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Technical background information to support the development of the mitigation component of South Africa’s intended nationally determined contribution, including supported required for mitigation August 2015

Suggested citation for this paper: Energy Research Centre 2015. Technical background information to support the development of the mitigation component of South Africa’s intended nationally determined contribution, including supported required for mitigation. Energy Research Centre, University of Cape Town, Cape Town, South Africa.

Energy Research Centre University of Cape Town Private Bag X3 Rondebosch 7701 South Africa Tel: +27 (0)21 650 2521 Fax: +27 (0)21 650 2830 Email: [email protected] Website: www.erc.uct.ac.za

Contents

1.

Introduction to technical background information

1

2.

South African development plan and climate change mitigation policy

1

3.

The South African mitigation INDC

1

4.

Planning processes and mitigation system 4.1 Mitigation system

2 2

4.2

Peak plateau and decline trajectory

3

4.3

Emissions range in 2025 and 2030 emissions

4

4.4

Assumptions

4

5.

6.

Reporting, mitigation potential and measures 5.1 Inventory, reporting, and monitoring & evaluation

4 4

5.2

Technical analyses of mitigation potential in South Africa

5

5.3

Analysis of implementation of mitigation actions – steps taken and envisaged 8 5.3.1 Flagship programmes for near-term priority actions 8 5.3.2 Integrated resource plan (electricity) 8 5.3.3 Renewable energy independent power producer procurement programme 9 5.3.4 Investment in public transport 10 5.3.5 Carbon tax 10 5.3.6 Creating employment in the green economy and green industries 10 5.3.7 Desired emission reduction outcomes to guide sectors in long-, medium and short-term, company-level carbon budgets and mix of measures 11

5.4

Co-benefits of mitigation

11

5.5

Support for mitigation needed in future 5.5.1 Analysis of finance and investment flows 5.5.2 Technologies identified 5.5.3 Capacity building

13 13 14 16

Analysis of equitable access to sustainable development 6.1 Analysis by South African experts

17 17

6.2

Analysis by experts from other BASIC countries

18

6.3

Analysis of a range of metrics used in other international studies

18

6.4

Derivation of five-year carbon budgets

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Appendix 1

22

Appendix 2

22

Appendix 3

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Appendix 4

35

Bibliography

37

List of figures Figure 1: Illustration of emissions ranges and PPD trajectory range

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Figure 2: Overall mitigation system

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Figure 3: Emissions ranges in 2025 and 2030

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Figure 4: Updated analysis of mitigation potential in relation to PPD trajectory and emissions ranges 6 Figure 5: Mitigation potential analysis 2010 to 2050

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Figure 6: MPA mitigation cost curve for 2020

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Figure 7: MPA mitigation cost curve for 2030

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Figure 8: MPA mitigation cost curve for 2050

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Figure 9: GHG emissions in various IRP 2010 scenarios

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Figure 10: Comparison of different equity approaches for South Africa

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Figure 11: Five-year carbon budgets consistent with upper PPD (upper panel) and lower PPD (lower panel), highlighting 2021–2025 and 2026–2030 21 Figure 12: South Africa's GHG emissions, 2000-2010

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Figure 13: South African energy emissions, 2000-2010

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Figure 14: GHG intensity of the South African economy, 2000–2010

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List of tables Table 1: Implications of industrial energy efficiency on costs, pollutants and jobs

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Table 2: Co-benefits of selected mitigation actions

12

Table 3: Technologies for potential inclusion in South Africa’s mitigation technology implementation plan 15 Table 4: Carbon budgets for South Africa based on the same future global carbon budget according to different allocation approaches, Gt CO2-eq for the period 2000–2049 18 Table 5: Specification of the Peak, Plateau and Decline trajectory (Mt CO2-eq)

22

Table 6: Summary of mitigation actions modelled in LTMS, GHG emission reduction potentials and costs, 23 Table 7: Net annual costs of measures in MPA

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Technical background document – mitigation component of INDC

1

1. Introduction to technical background information This document contains technical background information provided in support of the mitigation component of the intended nationally determined contribution (INDC) communicated by South Africa, and associated support for mitigation. The technical background information is provided to enable clarity, transparency and understanding, but this information does not form part of the INDC, or any mitigation commitments to be inscribed in an Agreement. Technical work on the adaptation component of South Africa’s INDC was conducted by the Council for Scientific and Industrial Research (CSIR) and is not included in the current technical background document. The only official document is South Africa’s INDC, which is available on the UNFCCC INDC portal.1

