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Sari medium presentation for durban

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The South African Renewables Initiative

The South African Renewables Initiative


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    • 1. The SOUTH AFRICAN RENEWABLES INITIATIVE“The South African Renewables Initiative is anambitious initiative which has the potential tocatalyse South Africa’s transition to a greenergrowth path.”President Jacob Zuma, President of theRepublic of South Africa. The SOUTH AFRICAN RENEWABLES
    • 2. The SOUTH AFRICAN RENEWABLES ProvisionalINITIATIVESouth Africa’s green growth opportunity Grid based renewables Wider green development Contributing Industrial to development energy and jobs security Mobilizing champions Reducing Creating a emissions and regional greening technology exports hub
    • 3. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE unlocking green growth The vision:Citizens, labour, South Africanconsumers Commitment Government Catalyses green to ambitious growth in South renewables Africa, with procurement with minimal burden. modest domestic funding Unlocks International innovative co-operation Domestic Creates industrial financial industry and economic instruments to benefits reduce the cost burden Enables development of a critical mass of renewables projects International investors
    • 4. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVECitizens, labour, South Africanconsumers Commitment Government Catalyses green to ambitious growth in South renewables Africa, with procurement with minimal burden. modest domestic funding Unlocks International innovative co-operation Domestic Creates industrial financial industry and economic instruments to benefits reduce the cost burden Enables development of a critical mass of renewables projects International investors
    • 5. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE Ambitious commitment for renewables in the Integrated Resource Plan (IRP) – up to 19 GW by 2030 Implementation GW through Renewables24 Flagship Programme21 (RFP). 18.818 Initially funded through electricity15 13.3 tariff – would impose12 incremental costs rising to9 7.0 US$1billion/year, or an6 overall present value of 2.7 US$9 billion.30 IRP is a ‘living plan’2012 2015 2020 2025 2030 volume of renewables can be adjusted if CSP PV Wind circumstances change.
    • 6. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVECitizens, labour, South Africanconsumers Commitment Government Catalyses green to ambitious growth in South renewables Africa, with procurement with minimal burden. modest domestic funding Unlocks International innovative co-operation Domestic Creates industrial financial industry and economic instruments to benefits reduce the cost burden Enables development of a critical mass of renewables projects International investors
    • 7. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE Financial instruments such as low cost loans and insurance products bring down the incremental costIncremental cost Sources for closing remainder of gap$bn in $2011 PV terms South African 1 domestic funding 8.0 – 8.9 -35% • Including potential savings from lower 3.0 5.1 – 5.9 cost wind, up to US$2.8 bn. $790 m /year $510 m /year 2 International grant funding Incremental Incremental cost Reduction cost with low • Pay for performance due to low cost loans cost loans grants for green GWhs and financial instruments [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.]
    • 8. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVECitizens, labour, South Africanconsumers Commitment Government Catalyses green to ambitious growth in South renewables Africa, with procurement with minimal burden. modest domestic funding Unlocks International innovative co-operation Domestic Creates industrial financial industry and economic instruments to benefits reduce the cost burden Enables development of a critical mass of renewables projects International investors
    • 9. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE Potential results of a first critical mass of renewables • Electricty supply: 19GW by 2030 as laid out in IRP, providing 9% of Energy electricity supply. security • Employment: 35,000 – 40,000 new jobs created at peak.Economic • Investment: directly in the region of $36 bn investment in renewables capacityFinancing/ by 2030.Investment • 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 Carbon Africa’s Cancun agreement target. • Decarbonization of South African exports: green house gas intensity of exports reduced by 20% by 2025.Source: Integrated resource plan, team analysis, expert interviews, SARi model
    • 10. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVECitizens, labour, South Africanconsumers Commitment Government Catalyses green to ambitious growth in South renewables Africa, with procurement with minimal burden. modest domestic funding Unlocks International innovative co-operation Domestic Creates industrial financial industry and economic instruments to benefits reduce the cost burden Enables development of a critical mass of renewables projects International investors
    • 11. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE Could international partnership enable the pursuit of greater domestic ambition? IRP Current plan: 19 GW by 2030 Bold scenario – 24GW by 2025 GW GW 25 23.8 23.8 25 20 20 18.8 CSP 15 13.3 15 11.4 10 10 PV 7.0 5 2.7 5 2.9 Wind 0 0 2015 2030 2015 2030Gross Gross Reduced Reducedincremental Investment incremental Investment incremental incrementalcost challenge need cost challenge need cost gap cost gap $ 9 bn $ 36 bn $ 6bn $ 14 bn $ 50 bn $ 11bn
    • 12. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE Key Summary Guided by a cross-departmental Project Steering Committee (PSC) Intra- Lead by the Department of Trade and Industry and Department ofgovernment Energy.al initiative To catalyse South Africa towards a green growth pathway and support the implementation of the climate change and energy planning policies. Aim To design and establish the financing arrangements needed to enable a critical mass of renewables to be developed, without incurringObjective unacceptable incremental cost burdens on South Africa. Supported by an international public partnership of other governments and international finance institutions willing to support South Africa in thisPartners effort.
    • 13. The SOUTH AFRICAN RENEWABLES Provisional INITIATIVE in collaboration Next stepsPartnership launch December 7th, Durban Co-design implementable financial mechanisms Declaration of Intent Implementable Support in effective implementation financial Enabling framework instruments for the partnership Enable wider collaboration Mobilising funding at scale Share experience
    • 14. The SOUTH AFRICAN RENEWABLESINITIATIVE www.dti.gov.za www.sarenewablesinitiative.gov.za Nimrod Zalk Sharmala Naidoo Deputy Director General, DTI Project Manager Nzalk@dti.gov.za Sharmala@sari.org.za