struggled with a lack of both financial and human resources as well as political challenges.

The demand for energy is rising and the country is meeting this challenge by building more coal power plants. In September 2009, prior to the Copenhagen climate talks, the South African government gave its support in principle to reducing its CO2 emissions but said it could not commit to targets that might undermine economic progress.

To using CCS

Although the government agrees with CCS in principle, the country’s Environmental Monitoring Group (EMG) has noted a suspicion of what is seen as an “easy solution” from foreign sources. Many NGOs are wary of the country being forced to be dependent on western technologies. There is also a lack of trust on the part of other stakeholders in the political system, and a concern that any new construction projects will have environmental impacts.

Many stakeholders agree that, for CCS to be economically viable, there must be a carbon tax or at least a carbon trading mechanism in place. They also believe that state energy companies should have authority to invest in CCS development and technology.

Environmental agencies, such as WWF, have argued that efforts should be made to address emissions at source rather than at the end of the process, and that funding would be better spent on renewable energies rather than CCS infrastructure.

Government commitments

South Africa’s Inter-Ministerial Committee has been set the task of producing a national programme for climate change together with a final mandate as part of the United Nations Framework Convention on Climate Change (UNFCCC). This includes a commitment to work with other developing nations to tackle poverty and contribute to economic development.

The government has also set targets for increasing the use of renewable energies and improving energy efficiency. In April 2010, it introduced a feed-in system for renewable energy. It has introduced its 2003 White Paper on Renewable Energy, which sets a target of 10,000GWh contribution from new renewable energy sources in 2013, the 2005 Energy Efficiency Strategy - with a goal of achieving savings of 12% by 2015 - the development since 2006 of Long Term Mitigation Scenarios (LTMS) and the 2011 National Climate Change Response policy. LTMS is one of the key documents on which national climate policy and strategies are based.

Climate change mitigation actions currently under consideration include the potential use of CCS, the imposition of a universal carbon tax, emissions trading, tax rebates for energy efficiency within the energy sector, cleaner coal for electricity generation, and greater transport efficiency.

CCS

The development of CCS has been declared a national research priority and the government was instrumental in setting up the South African Centre for Carbon Capture and Storage (SACCCS, see below) in March 2009. A discussion paper released by the Department of Environmental Affairs in 2010 – its National Climate Change Response Green Paper 2010 – refers to CCS, including the need to develop a policy and regulatory framework to support its deployment. SACCS provides advice to the Department of Energy on the development of policy.

SACCCS has developed a five-point CCS roadmap, which include investigating the potential for CCS (already completed); completing a geological storage atlas (see below); undertaking a CO2 injection experiment; building a demonstration plant; and commercial deployment of CCS. A demonstration CCS project is targeted for 2020. The government has already funded the project Atlas on Geological Storage of CO2 in South Africa, published by the Council for Geoscience in 2010 (see Storage Potential below), in which possible CO2 storage sites both on and offshore were identified. SACCCS is currently working towards the third phase—the test injection.

Regulatory framework

According to the IEA’s review of CCS legal frameworks worldwide (October 2010), South Africa is in the process of studying other countries’ regulatory regimes, between now and 2016, to consider how similar laws might be relevant to its own situation. The government has intimated its support for the development and implementation of CCS, and understands that, with the clock ticking, it needs the necessary legislative framework. It is operating within the requirements of the Republic’s constitution and the National Environmental Management Act – the umbrella law for environmental management dating to 1998.

In December 2010, the South African Cabinet approved a draft carbon tax policy, which is due to be published for public comment. It is expected to present an environmental and economic rationale for carbon tax measures to address climate change. The policy sets out three options – a direct tax on emissions, a fossil fuel input tax based on the carbon content of fuels and an output tax applied to emitters where fuel is burnt. A media article relating to this can be found here.

In 2006, the government began a long-term mitigation scenario process (LTMS) on climate change, which involved government, business, the general public and other stakeholders. This looked at the impacts of global warming and analysed the consequences of different actions, from “no constraints” development to a commitment to “reaching for goals”. Two years later, its findings described a number of actions that the country must take from that point until 2050 in order to reduce carbon emissions. Links to the LTMSs can be found here.

The findings concluded that a massive and immediate effort was needed to reduce South Africa’s carbon footprint and that energy efficiency and adaptive behaviour by all stakeholders could play a large part. It was also acknowledged that a move to clean coal would have minimal impact without the use of CCS. The need for access to various technologies and the development of human resources was also pinpointed.

Supporters of South Africa’s moves towards a low-carbon future agree that the country urgently needs a long-term, stable economic, legal and practical framework coupled with adequate funding, the development of human resources and a fostering of public acceptance of actions needed.

Climate Change/CCS programmes and initiatives

South Africa has submitted 125 Clean Development Mechanism (CDM) projects, with 15 having been registered as of early 2012. As well as projects aimed at obtaining CDM credits, 56 are part of the Department of Environmental Affairs’ National Climate Change Response Database, with a total emission reduction potential of 25 million tonnes of CO2e between 2000 and 2050.

The key CCS players in South Africa are SACCCS, the Council for Geoscience, the South African National Energy Research Institute (SANERI), CSIR, Petroleum Agency of South Africa, public companies Sasol, Eskom and PetroSA, and Anglo American. There are also a number of international parties who are keen for the country to put the necessary infrastructure in place (see International Co-operation).

