Thursday, 5 March 2009

How South Africa can take advantage of clean energy

Dear all

(I'm sorry that this blog entry got so long (it took me most of today (8th March) to write), but there is so much to report on after my trip to the USA. I have left it as it is and will try to answer any questions you may have as a result of reading this email as best I can.)

Here is an index of the email:
1) Introduction
2) My Visit to the USA
3) South Africa's Goals And My Needs
4) Clean Coal (and Pea Soup Fog)?
5) Cape Town's Population Explosion
6) R1 Trillion
7) The technology is already available
8) What can we do?
9) Turning DREAMs into Reality


1) Introduction

"Even if all greenhouse gases stabilised at today's levels, the global climate would change for several decades because of the presence of these gases in the atmosphere." Environment Writer; Cape Times, 4th March 2009; page 4.

The government says it wants our "carbon emissions to peak between 2020 and 2025." Melanie Gosling; Cape Times, 4th March 2009; page 4. This might be too late as in the next few years huge wars may ensue (due to lack of water and other scarce resources) which may kill billions (these words from the leaders who spoke at the Retech 2009 conference that I attended last week in Las Vegas). I believe that this is why President Barack Obama has called for the USA's Renewable Energy productive capacity to double in the next three years (DREAM) (see http://www.acore.org/dream; http://www.orbitalre.com/html/barack_obama.html and http://repairyourworld.blogspot.com/)

"By 2020, climate change will decrease agricultural yield by 50%." Professor Rajendra Pachauri, chair of the Intergovernmental Panel on Climate Change, as reported in the Cape Times on 4th March 2009. This shows that we don't have until 2020 or 2025 to start making changes. We have to make changes NOW. Dr Hermann Scheer (more further down) says that the reason for central governments resistance to Renewable Energy (RE) around the world is because of BLAME. They feel they will be blamed for their past decisions. I understand that the main reason that central planners don't want to change is because they don't want to be seen as wrong, i.e. that perhaps they made the wrong decisions in the past. My personal opinion is that the past is the past. We need to make the decisions NOW for the future. We need to remember that we are not given the world by our parents, but lent it by our children. Our faith in the future and in G-d demands that we take responsibility NOW and do something to fix our small and fragile planet NOW. Mental blocks in the form of "baggage" and "vested interests" remains. Rich people (countries) can afford to buy their way out of trouble whilst the poor (developing countries) bear the brunt of bad energy management policies that should not be allowed to continue.

"Climate change and global warming are already effecting our health and it will get worse." "Heatstroke related deaths" are increasing. "Raging fires" are increasing. "Diseases associated with climate change and global warming include cardiovascular disease, diarrhea, malaria, fatal accident injuries, malnutrition from the unavailability of daily calorie intake." "The International Panel on Climate Change talks about the health effects of temperature change: wind, storms, floods, drought and nutrition, food security and food safety; water and disease; vector-borne, rodent-borne and other infectious diseases; and finally occupational health and ultraviolet radiation." "The solution will require unprecedented human co-operation." All quotes from Dr Wilmot James's article in the Cape Times on March 5th 2009 (page 9). Dr James is executive chairman of the Africa Genome Education Institute and UCT Honorary Professor in the Division of Human Genetics.

"2.5 million homes are without electricity" in South Africa. Cape Times, Thursday March 5th, 2009. Most burn wood and use paraffin. It is estimated that there are currently 1.6 Billion people worldwide without access to electricity. Note that in the next 20 years the number of people without electricity is set to increase worldwide due to population growth although the percentage of people with electricity is expected to increase.


