ethekwini municipality technical assistance report durban · 2019. 10. 29. · informed by existing...

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eThekwini Municipality

Technical Assistance Report Durban

Durban Strategic Roadmap for Renewable Energy (2019 – 2030)

261006-01 | DRAFT | 03 May 2019

eThekwini Municipality | Technical Assistance Report Durban

Arup | Durban Strategic Roadmap for Renewable Energy (2019 – 2030) | 261006-01 | 03 May 2019

Contents

City Mayoral Foreword ii

Executive Summary iii

Approach iii

Next Steps iv

1 Introduction 5

Study objective 5

Study methodology 5

Scope limitations 6

2 Durban City Context 7

Durban’s commitment to climate action and renewable energy deployments 7

eThekwini Energy Office 8

Political, regulatory and institutional context 9

Key Challenges 12

Demand forecast 14

Reducing demand 14

Climate considerations and impacts on future energy demand 15

3 Current state of Renewable Energy deployment – South Africa & Durban 16

Snapshot into the South African renewable energy sector 16

eThekwini resource potential 16

eThekwini renewable energy projects identified for deployment - summary 28

Broader considerations for renewable energy deployment 29

Associated technology deployment 29

Energy storage 29

Electric vehicles 30

Smart grids 31

Smart meters 32

Energy poverty 34

Finance and investment 35

Human capacity 36

4 Gaps Hindering Deployment 37

5 eThekwini Municipality Roadmap 39

Recommendations 39

eThekwini Municipality Renewable Energy Roadmap Actions 43

Glossary and key terms 58

A1 Municipality EE and RE inititiaves 60

A2 : eThekwini Energy Office 61

A3 : Renewable energy analysis South Africa 62

A4 : Solar Hot Water study – Sustainable Energy Africa 65

A5 : Entura hydro study 66

A6 : City Power energy arbitrage 67

A7: Demand reduction and energy efficiency initiatives 68

A8 Municipal regulatory case studies 72

Bibliography 74


ii Arup | Durban Strategic Roadmap for Renewable Energy (2019 – 2030) | 261006-01 | 03 May 2019

City Mayoral Foreword


Arup | Durban Strategic Roadmap for Renewable Energy (2019 – 2030) | 261006-01 | | 03 May 2019

iii

Executive Summary

Approach

The global shift towards reducing energy consumption

and carbon emissions has driven municipalities to

explore their role in this transition. Numerous studies

have been completed outlining the barriers,

opportunities, and implications of municipalities

transitioning to renewable energy resources.

eThekwini has been proactive on the road to achieving

a clean energy future and has already made strides,

evident by being one of the first municipalities in

South Africa to have a dedicated Energy Office. The

Municipality has agreed to ambitious targets of 40%

renewable energy supply by 2030 and 100% renewable

energy by 2050.

This strategic renewable energy roadmap has been

informed by existing research studies and attempts to

consolidate the work previously commissioned for the

eThekwini Municipality, with the aim of providing the

guidance required to move to implementation. It must

be noted that this roadmap has focused solely on

electricity consumption and excluded other sectors

such as transport. The peak demand for eThekwini for

2016/2017 was just below 1,800 MVA. Data shows

that the peak demands have been relatively flat and

future demand is not expected to rise drastically.

Many studies address the notion that a transition to

lower energy consumption will decrease municipality

revenue. Lower municipality energy consumption will

free up municipal funds for the improvement of public

services; lower consumption by constituents will

reduce strain to provide energy and lower grid

infrastructure operation and maintenance costs. The

progress of the smart grid and smart meters will enable

municipalities to reduce losses and improve the

efficiencies of energy supply.

Without external support, most municipalities struggle

to attend to long sustainability projects due to the

pressing demands of day-to-day service delivery. As

such, most municipalities do not routinely collect data

on all projects and many do not have necessary

monitoring equipment in place. (Sustainable Energy

Africa, 2015). As such, while the eThekwini

Municipality has implemented many renewable energy

and energy efficiency strategies, no comprehensive

register or database exists.

This study has found that the eThekwini Municipality

has a suitable potential for the deployment of

renewable energy technologies. Solar, wind, small

scale hydropower, biomass and waste to energy

options were explored and found to be viable

alternatives, as well as waste to energy. Approximately

245MW of renewable energy was identified for

‘immediate’ deployment through a mix of solar, wind,

in-line hydropower and waste to energy projects i.e. a

level of investigation has already been conducted for

these projects and they are in a position to be taken

forward. This equates to roughly 5% of the

eThekwini’s current demand. If solar PV were

explored, approximately 1.8GW of solar would need to

be installed across the eThekwini in order to accelerate

deployment and achieve the remainder of the City’s

target.

The regulatory, financial and technical capacity of the

Municipality has been explored to identify gaps

concerning the deployment of renewable energy

solutions. Furthermore, key strengths, weaknesses and

opportunities to maximising their renewable energy

deployment were explored.


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Next Steps

A holistic system thinking approach needs to be

adopted to have the most effective change. The

Municipality needs to have a clear understanding of

the electricity landscape, focusing first on ensuring

that demand reduction and energy efficiency are being

incorporated at all municipal levels. Behaviour change

campaigns should be convincingly driven to ensure

that energy is used wisely at all times and not only

during electricity price increases and load shedding.

The Municipality should look to future trends analysis

to be able anticipate what impact technological

advancements and climate change will have on the

city’s needs and how to best prepare for negative

impacts and leverage opportunities. These factors

should be considered when setting targets for the

municipality, and these targets should be revised on an

annual basis to ensure that action plans are relevant

and applicable.

Investing in a robust database will allow projects to be

captured, monitored and tracked in an efficient

manner. Cloud-based analytics bring significant cost

and efficiency advantages when it comes to storing

large amounts of data. Having access to this data is key

to achieving an accurate baseline of renewable energy

projects and planning future projects.

All municipal operations should be investigated for

areas where renewable energy interventions can be

incorporated. The challenges the Municipality faces

are not unique and thus collaboration is encouraged to

draw upon learnings from other cities.

Among the recommendations for the Municipality, is

the need to develop a comprehensive database of

existing initiatives which can be used to track project

progress and feed into future implementation plans.

Without being able to monitor and track the success

and failures of projects, there are valuable learning

points that are lost.

Through an understanding of which initiatives are

most valuable in terms of energy consumption,

reduction and return on investment, the Municipality

will be able to make informed decisions on where to

focus its expenditure. Collating, utilising and

managing this data is a crucial step to developing a co-

ordinated approach and moving forward in a strategic

manner.

In terms of renewable energy generation, the most

attractive route for the municipality is to purchase

renewable energy from IPP’s. The primary benefit

being that the municipality will not be responsible for

any upfront capital costs nor the operation and

maintenance of large scale systems, whilst still

accruing the electrical production and carbon deficits.

Unfortunately, various legislative barriers currently do

not allow this avenue to be pursued legally, in future

this option could be allowed. In the interim, the

Municipality is encouraged to drive down energy

consumption, increase energy efficiency and further

investigate the renewable energy options identified.

While the focus of increasing renewable energy is

generally centred around carbon reduction, in the

context of eThekwini, the reality is that the

Municipality’s constituents face far more pressing

issues in terms of poverty and lack of access to

services. To ensure the Municipality is working

towards a just energy transition, poverty alleviation

and job creation targets should be applied to each

renewable project going forward.

In addition to the complex nature of transitioning to

100% renewable energy technologies, municipalities

are generally time and resource constrained and will

require support. An external party can be appointed to

work together with the Municipality to map out and

build upon the recommendations suggested in this

strategic roadmap. With external support and

guidance, the Municipality will be well equipped to

develop a strategic co-ordinated approach to achieving

their renewable targets whilst having objective

feedback and supervision.



v

1 Introduction

Study objective

This study aims to provide an understanding of the

status of renewable energy deployment within the

eThekwini Municipality to understand the work

required to reach the City’s renewable energy targets.

This output of this strategic renewable energy roadmap

will feed into the Durban Climate Action Plan under

the clean energy targets under consideration i.e.

‘Ensure 100% of electricity purchased by eThekwini

Municipality for resale is produced from Renewable

Energy sources by 2050’.

Study methodology

The study draws upon earlier research completed for

eThekwini as well as other South African

municipalities and aims to build a consensus around a

roadmap for implementation. This study was informed

through a combination of literature reviews, trend

analysis and engagements with various stakeholders

and city departments (listed in the steps below). As

stated previously this study focuses solely on the

City’s electricity demand.

The following steps were taken in this study:

A. Understanding eThekwini’s renewable energy

targets. This study utilised the electricity

consumption using 2016/2017 electricity

demand as a baseline for the projected

electricity demand in 2030 and 2050 (see

Table 3). It is noted that this strategic

renewable energy roadmap has focused solely

on electricity consumption in buildings and

excluded other sectors such as transport.

B. Understanding the global context of cities, and

what measures they are adopting in order to

set their renewable energy targets and move

towards these targets.

C. A literature review was undertaken of

renewable energy projects in South African

municipalities. Updated information was

collated with specific focus on the eThekwini

Municipality.

D. Understanding the viability of renewable

energy technologies both technically and

economically in the South African context.

E. Gathering data on renewable energy projects

installed in the eThekwini Municipality.

F. Engaging with USAID-South African Low

Emissions Development Program to

understand the status of hydro projects.

G. Consideration of the potential impacts of

electric vehicles and climate change on

electricity consumption.

H. Understanding energy efficiency trends and

opportunities that can be leveraged to capture

quick wins and drive down electricity usage to

improve overall system efficiencies.

I. Understanding eThekwini’s historic electricity

usage, current electricity demand profile and

the projected demand forecast for 2030 and

2050.

J. Understanding the implication of future

technologies and innovations on electricity

consumption.

K. A literature review was undertaken on the

regulatory barriers and opportunities for

municipalities in South Africa. Discussions

took place with various stakeholders and legal

advisors including Earthjustice.


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L. Understanding the status of municipality’s

electrical grid with regards renewable energy

integration smart metering, and smart grid

capabilities.

M. Understanding the current electricity demand

and the projected forecast to 2030 and 2050,

through interactions with the eThekwini

Electricity department.

Scope limitations

Note the following items are not covered in this

strategic renewable energy roadmap:

• Detailed analysis of the renewable potential

available in the eThekwini region for each

technology considered.

• Detailed analysis of the cost of each

renewable energy technology.

• Emissions reductions associated with

renewable energy technologies and impact of

Durban’s overall Greenhouse Gas (GHG)

reduction targets.

• Energy demand from sectors beyond

electricity i.e. transport sector etc. However,

the implications of electric vehicles on the

electricity grid supply have been explored.



2 Durban City Context

Durban is located on the east coast of South Africa,

and forms part of the eThekwini Metropolitan

Municipality, which includes neighbouring towns and

has a population of approximately 3.8 million, making

the combined municipality one of the biggest cities on

the Indian Ocean coast of the African continent.

Durban’s commitment to climate

action and renewable energy

deployments

Durban is a signatory to the frameworks identified in

Table 1 below. The Climate Protection Branch and

later the Energy Office teams were established to assist

in implementing policies and strategies aimed toward

achieving cleaner energy use and emissions reduction.

Table 1: Durban’s commitments to energy and climate change

Policy Year

Est.

Target

Municipal Climate Change

Protection

Program (MCCPP)

2004 Headline Adaption Strategy (eThekwini Municipality, 2011)

Imagine Durban

Action Plan 2004

Carbon neutrality by 2050

Energy Strategy 2008

27.7% CO2 reduction by 2020

Durban

Adaptation

Charter

2011 Local and sub-national governments

commit to accelerate climate

adaptation efforts

Durban Climate

Change Strategy

(including

additional

targets received by C40 to be

included in the

updated version)

2015 - 40% electricity demand

met by renewables by

2030

- 100% renewable energy by 2050

- 40% industrial energy

efficiency by 2050

- Reduce electricity

consumption by 40% by

2050 across residential, commercial and

municipal users

- Ensure 70% of public

and private electricity demand is provided by

self-generated

Renewable Energy by 2050

Sustainable Development

Goals

2015 Climate change, sustainable cities and communities (relevant to this study)

Sendai Framework

2015 7 Global targets around disaster risk reduction

METIS

Sustainable

Energy Action Plan

2016 100% energy demand met from

renewables by 2050 (40% by 2030)

Paris Agreement 2016

Limit global temperature increase to

1.5 degrees

Durban Resilience

Strategy

(suspended 2018)

2017 Collaborative informal settlement action. Institutionalizing resilience in

eThekwini. To date, this has been

suspended.

https://en.wikipedia.org/wiki/EThekwini_Metropolitan_Municipality

https://en.wikipedia.org/wiki/EThekwini_Metropolitan_Municipality

https://en.wikipedia.org/wiki/Indian_Ocean



As a member of the C40 Cities Climate Leadership

Group, Durban has committed to the Paris Agreement

1.5-degree Climate Action Plan, to become carbon

neutral by 2050 (Deadline2020 commitment). In

addition, Durban is a signatory of the Net Zero Carbon

Buildings declaration. As part of this initiative Durban

is developing a strategy to achieve a target of 40%

renewable energy by 2030 and 100% renewable

energy by 2050. The eThekwini Municipality is the

local government entity responsible for planning and

managing Durban. The Municipality has historically

been progressive in clean energy and climate action

initiatives having developed the Durban Climate

Change Strategy (DCCS) in 2015, with the vision of

implementing a city-wide approach to adapting to

climate change.

eThekwini Energy Office

eThekwini launched the Energy Office (EO) in 2009 to

increase awareness around saving electricity and

promoting energy efficiency in the city. Since then the

mandate of the Energy Office has expanded

significantly to include promoting renewable energy,

climate change mitigation and non-motorised

transport. The EO was the first of its kind in South

Africa, setting a precedent for local government

participation in sustainable energy interventions.

Figure 30 in Appendix A1 provides a summary of the

EO initiatives that have been implemented since the

establishment of the Energy Office. It was not possible

to obtain information on the status of each initiative as

there is currently no comprehensive register to capture

project data. A recommendation is included in Section

5 to develop a project database to capture and assess

valuable factors such as the status of initiatives, set

performance metrics, determine cost savings, return on

investment, carbon offsets and opportunities for

scalability and replicability. This will serve as an

important tool in assisting eThekwini to maximize on

the learning and growth opportunities that each project

brings.



Political, regulatory and institutional

context

As a signatory of the Paris Agreement on climate

change, South Africa has committed to reducing

carbon emissions by gradually transitioning away from

fossil fuels and increasing renewable energy

generation.

With the election of a new president the political

landscape of South Africa has recently shifted

favourably toward renewable energy. The Government

recently gazetted a draft version of the integrated

resource plan (IRP), outlining the country’s energy

mix breakdown forecast to 2030. According to the

draft IRP, coal will still account for 46% (34,000MW)

of the installed capacity mix up until the year 2030.

The Government has recommended the least cost plan

which favours a mixture of wind, solar and gas. A total

of 5,670MW of energy will be derived from solar,

8,100MW from wind and 8,100 MW from gas, see

Figure 1 for the breakdown.

The IRP allocates 200MW per annum for embedded

generation-for-own-use starting in 2018. The activities

that constitute embedded generation for own use relate

to the operation of a generation facility with an

installed capacity of between 1MW and 10MW,

whether connected to the national grid or not, that is

operated solely to supply electricity to a single

customer or related customer. The allocation is not

technology specific, and independent power producers

(IPP’s) will have to apply for and hold a generation

licence administered by National Energy Regulator of

South Africa (NERSA) if they are generating more

than 1MW.

Figure 1: Draft IRP energy mix (Cliffe Dekker Hofmeyr, 2018)

Municipalities in South Africa have historically been

involved in various demand reduction, efficiency and

renewable energy measures. Capturing data from these

existing projects will enable a co-ordinated approach

and provide guidance for new projects going forward.

Careful consideration needs to be taken regarding the

municipalities’ capacity to transition to clean energy.

Municipalities face limitations both financially,

technically and most importantly legislatively. Figure

2 below provides an overview of the key legislation

that governs the processes for pursuing energy

generation options in South Africa.

