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The SOUTH AFRICAN!RENEWABLES INITIATIVE

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The SOUTH AFRICAN!RENEWABLES INITIATIVE

“The South African Renewables Initiative is an ambitious initiative which has the potential to catalyse South Africa’s transition to a greener growth path.”!President Jacob Zuma, President of the Republic of South Africa.!

The SOUTH AFRICAN RENEWABLES INITIATIVE Provisional

South Africa’s green growth opportunity

Contributing to "energy security

Industrial development and

jobs

Reducing emissions and

greening exports

Creating a regional

technology hub

Mobilizing champions

Grid based renewables Wider green development


South African "Government

International"co-operation

International" investors

Domestic"industry

Citizens, labour,"consumers Commitment!

to ambitious renewables

procurement with modest domestic!

funding

Unlocks innovative financial

instruments to reduce the cost

burden Enables

development of a critical mass of renewables!

projects

Creates industrial and economic

benefits

Catalyses green growth in South

Africa, with minimal burden.

The vision: unlocking green growth





Domestic"industry




funding



burden Enables


projects


benefits




2015 2020

GW

24

21

18

15

12

9

6

3

0 2025 2012 2030

2.7

7.0

13.3

18.8

Wind PV CSP

Ambitious commitment for renewables in the"Integrated Resource Plan (IRP) – up to 19 GW by 2030

!   Implementation through Renewables Flagship Programme (RFP).

!   Initially funded through electricity tariff – would impose incremental costs rising to US$1billion/year, or an overall present value of US$9 billion.

!   IRP is a ‘living plan’ volume of renewables can be adjusted if circumstances change.





Domestic"industry




funding



burden Enables


projects


benefits




[Source: Team analysis, SARi model 2.3.5, average incremental costs are in ramp up years up to 2030, PV calculated with a 6% discount rate.]

Financial instruments such as low cost loans and insurance products bring down the incremental cost

$bn in $2011 PV terms

Incremental cost with low cost

loans

5.1 – 5.9

Reduction due to low cost loans

and financial instruments

3.0

Incremental cost

8.0 – 8.9

-35%

Sources for closing remainder of gap

1

International grant funding

2

South African domestic funding

•  Pay for performance grants for green GWhs

•  Including potential savings from lower cost wind, up to US$2.8 bn.

Incremental cost

$790 m /year

$510 m /year





Domestic"industry




funding



burden Enables


projects


benefits




Potential results of a first critical mass of renewables

•  Carbon mitigated: 575 Mt by 2049 or 27Mt per annum at full ramp-up.

•  Reduction from Business as Usual: by 2025 would contribute 7% of South Africa’s Cancun agreement target.

•  Decarbonization of South African exports: green house gas intensity of exports reduced by 20% by 2025.

Carbon

Economic •  Employment: 35,000 – 40,000 new jobs created at peak.

•  Investment: directly in the region of $36 bn investment in renewables capacity by 2030.

Financing/ Investment

Source: Integrated resource plan, team analysis, expert interviews, SARi model

•  Electricty supply: 19GW by 2030 as laid out in IRP, providing 9% of electricity supply. Energy

security





Domestic"industry




funding



burden Enables


projects


benefits




Wind

PV

CSP

Bold scenario – 24GW by 2025 IRP Current plan: 19 GW by 2030

2015

2.7

25

13.3

7.0

5

10

20

GW

15

0 2030

18.8

2.9

25 23.8

11.4

5

10

20

GW

15

0

23.8

2015 2030

Could international partnership enable the pursuit of greater domestic ambition?

Gross incremental cost challenge

Reduced incremental cost gap

Investment need

$ 9 bn $ 6bn $ 36 bn $ 14 bn $ 11bn $ 50 bn

Gross incremental cost challenge

Reduced incremental cost gap

Investment need


Guided by a cross-departmental Project Steering Committee (PSC) Lead by the Department of Trade and Industry and Department of Energy.

Intra-"governmental

initiative

Aim

Objective

To catalyse South Africa towards a green growth pathway and support the implementation of the climate change and energy planning policies.

To design and establish the financing arrangements needed to enable a critical mass of renewables to be developed, without incurring unacceptable incremental cost burdens on South Africa.

Key Summary

Partners

Supported by an international public partnership of other governments and international finance institutions willing to support South Africa in this effort.


Next steps in collaboration

Declaration of Intent

Enabling

framework for the

partnership

Co-design implementable financial mechanisms

Implementable financial instruments Mobilising funding at scale

Partnership launch December 7th, Durban

Support in effective implementation

Enable wider collaboration

Share experience

The SOUTH AFRICAN RENEWABLES INITIATIVE

!www.dti.gov.za !

www.sarenewablesinitiative.gov.za!!

Nimrod Zalk"Deputy Director General, DTI [email protected]"

Sharmala Naidoo"Project Manager [email protected]

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