REI4P Review by Liz McDaid - Electricity Governance Initiative

Report
SOUTH AFRICA’S
RENEWABLE ENERGY INDEPENDENT POWER PRODUCER PROGRAMME (REI4P)
2014 REVIEW REPORT:
WHO WE ARE
EGI has partners in 11 countries
around the globe
and is coordinated by the World
Resources Institute.
EGI-SA contact:
[email protected]
Http://www.egi-sa.org.za/
South African EGI
Active organisations:
• Project 90 by 2030 ( – host of EGI-SA for
2014).
• AIDC
• ConsumerFair
• GeaSphere
• One Million Climate Jobs Campaign
Supporting organisations:
• GroundWork
• SAFCEI
• WWF-SA
• Cullinan & Associates
• Greenpeace-South Africa
EGI-SA
Electricity Governance Initiative of South Africa
EGI-SA is a collaborative partnership between a number of civil
society organisations, which draws on the global expertise and
experience of the international EGI project, and is also more
informally associated with other civil society organisations.
The aim of EGI-SA is to build a roadmap towards a positive
electricity future for South Africa, by:
• Producing expert analyses and research to inform decisionmaking processes,
• Building the capacity of civil society to engage in these
processes,
• Advocating for transparent, inclusive governance that
results in legitimate decisions that uphold public interests.
40 diverse stakeholders were interviewed
in three sites from: De Aar in Northern Cape,
Saldanha in the Western Cape and Jeffrey’s
Bay, St Francis Bay, Humansdorp in the
Eastern Cape.
Among others, stakeholders included: NGOs,
local government, trade unions, community
groups, ward
committees, RE project community trustees
and management staff, local councillors,
sports associations,
reporters, police and the Department of
Labour
Renewable Energy Independent Power Producer
Procurement Programme (REI4P)
The goal of REI4P is to deliver 3,725MW of renewable energy by
2016, and to contribute towards social-economic and
environmentally sustainable growth.
These proposals (bids) are evaluated in three phases, according to
specific criteria.
To date there have been 3 complete rounds (bidding windows) with
a total of 64 approved RE projects out of 216 bids submitted so far
Description of economic development requirements
with respect to local communities (Tait 2013)
Element
Shareholding by local
community
Requirements
2.5% – 5% of project
shareholding
Description
The defined local community will have an ownership share in the
project company. There are no explicit requirements on how these
contributions should be spent, but would probably need to be
developmental in nature.
Employment
12% - 20% of South African
employees
This requirement requires that a percentage of the South African
employees in the project should come from the local community.
Enterprise development
0 – 0.6% of project revenue
Enterprise development refers to contributions to black-owned
businesses with the specific objective of assisting or accelerating the
development, sustainability and ultimate financial and operational
independence of that enterprise.
Socio-economic
development
1 – 1.5% of project revenue
These contributions should be directed towards activities that facilitate
sustainable access to the economy for beneficiaries. These
contributions can go towards a wide range of activities including rural
development, the environment, infrastructure, enterprises,
reconstruction of underdeveloped areas, development programmes for
women or youth, education, health care as well as arts and culture and
sports.
Findings 2014
1.
2.
3.
4.
5.
Increase of renewable energy uptake
Government capacity to manage the REI4P
The role of local government
Who decides on local benefits for communities?
Creating new decent jobs for locals – how local is a local job?
Increase of renewable energy uptake and the
revised integrated electricity plan
Electricity needed by 2030
Analysis of REI4P MW allocation and
remaining (DoE November 2013)
Technology
MW capacity
allocated in First
Bid window
MW capacity allocated
in Second Bid window
MW capacity allocated in
Third Bid window
MW capacity
remaining
Solar photovoltaic
632
417
435
1041
Wind
634
563
787
1336
Concentrated solar
150
50
200
200
Small Hydro (<-40MW)
0
14
0
121
Landfill gas
0
0
18
7
Biomass
0
0
16
43
Biogas
0
0
0
60
Total
1416
1044
1456
2808
The composition of the Evaluation team for
the REI4P (DoE 2012, DoE 2013).