Electricity utility landscape

The single buyer model in South Africa, gives Eskom

exclusive rights to buy from IPPs or generators and to

sell to distributors. It is a popular model implemented

in many Asian, African and Eastern European

countries today. It is typically adopted due to various

technical, economic and institutional factors, which

include the simplification of price regulation (by

maintaining a unified wholesale price), protection of

IPP lenders from market risk (thereby making projects

more commercially viable and bankable through

PPAs) and the preservation of the key role of the

Department of Energy (DoE) in decisions regarding

investments in generation capacity.

Municipalities need to balance generating sales from

electricity whilst promoting cheaper renewable energy

under a tariff which both incentivizes customers to

remain connected to the grid and protects municipal

revenues. Under the current municipal finance model,

revenues from electricity sales are relied upon to

subsidize services for the poor in addition to the

municipality’s operational costs. NERSA has launched

an initiative to standardize the different tariff structures

that can be used, however this this has not been

finalised.

The Independent System and Market Operator (ISMO)

bill was introduced by the DoE in 2012, however it has

never been promulgated. The ISMO bill would remove

the operation of the electricity grid from Eskom and

place it with an independent operator that is still

owned by the state. This disaggregated utility model

splits the electricity sectors into generation,

transmission, distribution and retail operations, and has

proved to be successful in several countries, including

Australia and the US. It allows greater competition for

competing energy sources and transparent procurement

of new generation capacity on a price certain basis. At

present, power prices are held in check by the NERSA

(Business Day, 2018). A state-owned ISMO is said to

eliminates Eskom’s conflict of interest and avoids the

costs and possible disruptions associated with

privatisation of the process, while maintaining a

bankable off-taker for IPP investment.



In response to the South African power utility’s

ongoing financial and operational crisis, the President

has announced (in the 2019 State of the Nation

address) plans to split Eskom’s business into three

separate entities – Generation, Transmission and

Distribution. The attempt to re-structure Eskom’s

business model aims to provide more accountability

and isolate costs, enabling Eskom to raise funding

more easily for its various operations.



The end goal is to be able to stabilise finances, ensure

security of electricity supply, and establish the basis

for long-term sustainability for the power utility

(Business Tech, 2019). The implications and details of

this decision are under discussion.

Figure 2: South African legislative framework

Public-private partnerships (PPP)’s

PPPs are useful vehicles for implementing projects and

for municipalities, are governed by the MFMA, along

with the MSA.

The MFMA prescribes a set of investigations and

consultation processes that must be completed before

approval of a PPP by the full council.

If the PPP extends beyond three years, Section 33 of

the MFMA also requires compliance.

Chapter 8 of the Municipal Systems Act must be

complied with, which includes a Section 78

investigation, however there are instances where this is

not required.



Key Challenges

eThekwini Municipality in partnership with C40 Cities

and MILE (Municipal Institute of Learning) hosted a

baseline assessment workshop for City officials in

March 2018. The aim of the workshop was to share

outcomes for Durban on climate change

accomplishments and identify gaps.

Table 2 below outlines the common barriers and

opportunities identified relating to renewable energy.

Table 2: Barriers identified related to renewable energy for

eThekwini

Barriers Mitigation measure

High poverty and inequality creates a need

for rapid economic growth and reduction in

human vulnerability, thus social and

economic development takes precedence

over climate action.

The green economy will result in job

creation and upskilling. Reduced electricity

demands will enable municipal funds to be

used for improvements in services for

communities.

Energy poverty reduction should be

addressed in action plans.

No current implementation plan exists. The significant movement in research and

policy adoption now makes it easier to

move into implementation.

The Durban Climate Change Strategy is set

to be updated only every 5 years.

Due to the rapid nature of technology

advancements, information availability,

unstable political landscape, the strategy

should be reviewed and updated regularly.

Climate change is not a funded mandate;

hence it does not become a priority.

eThekwini municipality has established a

dedicated team to prioritize climate change

action.

High consumption and dependence on

fossil fuels, and the probable need to

decouple from Eskom to achieve city

renewable energy targets.

There has been significant movement

within municipalities to explore renewable

energy options.

Monitoring, reporting & verification

systems are limited. Poor quality statistical

data exists on certain core city activities.

Limited use so far of renewable energy for

electricity and energy production.

Recommendations in this strategic

renewable energy roadmap include

incorporating monitoring reporting and

verification systems. See Section 5.

Climate change does not feature in the

long-term development plan vision for

2020 Durban.

eThekwini developed the Durban Climate

Change Strategy in 2015



Understanding Durban’s energy mix

Energy is provided predominantly through electricity,

which is generally distributed to users on a local grid

that is operated, maintained and controlled by the

eThekwini Municipality. The eThekwini electricity

network supplies more than 740,000 customers in an

area covering nearly 2,000 square kilometres. Figure 3

below indicates the breakdown of the electricity sales

for the Municipality. The residential and business

sectors alone contribute to 45% of electricity sales.

These sectors hold vast opportunity for both energy

demand reduction as well as renewable energy

generation.

Figure 3: Distribution of energy sales 2016/2017 (Annual

Ethekwini Electricity Report, 2016)

eThekwini purchases electricity from sources out of

the KwaZulu-Natal province. Electricity is then

transmitted and distributed for use by industrial and

commercial sectors and residential communities.

eThekwini Municipality purchases just over 5% of the

total energy generated by Eskom. The Municipality

operates under the Electricity Regulation Act, 2006

and its policies are determined by the Metropolitan

Council of Durban and the NERSA (Annual

eThekwini Electricity Report, 2016).

Figure 4 displays a breakdown of eThekwini energy

demand by fuel. It can be seen that electricity is the

third largest source of energy usage at 17%, however it

corresponds to being the largest emitter of greenhouses

gases, (displayed in Figure 5), due to the majority of

electricity being supplied by coal-fired power stations.

Transitioning away from coal-based power to

renewable energy electricity sources will thus have a

huge impact on the city’s greenhouse gas emissions as

mandated by the Climate Action Plan and many other

of the municipalities climate action commitments.

Figure 4: 2010 eThekwini energy demand by fuel (Sustainable

Energy Africa, 2014)

Figure 5: 2010 eThekwini greenhouse gas emissions by fuel

(Sustainable Energy Africa, 2014)

As seen in Figure 6 below, electricity price increases

from 2008 and 2009 have led to Durban’s electricity

consumption departing from a business as usual

(BAU) trend and since flattening in growth, similar to

trends in the rest of the country. According to the

eThekwini Municipality, the continuous decrease in

demand is associated with an increase in energy

efficiency measures rather than a decline in economic

activity (Annual eThekwini Electricity Report, 2016).

This trend however, is not accompanied by a reduction

in maximum demand or peak. This is largely driven by

the growth in residential sector connections.



Low income household electricity consumption is

relatively small; however, these households contribute

to the morning and evening spike in demand which is

costly to municipal distributors as these customers are

cross-subsidised from revenue of wealthier customers,

and electricity is most expensive to supply at peak

times. As poor households use the minimal amount of

electricity very few efficiency opportunities exist to

reduce usage. This makes peak demand management

within low income households an important area of

energy management. The indications are that water

heating is a large component of this peak, as well as

cooking, making the rollout of low pressure solar

water heating and the possibility of expanding gas

usage for cooking, viable mitigation measures.

Figure 6: System Maximum Demand (eThekwini 2017 Annual

Report)

Demand forecast

Figure 7 below indicates the energy demand up to

2050 based on eThekwini’s grid load forecasting

software. The forecast considers population growth

information (Census 2011 basis data) and does not

include energy efficiency interventions, renewable

energy generation or the uptake of electric vehicles on

the grid. A conservative increase or 3% was using to

project future expected demand.

Figure 7: eThekwini demand forecast to 2050

Table 3: eThekwini demand forecast

Year Maximum

demand forecast

Timeframe - 2019

2030 2,050MW 10 years

2040 2,233MW 20 years

2050 2,349MW 30 years

Reducing demand

It is internationally recognised that saving one unit is

cheaper than producing one unit of energy. Energy

efficiency is the quickest, cheapest and most direct

way of addressing the climate change imperative, high

electricity costs and the electricity supply constraints

facing the country. Sustainable Energy Africa (SEA)

estimates that municipalities themselves account for

2% of total energy consumption in South Africa. The

South African Cities Network (SACN) undertook a

study to model energy efficiency potential in

municipal operations, shown in Figure 8 below. Traffic

and street lighting initiatives have already begun in

most metros; hence these values are slightly lower.

Building and street lighting initiatives could result in a

combined 32% reduction in energy consumption. This

reduction in consumption could free up municipal

funds to be used for further efficiency measures, staff

upskilling, renewable energy generation and the

improvement of community’s services. Local

government self-consumption and electricity

distribution losses account for 1% each of total energy

demand. Losses can be addressed through smart grid

initiatives and enhanced demand management,

discussed in following sections.

The way forward to reduce building energy

consumption is to influence building design from the

outset to avoid locking in excessive building energy

consumption for the lifespan of the building. See case

for Building Energy 2020 in Appendix A7 case study

3. Durban participates on the C40 South Africa

Buildings Program and receives support to develop

low and zero carbon building codes, going beyond

national requirements.

Figure 8: Potential savings per sector for municipalities in South

Africa (SALGA, 2017)



Retrofitting of street and traffic lights to LEDs is

ongoing in eThekwini, with reports of having installed

7% LED streetlights mainly in the 36W range to

replace existing 80W streetlights. According to the

eThekwini annual electricity report various grant

funding options (Energy Efficiency Demand Side

Management, Department of Energy, Swiss and

German donor funding) are being evaluated for the

installation of LED streetlights in residential areas,

secondary roads and on main arterial roads.

Section 5 has included a recommendation to log this

progress and map it out in a co-ordinated manner in

order to monitor the carbon, electricity and cost

savings associated with this initiative.

Climate considerations and impacts on

future energy demand

The climate in Durban, located on the east coast of

South Africa is humid and subtropical with hot

summers and mild winters. There is an average of

2,343 hours of sunlight a year with an average of 6.4

hours of sunlight a day.

Climate change will likely exacerbate these conditions

and lead to increased cooling needs in Durban

resulting in higher levels of energy consumption,

placing additional stress on electricity supply (Golder

Associates Africa, 2010) (eThekwini Municipality,

2014).

WeatherShift is a collaborative software application

which projects future climate weather data with the

aim of influencing smart infrastructure design. The

weather data is generated by adjusting historical

weather data based on climate projections run for the

recent Intergovernmental Panel on Climate Change

(IPCC) Fifth Assessment Report. Based on this

software, temperature projections are displayed for a

typical mean year for 2040 and 2060 and compared to

the current baseline data, see Figure 9. Greater

temperature increases are seen over the winter months,

and lower levels of irradiation are seen over the

summer months (possibly due to increase humidity

levels). This will have overall impacts on the city’s

climate which will affect energy use profiles. Future

climate impacts should be considered when going into

detailed plans for future energy planning.

Figure 9: Durban temperature forecast in degrees Celsius

Figure 10: Durban GHI forecast in kWh/m2/period

In response to global rising temperatures innovative

product features and emerging technologies have

already influenced the heating and cooling industry,

improving product efficiencies and reducing energy

consumption. DEVap discussed in Appendix A7 case

study 1, is an example of innovative technology that

could affect the future of cooling products on the

market.



3 Current state of Renewable Energy deployment – South Africa & Durban

Snapshot into the South African

renewable energy sector

In 2017 the South African-German Energy Partnership

(GIZ) completed a study investigating the roles for

South African municipalities in the renewable energy

sector. According to this study, financial projections

based on best case assumptions for solar PV in South

Africa, indicate that the business model is

economically-viable as it generates a long-term

cumulated saving for municipalities. The levelized cost

of the electricity generated from the solar PV systems

is expected to be lower than Eskom’s tariffs in the long

run, with a payback of less than seven years. Short

payback periods are primarily linked to the low capital

cost, free energy resource and the rising cost of

Eskom’s coal-based electricity.

Similarly, financial projections based on best-case

assumptions for wind farms, indicate that this business

model is economically viable, generating large

cumulated savings for municipalities. The levelized

cost of the electricity generated from the wind farm is

expected to be lower than Eskom’s tariffs in the long

run. The payback period is relatively short, reaching a

maximum of seven years in the case of self-funded

projects. Like solar PV, these short payback periods

are primarily linked to the low capital cost, free energy

resource and the rising cost of Eskom’s electricity. See

Appendix A3 for further details.

The prices for renewable energy technologies have

continued to decrease year on year (see Appendix A3,

Figure 33) while Eskom tariffs have steadily been on

the increase (see Appendix A3, Figure 34) driving the

appetite for consumers and large-scale power

producers to pursue renewable technologies. Given the

rapid technology advancements in renewables and the

continuing instability plaguing Eskom, these trends are

likely to continue.

eThekwini resource potential

Overall, eThekwini is not as competitive as the rest of

South Africa in terms of renewable energy resources,

however compared to many other cities globally, the

city has fairly good resources particularly in solar

energy. Figure 11 below indicates the solar resource

potential of South Africa.

Figure 11: SolarGIS solar resource map, 2017

Figure 30 in Appendix A1 indicates the various energy

efficiency and renewable energy interventions that

have been adopted by municipalities in South Africa.

Solar PV

A solar photovoltaic (PV) system is an electrical

installation that converts solar energy into electricity.

PV systems can be ground-mounted, mounted on a

roof structure or integrated into the façade of a

building. It can be used to meet the building’s own

energy consumption requirements or fed back into the

electrical grid.

As seen in Figure 11 above, the solar resource

potential for Durban is not as favourable as the rest of

South Africa. This is attributed to a unique

combination of pollution, high humidity levels and the

topography of the area combining to create a higher

degree of cloud cover in the summer period than is

normal for South African cities (Marbek Resource

Consultants, 2007).



The average irradiation levels shown in Figure 12

below display the resource potential in Durban

associated with solar PV, the global horizontal

irradiation, diffuse horizontal irradiation and direct

normal irradiation. The graphs shown below indicate a

favourable range for each of these parameters

indicating that potential savings can be accrued from

solar PV.

Global Horizontal Irradiance (GHI) is the total

amount of shortwave radiation received by a surface

horizontal to the ground. This value is of interest to

photovoltaic installations and includes both Direct

Normal Irradiance (DNI) and Diffuse Horizontal

Irradiance (DHI).

Diffuse Horizontal Irradiance (DHI) is the amount

of radiation received per unit area by a surface (not

subject to any shade or shadow) that does not arrive on

a direct path from the sun but has been scattered by

molecules and particles in the atmosphere and comes

equally from all directions.

Direct Normal Irradiance (DNI) is the amount of

solar radiation received per unit area by a surface that

is always held perpendicular to the rays that come in a

straight line from the direction of the sun at its current

position in the sky.

Figure 12: Durban solar resource potential (GeoModel Solar,

2012)

Durban solar installed capacity

Sustainable Energy Africa (SEA) on behalf of the

eThekwini Municipality carried out a pre-feasibility

study on the possibility of installing PV on various

eThekwini Municipality building rooftops. This was

part of a pilot project that aimed to promote the use of

embedded rooftop solar PV generation in eThekwini

municipality to reduce the dependence on the national

energy grid. The study looked at 18 Municipal

buildings, of which 10 buildings were found to be

suitable for rooftop PV applications. Cumulatively

these installations were estimated at 2.5MWp. Of

these, 5 installations were completed in 2017, at the

following locations, totalling ~287 kWp: uShaka

Marine Theme Park (Figure 13 below), Moses

Mabhida stadium Sky Car and People’s Park

restaurant, Metro Police headquarters and the

eThekwini Water and Sanitation Customer Service

buildings. The pilot installations are expected to save

the city 426,75MWh a year, translating to R337 396 in

the first year.

Figure 13: uShaka Marine Theme Park 111kWp installation,

source: eThekwini municipality

The real time data for the production of the uShaka

installation can be viewed live on a monitoring website

powered by solaredge as shown in Figure 14 below.

