Kuyasa and its scale-up to a National Sustainable Settlements Facility
Western Cape Provincial CDM Workshop
Dr Shehnaaz MoosaSteve Thorne21th September 2011
Contents
• SouthSouthNorth • Kuyasa intro• Kuyasa implementation • National Sustainable Settlements Facility • Some conclusions• Some conclusions
SouthSouthNorth
• What are we?• Where are we?• Entry point – Sustainable Development• High hanging fruit• Mitigation and Adaptation• Mitigation and Adaptation• Project lead hands-on learning-by-doing• Knowledge in public domain
General InformationSouth African Export Development Fund (SAEDF) August [email protected]
The Kuyasa CDM Project: First Gold Standard and African CDM project registered. Currently being implemented in Khayelitsha, Cape Town
The Kuyasa CDM Pilot
• 2309 RDP houses
• Solar Water Heaters
• Insulated ceilings
• Energy efficient lighting
Overall view of light and SWH interventions
7
Sectional view of ceiling installation
8
9
First steps in design
• Selection retrofit of technologies (lighting, water heating and thermal performance improvements)
• Selection of study sample (10 houses)• Retrofitting and monitoring housing through winter• 15 community based meetings• 15 community based meetings• Project design drafting (using small scale CDM methods)• Project design registration• Fund raising for implementation• Business plan and transfer to implementers
Technology (and cost excl. infrastructure)
Tonnes/hh/year
Value Euro/hh/year
Solar water heating (100l)(Euro 250)
1.3 20
Insulated ceilings 1.3 20Insulated ceilings (30 square metres)(Euro 125)
1.3 20
Efficient lamps (2 lamps)(Euro 30)
0.2 3
Key methodological issues
• Taking account of poverty by including suppressed demand for energy service
• What does this mean?• How was it argued?• Difficulty – real and measurable emissions reductions• Difficulty – real and measurable emissions reductions• Difficulty – rigour versus simplicity
Some notes on Kuyasa
• Implementation completed. • Many small sources of emissions make transaction costs
high.• Cost R30m for implementation.• R200 000 for verification (awaiting completion)• R200 000 for verification (awaiting completion)• Scale… public investment and ownership of CERs.• Suppressed demand needs to be included in
methodological approach for replication.• NAMAs (Nationally Appropriate Mitigation Actions) may
be more appropriate.
VISION: A clearing house which enables and incentivises access to financing for clean energy services in all low income housing in South
Africa
MISSION: To establish a Facility which 1) administers a CDM programme, and 2) leverages and manages access to the additional
The National Sustainable Settlements Facility
programme, and 2) leverages and manages access to the additional upfront financing required for the incremental capital costs of
sustainable energy interventions in low income housing
NSSF progress to date
1. SSNA together with the CTCC developed Kuyasa as a pilot2. REEEP funding to explore viable models for replication at scale, with a
focus on financing3. Programmatic CDM approved, providing avenue for carbon finance4. Drafting Group established to provide guidance and legitimacy5. Kuyasa being implement by SAEDF with DEAT grant finance6. DANIDA funded development of a Business Plan for the NSHF7. South African Export Development Fund (SAEDF) and Energy
Development Corp. funding the development of a SWH programmatic methodology
8. DANIDA funding a work plan to achieve government endorsement and appointment of an incubator
9. DBSA funding the development of thermal efficiency methodology and programme/s and further establishment
National Sustainable Settlements Facility
• Institutional and Financial architecture• Methodological and Programmatic issues• Interface with housing developers
Institutional and financial issues
• Currently leadership through a drafting Group established to provide guidance and legitimacy.
• Includes: DBSA, SANERI, DHS, DoE, Eskom, NHFC, DNA, SSNA, municipalities.
• Where should the Facility be situated institutionally?• Where should the Facility be situated institutionally?• The income from carbon, demand side management,
Renewable energy certificates, other externality interests..• Loss of earnings for the utilities need to be recovered.
A Low Income Housing Programme for South Africa
1,000
1,500
2,000
2,500
Ran
d (in
Mill
ions
)
How to bring carbon finance forward?
-500
0
500
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Ran
d (in
Mill
ions
)
Years
Assumptions
Carbon price �15
Ongoing 50% equity investment
R1000 beneficiary contribution
Only Greenfield housing included
No financing
How to bring intervention costs down?
International Carbon Markets
SWH ThermalEfficiency
Energy Efficient Lighting
CDM Programme of Activities
The National Sustainable Settlements Facility
19
National Sustainable Settlements Facility
SWH MethodologyEfficiency
Methodology Lighting
Methodology
Housing Project
Housing Project
Housing Project
Housing Project
Equity Loan
Facility
Methodological approach
• Two new large scale methods • Solar Water Heating and • Thermal Performance improvements
High level BenefitsSocial
• Respiratory health burden reduced• Provision of hot water – health / comfort• Household cost savings due to energy efficiency • Employment opportunities (EPWP)
Economic• Peak demand reduced – defers new installed
capacity
21
capacity • Leadership for low cost housing / energy industry• Entrepreneurial opportunities
Environmental• Largest project of its kind in Africa - Leadership• City SWH target – 10% by 2010 (ie 80 000
houses) Project assists this target• Implementing global commitments
Governance• Local participation and decision-making
National Sustainable Settlements Facility (NSSF) Key Conclusions• Carbon finance for low income housing requires a long
term investment view.• But the returns to a programme are highly significant,
both carbon revenues and co-benefits• Risks are manageable.• The issue is around availability of upfront financing for • The issue is around availability of upfront financing for
capital interventions and identifying an entity to drive the programme.
• There is strong interest from CC community internationally, especially in Gold Standard programme.
• What is the role of SA Government – avoided cost of supply (EEDSM?), job creation, health care, environmental services.
Conclusions into the future
• NSSF Model is replicable for other sub-sectoral mitigation approaches using projects to head to programmes to sub-sectors to future developing country commitments
http://www.southsouthnorth.org
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