Category Archives: Restio Energy

Side-Stepping the Energy Ladder

For decades now there has been talk of a hierarchy of energy use or ‘ladder’ which defined levels of development as well personal aspirations. Occupying the bottom of this ladder were primary fuels such as biomass, dung, etc. Moving towards the middle we had kerosene and LPG which were considered ‘modern fuels’ because of their comparative convenience as well as fairly sophisticated refining process associated with hydro-carbon fuels. And of course, at the top of the ladder was electricity, the most versatile and modern energy source of them all.

There have been many articles published about the energy ladder, some supportive of its clear albeit simplistic representation of how households progress in terms of fuel use while others have been more critical altogether of its rigidity and inability to accommodate variables such as culture,  differing socio-economic and geographic contexts. How this is playing out in South Africa today is quite interesting. Looking at South Africa’s energy policy, it is highly orientated towards developing the ‘top of the ladder’ options. Policy and regulations abound when it comes to nuclear, coal, large scale renewable, LPG gas, etc. But there is little regulatory interest when it comes to wood. Perhaps its posturing (Africa’s largest and most sophisticated economy requires nuclear not biomass regulations) or perhaps that’s the reality (the energy service activities are at the top of the ladder).

Despite this there are a number of inconsistencies emerging;

  • Electricity is becoming increasingly expensive (above inflation increases for over 5 years already with about the same to come) so many poorer households are having to ‘back-switch’ to LPG and paraffin.
  • Many middle class households that have been electrified for decades are opting to cook on LPG gas (on stainless steel hobs for sure) and heat their houses in winter using wood (up-market fireplaces).
  • Millions of households still cook with wood although they have access to electricity. The energy source is simply uneconomic to support the full range of thermal services households require.
  • High oil prices (think kerosene and LPG) and increasing electricity prices are putting strain on the ability of people to use fuels which they have access to. Access and utilisation have become two different issues
  • Political promises which have for decades reinforced the energy ladder now cannot be met as lower-income households cannot afford to utilise these fuels for all services required.
  • Department of Rural Development and Land Affairs has put out a tender for improved cookstoves, a technology that has never appealed to the Department of Energy because of the ‘poverty’ stigma associated with wood. Or, “people did not struggle [against Apartheid] to use wood” the former Minister of Energy [Dipuo Peters] once said to this blogger [African Minister’s Meeting, Sandton Convention Centre, Johannesburg, 17th September 2011].

Without significant subsidies, the lower-income households will find ascending the so called energy ladder increasingly difficult to achieve. The progressive notion of the ladder had much to do with the assumption that it was simply a matter of time before households, given broader economic growth, would progress up the ladder. However such economic growth hasn’t quite materialised and the associated costs of using these fuels has become increasingly exorbitant. Perhaps the middle-class should be used to assist in de-stigmatising the use of biomass fuels and the like which will at least assist in addressing some of the indignity associated with being trapped at the ‘bottom of the ladder’. Third generation improved cookstoves instead of open fires should go a long way in terms of doing just that.

– Robert Aitken, Restio Energy

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South Africa’s Renewable Energy Procurement Program

Robert Aitken from Restio Energy offers his thoughts on South Africa’s renewable energy procurement program to date.

South Africa has undertaken a very ambitious renewable energy programme which has the world watching with great interest. It has been said that the current programme to secure 3720MW of renewable energy is the largest in the world at this point in time. The approach used by the government is a competitive bid scheme (IPP Procurement Programme) where the private sector is invited to submit proposals against a stipulated amount of renewable energy required. Each of the identified renewable energy technologies has an associated tariff cap beneath which the bid must sit. The renewable energy technologies involved include; on-shore wind, solar PV, concentrated solar as well as a small amount of biomass, biogas and small-hydro.

It is an innovative and effective scheme which has thus far has been heavily over-subscribed in each of the three rounds assessed. It represents an important step for South Africa for a number of reasons;

  • This is the first large scale utility based renewable energy project in the country.
  • It will provide security of supply by diversifying the generational mix (previously predominantly coal) of electricity in the country
  • It has an increasingly demanding ‘local content’ or localisation component which is intended to stimulate the local renewable energy technology industry
  • It also has a strong community component aimed at ensuring local communities in and around these utilities benefit in a meaningful way.

It is these sorts of parallel requirements that will contribute towards the long-term operations and imbedding of renewable energy in the country. However, one of the service gaps this initiative will not address is access to electricity. The REIPPPP is a powerful grid security initiative which demonstrates the country’s willingness to engage with the private sector, promote renewables etc. Despite this 3.4 million households within the country remain without a grid connection and many households that are electrified cannot afford to use electricity particularly for thermal applications. While security of supply is crucial, the South African government needs to ensure a mixed approach (grid/off-grid, rural energy service delivery, small scale distributed initiatives, etc.) if access for all is to be achieved.

– Robert Aitken, Restio Energy