Figure 14: Solar installation real-time data (solaredge)



Figure 15: Durban Metro Police Headquarters houses 92kWp

The Durban Metro Police Headquarters shown Figure

15 above, houses 350 solar panels and four inverters

with an installed capacity of 92kWp.

Figure 16: People's Park Restaurant houses 96kWp

People’s Park Restaurant located in the vicinity of the

Moses Mabhida Stadium houses 100 solar panels with

a single ABB inverter. SolarEdge technology is used

on all other sites.

Figure 17: Moses Mabhida Skycar Arch houses 5kWp

The smallest installation of 5kWp is housed on the

Skycar Arch at the Moses Mabhida Stadium shown in

Figure 17. This comprises 18 solar panels and a single

inverter. The eThekwini Water and Sanitation

Department houses 201 panels and three inverters

which comprises an installed capacity of 53kWp.

Figure 18: eThekwini Water and Sanitation houses 53kWp

The installation of these solar PV pilot projects

demonstrates the Municipality’s capability to install

small scale solar on municipal buildings. Lessons

should be drawn from these existing projects and the

program should be built upon, expanding the city’s

installed capacity of rooftop PV.

PV installations on private commercial and industrial

buildings within the city are largely driven by savings

on electricity bills and reduction in carbon footprint.

There are many private sector users who have installed

large scale systems such as Massmart subsidiary,

Makro shown in Figure 19 below. Massmart has a total

of six solar plants to date and together they have the

capacity to generate approximately 4.4 million kWh of

renewable energy a year. This makes Massmart the

biggest producer of renewable energy in the South

African retail sector (BizCommunity, 2018).



Figure 19: Makro Struben Valley 480kWp solar installation

Municipalities will lose revenue; however, revenue

impact is not likely to pose a significant threat to

municipal distributors and is generally likely to be

below 2% of total revenue for anticipated SSEG

penetration rates. Expected revenue loss from

substantial penetration of solar PV (even up to the

extreme scenario of 20% penetration) is not significant

in tariff categories where there is a fixed (R/kVA) and

variable (c/kWh) charge already in existence (i.e. most

commercial and industrial tariffs) (Sustainable Energy

Africa, 2017).

Solar PV Funds

Solar financing specialist SolarAfrica, together with

investment manager Inspired Evolution, have signed a

R100-million equity investment facility that will

contribute to a R500-million fund for financing solar

photovoltaic (PV) solutions. SolarAfrica’s software

platform, Unifii, is an innovative online design and

credit technology portal accessed by its solar EPC and

sales partners to provide funding solutions for

residential, commercial and industrial energy users.

This process removes previous market friction points

and unlocks solar energy solutions for property

owners, small and medium-sized businesses or any

commercial energy user interested in electricity

savings without any capital requirements (Engineering

News, 2019).

eThekwini floating solar

Water reservoir sites within eThekwini Municipality

provide space within municipal owned property for the

installation of solar PV. The city has 440 reservoir

sites ranging in size from 5.4m2 to 15,916 m2. A total

of 52 sites were found suitable for the installation of

100kWp up to 826kWp. The total potential generation

from these sites were found to be 9.8MWp (eThekwini

Municipality, 2017).

Solar Hot Water (SHW) systems

Solar water heating is the conversion of sunlight into

heat for water heating using a solar thermal collector.

The cost of SHW systems is much lower than PV

modules and they operate at much higher levels of

efficiency (above 60%). They provide direct savings to

the consumer and assist in demand side management

for utilities. This is achieved primarily because SHW

systems, when properly sized for their end-use and of

high technical quality, store energy efficiently during

the low-use daytime hours and release it during the

peak hours, particularly the early evening. Consumers

receive a significant reduction in water heating costs,

which comprise 50-60% of the average home

electricity bill (Marbek Resource Consultants, 2007).

According to the latest building codes SANS 10400

XA2, new builds are required to have no more than

50% of the annual volume of domestic hot water

supplied by means of electrical resistance heating, i.e.

50% or more of the hot water used must be heated by

energy sources other than electricity.

https://en.wikipedia.org/wiki/Sunlight

https://en.wikipedia.org/wiki/Water_heating

https://en.wikipedia.org/wiki/Solar_thermal_collector



A study completed by Sustainable Energy Africa in

2017 indicates a potential saving of 49MW with a 10%

penetration of solar hot water geysers in the eThekwini

Municipality, resulting in 205 tonnes of carbon dioxide

offset a year. A 50% penetration indicates a 246MW

peak demand reduction, resulting in 1,023 tonnes of

carbon dioxide offset a year. A 100% penetration,

indicates a potential saving of 492MW resulting in

2,046 tonnes of carbon dioxide offset a year (see

Appendix A4, Figure 35).

Wind power

Wind turbines generate electricity by capturing the

kinetic energy of the wind. When wind flows past the

blades of the turbine, the rotor to which the blades are

attached begins to rotate. This rotor is connected to a

shaft, which turns a generator within the turbine

nacelle and produces electricity.

Onshore wind power has globally become one of the

most competitive sources of renewable energy

generation, with a tariff of 2.34 cents (USD) per kWh

recently reported for a 400MW wind farm in Saudi

Arabia (CleanTechnica, 2018).

The South African Renewable Energy Independent

Power Producer Procurement Programme (REIPPPP)

has seen similar success through rounds of competitive

bidding, where the most recent round’s average wind

tariff was ZAR 61.9 cents per kWh (Engineering

News, 2015)

A study by the Council for Scientific and Industrial

Research (CSIR) concluded that South Africa’s wind

resource is on par with solar and that more than 80%

of the country’s land has enough wind resource for low

cost wind energy (Fraunhofer, CSIR, 2016). Although

the wind resource in eThekwini Municipality is lower

than wind speeds experienced in the Eastern, Western

and Northern Cape provinces, where most wind

projects have been developed thus far under the

REIPPPP, there is potential for the installation of

commercial wind farms in this area., Germany and

Spain for example, are global leaders in wind energy,

successfully operating cost-effective wind farms

despite having lower wind resources available than

South Africa.

Generally utility scale wind power plants require

minimum average wind speeds of 6m/s to be

considered commercially viable, and small wind

turbines require speeds greater than 4m/s. Commercial

feasibility is also highly dependent on the feed-in tariff

available to the project. A high tariff may make a

project in an area of lower resource, viable.

In 2011 3E consultants were commissioned to conduct

a wind study for the eThekwini region. The wind

resource map shown in Figure 20 below indicates that

there are several areas that experience wind speeds

between 6.5 to 8.1 m/s and 6 to 6.5 m/s. A total of 10

sites were identified that support installation sizes

between 15MW and 27.5MW. The following

constraints were applied to this first pass assessment:

• Minimum wind speed of at 6.2m/s, at 100m above

ground level

• Urban/suburban areas excluded

• Maximum distance of 25km to substation for grid

connection

• Minimum of 20MW installed capacity for

potential wind farm sites

• Only one landowner for each potential wind farm

site (where possible)

Figure 20: Wind map for eThekwini Municipality (3E, 2011)



Figure 21: Wind farm potential and site locations (3E, 2011)

This high-level study highlighted several sites within

the eThekwini municipality that have the potential for

commercial wind projects to be constructed (see

Figure 21). However, to have a more accurate

understanding of the energy yield for a site within this

area, it would be necessary to carry out a more detailed

study (with a minimum of 1-year on-site wind data to

account for seasonal effects), which would require the

erection of dedicated wind speed measurement masts.

Arup would recommend that the 3E study is updated to

ensure the sites identified are still relevant. These sites

should then be ranked according to wind resource,

environmental and social constraints, grid connection

and constructability to identify the most attractive

areas for further development.

The next step would be to obtain the necessary permits

for installation of wind measurement masts and to

record at least 12 months of wind data before assessing

the potential yield.

eThekwini Wind Repowering Project

Bremen Overseas Research and Development Association (BORDA) donated 2 complete turbines (150kWp) to the eThekwini Municipality in 2010. The objective of installing these turbines was to allow further scientific research into the effects of wind turbines on the local grid infrastructure and to gain experience on managing wind energy development projects. The Municipality commissioned an Environmental Assessment for the proposed installation sites as well as a study by wind specialists to determine if the turbines are still in a useable condition.

National Environmental Screening Tool This tool is a geographically based web-enabled application which allows the pre-screening of a proposed site for environmental sensitivities. The tool allows sensitives specific to renewable energy technologies (solar, wind, hydro, biomass, biofuels and wave) to be identified, for example for a wind site the

following sensitivities are listed: avian, bats, civil aviation, flicker, landscape, noise etc. The Municipality can explore the credibility or robustness of the tool and determine if the tool will be useful to pre-screen sites.

Hydropower

Water supply networks provide opportunities for

generating hydropower by bypassing energy

dissipation infrastructure within the water supply

networks and diverting the flow of water to turbines.

Classification of hydropower size is shown in Table 4

below.

Table 4: Hydropower classification size

Category Capacity

Pico <20kW

Micro 20-100kW

Mini 100 kW- 1MW

Small 1-10MW

Macro / Large >10MW

Suitable water resources for hydropower generation in

South Africa are situated primarily in Kwazulu-Natal

and the Eastern Cape, as seen in Figure 22 below.

Figure 22: Hydropower potential South Africa (CSIR, 2010)

Entura is a specialist power and water consulting firm

who were appointed in July 2016 to develop a

methodology for assessing the hydropower potential of

existing water supply networks within the eThekwini

Municipality. The screening process on the eThekwini

Water and Sanitation (EWS) network identified a

shortlist of 47 sites (see Appendix A5, Figure 36) from

a total of 159 potential sites across the network.

Data from the Umhlanga 2 Reservoir was analysed by

Entura with the following summary conclusion:



• The expected annual energy ranges from

316MWh/a, increasing to 500MWh and further

increasing to 826MWh after 30 years of operation.

• The estimated cost of the mini-hydro scheme,

including all contract and administration costs is

R4.8m (at 2016/2017 rates), and is expected to

take 30 weeks to procure, construct, install and

commission.

A pre-feasibility study completed in 2011 by GIBB

consultants, found both Ashley and Wyebank sites to

be feasible. The potential hydropower generation was

found to be 2.8MW and 3.7MW respectively, and

according to sources both projects are in the early

feasibility stage. The EWS Department is also

developing small scale hydropower at Sea Cow Lake,

KwaMashu 2, Aloes, Phoenix 1&2, Umhlanga 2

totalling approximately 750kW.

The CaBEERE project was a joint project between the

Governments of South Africa and Denmark and was

aimed at building capacity in energy efficiency and

renewable energy. An older study completed by the

CaBEERE identified the possible hydropower

potential production listed in Figure 23 below.

KwaZulu-Natal again has the highest potential

followed by the Eastern Cape. The study is quite old

hence the data should be interrogated and verified.

Figure 23: Cumulative potential for hydropower generation in

South Africa (CaBEERE, 2002)

In-conduit / In-line hydropower

In-conduit hydropower is a well-established

technology capable of generating electricity relatively

easily and inexpensively with little to no carbon

footprint. Renewable energy is harvested from existing

pressurised constructed conduits without the need to

construct new dams or large-scale infrastructure, by

placing a turbine within an existing conduit (such as

water pipes, canals or water transfer systems). The

systems range in size from pico (<20kW) up to small

scale hydro, see Table 4 above (EE Publishers, 2016).

Under the National Water Act (Act 36 of 1998), no

Water Use Licence or generation licence is required

(on a case by case basis) if limited to “own-use” as per

the NERSA, in terms of the Energy Regulation Act,

Act 4 of 2006.

The potential for conduit hydropower electricity

generation exists wherever there is high water pressure

due to pumping or gravity. Site examples include

(Loots, 2014):

• where dam water is released into bulk water

supply lines,

• water treatment works where the inlet water

source pipeline can be tapped,

• water reservoir inlets where pressure-reducing

stations are used,

• water distribution networks,

• treated effluent discharge points.



Benefits of small-scale and conduit hydropower:

(SEA, 2017)

• Considered a renewable source,

• proven technology with high efficiencies and a

long lifespan (typically 20 years),

• installed within existing man-made infrastructure

thus triggers only a basic environmental

assessment,

• capital cost is relatively low

• minimal operation and maintenance

• water license is not required as water is already

lawfully in use

• generating for “own use” avoids NERSA licencing

requirements (e.g. electricity generated by a

turbine at a wastewater treatment plant is only

used in the running of that treatment plant).



In cases where the conduit hydro technology is

installed in municipal infrastructure, the generation of

electricity can be carried out by a Public Private

Partnership in which the municipality will own the

generators, but the cost of all other equipment and the

costs of operation and maintenance will be borne by a

private sector partner. See Appendix A7 case studies 8

to 11.

Key takeaways from municipality in-line hydro

projects (SEA, 2017)

• Numerous stakeholders and entities on projects

create challenges in communication, approvals and

time schedules. Clear channels of communication

among stakeholders need to be agreed upon from

the inception phase

• Receiving approval from stakeholders and entities

could affect project timelines significantly.

• Construction access challenges at the site should

be considered for sites with difficult terrain

• The importing costs for equipment and parts can

be high, as many products are not available in

South Africa.

• Implementation is straightforward, however

legislative procedures and bylaws (and the

incurred costs and time thereof), may create a

challenge to small-scale project feasibility.

• Major issues include the prevention of theft and

the prevention of possible injuries to children

swimming in areas where equipment is exposed.

Ocean energy

There are several methods for harnessing wave energy.

These methods can be implemented on the shoreline,

near the shore or offshore. Most devices that are near

or offshore are anchored to the sea floor.

ZLM Project Engineering consultants were

commissioned in 2017 to provide a feasibility study to

harness the Cape Agulhas current to generate

electricity from East London to Durban. The coastline

of KwaZulu-Natal was investigated, and three possible

sites were identified as being suitable for further study

on the North and South Coasts. The central region was

found to be unsuitable due to the Natal Bight moving

the continental shelf about 50km offshore. According

to this study harnessing the ocean current could be

feasible, however the technology surrounding

commercial ocean current projects is not mature or

widely adopted at this stage.

A case study conducted in 2013 (South African Wave

Energy Resource Data) revealed that the Durban has a

mean annual median value of approximately 10 kW/m.

A range of approximately 30 kW/m is considered

suitable for ocean energy generation. Applying current

technology, it is generally considered that the potential

to generate wave energy at competitive prices within

any coastal zone with an average wave power level of

a threshold value of between 15 and 30kW/m.

Tidal energy has reached commercial stage; however,

the KwaZulu-Natal coastline was found to be

unsuitable due to the Durban tidal range being too low

and both Durban harbour entrances are unable to be

closed by a barrage. The study indicated that an

adaptation of ocean water tidal generators could be

explored. The Toshiba type tethered structure was

found to be the most suitable for the KwaZulu-Natal

coastline (Figure 24). They have been designed

specifically for ocean currents and have the advantage

of being able to swing as the current changes direction.

The design is semi-submersible and can thus be

adjusted for various depths to optimise the placement

of the turbines in the current.

Figure 24: Toshiba tethered turbine recommended for use

(Business Wire, 2018)

The technology is likely to mature in the near future.

eThekwini can monitor global trends and consider

exploring the technologies further within the next few

years. In the interim the marine and environmental

impact assessment can be conducted as suggested by

the study, and local manufacturing can be investigated

for undersea cables and turbine equipment.

According to a study completed for the Department of

Environmental Affairs Ocean and Coasts branch, the

north-east province of KwaZulu-Natal warm sub-

tropical waters offers possibilities for ocean

temperature energy conversion (OTEC) (Nelson

Mandela Metropolitan University, 2013). OTEC

systems use a temperature difference (of at least 20°C)

to power a turbine to produce electricity.

As seen in Figure 25 most ocean and wave

technologies are not mature at this stage and will be

more likely be ready for commercial stage

development beyond 2030. In the interim eThekwini

can partner with local universities on research



demonstration projects and continue to monitor

innovations in this sector.

Figure 25: Timeline for the development phase of ocean energy

technologies (Generated through consultation with the Ocean

Energy Forum)

Biomass

Prior studies completed for Durban indicate that

substantial opportunities exist to generate electricity

from bagasse, both through expansion of own-

generation capacity in raw sugar mills, and through

greenfield plants generating electricity as part of

ethanol production (Marbek Resource Consultants,

2007). This can be seen in Figure 26 below.