SACCCS is the leading authority for CCS activities in the country. It was launched in March 2009 and its core parties are SANERI, Sasol, the British High Commission for South Africa, the Norwegian Embassy and Eskom. It receives funding from the South African, Norwegian and UK governments, and from Sasol and Eskom. Its key objective is to have one CCS demo plant operating by 2020, but the agency has highlighted the need to develop human and technological potential to achieve this.

Following the production of the geological storage atlas already mentioned, the plan is to test inject tens of thousands of tonnes of CO2 at identified sites by 2016, followed by the construction and start-up of a demo plant by 2020. The long-term goal is to have commercial-scale storage of millions of tonnes by 2025. SACCCS needs to carry out seismic and drilling exploration to acquire more accurate information, prior to the test injection. The planning process for 2016 includes obtaining permits, doing risk assessments and undertaking public outreach initiatives. It also needs to secure a supply of CO2, which will likely be transported to the injection site by tanker.

SANERI is funded by South Africa’s Department of Science and Technology, and is the focus of research and innovation in the country with an emphasis on future energy solutions for South Africa, the Southern African Development Community and the sub-Saharan African region. It has significant input from the Department of Minerals and Energy.

As an incentive for developing renewable energies and lowering CO2 emissions, the government has already put in place a carbon tax on non-renewable energy, provided tax relief for bio-diesel and has set a feed-in tariff on renewable electricity.

South Africa has also placed a “carbon capture readiness” requirement – as part of the environmental impact assessment approval process – for Eskom’s proposed 5400MW coal-fired power station at Kusile, which is under construction and has a planned start-up date of 2013. There is currently no commitment to incorporate CCS.

In May 2010, a delegation of policy makers, researchers and industry professionals visited Norway on a fact-finding tour, which was funded by the Norwegian government. The delegates aimed to learn from Norway’s experience in researching, developing and deploying CCS – including the challenges of setting up a regulatory framework and providing funding mechanisms – as well as discussing the potential for future co-operation and funding. The possibility of student placements on various research projects in Norway was discussed during the visit.

Following the trip, the delegates concluded that the South African government, state-run companies and the private sector should take the lead in financing any CCS projects but acknowledged the need for international support. They are currently considering the relevance of the Norwegian experience to South Africa, given the very different economic and social circumstances. Read the final report on the visit below.

Sustainable Energy Africa (SEA) is working to bring together policy makers and other stakeholders to help identify hurdles to the implementation of sustainable energy alternatives. However, SEA has no policy on CCS.

Storage potential

In 2009, the government launched a 2-million rand initiative to explore the country’s CO2 storage potential. Initial studies had suggested that the country had the potential to store between 4 and 11 times South Africa's annual sequestrable CO2 emissions for the next 100 years.

The Geological Atlas for CO2 storage in South Africa was produced by the Council for Geoscience, using some data from Petroleum Agency and funded by PetroSA, AngloCoal, Eskom, Sasol, SANERI.

It was released on 10 September 2010 and concluded that the potential for CO2 storage opportunities existed on and offshore at Durban/Zululand, at Orange basin off the west coast, offshore at Outeniqua and onshore at Karoo basin. The link to the report is currently unavailable (http://www.sacccs.org.za/docs/Atlas.pdf). However, an article published at time of launch of Atlas project provides background.

The results of the atlas will guide future work of SACCCS and further studies will look at transportation factors. It has been pointed out by some CCS critics that location could be a challenge – if a storage site is not within 300 kilometres of the source, it may prove too expensive to pipe the CO2 there.

South African delegates who visited Norway in May 2010 stated that “the most valuable contribution to the post-atlas effort in South Africa identified on the Norway CCS delegation visit was the Guideline for Selection of Sites and Projects for Geological Storage of CO2 developed by DNV of Norway”. This is a comprehensive set of guidelines for geological storage of CO2 intended to help industry and regulators worldwide.

International co-operation

SANERI is one of the founding members of the Global CCS Institute, based in Australia, which has as its core principle the objective to accelerate the commercial use of CCS worldwide as part of efforts to reduce carbon emissions.

In addition, South Africa and Norway have been cooperating for more than 20 years. During the visit of the South African delegation to Norway in May 2010, the country’s environment minister told the delegation that it viewed South Africa as a key partner in its global climate change policy and was keen to facilitate CCS development there. Future cooperation is expected to include R&D work, the potential for student placements in key research projects, and access to expertise and financial support.

In May 2010, Sasol joined the CO2 Technology Centre Mongstad (TCM) project in Norway as a funding partner alongside the Norwegian state, Statoil and Shell. The facility is currently under construction but, when complete, it will be run by Statoil and will aim to test and improve CO2 capture technologies for large-scale use. The South African ambassador visited the Mongstad facility in December 2010 to see work in progress. The test facility is 60% complete and start-up was originally planned for the end of 2011 or early 2012. Statoil’s information on the project can be read here.

The World Bank CCS Trust Fund's first analytical study of potential legal and financial blocks to the use of CCS in developing countries chose South Africa and the Balkans as case studies - due to their reliance on coal and interconnected power systems, which allowed for an examination of trans-boundary transport and storage, and associated technical, legal and regulatory issues that could arise. A workshop was held in South Africa in June 2011 as part of the study. Read the results here.

Representatives from the Scottish Carbon Capture and Storage Centre (SCCS) were due to visit South Africa in early 2012 to assess the feasibility of a pilot carbon capture plant, as part of the country's five-point CCS roadmap plans. It was to be funded by the Scottish Government as part of moves to share low-carbon expertise and technology with developing countries.