2) My Visit to the USA

I have just returned from three very exciting weeks at 3 Renewable Energy Conferences and a one week training course on grid-tie photovoltaics. I met some incredible people including some very high up politicians in the UK and German governments. For example Dr Hermann Scheer. See http://www.hermannscheer.de/en/ and http://www.irena.org/. South Africa MUST become a member of IRENA and must have its application in by the end of March 2009. I attended an ACORE (http://www.acore.org/) international meeting where Dr Scheer spoke and was fortunate to sit at the table with him during the ACORE members day conference lunch in Las Vegas. He has been instrumental in getting Renewable Energy into Germany as well as being the person who created the German Rebate and Feed In Tariff (FIT) legislation. He travelled with Andrea Ypsilanti, a member of the SPD (Social Democratic Party) party in the German parliament and I am able to make contact with her. IRENA wants "to be the voice of RE worldwide and wants to be used to overcome the mental barriers that exist in some of the world's cleverest people." Dr Scheer says "success demands leadership." Where is this Clean-tech / RE political will and leadership in South Africa?

Germany changed the law to provide:
* priority access to the grid for all RE providers;
* a guaranteed Fee (FIT) guaranteed for 20 years.
This revolutionary one page law was drawn up and implemented in the German Bundestag (parliament) in 1990!!!

"It was simple and precise, based on three main pillars: free access to the grid, guaranteed fixed prices, and the obligation for utilities to purchase. The implementation of the law has resulted in an incredible 200-300 percent yearly growth in wind energy in Germany, and implementation of the 100,000 solar roofs programme. So, this unique renewable energy law has made Germany the world leader in production of wind energy with 7,000 megawatts (one third of the total world wind power capacity), and reached as much as 50 percent of the total European capacity." See http://globalpublicmedia.com/people/hermann_scheer Note that South Africa has much more sun - and perhaps much more wind - than Germany, yet we fall way behind this great nation. Note that South Africa has just embarked on a wind energy study, but this data is already available in a number of different places. I believe that all these South African studies are delaying tactics designed to make the public ignorant of the state of RE and give the huge fossil fuel groups more say in our future. Note that the stats above are slightly out of date as in 2007 the world added 15GW of wind power (and only 1.4GW of net nuclear power).

There is so much precedent. South Africa doesn't need to invent anything. It is all there ready for us to use. Just as Germany is using South African thin film technology, so we can use German technology and law as a precedent for what we need to do. At the moment we are buying Siemens products for peaking power stations, but there is so much better German technology available.

Note that FITs are not unique to the RE industry and are offered to Nuclear providers (see the Amory Lovins report handed out at the 19th November 2008 FIT tariff meeting at Cape Town's parliament).

South Africa is about to make a time consuming mistake by following the British lead in changing South Africa's fledgeling FIT legislation to rather be like the failed British tender system. If you need a report showing that Britain has already reached this conclusion, I can probably get it as I met the British Vice-Consul in the USA who is the top guy in the USA regarding British Clean Energy (Renewable Energy (RE)) policy and commercial business development in the RE space between British and American companies.

We are constantly told that using sun and wind and other renewable energies is unbelievably expensive compared with coal, but Germany has reached a point where it has shown that wind energy is cheaper than coal energy for the first time. Not only this, but South Africa has a number of mines that are 5km deep, a depth from which one can drill a little further into the earth at very small incremental cost to use the heat from earth in geo-thermal power stations and in other heat exchange applications. Not only this, but the true cost when health and other pollution effects from fossil fuels is added to the total cost of living is huge and possibly immeasurable.


3) South Africa's Goals And My Needs

My main problem now is that I need to divide my time between my new Renewable Energy business and helping South Africa reach its goal of low carbon emissions and reducing climate change. Perhaps someone knows someone who can fund my time for helping one of the political parties or one of our NGO's achieve South Africa's goals?

