Going green almost gets going

In a move that could boost the development of a market for green electricity, the City of Cape Town may launch a programme in the near future to promote such a market in the city by 'buying' electricity from the Darling Wind Farm. There may, however, still be some problem areas in this complicated system that often is referred to as “carbon trading”. There are also initiatives under way in other metropolitan areas in the country and other economic sectors.

Mayoral committee (Mayco) member for Planning and Environment, Marian Nieuwoudt told a meeting of the committee that, “By entering the market and buying it (green energy) ourselves, we are creating a market and setting the tone which will make others more inclined to enter into the market.”

Under consideration was a report recommending that the City buy and resell electricity certificates form the Darling Wind Farm as a part of its declared target to source 10% of its energy from renewable sources by 2010.

The wind farm-generated energy is fed into the national grid and is therefore not directly tangible or cannot be ring-fenced per se. Certificates bought from the farm, however, represent proof of the amount of green energy purchased.

The wind farm currently generates only a small amount of energy, equating to about half of the consumption of the city’s Civic Centre. This kind of energy also comes at a premium, but the city believes the benefit will outweigh the additional cost.

Some of the 'electricity' in the form of the certificates can be sold on to institutions that also would like to contribute to the sustainability of green technology in the City, said Mayco member for Utility Services Clive Justus during the meeting.

The Mayco member for Finance Ian Neilson questioned the terms and conditions of the sale of the certificates. These include a stipulation that the benefits of buying green certificates will be non-negotiable because of the lack of a nationally recognised tradable electricity certificate system.

The City will sell the benefits of this green electricity in the form of “Green Electricity Certificates”, where one certificate will be created for every net 1kWh of electricity generated by the wind farm and bought by the City.

While some of the green certificates will be retained by the council for its own use, it also will be sold at a premium to organisations such as Fifa, to the Cape Town International Convention Centre (CTICC) and other public bidders .

Brian Jones of the City’s electricity department said it was international best practice to trade in the rights to the benefits of green energy. Nielson, however, said he wanted clarity on the terms of the certificate agreements.

In terms of its agreement with the National Energy Regulator of South Africa, the premium that the City has to pay for green electricity from the wind farm may not be spread across all electricity consumers. The premium, which is above what it otherwise would have been as bought electricity from Eskom, must be recovered from “willing buyers”.

Justus said the City had to buy electricity from the wind farm in order to make it sustainable.

The report before the committee recommended that the needs of Table Mountain and the 2010 Soccer World Cup, among others, be serviced by way of green certificates. The CTICC also would benefit from the goodwill generated through the use of green energy, it was noted.

Other municipalities

In January this year, the Durban Landfill Gas to Electricity Clean Development Mechanism (CDM) project was launched, which is developed and implemented by the eThekwini Municipality.

Durban Landfill Gas to Electricity is the fifth project to benefit from the renewable energy subsidy scheme introduced in 2005 by the Department of Energy to assist in renewable energy projects.

This project generates electricity from waste by the capture of methane-rich landfill gas from the landfill site to provide fuel for the production of approximately six megawatts of electricity.

At the official launch of the Durban project, Minister of Energy Dipuo Peters said that the findings of certain studies by the department indicated that South Africa has about 57 municipal-owned landfill sites that have the potential to generate approximately 1 200GWh per annum.

Municipalities also have the option to buy green electricity from independent power producers (IPPs).

IPPs have an option of selling electricity either to Eskom or directly to municipalities. So far, however, this has been a complex process. But new strategies for partnerships with municipalities have emerged, providing an attractive option for IPPs.

The successful application of these strategies is evident in the following cases: the Bethlehem hydropower project, the Darling Wind Farm and the Nelson Mandela Bay Renewable Energy Project. These projects were structured by a combination of incentive mechanisms: CDM, Tradable Renewable Energy Certificate (TREC), grant financing and a premium power purchase price.

In short, these municipalities agree to a higher purchase price for electricity (green power), which has been facilitated through a Power Purchase Agreement (PPA). Municipalities then sell this electricity as green power at a premium price to a willing buyer (i.e. corporations). By securing agreements with corporate purchasers of green power, they are able to offset the higher costs of renewable energy.

Other sectors

The consequences of the global drive for lower carbon emissions and the rising cost of fuels derived from fossil oil are starting to be felt in other sectors of the international economy, including the airline industry.

Airlines are realising that cutting carbon emissions is not merely a concern regarding the issue of global warming, but that it has a direct bearing on cost efficiency with the implementation of the European Union’s Environmental Trading Scheme for the industry less than two years away.

From 2012, most carriers flying into the EU will have to cut their emissions to 85% of 2004-06 levels. Any emissions above that threshold will have to be paid for by acquiring carbon credits. The cost could be as high as R70 000 per flight.

The first deadline to full implementation of the scheme has passed already, with airlines having been required to submit their monitoring and verification plans to EU authorities late last year. From this year, they will have to put their plans into operation.

Emissions will be measured in the main by monitoring the amount of fuel used, with each kilogramme of fuel used creating 3.16kg of emissions.

In the process, airlines are looking at measures such as acquiring new, fuel-efficient aircraft, reducing onboard weight, and shortening the track distances flown.

• Add New
• Search

Comments (2)

• |2010-03-16 14:22:40 Lee Cahill
  A lot of this strikes me as an exercise in moving the deck chairs on the Titanic. Read James Lovelock's "Vanishing Face of Gaia: The Final Warning" for this scientist's insightful analysis of the inefficiencies of wind power and the utter uselessness of "carbon trading".
  • 0
  • 0

  Reply

• |2010-03-16 14:25:43 Lee Cahill
  Yes, we need to cut emissions - radically and quickly - but this needs to be a real reduction, not smoke and mirrors ...
  • 0
  • 0

  Reply

Write comment

Your Contact Details:

Name:

Email: do not notifynotify

Comment:

Title:

Message:

Security

Please input the anti-spam code that you can read in the image.

Powered by !JoomlaComment 4.0 beta2