Joint meeting: Mineral and Energy Portfolio Committee, Economic and Foreign Affairs Select Committee

Minutes by PMG, 9 March 2005

Chairperson: Mr E Mthethewa (ANC)

Documents handed out:

• Creating Employment, Reducing Poverty: Powerpoint presentation

• Energy, poverty and sustainability: perspectives from a local level

• Background Information

• Experiences of Communities - Electricity Access and Affordability for Basic Needs

• Introduction to the South African Energy Caucus

• Principles of the Energy Caucus

• Sustainable Energy for Development by EcoCity

SUMMARY

The Committees were briefed by the South African Energy Caucus on the public benefits of renewable energy and energy efficiency and relevant policy developments. The Caucus comprises of a number of civil society institutions, Sustainable Energy Africa, EcoCity Trust, Sustainable Energy and Climate Change Project and Earthlife Africa. It appealed to government that local level stakeholders be included in energy planning to ensure sustainability and access. It provided the Committee with suggestions on how it could promote this. It also outlined the potential solution of the Step Block Tariff to solve the inaccessibility to electricity services by the poor.

Introduction to the Energy Caucus

Mr Sibusiso Mimi (Sustainable Energy Africa) introduced the Energy Caucus as a platform for diverse civil society groups in South Africa to share and identify common ground for collaborative activities on specific and cross cutting energy issues. He stated that the Caucus called for a just transition to sustainable energy with access to basic energy services recognised as a basic human right. He outlined the defining principles of the Energy Caucus and its proposed policies and measures such as energy efficient codes and standards for buildings and equipment. Finally he listed the energy efficient targets that the Energy Caucus would like to see implemented (see document).

Employment Potential of Renewable Energy in South Africa

Mr Richard Worthington (Earthlife Africa Johannesburg) presented the findings of its Sustainable Energy and Climate Change Project. The Danida-funded study had produced a report, Employment Potential of Renewable Energy in South Africa, which identified the longer term impacts on employment that would result from commitments to developing Renewable Energy Technologies (RETs) that were sustainable. The findings of the study showed that RETs offered a quantifiable potential for creating and sustaining new and decentralised employment in South Africa. The most important conclusion arising out of the study was that the South African economy needed a higher target for renewable energy than the one currently outlined in the Draft White Paper on Renewable Energy, in order to derive maximum employment benefits. In addition, the South African government could stimulate massive employment gains faster and more easily in the Solar Water Heating (SWH) and bio fuel sectors - the non-electricity Renewable Energy sectors. The study recommended that these outputs be integrated into the Integrated Energy Planning (IEP) process to ensure that energy planning outcomes were in society's best interests.

Lack of Access to Electricity Services

Mr Nkosana Rikitla (Sustainable Energy and Climate Change Project: Earthlife Africa) gave an overview of difficulties experienced by communities where there is no access to electricity. This is as a result of the majority of the community being dependant on social grants as a main source of income. Hence they cannot afford electricity services. This resulted in many accidents and fatalities as a result of fires destroying homes due to the use of paraffin and gas stoves. He related personal experiences of lack of access in his community of Daveyton, Johannesburg.

Mr Worthington explained that a potential solution to the inaccessibility to electricity services that Earthlife Africa proposed was the introduction of a 'Step Block Tariff" which would be applicable to higher and middle income households. In cases where those households used far more electricity on average for luxury rather than basic purposes, they would in turn pay higher rates for their electricity usage and in turn subsidise poorer communities that had no access to these services because they simply could not afford them.

Energy poverty and energy sustainability: perspectives from a local level

Ms Leila Mohamed (Sustainable Energy Africa) briefed the Committees on the development of sustainable energy capacity and local level activities that could address these issues (see document). Sustainable Energy Africa was a non profit public interest organisation working nationally to build capacity in civil society and local government to think more strategically about energy so as to address the often "invisible" economic, social, and environmental impacts and opportunities of energy.

Energy services were needed and the aim should be to satisfy these needs through using the least amount of energy from a source that had the least amount of negative effect on the immediate and long-term health status of people.

