Climate Change Mitigation in Developing Countries: South Africa

1. Climate Change Mitigationin Developing Countries:South Africa Prepared for the Pew Center on Global Climate Change by Ogunlade Davidson Energy & Development Research Centre, University of Cape Town

2. Overview • Africa’s most industrialized country, largest energy user and largest GHG emitter • World’s fourth largest coal producer • Undergoing profound economic, social change since end of Apartheid in 1994 • Overriding objective of ruling African National Congress is sustainable economic development

3. Energy/Emissions • With just 5% of Africa’s population, consumes half of all electricity produced on continent • About 1/3 of population not connected to power supply grid • Coal accounts for 75% of total energy and 91% of power generation • Coal-based liquid fuels developed to overcome Apartheid-era trade restrictions

4. Energy/Emissions • Energy sector accounts for roughly 80% of total GHG emissions • Energy-related emissions grew 2% a year through 1990s • Per capita, nearly 2X world average and 10X African average • Emissions intensity relatively high compared to other developing countries • Agriculture, forests a net carbon sink

5. South African Figures

6. Mitigating Measures • Energy Restructuring • Corporatization of Eskom, state-owned electric utility • 30% of assets to be sold by 2006 • Six new regional utilities to be created • Ongoing debate on whether to allow independent power producers and competition • South African Power Pool to allow electricity trading among countries

7. Mitigating Measures • Fuel Substitution • Subsidies for coal-based liquid fuels expected to end by 2005 • Lifting of trade embargo allows import of cleaner energy • Sasol, country’s main synthetic fuel producer, investing in natural gas fields in Namibia, Mozambique • Natural gas to replace coal as feedstock for liquid fuels

8. Mitigating Measures • Energy Efficiency • Programs with industry, consumers to reduce peak demand • GEF/Eskom aim to install 18 million compact fluorescents over 20 years • Efficiency standards for commercial buildings to become mandatory • Residential efficiency standards developed, but not mandatory

9. Mitigating Measures • Renewables • Provide less than 2% of electricity • Eskom developing over 100 MW of wind and solar thermal power • Off-grid electrification program to provide 350,000 solar home systems • Private sugar companies run 5 bagasse-and-coal-fired power plants

10. Mitigation Opportunities • Continued energy restructuring • Eliminate subsidies for emissions-intensive synthetic fuels • Adjust power rates to internalize environmental costs and allow return on efficiency investments • Remove energy trade barriers and facilitate investment in energy sector Mitigation Potential: 4 MtC in 2010

11. Mitigation Opportunities • Stimulate renewable energy • Government proposes increasing share of renewables from 9% to 14% of final energy consumption by 2010 • Strong potential for solar, wind, biomass, ocean energy, hydropower • Proposal: Renewable portfolio standard requiring 5% of electricity by 2010 and 20% by 2025 Mitigation Potential: 3 MtC in 2010

12. Mitigation Opportunities • Diversify energy sources • Complete substitution of natural gas for coal in production of synthetic petroleum Mitigation Potential: 5-10 MtC in 2010

13. Mitigation Opportunities Total Mitigation Potential: 12-17 MtC

14. Conclusions • Strong complimentarity between GHG mitigation and South Africa’s overriding objectives of reducing poverty, creating jobs, meeting basic human needs, and promoting sustainable economic development