Figure 26: Biomass Resource Potential South Africa (CSIR,

2010)

A study completed by Marbek Resource Consultants in

2007, for the eThekwini Municipality outlined the

following takeaways:

• Woody biomass waste, primarily from the

lumber industry and the pulp/paper industry,

constitute a large untapped resource, however

proximity to point of destination could pose

challenges,

• sewage effluent is a major potential source of

energy, from both the use of the methane gas generated and the dry solids, some of which

are already being pelletised,

• production of biofuels, both bio-ethanol and

bio-diesel represents an opportunity due to the

municipality’s proximity to sugar producers

on the ethanol side, and availability of

industrial land for development of algae-based

biodiesel. The city has engaged sugar

producers around biofuel & electricity

generation, however most plantations fall

outside the city’s boundary.

The assessment conducted by Marbek Consultants was

based largely on two national studies: A 2004 study of

biomass resources in South Africa, and a 2006 study of

biofuel potential—both conducted for the Department

of Minerals and Energy. According to the information

provided in the 2004 study, there is an estimated total

electricity generation potential of between 2,100GWh

(from bagasse) and 4,800GWh (from sugarcane

biomass) additional to what is being currently

generated. Based on these figures potentially over 40%

of eThekwini’s demand target (based on the current

energy consumption) could be met through electricity

generated from sugarcane biomass. However, it is

noted that this figure is somewhat misleading as it

assumes major technological changes in the processing

of sugar, the ability and willingness to use cane

residues now routinely burned in the fields, and

significant improvements in power generation

technology over the current standard. See Appendix

A7, case study 12 for details on the Tongaat Hullet

Maidstone Sugar Mill, the only mill within

eThekwini’s boundaries. Since the mill is privately

owned eThekwini would have to provide strong

incentives (such as a higher feed-in tariff than

presently offered and upgrading of the distribution

system) for the expansion and modernization of power

generation at the mill, to increase the contribution of

electricity from sugarcane to the Municipality.

Since the study completed above is old, the next step

would be for the Municipality to verify the generation

potential figures listed above and determine if this is

still a viable option to purse.

The Department of Science and Technology and

the Council for Scientific and Industrial

Research (CSIR) launched a R37.5-million Biorefinery

Development Facility (BIDF) in Durban in March

2018. The facility is said to bridge the gap between

research and development and industrialisation, while

helping to rejuvenate the pulp, paper and poultry

industries. The BIDF is accessible to large industry

and small, medium-sized and microenterprises

(SMMEs) for research and development, analytical and pilot scale testing, evaluation, processing and

development of technologies for processing biomass.

http://www.engineeringnews.co.za/topic/technology

http://www.engineeringnews.co.za/topic/council-for-scientific-and-industrial-research-company

http://www.engineeringnews.co.za/topic/council-for-scientific-and-industrial-research-company

http://www.engineeringnews.co.za/topic/biorefinery-development-facility


http://www.engineeringnews.co.za/topic/bidf

http://www.engineeringnews.co.za/topic/durban



The facility is home to highly-skilled chemists,

engineers and biologists who are well-versed in

technologies for beneficiation and valorisation of

biomass. The initial focus will be on waste generated

from the production of wood paper and pulp, however

it will also address the needs of other industries that

produce biomass (Engineering News, 2019). Thus, the

Municipality is encouraged to engage with the BIDF to

capitalise on relevant research, potential pilot projects

and sector innovations that may arise from the facility.

Waste to Energy (WtE)

Incineration

While not a form of renewable energy, Municipal

Solid Waste (MSW) can be processed using a number

of different technologies such as gasification, pyrolysis

or incineration to generate electricity using waste to

energy plants. The resulting products can then be used

to generate steam to drive a turbine and produce

electricity or produce a gas which can power a gas

engine or turbine to generate electricity. However,

when looked at from a systems perspective,

particularly considering the carbon impact,

incineration does not produce clean or renewable

energy. Even when all the hazardous exhaust

pollutants are cleaned (at great expense), thermal

treatment technologies release carbon to the

atmosphere through the combustion process, rarely

offsetting fossil fuels carbon emissions (C40

Advancing Towards Zero Waste Declaration).

Furthermore, waste incineration is highly costly

globally and in South Africa, requiring highly

specialised skills to manage and operate, and secure

volumes of waste to ensure viability. Land zoning

challenges are also a barrier for the establishment of

such WtE technologies (SEA, 2017). The lock-in

effect of incineration infrastructure, also financially

binds the city to keep producing (or importing) waste

for years to come to feed the incinerator.

The zero waste philosophy calls for an end to the idea

that waste is a renewable resource. It is estimated that

we will deplete many of the essential resources from

the Earth, like aluminium or phosphorus, before the

end of this century, making a systemic shift in how we

use and recycle those resources a matter of urgency.

Landfill to gas

Landfill sites produce large amounts of landfill gas

typically containing 40 – 60% methane. Methane is a

powerful greenhouse gas which can be captured to

generate electricity and simultaneously destroy the

methane. Durban is a city that has some of the best

landfill management practices in the world and they

have received international recognition. In 2017,

Durban eThekwini Municipality won an honorary

Climate and Clean Air Award. The three landfill sites

owned by eThekwini are displayed in Table 5.

eThekwini Municipality previously flared the methane

gas from the sites to reduce the risk of uncontrolled

fires and reduce odours from the site. In 2006, the

municipality embarked on a project to utilise the gas

more productively by generating electricity while

enhancing the environment at the same time

(Sewchurran, Davidson, & Ojo, 2016). A total of

9MW is currently being generated and fed back into

the grid. The Buffelsdraai landfill site is currently not

generating electricity, however the future plan is to

utilise the gas as a vehicular fuel equivalent, similar to

compressed natural gas.

Table 5: eThekwini landfill site capacities for generation

Landfill site Generation

potential (MW)

Operational

Marianhill 1 MW Yes

Bissasar 8 MW Yes

Buffelsdraai 1MW No

Wastewater to Energy

Like landfills, wastewater systems release methane gas

that can be captured to produce electricity. Sewage

treatment systems begin treating wastewater by

collecting the solid sludge. In a sludge-to-energy

system (see Figure 27), this sludge then undergoes a

pre-treatment process called thermal hydrolysis to

maximize the amount of methane it can produce. The

treated waste then enters an anaerobic digester, which

completes the process of breaking down the sludge.

The resulting product is a methane-rich gas, or biogas,

that can be used for on-site energy needs, or processed

further and used in place of natural gas. In addition,

the solid remnants of the waste create a nutrient-rich

digestate which can be used as a soil fertilizer to boost

plant growth. See Appendix A7 case study 13.

Figure 27: Wastewater-to-Energy System (World Resources

Institute, 2017)



A pre-feasibility study was completed for the

wastewater works owned and operated by the

Municipality to understand the potential amount of

biogas that can obtained from these sites. The

electricity generated from the biogas can be used to

offset the electricity utilised by the treatment works,

with the excess exported to the grid whilst the heat

produced from the engine can be used to warm the

digesters or to dry the sludge. Drying of sludge will

assist in reducing the transport costs of sludge

disposal. The wastewater treatment works included in

the prefeasibility study are shown in

Table 6. The next step would be for the Municipality

to progress to a feasibility stage for each of the sites.

Table 6: eThekwini wastewater generation potential

Wastewater

Treatment

Works

Capacity

(ML/d)

Generation

Potential (kW)

Durban Northern 70 800 – 1000

Durban Southern 155 ± 2000

Phoenix 50 550 – 650

Amanzimtoti 22 100 – 150

KwaMashu 51 550 – 650

Total ± 4000



eThekwini renewable energy projects

identified for deployment - summary

According to the information reviewed, and previous

studies completed for the eThekwini Municipality, a

total of approximately 254 MW of generating capacity

has been identified for deployment. If all identified

projects are suitable for implementation, this will meet

around 5% of eThekwini’s annual demand (the annual

demand considered is based on an approximation of

the energy sales data from the 2017 eThekwini

Electricity Annual Report). Due to the complex nature

of estimating landfill to gas further investigation will

be required in order to approximate the contribution it

makes towards the Municipality targets.

Of the technologies listed in Table 7, wind and solar

are likely have the greatest potential to achieve the

40% target. Wind turbines however are limited in

terms of where they can be installed. Large areas of

land are required as well as environmental impact

assessments. Further investigations will have to be

conducted to determine if more wind capacity can be

achieved in the eThekwini region. In comparison, solar

PV panels are flexible in terms of where they can be

installed (residential, commercial, hospitals, schools

etc.). If solar were pursued, approximately 1.8GW

would need to be installed to achieve the 40% target

i.e. 180MW a year (this figure is excluding system

losses, panel degradation etc.). It must be noted that

PV panels would likely have to be installed on private

sector buildings in addition to those owned by the

Municipality, to achieve this target.

Purchasing renewable energy from IPP’s is likely to be

the best-case scenario, however as discussed in Section

4, there is no current mechanism in place allowing

municipalities to do this. There are however various

other options that the Municipality can explore to

aggregate installation capacities to achieve their target.

Municipal buildings, municipal land and infrastructure

alone would be unable to meet the installation targets.

The private sector could be engaged to discuss

installations in residential and commercial areas. A

number of contracting options exist which can be

explored to determine what business model would be

most the attractive for the municipality.

In the interim, the projects summarised in Table 7,

should be advanced to the next stages to determine the

viability of each project and begin the processes

required for implementation.

Table 7: Technology potential identified for deployment

Technology Detail Generation

Potential

(MW)

% of Total

Demand

Solar Combination of floating

solar, rooftop

and ground mounted solar

12.5 0.2

Wind 10 sites have

been

previously identified that

can be

explored

215 4

Hydro In-line hydro

opportunities

have been identified

13.3 0.6

Wastewater to

energy

Five sites have

been identified

4 0.3

Landfill to gas (LG)

Two sites currently

operational

9 A detailed study will

need to be

completed

to establish

this value.

Total Excl. LG ± 254 5%

The figures indicated in the Table above serve as a

baseline for what renewable energy technologies have

been identified for deployment. However, there are

still possibilities for large scale roll-out of different

technologies for the Municipality to investigate.

The following constraints prevented accurate scenario

modelling from being demonstrated:

• The timeline of the study didn’t allow the

investigation of large scale roll-out of

different technologies within the municipal

boundaries.

• Private sector will likely need to be engaged

as the likelihood of pursuing all renewable

projects only on municipal building and

municipal land, is low.

• Detailed investigations and site visits will

need to be conducted to appraise each of the

Municipality’s departments to explore the

possibility of deploying and embedding RE

technologies within their operations, and

leveraging their current location.



Broader considerations for renewable

energy deployment

Associated technology deployment

Energy storage

Energy storage facilities store excess electricity

generated in times of lower demand for use at a later

stage when demand is high. In South Africa the most

common storage facilities are hydro-electric pumped-

storage schemes that make use of potential energy,

solar water heaters and concentrated solar power plants

that store heat energy. Municipal biogas plants could

also play a type of storage role where the gas produced

is stored and only used for combined heat and power

in the hours of peak demand. Batteries are another way

to store electricity for use later and could be used to

provide storage where renewable energy installations

produce electricity intermittently. If eThekwini adopts

the approach of increasing levels of renewable energy

generation, batteries could be considered as a means of

mitigating grid instability, as well ensuring that all

generation is utilized.

From a utility perspective, it is within the mandate of

municipalities to provide storage facilities and

municipalities can easily put storage capacity onto

their grid. This would be allowed from a regulatory

perspective if storage is viewed as a grid service, i.e. it

is negating the need for grid expansion in specific

cases, strengthening electricity lines, or providing

auxiliary services, such as frequency and voltage

support. Beyond grid services, storage has not yet

found a place in the policy and regulatory landscape

within South Africa. The provision of storage facilities

would bring substantial benefits in terms of energy

security, including black-start capacity, and grid

stability (both in terms of load and frequency

management) (South African-German Energy

Partnership, 2017). Figure 28 below indicates battery

characteristics for commercial battery options

available on the market.

Figure 28: Battery storage characteristics (GIZ, 2017)

An energy arbitrage study run for City Power in

Johannesburg analysed the impact of 1kWh of storage

used 6 days per week, at the local government

Megaflex tariff (see Appendix A6, Figure 37).

Arup recently completed an energy arbitrage case

study based on the Eskom Megaflex tariff structure,

which indicates that the use of energy storage systems

(ESS) for arbitrage is becoming increasingly feasible

for large utility customers. The case study used the

2017/18 Megaflex tariffs specified for local authority

customers and considered active energy charges, as

well as network capacity charges and network demand

charges. Based on trends observed over the past few

years, an average annual tariff increases of 10% was

applied to all charges.

A four-hour battery system with a round-trip efficiency

of 88% was considered since this is a common

configuration for popular technologies such as lithium-

ion batteries and flow batteries. The ESS was assumed

to charge fully during off-peak hours and discharge

fully during peak hours, while reducing the maximum

demand in any given month by its maximum power

output capacity. Based on the 2018 benchmarks

provided by Tesla, the ESS was assumed to have a per

unit capital cost of $350/kWh (including installation).

This resulted in an estimated simple payback period of

8.3 years, which decreased to 7.9 years if the yearly

savings are assumed to be invested at an annual

interest rate of 10%. It decreased further to around six

years if two discharges per day were assumed, despite

the increased rate of degradation associated with

increased usage. These figures are expected to improve

year on year, as energy storage costs continue to fall

while the utility’s tariffs increase. Table 8 below

shows the simple payback periods estimated for

declining ESS costs. The rate of ESS cost reduction is

not well defined, although current literature indicates

that the cost reduction to $200/kWh could be achieved

by 2020



Table 8: ESS payback period vs. capital cost

ESS capital cost

($/kWh)

350 300 250 200

Simple payback

period (years) 8.3 7.4 6.5 5.5

The results of this case study indicate that the reduced

capacity and demand charges achieved through peak-

shaving have a significant impact on lowering the

payback period.

More importantly, peak-shaving offers opportunities

for deferral or avoidance of grid infrastructure

upgrades and grid connection costs. This can apply to

new grid connections as well as expansions that will

increase the maximum energy demand at existing

connections. The best investment opportunities will

likely be found in cases where infrastructure upgrade

deferrals can be achieved in conjunction with energy

arbitrage savings.

City energy storage targets

New York (NY) was the third city (along with

California and Massachusetts) in the United States of

America to adopt an energy storage target - 100MWh

by 2020, along with an expanded solar target of 1GW

by 2030. NY has some of the most stringent rules in

the country for energy storage projects particularly for

lithium-ion technology. Due to the difficulty in

obtaining permits the installation of storage has been

very slow with only 4.8 MWh of storage installed in

the city at the beginning of 2017. In response to this,

the city released comprehensive guidelines for

installing lithium-ion batteries for outdoor energy

storage projects, including rooftop projects (Utility

Dive, 2018).

Electric vehicles

The advent of electric vehicles (EVs) in developed

countries has already led to an increasing number of

charging stations being built around cities with the

latest generation of electric vehicles improving their

range capability to enable longer distance driving.

Developing countries will have a more gradual uptake

of EVs and the impact this will have on the electricity

grid is still under debate. Concern exists that the

concentration of EVs charging at peak times could

cause electricity disruptions and congestion on the one

hand, whereas other research sources have reported

that it will have minimal grid impact as vehicles will

be left to charge overnight when many other electrical

devices are switched off (Techcentral, 2019).

The penetration of EVs in South Africa is still very

new, with the only two brands of electric vehicles,

BMW (i3 and i8) and the Nissan Leaf. BMW has 57

charging stations in South Africa, six of which are

shared with Nissan. Jaguar Land Rover will be

launching its own electric vehicle to the South African

market on the 1st March 2019 (The South African,

2018). Jaguar, in conjunction with electric vehicle

charging authority GridCars, is investing R30 million

in infrastructure for the installation of 82 new public

charging stations in South Africa (see Figure 29). A

total of 30 public charging stations will be established

at various points of convenience, such as shopping

centres, in the country’s major hubs, including

Johannesburg, Pretoria, Durban, Cape Town, Port

Elizabeth, East London and Bloemfontein in addition

to publicly available charging stations which will be

installed in customer parking areas at every Jaguar

Land Rover retailer in South Africa.