Ms Mohamed listed the current problems experienced by low income households living without electricity such as 15-25% of their income being spent on energy, potential paraffin poisoning of children, low quality of air (indoor and outdoor), inconvenience. Medium to high income households living with electricity experienced none of these problems. She stated that the best way to address energy poverty was to work from the bottom up with local players who have direct contact with people on the ground, such as civil society organisations (CSOs). National government needed to set the right framework for participatory policy development in its energy planning.

She introduced a planning tool mechanism which was based on partnerships between different levels of government and civil society, as well as businesses which would lead to a 'City Energy Strategy' - a comprehensive plan for cities and towns covering all municipal functions. It was based on integrated energy planning that was demand-led and cross-sectoral and which promoted sustainable energy approaches at the local level with a clear vision for future city development.

This would improve service delivery and develop solutions to energy service needs that would not involve more energy. It would improve air quality and reduce greenhouse gas emissions as well as enable local governments and communities to become energy suppliers. This would harness energy financing for cities more effectively and promote economic and social development.

Decentralised energy production system

Ms Annie Sugrue (EcoCity Trust) briefed the Committee on the current and future situation of dependence on high energy fuels such as coal, oil and gas. Access to these resources will become more limited and expensive and this would have serious repercussions on the agricultural sector and increase food prices. Continued use of fossil fuels such as coal would result in significant climate changes increasing floods, droughts and other serious disasters. Further the current energy regime does not provide a solution to people's energy needs in that the poor have limited access to affordable energy. Subsidies were not a real solution to the problem since this simply entrenched the energy system.

She proposed a decentralised energy production system that focuses on: - small scale renewable energy technologies implemented at local government level by communities and small scale producers.

- mandatory energy efficiency technologies instituted into homes and businesses,

- implementing by using existing government programs such as housing.

She then outlined how the Portfolio Committee could make some important policy changes that would impact positively on promoting renewable, efficient energy (see document).

Proactive sustainable energy initiatives by communities

Ms Fikiswa Mahote stated that the Development Action Group (DAG) was an NGO working in partnership with communities around housing and urban development projects. They provided training, information dissemination and advocacy. DAG supported community-driven housing developments and it saw the Peoples Housing Process (PHP) as an opportunity to get households to integrate sustainable use of energy.

She named three successful programmes that are using sustainable energy such as solar heating in the Silver City Soup Kitchen and the Kuyasa Project as well as the dry water sanitation system in Energy Park, Khayelitsha. She asked the Committees to ensure that policies were conducive to these proactive efforts displayed by the poor. Through mandatory standards and policy regulation, they could ensure that there is a policy framework that addresses the challenge of sustainable use of energy.

Discussion

The Chairperson commented that there was currently no clear line of communication between the government departments and civil society regarding the processes of renewable energy.

Due to time constraints, the Chair noted that discussion period would have to be limited.

Ms Ndalene (ANC) asked the Caucus how it thought their proposed programmes should viably work. Secondly, she asked what was the response of SALGA as well as local municipalities and districts to the Step Block tariff proposal and finally what studies had the Caucus conducted in provinces.

Mr Worthington replied that they had not communicated with local governments. Their solution was the Step Block Tariff in which people who consume more electricity would essentially pay higher tariffs thus subsidising poor people for electricity services.

Mr K Sinclair (NNP) asked if any studies showed that South Africa could viably become a world-leading producer of Renewable Energy technologies.

Mr Worthington replied that he was not aware of any specific study carried out. However studies had shown that if SA was to produce solar panels on a large scale it would incur be expensive in terms of start-up costs however South Africa certainly did have the potential in terms of its skilled and semi-skilled labour market to become a leader.

Mr E Lucas (IFP) commented that people were far too dependant on electricity and that it was time that RE technologies were given serious thought as an alternative.

Mr Kevin Nassiep from the Department of Minerals and Energy commented that the biggest issue that had came out of the briefings was that communication between CSOs and government needed improvement. He added that government was planning an "energy efficiency" month in May which was when all appliance labelling would become mandatory.

The meeting was adjourned.