power in the hands of the people

I fail to see why the National Energy Regulator of South Africa (Nersa) wants to control renewable energy projects with a tendering system. What the country needs is as many projects as possible, and what project developers need is certainty. So fix the rate, and rely on other regulatory controls to ensure that things like environmental impacts are considered in project plans.

As Ingi Salgado points out in yesterday's Business Report, the argument that regulators need to ensure there is an appropriate energy mix doesn't hold water. There is nothing inherently wrong with having more wind farms than thermal solar collectors, for example.

The emphasis is also entirely on big projects - not big by Eskom's standards, but bigger than groups of individuals who want to supplement their supply with solar panels or other small-scale efforts. We need distributed energy sources, and small projects could supply this if they also had feed-in tariff incentives. Worldwide, there are all kinds of initiatives that adopt a creative approach to generating energy, from extracting heat from sewers to putting solar panels on top of downtown office towers.

The Canadian Province of Ontario is now considering a Green Energy Act that, if passed into law, will establish guaranteed tariffs for all forms of renewable energy, and is specifically targetted at communities and individual homeowners. Solar micro-generation, 10 kilowatts and under, will enjoy the highest tariff, but projects can include on-shore and off-shore wind, hydroelectric, solar, biogas, biomass and landfill gas. And while this would be a first for North America, similar strategies have already been used in several European countries.

Solar is not cost-effective yet without generous tariffs, but it never will be if demand isn't established at the level of individual consumers. In this respect, solar panels or rooftop wind turbines are no different from any other new technology - there are early adopters who are willing to pay a premium, and as demand increases the prices come down.

But there is also the Clean Development Mechanism as a potential source of funds that is almost entirely untapped in Africa. There have been significant barriers to establishing CDM projects, but the mechanism is undergoing an overhaul. The CDM Executive Board has just released a report from their meeting earlier this week, and is planning to enhance the efficiency and expand the reach of the CDM. One of the key proposals relates to making it easier to fund small-scale projects:

The Board further discussed the "Procedures for registration of a Programme of Activities as a single CDM project activity", and agreed to revise the procedures at its next meeting, with the intention of providing greater clarity to project participants and to address some constraints identified in the development of  POAs under the current procedures.

This should make it possible to group small projects that would otherwise find the process too onerous. POA is not new under the CDM, but there is lack of clarity on how it can be applied, and it hasn't taken off. If it is streamlined, this programmatic approach has the potential to expand the range of project types to include some that are less capital-intensive - such as improving end-user energy efficiency - and also to allow for bundling of projects that are not on the same physical site. Some papers on the topic are available from Christiana Figueres. This could open up a whole world of possibilities by bringing funding to projects almost down to the scale of the individual homeowner, through certified emissions reductions.

Comments

[Philip Rosenthal]

Hi Rory.

My question is how small scale renewable energy sources compare in terms of efficiency with large scale ones? I suppose they can save some energy that might be lost from large scale ones in terms of transmission to site, but there is also the cost of multiple small device installation which may be inefficient compared with larger installations. Have you or anyone else investigated this?

Philip Rosenthal

[Rory]

I haven't seen direct comparisons, but intuitively I think your suspicion is right, Philip. My response, though, is that cost efficiency is but one consideration when establishing a strategy to improve sustainability.

A planning authority might design a road (or other infrastructure) to high standards in order to reduce the maintenance costs. This high upfront capital cost might be the most efficient approach, cost-wise. But other authorities may choose to design for labour-intensive construction methods as a form of job creation, which would have lower capital cost but higher maintenance cost. I have seen this in Botswana, where some roads are built with interlocking paving bricks that are easily removed and replaced manually when maintenance is required.

Similarly, distributed energy systems not only provide individual landowners with some degree of control over their energy supply, they can also provide community-level benefits such as jobs for installing and maintaining systems.

And then there are energy sources that are more suited to the distributed approach, such as biogas from waste, or cogeneration in buildings.

There are lots of web sites on this topic, but there is a useful summary of distributed generation systems on Wikipedia.