South Africa’s city centres will be connected by the

Jaguar Powerway, a series of 22 charging stations

along the N3 between Gauteng and Durban and the N1

between Gauteng and Cape Town (Business Report,

2018). Most of the public charging stations will be

60kWh fast chargers (Stuff, 2018).

Charging stations can currently range up to a 350kW

charge per 10 minute interval, indicating the future

trajectory for charge stations and the significant impact

it could eventually have on the grid.

Figure 29: Jaguar Powerway charging station locations (Stuff,

2018)

Eskom says it has been working on a mobility project

to support collaboration in the roll-out of charging

infrastructure, while also engaging various local

vehicle manufacturers and charging point installers

about electricity demand concerns as well as other

smart charging solutions. These solutions will

incorporate renewable energy and storage options.

https://nysolarmap.com/media/1911/lithium-ion_energy-storage-systems-permitting-process-guide-final4_26v1.pdf



In markets like California or Norway, cash incentives

of up to R100,000 drop the capital cost of new EVs to

below the fossil fuel equivalent. EV owners then enjoy

priority parking, use of bus lanes, and exemption from

road tax and tolls. In Ireland, EV uptake is encouraged

by a €5,000 grant towards purchase of new electric

cars. National fast charging infrastructure is being

installed every 50km in Ireland, and Europe is

developing fast charging corridors (Low Carbon

Transport South Africa, 2017)

Electric Vehicle Industry Association (EVIA) (Low

Carbon Transport South Africa, 2017) :

• The Electric Vehicle Industry Association (EVIA)

is a national consortium of public and private

sector organisations.

• EVIA promotes clean mobility in South Africa by

supporting the development of EV policies and

regulations, promoting and integrating EV

technologies, developing charging infrastructure

and creating consumer awareness of EVs

• Seven EVIA working groups will focus on

different areas of E-mobility including charging

infrastructure, batteries and recycling policies, and

sustainable driving and living.

• The founding members of EVIA are BMW SA,

Nissan SA, GridCars, the South African National

Energy Development Institute (SANEDI) and the

Technology Innovation Agency (TIA).

• EVIA will work closely with national government

departments including the departments of trade

and industry, transport, science and technology,

and environment

Zero Emission Vehicle Car-Sharing (ZEV CS)

Arup and C40 have partnered to research the impact of

ZEV CS schemes in several selected cities, assessing

and analysing their effects on urban social,

environmental and transport issues. Research focused

on three case study cities, Los Angeles, Copenhagen

and Madrid.

The Zero Emission Vehicle (ZEV) Network is one of

the 16 C40 networks that focus on critical areas of

municipal action. Established to support cities that are

pursuing cleaner vehicle technologies to help reduce

transport emissions, the ZEV network works with C40

cities to advance policies and actions to facilitate ZEV

uptake by providing a platform for sharing best

practices and technical expertise.

Many of the public officials highlighted the potential

of learning how to adapt to the new digital-connected-

service mobility and engaging with the private sector.

In turn, many of the operators expressed an interest in

working with cities to promote more environmentally

sustainable urban mobility alternatives that make a

private vehicle no longer indispensable.

Opportunities for EVs

• EVs can be used to send power back to the grid

when the demand is high, and to power appliances

at residence or businesses during times of high

electricity demand or in emergency situations.

• The CSIR’s Energy Centre is developing systems

to integrate electric vehicles into energy

infrastructure. Researchers are working to improve

the integration of energy storage into the grid to

absorb and balance fluctuations.

• The uYilo E-Mobility Technology Innovation

Programme (EMTIP) EV systems laboratory

checks the compatibility of EV products from

global suppliers in order to speed up the

development and deployment of EVs

Barriers for EVs

• EVs entering the South African market are

expensive. EV owners pay a 43% tax (25% import

tax and 18% ad valorem tax)

Consumer range anxiety due to the limited availability

of charging infrastructure

Smart grids

As renewable energy generation and distribution

increases, together with improved efficiency measures,

more sophisticated and intelligent network capabilities

will be required at grid level to meet future energy and

climate challenges.

Smart grids allow for two-way digital communication

allowing better control over supply and demand

thereby limiting losses and reducing peak demand. It

ensures quicker restoration during power disturbances

and offers better integration with renewable energy

technologies. Distribution operations become proactive

instead of reactive by transferring loads to operate

within designed limits of transformers, circuits, and

substations and identifying and repairing equipment,

cables and lines before failure occurs.



A national vision document Smart Grid 2030 Vision

has been compiled by the South African Smart Grid

Initiative (SASGI), a South African National Energy

Development Institute (SANEDI) initiative developed

through one of its portfolios, the Smart Grid

Programme. The smart grid vision aims to serve as a

guidance for smart grid planning and roll-out by both

Eskom and the municipal electricity distributors.

eThekwini Municipality established a Smart Grid

working group in 2013 as well as a Smart Grid

strategy. The following grid challenges listed below

have been identified by eThekwini (Annual eThekwini

Electricity Report, 2016):

• Growing rate of illegal connections straining the

electrical network and causing multiple faults,

• theft and vandalism of electrical equipment which

results in long outages and damage to customer

contents,

• weather patterns influenced by climate change.

The following developments in smart grid

technologies can be explored to mitigate the challenges

listed above. Systems that will assist in the smart grid

transition are discussed below (Lapping, 2018):

Demand Response

New technology on the demand side will allow utilities

to send signals during peak load times to customers

who can automatically switch electrical equipment on

and off. This practice is known as load shifting, or load

reduction. This is set to save billions of dollars in

energy consumption and reduce carbon emissions.

Smart Grid Feeder Automation

The backbone of smart grids are communications

systems that will consist of its own data transmission

network and sensors to provide real time feedback on

the status of the electrical grid, identify any issues and

then send this information back to a central hub for

analysis. Several large international engineering

companies such as Siemens, ABB and Schneider

Electric are working on their own feeder automation

technologies.

Smart Grid Data Analytics

As the new technology components of the smart grid

will provide more data to the utility, this data will need

to be analysed for trends and require advanced

analytics methodologies. This will include predictive

and prescriptive analytics, forecasting and

optimization of the grid. Data analysts will be able to

mine data such as real-time asset metrics and weather

factors, then apply smart grid analytics to optimize the

performance of connected devices in the field. This

approach will assist the utility in controlling operating

costs, improving grid reliability and delivering

personalized services to its end users.

Advanced Distribution Management Systems

(ADMS)

The electricity utility business as we know it is rapidly

changing. Customers are installing grid-tied rooftop

solar PV systems, using the grid to charge their electric

vehicles and other grid connected devices that utilities

must be able to accommodate. ADMS will help utility

providers manage resources and operate their networks

efficiently and reliably. As new concerns and

challenges emerge, ADMS will evolve and adapt to

meet providers' changing needs.

Geographic Information Systems (GIS)

In the smart grid context, GIS adds intelligence by

capturing and digitally presenting the location of utility

infrastructure such as substations and transformers.

GIS helps utility companies know the location of all its

equipment. It helps the provider understand the

relationship of the equipment to the surrounding area.

Smart meters

Smart meters are a major component of the next-

generation smart grid as they allow information to be

easily transferred to the grid. Homes and the

appliances can connect to the Internet of Things (IoT),

reducing power consumption, particularly at peak

times, thereby enabling consumers to participate in

demand-side management.

Smart meters can allow the Municipality to collate

energy consumption data from customers, manage

electricity demand more efficiently and encourage

users to consume power wisely. Based on the long-

term power usage pattern, the feedback information

from smart meter data analytics will offer consumers a

better understanding of their energy consumption and

help them increase end-use energy efficiency and

awareness. Individual customers will be able to

provide balancing and ancillary services via virtual

power plants and aggregators. Samsung has committed

to connecting every product the company makes,

devices and appliances, to the IoT cloud and equipping

them with Bixby AI technology by 2020.



A specification (NRS049:2008) for advance metering

infrastructure (AMI) systems has been drafted and

published to create a standardised approach for

residential and commercial customers in South Africa.

An NRS049 compliant smart metering system

essentially has the following characteristics:

• Bi-directional communications from the central

server to meters and devices and from these

devices back to the central server

• customers have a portable interface unit in their

premises that can read information off a meter and

receive information from the utility,

• the ability to control up to two relays for load

control (such as hot water cylinder and a

swimming pool pump),

• capable of remote load disconnect for revenue

protection of the utility.

According to the eThekwini Electricity Department

smart meters will be leveraged in the following areas:

Systems Integration: Advanced metering infrastructure

(AMI) systems will be integrated with distribution

management systems (DMS) to provide enhanced

outage management and restoration and improved

distribution system monitoring.

Operational Savings: Smart meters will result in

operational savings such as reduced truck rolls (the

need to dispatch a technician in a truck to install, move

or reconfigure an item of equipment, a wire and cable

system or network outage etc.) automated meter

reading, and reduced energy theft.

New Customer Services: Smart meters will have

enabled services such as automated budget assistance

and bill management tools; energy use notifications;

smart pricing and demand response programs.



Energy poverty

The renewable energy transition requires not only

technology change, but also equitable access to energy

and economic opportunity within the energy sector to

ensure a just and fair energy transition. Energy poverty

is particularly prevalent in informal settlements and

includes those households living in backyard shacks.

This informal sector largely falls through the cracks of

municipal service provision and nationally allocated

poverty alleviation subsidies. Poor households are

burdened with relatively high energy costs, often in

excess of 10% of their income compared to wealthier

households, who typically spend 2-3% (Sustainable

Energy Africa, 2014).

A target of the eThekwini’s DCCS strategy includes

the following:

‘All citizens have access (both physical access and

social access – affordability) to suitable energy forms

to meet their needs’

According to the eThekwini Annual Electricity Report,

the Municipality began electrifying informal

settlements in the last 5 years which has reduced

energy poverty. LED floodlighting and solar lighting

for ablution facilities in informal settlements is on the

agenda for this financial year. Section 5 of this report

has included a recommendation to log this progress

and map it out in a co-ordinated manner in order to

monitor the social impact, carbon, electricity and cost

savings associated with this initiative.

Alternative energy sources that could be rolled out for

low income households include a combination of gas

stoves, solar water heaters, solar chargers and energy

efficient lighting. These would replace fuel sources,

such as paraffin, wood and candles that contribute to

the risk of fires and air pollution. Other benefits

include reduced peak electricity consumption, reduced

electricity theft, and opportunities for small scale

business development.

The key risk with offering alternative energy services

is push-back from community members who see it as a

sub-standard service. It is important to manage the

stakeholder consultation process when initiating

programmes of this nature. There also needs to be

careful consideration of the long-term implications

such as operation and maintenance costs, safety and

practicability for users (SALGA, 2018).

A workshop was undertaken in November 2017 with

representatives from local and national government,

the research community, the utility industry, and other

organisations. Affordability and access to finance were

found to still be among the reasons low and middle-

income households have not participated in the

growing uptake of solar PV small-scale embedded

generation (SSEG) systems in South Africa. Where

they do occur, most rely on full or partial subsidisation

implementation as the business case is currently not

convincing for households and municipalities (GIZ,

2017).

Mini-Grid in Upper Blinkwater

The Eastern Cape was the first municipality to have a

mini-grid license issued. The 75kW battery-operated

system is situated at a remote rural village in Upper

Blinkwater, Raymond Mhlaba municipality. Future

challenges which will need to be overcome include

revenue for battery replacements (despite a 10-year

horizon), diesel management, management of spares

and store’s inventory, an influx of new community

members, regulating the timing of energy usage and

land tenure.



Pay-As-You-Go (PAYG) model

DC Go is a South African company which provides

off-grid solar energy to currently unserved customers

and communities. Energy solutions are available to

customers through affordable and adaptive PAYG

packages which range from basic lighting to a full

suite of low energy, direct current appliances available

from DC Go.

BBOXX is a UK based company which designs,

manufactures, distributes and finances innovative plug

& play solar systems to improve access to energy

across Africa and the developing world.

In 2018 DC Go and BBox entered into a partnership to

deliver energy solutions to rural and urban

environments with particular focus on informal

settlements. They will focus on South Africa Lesotho

and Swaziland.

Finance and investment

There are various resources for municipalities to take

advantage of, both technically and financially as

discussed in the sections below.

Funding

There are a few regional and global funding

mechanisms to support the deployment of renewable

energy technologies in South Africa. These funds are

accessible to reduce the required upfront capital

investment and future operational cost burden of

renewable and battery technologies. Some funds for

consideration include:

Local

The Government of South Africa, through the

Department of Environmental Affairs (DEA) has set

aside R800 million to establish the Green Fund. The

DEA has appointed the Development Bank of

Southern Africa (DBSA) as the implementing agent of

the Green Fund. The Green Fund’s objective is to lay

the ground for the SA economy to transition to a low

carbon, resource efficient and climate change resilient

economy. It aims to provide catalytic finance to

facilitate investment in green initiatives. The fund only

supports initiatives that would not be implemented

without its support. It is additional and complementary

to existing fiscal allocations. Financial support is

provided, based on an application process; it can take

the form of grants, loans or equity (Department of

Environmental Affairs, 2016). Listed below are further

funding sources available for municipalities to explore

for the indirect implementation of green initiatives:

Municipal Infrastructure Grant (MIG)

Specific capital financing for poverty eradication

through reducing municipal infrastructure backlogs for

poor households, microenterprises, and social

institutions that serve poor communities. This fund can

be leveraged, for example the construction of

community halls can include solar to power the

building and energy efficient lighting

Regional Bulk Infrastructure Grant (RBIG)

Funds large bulk water and wastewater projects within

a municipality or projects that cut across several

municipalities. This fund can be leveraged, for

example bulk water supply projects can ensure that

energy efficient pumping technology is installed. In-

line hydropower and energy generation from

wastewater options can be explored (as discussed in

Section 0).

Water Services Infrastructure Grant (WSIG)

Designed to address the water and sanitation backlogs

and improve the sustainability of services in prioritised

district municipalities with the focus on rural

municipalities. This fund can be leveraged, for

example energy efficient technology can be

incorporated when investing in new or replacing old

water sector infrastructure. In-line hydropower and

energy wastewater options can again be explored (as

discussed in Section 3 Hydropower section).

Global

• Green climate fund (GCF) - The aim of all GCF

activities is to support developing countries to

limit or reduce their greenhouse gas emissions and

adapt to climate change impacts.

• The African Development Bank (AfDB)

contributes to poverty reduction and economic and

social development in the least developed African

countries by providing concessional funding for

projects and programs, as well as technical

assistance for studies and capacity-building

activities.

• The Energy and Environment Partnership covering

Southern and East Africa (EEP Africa) is a multi-

donor fund providing early stage grant and

catalytic financing to innovative clean energy

projects, technologies and business models.



• WWF (World Wide Fund for Nature) has a Green

Trust that supports programmes with a strong

community-based conservation focus in multiple

areas, including climate change. Projects are

funded on a maximum three-year timeframe, with

an opportunity for project extensions to be

considered under exceptional conditions.

There are many other partial or full funding options

available which should be further explored. A

recommendation has been made in Section 5 to

develop a database of local and international funding

opportunities to keep abreast of eligibility and

deadlines for funds.

Human capacity

SALGA in partnership with Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ) offers various

training and upskilling programs specifically for

municipalities to assist in the transition toward

renewable energy and energy efficiency initiatives.

eThekwini is currently utilising these resources

available to locally to upskill staff and build capacity

within the municipality.

A web platform, Urban Energy Support, has been

developed jointly between SALGA and Sustainable

Energy Africa (SEA). It aims to support South African

local governments to meet sustainable energy and

climate change challenges. The platform is used to

disseminate information specifically to municipalities

on energy efficiency and renewable energy

innovations, including guidelines and case studies on

topics aligned with the SALGA energy efficiency and

renewable energy strategy.



