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Lessons from the South

Monga Mehlwana – Energy Specialist

ENERGY CENTRES

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Social contrasts in satisfying energy needs

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RSA Energy Overview: Energy Flows (After Surridge, DME, 2003)

SUPPLY TRANSFORM TRANSPORT END USE

Oil

Natural Gas

Coal

Gas

ElectricityEskom

and Others

Coal

PetroSA

Export

Sasol

Road/Rail

Pipeline

OilRefineries

RailRoad

Pipeline

LiquidFuels

Biomass WoodPerson/Road

HydroNuclear

Transmission Wires

“Washery”

Koeberg

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A fundamental challenge is to redefine

the paradigm for sustainable

development in energy context

A Fundamental Challenge

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SOCIOECONOMIC CONTEXT OF SA POOR

• A population of more than 43 million• More than 50% is urbanised and 45%

in rural areas• More than 50% unemployed (officially!)• 34% of work seekers cannot find jobs• Disparities in land ownership,

education, etc• 62% earn less than $250 per month• 58% earn less than $83 per month• Unregulated growth of the informal

economy

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Progress in Rural Energisation

• More than 70% households have electricity

• Only 49% of rural homes are connected to the grid

• A growing backlog of houses without electricity

ELECTRIFICATION IN RSA

1997 Houses (Million) 2001

Electrified Not Electrified Electrified Not Electrified

1.41 2.29 Rural 2.10 2.17

4.10 1.42 Urban 5.02 1.48

5.51 3.71 Total 7.12 3.65

59.70% 66.10%

Increase in total number of houses: 16.80%

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Early Renewables Initiatives

• 1.8 million houses will not have access the grid by 2012

• A number of off-grid pilots project since 1990s focusing on PVs

• Schools and clinics (by EU and Eskom)• Water pumping• Household use (lighting and TV)

• Success limited, as they were not supported by a well defined policies

• Inadequacy of solar PVs to meeting most household needs

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Public-Private Partnerships

• A delivery mechanism to address energy in an integrated manner

• Fee for service approach• Concessions to private consortia

consisting of international and local companies

• Mandate: to energise rural communities• Heavily subsidised by the government

• More than 75% of the systems costs• Households do not own the systems but

rent use from the utility

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Rural Energy Service Utility Model

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Energy Store

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More and more households have access to electric power and basic LPG

•Payment of R55 ($8) fixed rent to the utility •Later experienced problems of nonpayment and households not affordable the fixed rate

Does it work?

Then

IMPLICATIONS:To make to work – government further announced intention of subsidising use of energyLocal govt to fund this from fiscus. Difficulty in implementing the subsidy caused by miscommunication between national govt, local govt and concessionaires

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Non energy initiatives

• Integrated Sustainable Rural Development Strategy

• Emphasis on institutions to deliver change• Empowering of local Govt structures to coordinate

multiple programmes and link them• Coordination of funding to high impacts programmes

• Integrated Development Planning• Integration of planning in the different sphere of

government• linkages of social, physical, institutional components

of planning with management & implementation structure

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Lessons from Energisation

• rural participation in planning & implementation of initiatives

• Transformation of energy needs into effective & articulated demand

The number of people connected to the national grid or have access to solar PVs does not mean development

Delivery mechanisms which acknowledge specificity of rural context

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Integrated Energy Centre Model

• At the heart of the ISRDS and IDPs• Integrating the provision of wider energy choices

• Water supply• Building of schools and clinics, etc

Community ownership of the process through cooperatives

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CABA MDENI ENERGY CENTRE

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Objectives of the energy centres

• Increase access to affordable energy services

• Delivering appropriate & safe fuels• Providing information about energy carriers• Awareness raising – policy making to

implementation• Reducing energy prices• Value adding energy retailing enterprises • Assist local authorities to incorporate

energy in planning • Integrate energy into wider community

needs

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How does the model work?

The centre is by definition a public-private partnership with a community focus

PURELY MARKET BASED APPROACHES ARE NOT SUITABLE FOR RURAL CONTEXTSTherefore a hybrid approach that

combines relevant features of developmental & market based approaches

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Energy issues for the poor in SA

Energy Centres

Rural

Households

Public

Buildings

Local Economic Activities

Local Govt Structures

National

Govt (DME)

Private Companies

Market/End-use Operations Enablers/Policy

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IeC Finances (after Crompton 2004)

ENERGY

SHOPEDUCATION

JOBS

Sales

DonationsEquity

JOBS

Govt Projects

SETAS

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Lessons learned

• Policy fit and role of government• Institutional realignment• Capacity building• Local level action planning• Active role of the private sector• Integrated planning of resources• Sustainable finance systems• Market development

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Lessons Learned

Policy fit and role of government

Supporting policy environment to enable implementation

Policy vacuum of earlier attempts made it impossible to realise gains

•White Paper on Energy

•Renewable Energy White Paper

•Strategies to implement these policies

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Lessons Learned

Policy fit and role of government

Institutional realignment

Non-energy interventions

Investment in (strengthening of) local institutions

Integrated sustainable rural development strategy

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Lessons Learned

Policy fit and role of governmentInstitutional realignment

Capacity buildingRole of international organisation (SEED Programme)

Role of local organisations

Extension officer on day-to-day interaction with rural communities

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Lessons Learned

Policy fit and role of governmentInstitutional realignmentCapacity building

Local level action planningLinked to capacity building – simultaneous

Workshop on identifying local development needs, resources and constraints

Systematically propose action plans on how address constraints using local resources

Exposure to wider society and knowledge (conference, other training, etc)

Identify best local organisation/model to carry forward

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Policy fit and role of governmentInstitutional realignmentCapacity buildingLocal level action planning

Active role of the private sectorCommunity-service provider interactions

Management training

Consignment of stock

Credit facilities

Lessons Learned

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Lessons Learned

Policy fit and role of governmentInstitutional realignmentCapacity buildingLocal level action planningActive role of the private sector

Integrated planning of resources

Integrated Development Planning

Integrated Sustainable Rural Development Strategy

Local governance

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Lessons Learned

Policy fit and role of governmentInstitutional realignmentCapacity buildingLocal level action planningActive role of the private sectorIntegrated planning of resources

Sustainable finance systemsConsignments from oil companies

Government funds for non-commercial activities

Development funding

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Lessons learned

Policy fit and role of governmentInstitutional realignmentCapacity buildingLocal level action planningActive role of the private sectorIntegrated planning of resourcesSustainable finance systems

Market developmentCreate energy demand

Role of centres in productive activities

Synergies with other development initiatives

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Independent evaluation of the IeCs

Provision of access to safe and affordable energy resources for low-income rural households

Provision of information about safe, efficient and environmentally sustainable energy source

Promotion of the SME sector and job opportunities through energy related businesses

Provision of access to safe energy appliances

Finally, influencing of policy on access to safe and affordable energy

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Rural energisation is sustainable, but requires innovation in technology choice and implementation process

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Thank you!!!