2. South African development plan and climate change mitigation policy South Africa’s contribution to the collective challenge is framed by both its development plan and its climate policy. The policy background is outlined in the INDC itself. For brief reference, key documents are cited here and access to the full documents is indicated in URLs in footnotes. The National Development Plan includes a chapter on ‘Ensuring environmental sustainability and an equitable transition to a low-carbon economy’.2 The Plan reaffirms South Africa’s ‘peak, plateau and decline’ emissions trajectory and argues that this will require ‘aggressively promoting the development of local manufacturing and technical capacity in a broad range of renewable energy and other clean technologies to provide the country with room to manoeuvre in a carbon-constrained global economy.’ (NPC 2012) South Africa’s climate mitigation policy is contained in the 2011 National Climate Change Response White Paper3 (NCCRP). The NCCRP has two objectives: •

Effectively manage inevitable climate change impacts through interventions that build and sustain South Africa’s social, economic and environmental resilience and emergency response capacity.



Make a fair contribution to the global effort to stabilise greenhouse gas (GHG) concentrations in the atmosphere at a level that avoids dangerous anthropogenic interference with the climate system within a timeframe that enables economic, social and environmental development to proceed in a sustainable manner. (RSA 2011a)

3. The South African mitigation INDC South Africa’s national climate mitigation policy, contained in the National Climate Change Response White Paper, is based on a emissions trajectory range, in terms of which emissions will peak in the 2020s, plateau for around a decade, and decline thereafter. Mitigation measures aim to keep South Africa’s emissions within this range. The policy also provides for the periodic review and adjustment of this range, in response to the latest science, international and national progress in mitigation, changing costs and benefits of mitigation measures, challenges and opportunities for mitigation, and other national circumstances. South Africa’s contribution to the international mitigation effort thus takes the form of this ‘peak, plateau and decline’ trajectory, with emissions ranges specified for 2025 and 2030. Future contributions, for years 1 2

3

See http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx South Africa’s National Development Plan is available at http://www.gov.za/sites/www.gov.za/files/Executive%20Summary-NDP%202030%20-%20Our%20future%20%20make%20it%20work.pdf The National Climate Change Response White Paper is available at http://www.gov.za/sites/www.gov.za/files/national_climatechange_response_whitepaper_0.pdf

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after 2030, will take into account the review and adjustment process above. Thus, South Africa’s INDC, has two key features: •

South Africa’s emissions will follow a ‘peak, plateau and decline’ trajectory over the next few decades, currently specified in the NCCRWP, and subject to periodic review; and



For the years 2025 and 2030, South Africa’s national emissions will be in the range 398 to 614 Mt CO2-eq.

This is illustrated in the figure below.

Figure 1: Illustration of emissions ranges and PPD trajectory range

4. Planning processes and mitigation system 4.1 Mitigation system South Africa is designing a mitigation system and, at the same time, taking steps to implement mitigation actions, to remain within its ‘peak, plateau and decline’ GHG emissions trajectory range. The Department of Environmental Affairs (DEA) is designing an overall mitigation system. An overview of the system and process required to establish it is shown in Figure 2. As can be seen there, the institutional development of South Africa’s mitigation system are framed in terms of national development priorities (as in the NDP) and the climate change policy framework. The mitigation system relates to air quality and energy and also has a component focused explicitly on GHG emissions. Some key institutional elements are being put in place, others are part of ongoing work and improvements based on review. The mitigation system being established is the basis for key elements of the mitigation component of South Africa’s INDC, and underpins the PPD trajectory range and emissions in 2025 and 2030.

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Figure 2: Overall mitigation system Source: Presentation by Department of Environmental Affairs

4.2 Peak plateau and decline trajectory South Africa’s NCCRP ‘details the “peak, plateau and decline trajectory” used as the initial benchmark against which the efficacy of mitigation actions will be measured’. Peak, plateau and decline (PPD) is a GHG emissions trajectory range after mitigation. The climate policy refers to the PPD trajectory4 as

the initial benchmark against which the efficacy of mitigation actions will be measured. The PPD is thus the form or shape, which South Africa’s mitigation ambition is to follow. The NCCRP spells out key points, stating: ‘In summary: o South Africa’s GHG emissions peak in the period 2020 to 2025 in a range with a lower limit of 398 Megatonnes (109 kg) (Mt) CO2-eq and upper limits of 583 Mt CO2-eq and 614 Mt CO2-eq for 2020 and 2025 respectively. o South Africa’s GHG emissions will plateau for up to ten years after the peak within the range with a lower limit of 398 Mt CO2-eq and upper limit of 614 Mt CO2-eq. o From 2036 onwards, emissions will decline in absolute terms to a range with lower limit of 212 Mt CO2-eq and upper limit of 428 Mt CO2-eq by 2050.’ (RSA 2011a: 6.4.2) The PPD trajectory range takes several things into consideration: i) South Africa’s mitigation potential; ii) the requirement for South Africa to make a fair contribution to the international mitigation effort; and iii) South Africa’s national circumstances – what the best pathway is to a low-carbon future, given current development challenges.