According to the newspaper and web site, I have read that South Africa's goals should be reinforced by an ethos which has been written by our politicians:
* "The South African government regards climate change as one of the greatest threats to our planet and to our people. The South African government also believes that climate change, if un-mitigated, also has the potential to undo or undermine many of the positive advances made in meeting South Africa's own development goals and the Millennium Development Goals." See http://ccsummit2009.co.za/ (Climate Change Summit 2009)
* Helen Zille and others have said they will be "Unashamed Ethical" (see http://www.unashamedlyethical.com/). They subscribe to "a culture of good values, clean living and good business practice." This, together with Cape Town's wish to be Africa's first "green city" means that our politicians will force themselves to put their words into practice. And it will be much easier than they think.
* A process was started at the Wind Energy Conference in Cape Town, South Africa in November 2003 at which Dr Hermann Scheer made recommendations. These recommendations had been implemented by Germany in 1990 and revised in 2000. Germany now has the highest number of off grid houses worldwide. Although the conference took place in South Africa, South Africa didn't implement its recommendations. See http://www.sbs.co.za/wwec2003/home.htm Click on Conference Committees for an interesting list of people who attended the conference. Note that Hermann Oelsner was at this conference. He is now the CEO of Darling Wind Farm which has a 20 year FIT agreement with the City of Cape Town. If big business can organise FITs why can't fits be provided for private individuals in South Africa?

At the same time that decentralisation and deregulation are required we find Minerals and Energy Minister Buyelwa Sonjica calling for a new law "forcing the consolidation of the electricity industry." (see Cape Times, March 4th, 2009, page 20 Business Report). This is another mistake at a time when the world sees the need for decentralised electricity generation and smart grids which very quickly reduces peak load and thus reduces the need for more base load power stations.


4) Clean Coal (and Pea Soup Fog)?

At the same time as this, "SA was moving into a new era of carbon taxes" with a target for emissions peaking "between 2020 and 2025". "State led policy intervention will play a key role ..." There is also a reference to "clean coal", i.e. cleaning the output emissions of a coal powered power station. We are told that it is ok to build coal powered power stations because one can clean the fumes! This from the articles on page 6 of the Cape Times on 4th March 2009. There is no such thing as clean coal, however there is a massive advertising campaign showing in the USA trying to persuade voters that coal is clean! Their advertising refers to http://www.cleancoal.org/ You need to make up your own minds.

However, if one looks at Satellite images of China where a new coal power power station opens every week, one will see a huge plume of smoke covering many cities and I understand that this plume is now moving out over the Pacific Ocean towards Japan and the USA. I haven't checked, so it would be interesting to see if anyone can get hold of these satellite images. I do know that China did a massive close down of all the power stations near Beijing for the Olympics last year and that Beijing hadn't been so clean in years. I also know that Beijing isn't the only city in China that suffers from this "fog" and that in the 19th Century London (England) suffered from this "Pea soup fog" (http://en.wikipedia.org/wiki/Pea_soup#Pea_soup_fog).


5) Cape Town's Population Explosion

At the same time as all this we learn that Cape Town will have twice as many people in 2030 as it has now. The only way to sustain this kind of growth is through decentralisation of energy, of farming, of water conservation. I believe that one way to support this is with my "living off grids" process. I will be happy to explain why this is much cheaper than any other alternative.


6) R1 Trillion

We have been told that in its initial phase Eskom will borrow R343 billion, yes billion Rand and for its overall expansion it will need R1 trillion. With prime at 14% and with credit currently being tight and interest rates for big loans being about 3% over prime at the moment, borrowing at 17% means a huge repayment of R170 billion per annum just on interest. Repaying these loans over 30 years means that at least 20% of South Africa's GDP will be spent on repaying loans, possibly to foreign creditors, for years. There are easier, simpler and cheaper ways of solving our problems. I think that if (just) R50 billion per annum was made available in tax incentives such as rebates, tax credits and FIT's that within 2 to 4 years, we would have such a massive explosion of Renewable Energy in this country that the government would not need to build any new base load power stations again - EVER.