4 Gaps Hindering Deployment

eThekwini, like other municipalities, has historically

sought legal counsel to investigate options for purchasing

electricity from providers other than Eskom. To date

there are still legislative barriers that prevent

municipalities from purchasing electricity from large

scale IPPs.

The information summarised below is informed by the

Renewable Energy Scenarios for Municipalities in South

Africa published by South African Local Government

Association in partnership with GIZ, in January 2018.

The various scenarios for the Municipality to pursue

renewable energy are listed below, together with the key

challenges associated with each scenario.

Procuring from IPPs

The most attractive route for the municipality to achieve

their targets is to purchase renewable energy from IPP’s.

The primary benefit being that the municipality will not

be responsible for any upfront capital costs or the

operation and maintenance of large scale systems whilst

still accruing the electrical production and carbon

deficits.

• Electricity Regulation Act (ERA, Act 4 of 2006)

mandates IPPs to acquire a NERSA license.

• New Generation Regulations of 2011 (NGR) states

that a Section 34 determination from the Minister of

Energy may be needed for a municipality to

purchase electricity from an IPP.

• Tariffs paid for the electricity fed back to the grid

cannot normally be more than Eskom’s Megaflex

rate. This impacts the investment case for

renewable energy projects and creates financing

barriers for developers.

• NERSA’s approval is furthermore required for all

electricity tariffs. Municipalities could set a

renewable energy tariff for embedded generators,

but these tariffs are only valid for a year. This

provides little long-term security for investors.

• Although the MFMA does not explicitly prohibit

the sort of long-term contracts required with IPPs,

typically 20 years, it requires due processes of

securing public participation, council approval and

endorsement by the National Treasury to be

followed for contracts that have financial

implications beyond three years.

• Wheeling agreements may be required with

Eskom and/or other municipalities, depending on

where the generating assets are situated.

Municipalities need to have a high credit rating to

make projects bankable for investors.

Generating renewable energy for own use or for sale

• Electricity generating facilities have a high capital

costs associated with them.

• A municipality may only borrow funds, in terms

of the MFMA, for acquiring assets, improving

facilities or infrastructure to provide service

delivery (in accordance with Section 135 of the

Constitution). In addition, municipalities’ gearing

ratio must be below 50% and debt service cost less

than 10% of their annual operating budget, which

limits the extent to which they can borrow.

• Systems larger than 1MW will require a NERSA

license and registration. There process is currently

a risk in delaying projects.

• The municipality may also need determination

from the Minister of Energy to go ahead with the

installation.

• Municipalities do not have the required technical

skills for operation and maintenance.

Wheeling of Private Sector Electricity (IPP’s use

municipal grid to sell electricity)

• Municipality could lose revenue if customers

migrate to IPP’s.

• Increased administration burden associated with

new types of customers.

• Difficult to determine how much to charge IPP’s

for use of the grid.

• NERSA has developed guidelines and ‘Rules on

network charges for third-party transportation of

energy’, which outlines the process for calculating

‘use-of-system charges’

• Significant issues have been raised by

municipalities and the sector regarding these rules

and, as a result, NERSA is currently undergoing a

consultation process to review the rules and

regulations.

Increasing Energy Access and Reducing Energy

Poverty

• Informal settlements by nature are faced with a

myriad of challenges in terms of lack of

infrastructure, this leads to illegal connections and

safety hazards.



• Theft is a key barrier preventing municipalities

from rolling our solar panels on a large scale to

provide electricity for informal settlements.

• The key risk with offering alternative energy

services is push-back from community members

who see it as a sub-standard service.

Operating a storage facility

• Energy storage technologies typically have high

capital costs, require specialised skills and need to

be monitored carefully in order to limit the

frequency of replacement.

• Legislation for energy storage technologies has

not been fully developed in South Africa.



5 eThekwini Municipality Roadmap

Recommendations

There are several opportunities for the Municipality to

boost growth toward achieving its renewable energy

targets.

The following recommendations should serve as a

guideline for the eThekwini Municipality to accelerate

its efforts towards achieving those targets, and

overcome potential gaps and barriers. Items requiring

longer timelines for example, those regarding policy

and legislation, should be broken down further to

include frequent follow-ups to ensure that momentum

is not lost in achieving these arduous tasks.

The recommendations are broken down into a

reasonable level of detail in the following sections and

form the basis of the Municipality’s renewable energy

roadmap.

Policy management, generation licenses and

funding

• The Durban Climate Change Strategy is currently

set for review every 5 years. Due to the fast pace

of the energy sector this document should be

reviewed and updated annually as required, to

ensure that the strategy is relevant and capitalising

on technology advancements in the sector.

• Investigate bundled generation license applications

• Investigate mini-grid license applications for rural

areas

• PowerX holds a NERSA-issued licence to trade

electricity countrywide. The company buys green

power from IPPs and sells it to consumers.

Investigate options to purchase electricity from

PowerX. The first step is to submit the

Municipality’s ‘D-Forms’ to PowerX, in order to

establish if the Municipality’s tariff structure is

suitable for the PowerX business model. See case

study 7 in Appendix A8 for further details.

• Engage with municipalities, DoE, National

Treasury and NERSA to jointly map a clear way

forward from a regulatory perspective. A working

group could be created to address the transition of

South African municipalities to new funding

models and explore options for licenses for

bundled projects, virtual metering and community

owned projects.

• Ensure wheeling tariff structures allow the

municipality to cover operation grid costs

• NERSA has launched an initiative to standardize

the different tariff structures that can be used.

Engage NERSA to determine the status of this.

• Engage SALGA and AMEU to allow

municipalities to provide structured inputs into the

IRP and IEP, with the aim of securing a mandate

for further action at the local level, this will also

grow the local economy and create jobs.

• Engage with C40 Building Energy 2020 Program

to determine the possibility of incorporating

renewable energy generation and smart meters into

new building codes, and the possibility of tying

retrofitting of buildings to tax deductions.

a) Under new requirements in California builders

must make individual homes available with

solar panels or build a shared solar-power

system serving a group of homes. In the case

of rooftop panels, they can either be owned

outright and rolled into the home price or

made available for lease monthly (New York

Times, 2018). In 2017 Miami adopted a

similar law requiring all new homes built in

the city to have solar panels.

b) Rooftops on new buildings built in

commercial zones in France must either be

partially covered in plants or solar panels (The

Guardian, 2015).

• Based on the outcome of the Cape Town legal

case regarding purchasing power from IPP’s – the

Municipality needs to take advantage of the

rulings award to the City of Cape Town in the

event that there are any flexibilities allocated to

municipalities.

Demand reduction

Ensure the municipality is operating in the most

efficient manner by driving demand reduction

strategies:

• Conduct energy audits on all municipal buildings.

Retrofit buildings with efficiency measures based

on the outcomes of the energy audits (LED

lighting, motion sensors, air curtains at entrances,

upgrade HVAC equipment, pump technology etc)

https://www.theguardian.com/world/france



• Develop a detailed implementation plan for the

smart grid transition, log the status of existing

initiatives, on the project database mentioned

above.

• Operation and maintenance of existing initiatives

needs to be outsourced if the municipality does not

have the capacity and technical skill.

• Raise awareness and promote behaviour change

through communication and education – numerous

studies indicate that there is a need to provide

energy and climate change information to a more

general audience, including school learners, city

staff, residents and businesses. Electricity saving

campaigns educate consumers to reduce

consumption through a wide range of behaviour-

change actions such as turning down geyser

temperatures and switching off plug and light

switches.

• Raise awareness in all municipal departments of

the Energy Office’s objectives and gain buy-in.

Public awareness campaigns can be run to gain

buy-in from constituents, and incentives could be

created to get public participation in coming up

with new innovations or reducing energy usage.

• Peak demand management within low income

households is an important area of energy

management. Explore alternative energy sources

that could be rolled out for low income households

- a combination of gas stoves, solar water heaters,

solar chargers and energy efficient lighting. These

initiatives could be paired with small scale

business development.

Capacity building

• Monitor the global landscape and leverage off

lessons learnt from what other cities are doing to

deploy renewable energy

• Develop a project database to log information of

initiatives, set performance metrics, monitoring

and review processes, capture cost savings, carbon

offsets, opportunities for scalability and

replicability. This will be an important tool in

assisting eThekwini in ensuring a co-ordinated

approach going forward as well as capturing and

maximising the learning and growth opportunities

that each project brings. Having access to this data

is a critical first step to achieving the

municipalities targets.

• Improved co-ordination between EE and RE in all

departments is required to ensure that the EO is

not working in a silo. This will ensure that there is

a wholistic view of how the city is managed in

order to recoup the benefit.

• Engage with other municipalities and

stakeholders, share experience and lessons learnt.

The barriers and challenges experienced by

municipalities will create opportunities for various

industry stakeholders in the green economy who

will be willing to offer innovative solutions.

• Establish a renewable energy sector development

agency. In 2010 the City of Cape Town partnered

with the Western Cape Provincial Government to

establish Green Cape, a sector development

agency aiming to unlock the manufacturing and

employment potential of the ‘green energy

economy’ in the Western Cape. Green Cape

stimulates both economic development and the

uptake of renewable energy.

• GreenCape can also be engaged directly to explore

opportunities together with the eThekwini

Municipality.

• Establish a point of contact within all relevant

departments to feedback to the EO on energy

efficiency and demand reduction strategies and to

be on the look-out for opportunities to incorporate

renewable energy technologies.

• Continue to make use of the various training

programs made available to upskill city officials of

energy efficiency and renewable energy

technologies.

• Update Durban Solar map tool (Appendix A7 case

study 6) on a regular basis and engage in

marketing campaign to increase awareness and

usage of the tool. Ensure to track the usage and

have think tank sessions to see how the tool can be

built upon and how the data from the tool can be

leveraged.

• Create a log for LED flood lighting and solar

lighting for ablution facilities in informal

settlements, set targets to work toward. Ensure that

progress is monitored and tracked in the tool

mentioned above.

• Explore the implementation of SSEG on low to

middle-income apartment blocks – this scenario

presents a more desirable financial case than

individual households.



• Periodically draw together the work of the many

stakeholders active in this area to share experience

and coordinate activities. GreenCape, the CSIR,

Eskom, SEA and SAPVIA are among stakeholders

working in areas relevant to SSEG in the low-

income sector, together with City of

Johannesburg, the Nelson Mandela Bay Metro,

and the City of Cape Town

• An external party (organisation / consultant etc.)

can be allocated is to provide oversight and

support to the municipality as well as hold the

municipality to account with regard to achieving

their targets and provide guidance and feedback as

required.

• Explore the opportunities for EVs to be used to

send power back to the grid

• Develop a database of local and international

funding opportunities to keep abreast of eligibility,

requirements and deadlines for funds. This

database should be regularly updated.

The application process can be streamlined to

become more efficient reducing time taken to

submit applications. The Municipality could be

alerted when opportunities arise and new project

ideas may be inspired by certain funding

opportunities.

• Engage with municipalities across South Africa to

drawn lessons for the numerous municipal owned

renewable projects that are currently being

operated.

Renewable energy projects

The municipality can follow through on the

deployment of the identified projects listed in this

strategic renewable energy roadmap.

Solar energy

• Durban Solar tool up and running and gather

usage data to determine public interest and

appetite for solar installation.

• Apply for a bundled generation license

• Build upon the existing successful rooftop

installations already piloted by the city.

• Conduct feasibility studies for installing solar on

municipal reservoirs sites already identified.

• Explore options to install solar on municipal

infrastructure

Wind energy

• Update 3E study for each of the 10 sites wind sites

identified. Where land is still available for use

conduct the following assessments:

• Obtain permits to install wind measurement

equipment at all sites

• Conduct environmental impact assessments

• Rank sites according to wind resource,

environmental and social constraints, grid

connection and constructability to identify the

most attractive areas for further development.

• Apply for bundled generation licenses

• Determine the municipalities financial capability

for procuring equipment. Explore grant funding if

required

• Establish in-house capability to own and operate

wind turbines

Biogas / Biomass / Wastewater

• Conduct an updated study to determine the

opportunities available for eThekwini in the

biomass and biogas sector

• Conduct pre-feasibility study for biogas digesters

for rural school areas and villages. According to

the municipality this is a desired route to alleviate

rural expenditure on electricity. A study was

completed in 2014 for schools in the Cornubia

district, this study should be drawn upon as a

basis.

• Explore future opportunities for eThekwini landfill

gas

• Investigate the power purchase agreement barriers

preventing the existing landfill to gas projects

from being run

• Engage the Biorefinery Development Facility

(BIDF) to understand the opportunities to run pilot

projects and engage in new sector innovations

• Engage with the Tongaat Hullett Maidstone Sugar

Mill to explore options to increase the electricity

generation from sugar cane

• The wastewater treatment works prefeasibility

study should progress to a feasibility stage for

each of the 5 sites identified





Hydropower

• 47 sites have been identified for micro-hydro

power implementation, develop an implementation

schedule prioritising larger sites (likely

economically feasible than smaller sites).

• Determine the feasibility of installing monitoring

equipment at these sites.

• Engage water authority to verify and confirm that

the assumed flows for shortlisted sites are

reasonable and that any sites of known potential

are included in the shortlist

• Ashley and Wyebank sites were both were found

to be feasible micro-hydro power implementation

and are in the feasibility stage of a public private

partnership – monitor progress going forward and

draw key lessons from the process

• Install monitoring equipment (pressure gauge,

flow meter etc.) or analyse data from existing

equipment, at the 47 sites shortlisted, in order to

determine the potential energy from the scheme,

and the optimum peak power that can be achieved

• Explore Public Private Partnerships where the

municipality will own the generators (for in-line

hydro), but the cost of all other equipment and the

costs of operation and maintenance will be borne

by a private sector partner

Ocean energy

• Explore feasibility of installing the Toshiba

tethered turbine at Durban harbour

• Undertake a comprehensive marine and

environmental impact study for Durban harbour

tidal area

• Determine if undersea cables and turbine

equipment can be manufactured locally

• Monitor technology improvements and

commercial projects internationally

• Collaborate with local academia on pilot projects

• Pursue implementing technology closer to 2030

when technologies are more mature

A summary of all the actions mentioned above can be

seen in the following tables.



43

eThekwini Municipality Renewable Energy Roadmap Actions

The following table summarises the roadmap recommendations indicated in the section above and provides steps for the Municipality to take each action forward. These

steps are all in line with the strategic goals listed below. The actions are also mapped as per the level of effort(s) required, and how soon it needs to be implemented whether

in the short, medium and/or long-term although do not follow any particular order of priority.

Strategic Goals

1. Municipality to achieve 40% renewable energy supply by 2030 and 100% renewable energy by 2050.

2. Ensure 100% of electricity purchased by eThekwini Municipality for resale is produced from Renewable Energy sources by 2050

3. Ensure 40% Industrial Energy Efficiency by 2050 (from a 2018 baseline)

4. Reduce Electricity Consumption by 40% by 2050 across residential, commercial and municipal users

5. Ensure 70% of public and private electricity demand is provided by self-generated Renewable Energy by 2050

Level of efforts

Easy

Medium

Difficult

Action timeline scale

Short

Medium

Long



Target Areas Strategic

Goals

Tactical Intervention

Area

Actions/Activities Lead/ Owner Action

Timeline Scale

Level of

effort

Policy

management,

generation

licenses

1 – 5 Update and revise the

Durban Climate Change

Strategy annually to

ensure that the strategy

is relevant and

capitalising on

technology

advancements in the

sector

• Explore the most advantageous time to

set the review date (prior to Budget

Speech, Financial Year End)

• Allow adequate time for the review

process.

• Invite external stakeholders and technical

specialists in the clean energy transition

space to participate in the review.

• Invite and engage with at least one

representative from each of the

municipality departments.

• Identify items that require further

investigation and appoint personnel to

follow through.