4

The NCCRP refers to a document published by the Department of Environmental Affairs entitled: Defining South Africa’s Peak, Plateau and Decline Greenhouse Gas Emission Trajectory (DEA 2011). See Appendix 1.

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4.3 Emissions range in 2025 and 2030 emissions The INDC states that South Africa’s emissions by 20255 and 2030 will be in a range between 398 and 614 Mt CO2–eq, as defined in national policy. These values are specified in the NCCRP (RSA 2011a), with 2030 falling into the period when emissions are to plateau. This is illustrated in Figure 3 below. The range provides some temporal flexibility, to take into account various contingencies, while providing clarity on emissions in absolute units, millions of tons of carbon dioxide-equivalent. The emissions ranges from 398 to 614 Mt CO2-eq for 2025 and 2030 provide both clarity and flexibility. The ranges of emissions ranges provide balance mitigation potential, South Africa’s relative fair effort, and flexibility at the national level.

Figure 3: Emissions ranges in 2025 and 2030

4.4 Assumptions The major assumptions are stated in the relevant section of the INDC. Some more technical data and parameters are included in the following section.

5. Reporting, mitigation potential and measures 5.1 Inventory, reporting, and monitoring & evaluation A crucial part of any mitigation system is a reporting system to ensure transparent, accurate, comprehensive, complete and comparable data. Both GHG reporting systems and monitoring and evaluation systems are currently under development. Draft reporting regulations were published in 2015, which will provide for compulsory reporting of GHG emission by large emitters, with the aim of a) developing a more comprehensive and detailed national GHG inventory; b) serving as a basis for measures such as the proposed carbon tax and the proposed carbon budget system; and c) enhancing mitigation policymaking. Specific climate change legislation is expected before 2020, which will consolidate existing legislation and regulations. Monitoring and evaluation is crucial for ex post evaluation. Building on reporting under steps taken, a Monitoring & Evaluation (M&E) Framework is envisaged. Initial technical work has been undertaken towards an M&E framework (Ricardo-AEA & Cybernetics 2014). The 5

The trajectory range for 2025 is consistent with a 42% deviation below business as usual (BAU ) emissions, as stated in South Africa’s National Climate Change Response White Paper. 614 Mt CO2-eq is 42% below the upper BAU projection for 2025; while 398 Mt is 42% below lower BAU; BAU as defined in the explanatory note (DEA 2011). Note that, in Copenhagen and Cancun, South Africa indicated emissions would be 34% below BAU by 2025 and 42% by 2025. BAU was not reported internationally at the time, but has since been defined in national policy, with an upper and lower range. The progression is a) a movement in form from ‘deviation below BAU’ to an emissions range; and b) the INDC also quantifies a contribution for 2030.

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Presidency has an overall M&E framework for performance evaluation across all Ministries, and so the domestic system is framed as M&E, laying the basis for what internationally is called MRV – measurement, reporting and verification. South Africa has submitted two National Communications to the UNFCCC, as well as its first biennial update report (DEA 2014c) and GHG inventory for 2000-2010 (DEA 2014b) on 17 December 2014.6 The first BUR updates elements of mitigation of the SA’s second national communication (RSA 2011b). South Africa has completed national GHG inventories, and submitted these to the UN with its national communications and BUR, for the years 1990, 1994 and 2000-2010. Although South Africa will only report its inventory to the UNFCCC bienially, the current goal is to update inventories annually. A brief overview of South Africa’s emissions profile from it’s latest inventory is contained in Appendix 4.

5.2 Technical analyses of mitigation potential in South Africa In addition to a large body of other work,7 two key economy-wide analyses have been undertaken by the South African government to determine South Africa’s mitigation potential. The first was undertaken in 2007 as a multi-stakeholder scenario process called the Long-Term Mitigation Scenarios (LTMS),8 and an updated assessment, South Africa’s Mitigation Potential Analysis (MPA),9 was undertaken in 2012, to provide a basis for the implementation of the National Climate Change Response White Paper. The figure below portrays South Africa’s full mitigation potential as determined in the MPA to 2030 – the current assessment is that implementation of all interventions modelled in the MPA would result in emissions well within the 2025 and 2030 ranges.

6

Biennial update reports are available for download at http://unfccc.int/national_reports/nonannex_i_natcom/reporting_on_climate_change/items/8722.php.