FYI, the total revenue of the electricity distribution industry in South Africa is currently R33 billion per annum. How does one repay R200 billion per annum from a R33 billion per annum revenue? High taxation is required! Note that after the 50% increases in electricity last year, electricity in South Africa is relatively the same price as in the USA; e.g. a South African electrical team comprising an electrician and two helpers charges approximately R550 per hour. In Georgia, USA, the fee is $95 per hour, almost twice the price. Doubling the price of electricity in South Africa will make the cost of electricity to South Africans twice what it is in the USA in real terms, thus making South African's ability to do business and compete on a world platform that much less. The real way to solve our electricity pricing crisis is to charge foreigners who wish to put huge energy-hungry businesses on our shores the same price they are charged in their home country for electricity; e.g. I've heard that it is currently cheaper for Australia to ship its iron ore to South Africa to be smelted and then to ship the steel back to Australia to be made into cars etc than to do the same in Australia. The same goes for all the other smelters in the Richards Bay area. The same goes for all the other foreign companies who are using power stations built with South African blood to maximise their profits and maximise our losses.


7) The technology is already available

Please be aware that all the technology that we need is already available. The problem is the lack of political, business and private willingness to make the change. I have done the numbers for myself and have found that removing my house from the grid is cost effective over the long term. You should also make this decision.

The time to act is NOW. Let's work together to make our lives better. Start NOW.


8) What can we do?

Here are some ideas to think about. This is the sequence in which I would implement changes if I was responsible for Renewable Energy government policy in South Africa. They are listed in order of zero cost upwards.

1) Net Metering;
2) Tiered Rates Structure (like water rates) for private houses;
3) Accelerated Depreciation for RE investments: preferably 100% in the first year, but otherwise 50% in the first year, then 30%, then 20%. Rather than straight line for 6 years;
4) Feed in Tariffs: reviewed every 5 years. Existing (if working) FITs left alone. Taking the money which is being made available to Eskom over the next few years will more than cover Grants, FITS and Rebates;
5) Tax Credits (for people who owe tax: 30% in some US States);
6) Grants & Rebates (50% in Germany; already 30% in some US States);
7) Time of use tariffs (require electricity meters to be upgraded);
8) Extending the grid to sunny and windy and wave energy places in South Africa thus allowing private industry to create power stations. German calls this "giving access to the grid as an absolute priority." Private industry can pay the government a fee (say 10 cents per kwh) for using their grid.

9) Something to do at the same time as the above is "demand management." In the USA, they are calling this "smart grids." For example the South African government has already gone some of the way by giving us CFL lights instead of Incandescent Lights. And geyser blankets. But we need more; for example: on Mondays all houses with even numbers can do their washing and on Tuesdays all houses with odd numbers can do theirs. Or with meters that measure time of use, one can plan to do their washing and cooking at low rates. Or the central utility (Eskom) can put special electronics in our appliances such as washing machines and cookers so that they control when they are switched on, e.g. when there is spare electricity.

Note that I have done some research which shows that it costs R4.20 per kWh (kilowatt hour) to run Koeberg and R11.20 per kWh to run our peaking power station in Atlantis at full capacity (using 25,000 litres of diesel a minute). Our electricity cost is about 75 cents per kWh which means that the majority of the cost of nuclear and peaking power comes from taxation. If this is the case, then FIT's in South Africa could easily be R4.20 per kWh instead of the currently proposed 70 cents (which is going to reduce every year!). South Africa has much more sun than Germany. It should be an easy decision of what must be done.

Jobs at an unprecedented rate are being created in the RE space worldwide. This industry is growing at over 30% annually and this will increase over the next few years. Does South Africa want to be left behind? We have some of the brainiest people in the world. For example Professor Vivian Alberts from Wits who invented a viable thin film technology and Elon Musk, a former South African and now CEO of the USA's premier electrical sports car company: see http://www.teslamotors.com/


9) Turning DREAMs into Reality

Barack Obama gave 3 minutes of his State of the Nation speech on 24th February 2009 to RE See ( http://www.whitehouse.gov/the_press_office/remarks-of-president-barack-obama-address-to-joint-session-of-congress/ ). He wants the USA to get to 20% renewable energy by 2020 and 25% renewable energy by 2025. Why should South Africa wait until 2025 before it gets serious about implementing RE? It is estimated that over the next 20 years, US$20 Trillion will be spent on RE worldwide. We should not be left behind.

If you need an explanation of any of the terms used in this email, please let me know.

Sincerely
David

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