• Environmental

Planning and

Climate

Protection

Department

(EPCPD)

1, 2 Investigate generation

licenses for:

• bundled

generation

license

applications

mini-grid licenses

applications for rural

areas

• Set up regular meetings with NERSA to

discuss the option for the municipality to

bundle generation license applications

• Submit license application to NERSA and

DOE

• Energy Office

(EO)



45

1, 2, 5 Investigate options to

purchase electricity from

PowerX

• Submit the Municipality’s ‘D-Forms’ to

PowerX, in order to establish if the

Municipality’s tariff structure is suitable

for the PowerX business model

• Energy Office

(EO)

1 – 5 Set-up a working group

to address the transition

of South African

municipalities to new

funding models and

explore options for

licenses of bundled

projects, virtual metering

and community owned

projects.

• Engage with the following bodies to gain

buy-in:

• Municipalities

• Department of Energy

• National Treasury

• NERSA

• Launch an initial survey followed by a

workshop to establish and define the

organisation, roles and responsibility of

the working group.

• Energy Office

(EO)

• Department of

Energy

1 – 5

Drive forward smart grid

transition

• Develop a detailed implementation plan

for the smart grid transition, log the status

of existing initiatives, on the project

database mentioned below.

• Explore the opportunities for EVs to be

used to send power back to the grid.

• Research the impact electric trucking

vehicles could have on the grid – Durban

port harbour has a large trucking industry.

• Department of

Electricity

1, 2, 5 Examine tariff structures

regularly

• Ensure wheeling tariff structures allow

the municipality to cover operation grid

costs.

• Energy Office

(EO)

• NERSA



• NERSA has launched an initiative to

standardize the different tariff structures

that can be used by municipalities. Set up

a meeting with NERSA to determine the

status of this. Schedule regular follow

ups.

• Department of

Electricity

1 – 5

eThekwini Integrated

Resource Plan (IRP)

Integrated Energy Plan

(IEP)

• Engage SALGA and AMEU to allow

municipalities to provide structured inputs

into the IRP and IEP, with the aim of

securing a mandate for further action at

the local level, to grow the local economy

and create jobs.

• Engage external technical experts for

input into both plans.

• Explore established energy mix designs

assumed for other cities which have

similar characteristics to eThekwini

(climate, topography, spatial, layout etc.).

• Energy Office

(EO)

• Department of

Energy

1 – 5 Revamp municipal

building codes to

incorporate energy

efficiency and renewable

energy generation.

• Engagement with the C40 Building

Energy 2020 Program Manager to

determine the possibility of incorporating

renewable energy generation and smart

meters into new building codes, and the

possibility of tying retrofitting of

buildings to tax deductions.

• Tap into the C40 Buildings Network to

keep abreast of international best practice

in buildings codes in cities.

• Explore the unintended consequences of

their legislations and investigate how

• Energy Office

(EO)

• Department of

Energy

• Green

Building

Council

• Property

sector/

Developers



47

eThekwini can pre-empt these (property

price escalation reducing housing

affordable in some instances etc.)

• Engage with the engineering and built

environment industry bodies to gain input

from technical specialists on the impacts

legislation will have on the technical,

financial and commercial aspect of

buildings. Identify the challenges and

opportunities that may arise.

• Engineering

bodies

Demand

reduction

1 – 5 Ensure the Municipality

is operating in the most

efficient manner by

driving demand

reduction strategies:

• Conduct energy audits on all municipal

buildings.

• Retrofit buildings with efficiency

measures based on the outcomes of the

energy audits (LED lighting, motion

sensors, air curtains at entrances, upgrade

HVAC equipment, pump technology etc)

• Outsource operation and maintenance of

existing initiatives, if the municipality

does not have the capacity and technical

skill.

• Design and run electricity saving

awareness campaigns to promote

behaviour change through

communication and education

programmes to a more general audience,

including schools, city staff, residents and

businesses.

• Energy Office

(EO)



• Raise awareness in all municipal

departments of the Energy Office’s

objectives and gain buy-in.

• Public awareness campaigns can be run

to gain buy-in from constituents, and

incentives could be created to get public

participation in coming up with new

innovations or reducing energy usage.

• Explore alternative energy sources that

could be rolled out for low income

households to manage peak demands - a

combination of gas stoves, solar water

heaters, solar chargers and energy

efficient lighting.

• These initiatives could be paired with

small scale business development.

Capacity Building 1 – 5 Regular trend analysis • Monitor the global landscape and

leverage off lessons learnt from what

other cities are doing to deploy renewable

energy.

• Subscribe to international renewable

energy and smart city bodies who

produce market intelligence reports e.g.

REN21, IRENA, Deloitte Insights Global

Renewable Energy Trends etc.

• EO

• eThekwini

municipality

departments

• Govt.

departments

in charge of

port and

harbour

authorities

•



49

1 – 5 Continue to upskill and

build capacity for city

officials on energy

efficiency and renewable

energy technologies.

• Create a database of training programs

made available by SALGA, SAGEN,

AMEU, GIZ etc.

• Appoint personnel to oversee sending out

automated prompts or subscribing to

newsletters to inform departments of

trainings that are taking place and ensure

enrolment of staff.

• Monitor and track staff who are attending

training programs and have a progression

plan in place to continuously build on

knowledge gained.

• Encourage staff who attend training

programs to run in-house presentations

and knowledge share.

1 – 5 Improve data

management and co-

ordination between

various municipal

departments as well as

other city municipalities.

• Set-up a centralised database

management system to collate project

information for existing projects and

aborted projects.

• Create project database to log information

of initiatives, set performance metrics,

monitoring and review processes, capture

cost savings, carbon offsets, opportunities

for scalability and replicability.

• Interview project managers for feedback

and key takeaways – including personnel

who no longer work at the Municipality.



• Draw lessons from feedback received and

look to incorporate this learning into

future strategy planning sessions.

• Engage with specialists in the digital field

to determine what are the latest trends in

smart data management systems for cities

– cloud-based software, data mining and

machine learning are areas that can be

leveraged to assist the city in managing

and utilizing city data in the most

effective way possible

• Appoint a RE and EE scout within each

municipal department to keep abreast of

activities within departments (to actively

look for areas to drive RE and EE) as

well as keep the various departments

aware of the EO’s activities.

• Activities within each department should

be collated and tracked in the database

mentioned above.

• Appoint a municipality co-ordinator to

arrange regular meetings with other

municipalities to share the learnings

mentioned above and knowledge share.

• Potentially set up a subcommittee

department that meet regularly between

all cities (e.g. Electricity dept. all co-

ordinate across the country).

• Establish a point of contact within all

relevant departments to feedback to the

EO on energy efficiency and demand



51

reduction strategies and to be on the look-

out for opportunities to incorporate

renewable energy technologies.

• Set up a meeting with GreenCape Energy

department to determine if it will be more

advantageous for the Municipality to

establish their own renewable energy

sector development agency or partner

with GreenCape (see Glossary for more

information on GreenCape).

• Host workshops with the private sector to

stimulate innovative business solutions to

meet the needs of the energy sector.

• Host workshops with the largest

consumers of power in the private sector

to incentivize businesses to move to

green energy solutions (data centres,

factories, shopping malls, hotels etc.)

• Host workshops with airport and port

management to look at global EE and RE

initiatives to drive down consumption and

generate renewable energy generations as

well as stimulate job creation

1 – 5 Update Durban Solar

map tool (Appendix A7

case study 6)

• Create a marketing campaign to increase

awareness and usage of the tool.

• Ensure to track the usage and explore

how the data from the tool can be

leveraged.

• Host hackathon sessions to see how the

tool can be built upon.



• Compare the tool to international tools

being used and explore areas to improve

the tool.

1 – 5 Consider impacts of

energy poverty on the

renewable energy

transition program

• Create a log for LED flood lighting and

solar lighting for ablution facilities in

informal settlements, set targets to work

toward. Ensure that progress is monitored

and tracked in the tool mentioned above.

• Explore the implementation of SSEG on

low to middle-income apartment blocks –

this scenario presents a more desirable

financial case than individual households.

• Periodically draw together the work of

the many stakeholders active in this area

to share experienced and coordinate

activities. For example, GreenCape, the

CSIR, Eskom, SEA and SAPVIA are

among stakeholders working in areas

relevant to SSEG in the low-income

sector, together with City of

Johannesburg, the Nelson Mandela Bay

Metro, and the City of Cape Town.

• EO

1 – 5 Build capacity within the

Municipality

• Appoint a third-party reviewer or assessor

to provide oversight and support to the

Municipality as well as help them track

achieving their targets and provide

guidance and feedback as required.

• EO



53

Funding 1 – 5 Track funding

opportunities to leverage

grant fund opportunities.

• Develop a database of local and

international funding opportunities to

keep abreast of eligibility, requirements

and deadlines for funds. This database

should be regularly updated.

• Set up alert systems for the Municipality

to keep track of new funding

opportunities.

• Keep log of previous submissions to

streamline and become more efficient,

reducing time taken to submit new

applications.

• Develop and collate repository of case

studies on other successful projects.

• EO

Technology

solutions

Follow through on

existing solar energy

initiatives and develop

new avenues for

deployment

• Update the Durban Solar Tool, gather

usage data to determine public interest

and appetite for solar installation.

• Apply for a bundled generation license.

• Build upon the existing successful

rooftop installations already piloted by

the city.

• Conduct feasibility studies for installing

solar on municipal reservoirs sites already

identified.

• Explore options to install solar on other

municipal infrastructure.

•

• EO



Follow through on

existing wind energy


new avenues for

deployment

• Update 3E study for each of the 10 sites

wind sites identified.

• Where land is still available for use

conduct the following assessments:

• Obtain permits to install wind

measurement equipment at all sites

• Conduct environmental impact

assessments

• Rank sites according to wind resource,

environmental and social constraints, grid

connection and constructability to

identify the most attractive areas for

further development.

• Apply for bundled generation licenses.

• Determine the municipalities financial

capability for procuring equipment.

Explore grant funding if required.

• Establish in-house capability to own and

operate wind turbines.

• EO

Follow through on

existing biogas, biomass

and wastewater


new avenues for

deployment

• Conduct an updated study to determine

the opportunities available for eThekwini

in the biomass and biogas sector.

• Conduct pre-feasibility study for biogas

digesters for rural school areas and

villages. According to the Municipality

this is a desired route to alleviate rural

expenditure on electricity. A study was

completed in 2014 for schools in the

• EO



55

Cornubia district, this study should be

drawn upon as a basis.

• Explore future opportunities for

eThekwini landfill gas to energy options.

• Investigate the power purchase agreement

barriers preventing the existing landfill to

gas projects from being run.

• Engage the Biorefinery Development

Facility (BIDF) to understand the

opportunities to run pilot projects and

engage in new sector innovations.

• Engage with the Tongaat Hullett

Maidstone Sugar Mill to explore options

to increase the electricity generation from

sugar cane.

• The wastewater treatment works

prefeasibility study should progress to a

feasibility stage for each of the 5 sites

identified.

Follow through on

existing hydropower


new avenues for

deployment

• 47 sites have been identified for micro-

hydro power implementation, develop an

implementation schedule prioritising

larger sites (likely economically feasible

than smaller sites).

• Determine the feasibility of installing

monitoring equipment at these sites.

• Engage water authority to verify and

confirm that the assumed flows for

shortlisted sites are reasonable and that

• EO






any sites of known potential are included

in the shortlist.

• Ashley and Wyebank sites were both

were found to be feasible micro-hydro

power implementation and are in the

feasibility stage of a public private

partnership – monitor progress going

forward and draw key lessons from the

process

• Install monitoring equipment (pressure

gauge, flow meter etc.) or analyse data

from existing equipment, at the 47 sites

shortlisted, in order to determine the

potential energy from the scheme, and the

optimum peak power that can be

achieved

• Explore Public Private Partnerships

where the municipality will own the

generators (for in-line hydro), but the cost

of all other equipment and the costs of

operation and maintenance will be borne

by a private sector partner.

Follow through on

existing ocean


new avenues for

deployment

• Explore feasibility of installing the

Toshiba tethered turbine at Durban

harbour.

• Undertake a comprehensive marine and

environmental impact study for Durban

harbour tidal area.

• Determine if undersea cables and turbine

equipment can be manufactured locally.

• EO



57

• Monitor technology improvements and

commercial projects internationally.

• Collaborate with local academia on pilot

projects.

• Pursue implementing technology closer

to 2030 when technologies are more

mature.



Glossary and key terms

AMEU

The AMEU is an association of municipal electricity

distributors as well as national, parastatal, commercial,

academic and other organisations that have a direct

interest in the electricity supply industry in Southern

Africa.

Advanced Metering Infrastructure (AMI)

The collective term to describe the whole

infrastructure from smart meter to two way-

communication networks to control centre equipment

and all the applications that enable the gathering and

transfer of energy usage information in near real-time.

The installation of an AMI is looked upon as a bridge

to the construction of smart grids and smart meters are

an integral part of the AMI.

Electricity Regulations Act (ERA) (No. 4 of 2006)

The ERA and the Electricity Regulation Amendment

Act (No. 28 of 2007) defines ‘municipality’ that has

executive authority and rights to reticulate electricity

within its boundary. These regulations provide

municipalities with the ‘authority function’ of energy

reticulation. This function includes the development of

policies, drafting by-laws, setting tariffs, deciding how

energy reticulation services are provided and

regulating the provision of these services in terms of

the by-laws and other mechanisms.

Energy Efficiency Demand Side Management

(EEDSM)

The EEDSM programme is managed by the

Department of Energy (DOE). The EEDSM

programme supports municipalities in their efforts to

reduce electricity consumption by optimising their use

of energy. Selected municipalities receive grants for

the planning and implementation of energy efficient

technologies ranging from traffic and street lighting to

energy efficiency in buildings and water service

infrastructure. The estimated electricity saving

potential for traffic lights is up to 80%; for street

lighting between 40-70%; for office building 20-30%;

and 15-25% for pumps that are used for water

provision and treatment. The EEDSM programme is

supported by Deutsche Gesellschaft für Internationale

Zusammenarbeit (GIZ) through the South African-

German Energy Programme (SAGEN).

GreenCape

In 2010 the City of Cape Town partnered with the

Western Cape Provincial Government to establish

Green Cape, a sector development agency aiming to

unlock the manufacturing and employment potential of

the ‘green energy economy’ in the Western Cape.

Green Cape stimulates both economic development

and the uptake of renewable energy.

Independent Power Producer (IPP)

An IPP is an entity, which is not a public utility, but

which owns facilities to generate electric power for

sale to utilities and end users.

Integrated Energy Plan (IEP)

The IEP aims to guide future energy infrastructure

investments, identify and recommend policy

development to shape the future energy landscape of

the country.

Integrated Resource Plan (IRP)

The Integrated Resource Plan (IRP) projects the

country’s long-term electricity needs and defines the

infrastructure developments needed to meet power

production. The IRP is the National Electricity Plan

and is a subset of the Integrated Energy Plan (IEP).

The IRP lists targets for generation of electricity from

different technologies, such as coal, nuclear and

various renewable energy technologies. The IRP draft

was released in August 2018 for public comment and

will be finalised in at the end of February 2019.

Municipal Finance Management Act (MFMA) Act

No. 56 of 2003

The MFMA’s key purpose is the sound and secure

fiscal management of municipalities and municipal

entities. The MFMA outlines the requirements for

municipalities to set tariffs for service provision,

including electricity tariffs. Section 33 does not

prohibit long term contracts i.e. 5 to 20-year contracts,

however it stipulates that a municipality can only enter

into a contract imposing financial obligations on the

municipality beyond a three-year period if:

• A draft of the contract is publicly advertised

for comment 60 days prior to the municipal

council meeting at which the contract will be

considered for approval.

• The municipal council has considered the

financial implications of the contract and any

comments received on the proposed contract.



• The municipal council has adopted a

resolution on the financial benefits of the

contract and authorised the municipal

manager to sign the contract on behalf of the

municipality.

Natal Bight

The Natal Bight is an inset in the coastline beginning

just south of Richards Bay

and extending down to the Durban area.