Location of the renewable energy projects to
date http://www.energyblog.co.za
Envisaged timetable for REI4P
Original RFP date
actual RFP date
Megawatts
Number of bids
accepted out of the
number of bids
received
(DoE 2011)
(DoE 2013)
(DoE 2013)
Window 1
4 November 2011
4 November 2011
1 415.52 (28
agreements)
Window 2
25 November 2011
5 March 2011
1 043.9 (19 agreements) 19 out of 70
Window 3
14 May 2012
5 November 2013
1 456 (17 agreements)
Window 4
29 October 2012
26 May 2014 open with 18
August to close
Window 5
13 May 2013
-
28 out of 53
17 out of 93
Government capacity to manage the REI4P
The human capacity allocation to the different DoE
branches (DoE budget vote 2014).
2014/15
Public Entities
and other
agencies
DoE branches (number of staff)
Energy Policy
Petroleum
and Planning
IEP (3)
Compliance (4)
Energy Plan (oil) Licensing (33)
(23)
Fuel pricing (5)
Hydrocarbons
Regional office
(20)
(61)
Policy (RE, Coal
Map, ISMO) (8)
SANEDI (51)
National Energy
Regulator SA –
NERSA (180)
Central Energy
Fund – CEF
(2202)
Electrification
Nuclear Energy
Clean energy
INEP (20)
Energy Reg.
office (19)
Elec
infrastructure,
include REI4P (7
+ 4 contract
staff)
Upliftment (6)
Nuclear (25)
Renewable
Energy (5)
Carbon Capture
Storage, Climate
Change (8)
SA nuclear
energy
corporation/
NECSA
(2247)
National Nuclear
Regulator (97)
Budget allocation (R m’s) to the different DoE branches
(DoE budget vote 2014).
Administration
Energy policy
and planning
Petroleum
regulation
Electrification
and energy
Nuclear
Energy
Clean Energy
2014/15
244.1
52.6
82.7
4199
850.5
1986.5
2015/16
255.6
50.3
79.8
5890
682
1030.3
2016/17
272
53.6
83.6
6203
718.7
1053.9
year
97% of clean energy budget goes to CCS and Fracking
Community Engagement
• Consistent failure across the study area to engage with communities
transparently
• Failure to set up meaningful institutions that can allow local
communities to participate in their own local economic development
planning.
• Existing local economic planning frameworks such as the IDP are not
participative
• Risk of ad hoc development plans for specific geographic areas
• Corruption and poor labour practices
Community Engagement
• Community trusts benefit elite
• Ad hoc non transparent benefits increase community conflicts
• International case studies provide empowering experience
• Inter-sectoral lessons can be drawn on – eg mining sector
• Weak and ineffectual engagement, potentially exacerbating existing
community conflicts within already marginalised communities
Access to information
• REI4P tender documents on a website
• Registration and R15 000 to access
• Socio-economic development plans not available at local government
level
Summary of the jobs created over the three windows
for Solar pv, wind and solar CSP (adapted from
Eberhard 2014)
Technology
Local construction jobs
Local operations jobs
Total
Bid Window 1
6074
9960
16034
Bid Window 2
5221
7227
12448
Bid Window 3
7813
17749
25562
Summary of the window 3 jobs per province
province
Jobs during
Jobs during
(DoE 2013)
construction
operations period
Eastern Cape
Free State
Gauteng
Kwazulu-Natal
Limpopo
Northern Cape
Western Cape
512
414
6
96
160
6502
223
(one job = 12 personmonths)
4908
1442
240
240
1366
8736
1295
Jobs measured in job
years – 20 job years is
1 person employed
for 20 years
Local Jobs?
• Few local contractors benefited
• International firms scam criteria (technical local)
• South African but not within 50km radius
• Limited skills transfer
• Social ills due to influx of workers?
• Sufficient demand to drive manufacturing?
Recommendations
•
•
•
•
•
•
•
•
Lift the “cap” on renewables
Increase staff and budget to reflect increasing renewables proportion of energy mix
Review REI4P design to address unintended negative community impacts
Localisation evaluation needed and promotion of skills transfer
Include specialist community development practioners in REI4P formal process
Review of Community Trust system is needed
DoE to promote meaningful communication and public access to information
Monitoring and Evaluation system that includes community and parliamentary
oversight
• All tiers of government and civil society stakeholders need to engage in order to
enable best practice
Take home message
Renewable Energy capacity in South Africa must be expanded beyond
the REI4P.
Within the REI4P, the intention to create additional social
benefits are applauded.
However, the bidding process and the design of REI4P are
flawed and have resulted in some unintended consequences that
need to be addressed urgently.
THANK YOU

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