National Energy Regulator of South Africa

(NERSA)

NERSA’s mandate is to regulate the electricity, piped-

gas and petroleum pipelines industries in terms of the

Electricity Regulation Act, 2006 (Act No. 4 of 2006),

Gas Act, 2001 (Act No. 48 of 2001) and Petroleum

Pipelines Act, 2003 (Act No. 60 of 2003).

Power Purchase Agreement (PPA)

A PPA is a contract that outlines the conditions of an

agreement by a generator of energy and a purchaser of

that energy. PPAs are usually long term and specify

the rate at which the electricity will be bought for

between the period of the agreement.

Sustainable Energy Africa (SEA)

SEA promotes the development of an equitable low

carbon, clean energy economy throughout Southern

Africa.

South African Local Government Association

(SALGA)

SALGA is an autonomous association of all 257 South

African local governments, comprising of a national

association, with one national office and nine

provincial offices. SALGA has set out its role to

represent, promote and protect the interests of local

governments and to raise the profile of local

government, amongst other objectives.

Smart meters

A smart meter is an energy metering device with

enhanced capacity to store and analyse information

about energy consumption in real time. A smart meter

also enables two-way communication function

between energy utilities and each end user.

Small-Scale Embedded Generator (SSEG)

Small-scale embedded generation refers to power

generation facilities located at residential, commercial

or industrial sites where the electricity is generally also

consumed. These are mainly solar photovoltaic (PV)

systems, but also include other technologies such as

wind and biogas. A SSEG customer generates

electricity on the customer’s side of the municipal

electricity meter, to which the generation equipment is

connected, and which is synchronised with the

municipal electricity grid (i.e. ‘embedded’).

Wheeling

Wheeling refers to the transportation of electricity

from a generator to a customer using the electricity

grid. Since the wheeling of electric energy requires the

use of transmission and/or distribution infrastructure,

there is often an associated fee paid by the users to the

infrastructure owners. This fee is called ‘use of system

charge’.

Municipal Systems Act (MSA)

This roadmap references Chapter 8: Municipal

Services, of the MSA, which stipulates the criteria and

process for deciding on mechanisms to provide

municipal services (Part 2: Provision of Services,

Section 78).



A1 Municipality EE and RE inititiaves

Figure 30: Municipality interventions in South Africa (Sustainable Energy Africa, 2013)



61

A2 : eThekwini Energy Office

Figure 31: Energy office structure



A3 : Renewable energy analysis South Africa

Figure 32: Renewable energy techno-economic analysis South Africa (South African-German Energy Partnership, 2017)



63

Figure 33: Movement of prices per technology (South African-German Energy Partnership, 2017)



Figure 34: Eskom's average price in ZAR cents per kWh 2008-2016 (South African-German Energy Partnership, 2017)



65

A4 : Solar Hot Water study – Sustainable Energy Africa

Figure 35: Potential peak demand reduction from large-scale SHW rollout (Sustainable Energy Africa, 2017)



A5 : Entura hydro study

Figure 36: Hydro-power potential greater than 50kW (Entura, 2016)



67

A6 : City Power energy arbitrage

Figure 37: City Power case study on energy arbitrage



A7: Demand reduction and energy efficiency initiatives

1. Case study: Desiccant Enhanced

Evaporative (DEVap) Air Conditioner

DEVap uses an environmentally friendly saline

solution rather than conventional refrigerants,

and a thin membrane to achieve a cost reduction.

It is expected to use 30% to 80% less energy

than the most efficient air conditioners that use

refrigerants. DEVap is currently only available

on a commercial scale, however in it future

could be available for residential users and is set

to make a huge impact for the Net-Zero Energy

user market (Comfort Institute, 2018).

2. Case study: Point Pump Station

eThekwini municipality installed new energy

efficient pumps fitted with variable speed drives

instead of refurbishing old pumps for water

supply. The estimated cost saving was R200 000

and 401MWh energy savings per annum for this

site. The project was completed in 2013

(SALGA, 2017).

3. Case study: C40 Building Energy

2020

Although retrofitting buildings with efficient

technologies can help reduce building energy

demand, influencing actual building designs can

reduce the amount of energy services required at

the outset. Buildings have a long-life span and

can range from 40 to 120 years, with rapid

urbanisation occurring, this presents an

opportunity to change the way we construct

buildings. Existing building regulations already

include minimum energy efficiency requirements

(SANS:10400 XA). C40 is working with

Johannesburg, Tshwane, Durban and Cape Town

municipalities via embedded expert advisors to

take these regulations a step further by

developing low and zero carbon building codes

with a target of writing them into legislation by

2020.

This work is supported by the C40 Cities

Climate Leadership Group, with Sustainable

Energy Africa (SEA) as the local implementing

partner. Within each city, the work is driven by a

technical officer, funded by C40 and employed

by SEA, but based within the city and supported

by a City senior city line manager. Figure 38and

Figure 39 below indicate the energy savings and

carbon reductions that can be achieved through

incorporating and enforcing more stringent

building regulations focused on demand

reduction, efficiency and clean power sources.

Figure 38: Building energy consumption impacts


Figure 39: Building emission reduction potential




4. Case study: Cool Surfaces Project

(SANEDI, 2018)

Cool surfaces (i.e. white roofs and light-

coloured pavements) are measured by how

much light they reflect (solar reflectance)

and how long they hold heat (thermal

emittance). The Cool Surfaces Project

began as a collaboration between the South

African and United States of America’s

respective Departments of Energy under the

Clean Energy Ministerial. The Cool

Surfaces Project is the response to South

Africa’s need for energy passive, low

cost, low maintenance cooling technology

for buildings. The following objectives

have been outlined:

• South African Cool Surfaces Association

(SACSA) has been launched to regulate and

promote the industry.

• Standards have been adopted and published

from the Cool Roof Rating Council (CRRC)

against which Cool Surfaces products are to

be measured.

• A laboratory has been established to test

products at the South African Bureau of

Standards (SABS).

• Certify each tested product, rate its efficacy,

label the product for consumers to easily

understand.

• Establish a database of all approved Cool

Surfaces products that comply with the

criteria.

• Conduct demonstration projects to assess the

suitability of Cool Surfaces for mass

application under South African climatic

conditions in retrofit building projects, as

well as to promoting the highest quality of

products at the most affordable prices.

5. Case study: Geyser Ripple-Control

Demand Side Management Pilot

The City of Cape Town electricity department

implemented a demand side management (DSM)

pilot project, turning geysers off during peak

demand periods. The programme reportedly

resulted in estimated savings of 23MW, with a

potential of 40MW savings if all geysers were

switched off during peak demand times (City of

Cape Town , 2006).

6. Case study: Durban Solar Map

The internal municipality GIS department is

hosting the Durban Solar Map web page on

behalf of the Energy Office. This site

allows consumers to plan a PV installation

on their roofs and gather information

regarding possible costs and potential

savings. A recommendation has been made

to gather data from the usage of this tool to

determine the public interest and appetite

for solar installations.



Case study: Umgeni Water: Energy

Conservation and Demand Management

Strategy

Arup was commissioned in 2017 to create a

guideline to improve Umgeni Water’s future

energy usage and manage its overall electrical

demand with respect to its reservoirs, pipelines

and associated pump-stations. The intent is that

all new reservoir and pipeline infrastructure

project designs will be informed and guided by

this Energy Conservation and Demand

Management (ECDM) strategy. The

recommended changes on this case study involved load management techniques,

installation of more energy efficient pumps and

variable speed drives with the attempt to

minimise energy consumption. Effective load

management would require the installation of

data loggers for determination of electricity load

profiles and water flow. Improved lighting

technologies were also recommended, even

though the energy gains are few when compared

to gains in terms of pumping equipment and

variable speed drives. The potential energy

savings relative to baseline usage were estimated

at 45.6% and 60.2% for energy efficient

equipment and lighting measures respectively.

Advanced pressure management concepts were

implemented in Durban. Alterations on the plant

were done to install pressure reducing valves

(PRVs) in the distribution system as well as real

time pressure management algorithms. The

result of this process was a 14% reduction in

pipe burst incidents reported in the metropolitan;

in addition, energy savings using variable speed

pumps allowed an additional saving of roughly

50%.

7. Case study: Conduit hydropower City

of Cape Town (SEA, 2017)

Five percent of the City’s internal operations’

electricity demand is met through conduit

hydropower at its four bulk water treatment

plants which total 2.8MW. Two water treatment

plants were designed to meet the entire plants’

electricity demand, thereby reducing the cost of

potable water.

8. Case study: Conduit hydropower

eThekwini (SEA, 2017)

Durban’s steep topography and resultant high-

water pressure in its water distribution system

provide ideal opportunities for conduit

hydropower (see Table 9 below). The water

pressure has to be dissipated at reservoir inlets

through the use of pressure control or reducing

valves to avoid damage to pipe inlets. A conduit

hydropower system, installed in parallel to the

pressure control valves, will assist in pressure

dissipation; extending the life of the valves, as

they would only be in use when the turbine is not

operational.

eThekwini municipality undertook a scoping

exercise to locate suitable pressure control valves

and break pressure tank locations for turbines,

after which an invitation to tender was sent out

for the feasibility, design and installation of

conduit hydropower turbines. Initial indications

are an expected payback of 14-15 years, with a

5.7% return over 20 years.

Table 9: eThekwini conduit hydropower

potential (SEA, 2017)

Reservoir Hydro turbine

potential (kW)

Theomore reservoir 71

Stone Bridge Drive

reservoir

104

Umhlanga Rocks

reservoir

26 – 177

Yellowfin and Escolar

reservoir

26 – 177

Avocado and

Pomegranate reservoir

26 – 177



9. Case study: KwaMadiba, Mhlontlo

Local Municipality

The Department of Science and Technology

(DST) launched an initiative called the

Innovation Partnership for Rural Development

Programme (IPRD). The University of Pretoria

conducted research within the IPRD which

resulted in the development of the 50kW

KwaMadiba small-scale hydropower plant in

2017. The plant provides a constant electricity

supply to the KwaMadiba community.

10. Case study: Boegoeberg !Kheis Local

Municipality

In 2017 the Department of Science and

Technology (DST) funded the University of

Pretoria to develop a 28kW kinetic hydropower

installation at the !Kheis Municipality as part of

the second phase of the DST’s IPRD

programme. The Boegoeberg irrigation canal

proved a good fit for this pilot project, as

existing infrastructure could be used to add value

to the municipality in terms of energy production

11. Case study: Tongaat Hullet

Maidstone Sugar Mill

The Tongaat Hullet Maidstone Sugar Mill,

which is the only mill within the eThekwini

metro, has the capacity to crush 475 tons of raw

sugar cane per an hour which produces 150 tons

of bagasse an hour when the mill is crushing at

full capacity. Bagasse is a by-product of sugar

cane which can be considered as a free energy

resource. The calorific value of bagasse at the

Maidstone Mill is 7.7 GJ/ton. Bagasse is

currently used as a fuel in the boilers at the

Maidstone Mill to produce steam only during the

sugar crop season. Sugar Mills across South

Africa have historically utilized this bagasse by-

produce as a source of fuel to raise their internal

steam and electrical requirements (Garz, 1997).

The Tongaat Sugar Mill allows 5MW of capacity

to be made available (out of 29 MW total

capacity) for sale as green power. The mill

generates 67.4 GWh, although more than 85% of

this is used by the mill itself (Marbek Resource

Consultants, 2007).

12. Case study: Wastewater to Energy

City of Johannesburg

Johannesburg Water has upgraded their sludge

handling and digestion facilities at its wastewater

treatment plants to provide harvesting and

cleaning of biogas produced in the digesters. The

biogas is in turn used to generate electricity and

heat through the burning of methane. The

combined heat and power (CHP) generation can

produce approximately 57% of the electricity

needs of 5 of the City’s wastewater treatment

plants (SALGA, 2017).



A8 Municipal regulatory case studies

1. Case study: City of Cape Town

challenges ministerial decision

The City of Cape Town (CoCT) initiated a

process to purchase electricity from IPPs to meet

its renewable energy and climate change

commitments. The CoCT acknowledged that the

IPP would need to obtain a generation licence

from NERSA. However, NERSA indicated that

there was a requirement for a ministerial

determination for it to grant generation licences,

as per Section 34 of the Electricity Regulation

Act (No 4 of 2006).

Following two years of unsuccessful discussions

between the CoCT, NERSA and the Department

of Energy, the Minister of Energy refused to

gazette the determination. In 2017 the CoCT

initiated legal proceedings against NERSA and

the Minister requesting the court to allow the

municipality to buy electricity directly from the

IPP. The basis of the court application is to test

whether a ministerial determination is in fact

needed (or is just a possibility) and, if the

determination is needed, to test the

constitutionality of Section 34 of the Electricity

Regulation Act and the ministerial determination

process. The court case is still pending to date. If

successful, the Cape Town case will drastically

impact the renewable energy landscape for

municipalities. Even if unsuccessful, there may

be negotiations with the new government

administration and certain allowances that arise

from the case that could be leveraged for other

municipalities.

2. Case study: Darling Wind Farm

In 2006 the City of Cape Town signed a 20-year

PPA with the Darling Wind Farm, however this

was the first commercial wind farm built in

South Africa and was subject to government

support. Through the PPA the City provided

financial security as the buyer of all electricity

that was going to be produced. The electricity

from the Darling wind farm is wheeled to the

City through a Wheeling Agreement between the

City and Eskom. This was the first wheeling

agreement and its development involved

substantial time and capacity.

3. Case study: eThekwini PPA’s

In 2012 the eThekwini Electricity Department

drafted a standard three-year PPA for buying

electricity from local power producers. The PPA

was developed in response to load-shedding and

allowed the Municipality to use additional

suppliers to sustain electricity services to

customers. A condition for entering the PPA was

that the generated electricity has less greenhouse

gas emissions than electricity provided by

Eskom.

4. Case study: Confidential solicitation

to eThekwini from IPP

The eThekwini Municipality was approached in

2015 by an IPP to supply 280MW of energy

from a wind farm for a period of 20 years. The

proposal was very lucrative for the Municipality;

however, it was not pursued due to the

limitations of the legislative framework.

5. Case study: Nelson Mandela Bay

Tariffs paid for the electricity fed back to the

grid cannot normally be more than Eskom’s

Megaflex rate. However, some municipalities,

such as Drakenstein and Nelson Mandela Bay,

have NERSA-approved SSEG feed-in-tariffs

higher than Eskom’s Megaflex rate. The City of

Cape Town also followed this ‘pilot tariff’

approach with net metering for their initial three

embedded generation customers for the first few

years, before setting a lower SSEG tariff, where

electricity is bought at a blended Megaflex tariff

plus a monthly fixed charge.



6. Case study: Nelson Mandela

Municipality

Nelson Mandela Bay Metropolitan Municipality

(NMBMM) has initiated a wheeling agreement

process for green power trading. The Metro

initially set a grid usage charge of 7% of the

value of the electricity sold. This was later

revised to 20% following a detailed cost-of-

supply study.

7. Case study: PowerX

PowerX holds a NERSA-issued licence to trade

electricity countrywide. The company buys

green power from IPPs and sells it to consumers,

offering IPPs long term PPAs of up to 20 years.

PowerX negotiates and pays wheeling fees of the

transmission and distribution grids to Eskom and

municipalities. The wheeling fees compensate

them for the cost of the grid/network use and for

the administrative expenses of mo

+nitoring and undertaking the billing process of

the wheeling transaction. Well-structured

wheeling fees ensure that Eskom and the

municipalities do not incur losses when a

customer selects to purchase green power

through its network. PowerX signed a 20-year,

non-exclusive wheeling agreement with

NMBMM listed above.

8. Energy trading

This model, shown in Figure 40 below entails

the use of an energy trader that is licensed (by

NERSA) to trade power within the framework of

a voluntary ‘willing buyer, willing seller’

market, rather than installing generation capacity

or procuring power. The generator could be

located anywhere in the country. The electricity

is then offered to electricity consumers as an

alternative energy source, complimentary to the

electricity supplied by Eskom. eThekwini could

work with PowerX in a manner similar to the

Nelson Mandela Bay Municipality, discussed

below.

Figure 40: Trading business model for municipalities

(South African-German Energy Partnership, 2017)



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