7

South Africa has undertaken extensive analysis of its mitigation potential and possible mitigation actions to reduce emissions and enhance sinks. The published work is extensive (Camco 2012; Camco & TIPS 2010; De Villiers 2000; De Villiers & Matibe 2000; DEA 2014d; Goldblatt, Kagi, Leuchinger & Visser 2001; Howells 2000; Howells & Solomon 2002; Lennon 1993; Manley 2008; Marquard , Trollip & Winkler 2011; Merven, Moyo, Stone, Dane & Winkler 2014; Naude , Coovadia & Pretorius 2000; Nhamo 2009; Promethium 2014; Scholes, Van der Merwe, Kruger & Crookes 2000; Trikam 2002; Tyler, Boyd, Coetzee & Winkler 2014; Tyler , du Toit & Burchell 2011a, 2011b; Van Horen & Simmonds 1996; Winkler 2010; Winkler, Hughes, Marquard, Haw & Merven 2011; Winkler, Marquard, Manley, Davis, Trikam, den Elzen, Höhne & Witi 2008; Witi 2010) . LTMS results are available in a range of documents: a scenario document approved by stakeholders (SBT 2007) and technical reports (ERC 2007a, 2007b; Hughes, Haw, Winkler, Marquard & Merven 2007; Kornelius , Marquard & Winkler 2007; Midgley, Chapman, Mukheibir, Tadross, Hewitson, Wand, Schulze, Lumsden, Horan, Warburton, Kgope, Mantlana, Knowles, Abayomi, Ziervogel, Cullis & Theron 2007; Pauw 2007; Raubenheimer 2007; Taviv, van der Merwe, Scholes & Collet 2007; Winkler et al 2007). Joubert, Palmer, Forster, Mullins & Curren (2014) and (DEA 2014d). A full set of reports of the MPA can be found on the Department of Environmental Affairs’ website at https://www.environment.gov.za/documents/research#climate_change .

8

9

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Figure 4: Updated analysis of mitigation potential in relation to PPD trajectory and emissions ranges

The MPA also analysed the full mitigation potential of the South African economy going forward to 2050. The results are portrayed in Figure 5 below. The baseline is referred to as ‘Without measures’ (WOM). ‘Business as usual’ is referred to as ‘With existing measures’, which contains interventions being implemented in 2010, and excludes the REIPPPP and other investments currently being made. This scenario was used as the baseline for calculating mitigation potential and costs throughout the study. A key feature of the study is that in the long term, significant innovation will have to drive further reductions, since the mitigation potential identified in the MPA is not sufficient to meet South Africa’s long-term mitigation goals.

Figure 5: Mitigation potential analysis 2010 to 2050 Source: DEA (2014d)

Mitigation cost curved were calculated for three time points in the study – 2020, 2030 and 2050, which are portrayed in Figure 6, Figure 7 and Figure 8. Methodology for these figures reflects

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the annualised mitigation cost in that year and the mitigation resulting in that year. In all three years, more than 20% of the mitigation potential can be implemented at net zero cost or with a resulting net benefit to the country. Some more costly mitigation options, including carbon capture and storage, have not yet been implemented at any scale and are still under investigation, whereas others are well-established. A complete list of mitigation options, costs and mitigation potential is contained in Appendix 3. .

Figure 6: MPA mitigation cost curve for 2020 Source: DEA (2014d)

Figure 7: MPA mitigation cost curve for 2030 Source: DEA (2014d)

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Figure 8: MPA mitigation cost curve for 2050 Source: DEA (2014d)

5.3 Analysis of implementation of mitigation actions – steps taken and envisaged South Africa is establishing a mitigation system, as outlined in section 4.1 above. At the same time, mitigation is taken through flagship programmes, energy plans and programmes, economic instruments and more. 5.3.1 Flagship programmes for near-term priority actions The NCCRWP includes near-term priority flagship programmes, prioritizing immediate actions on both adaptation and mitigation. The programmes identified include public works; water conservation and demand management; renewable energy; energy efficiency and energy demand management; waste management; carbon capture and sequestration; and adaptation (RSA 2011a). 5.3.2 Integrated resource plan (electricity) The Department of Energy’s electricity plan, formally published in the Government Gazette (DoE 2011), and known as the Integrated Resource Plan (IRP) 2010, made carbon an important factor in planning South Africa’s electricity supply mix. This was a significant change from previous electricity plans, which were based on models where minimizing cost was the only objective. The IRP 2010 says that it ‘assists in fulfilling South Africa’s commitments’ made in Copenhagen (DoE 2011). Electricity supply is the largest single sector of GHG emissions, yet any overall mitigation result depends on all sectors. The planning horizon for the IRP is 2010– 2030. Modelling for it ran several emissions cases, limiting emissions to 275 Mt CO2 per year from 2025, or to 220 Mt for the EM3 scenario. A carbon tax case was also run, keeping emissions to 269 Mt CO2. IRP 2010 also analyses a reduction in the CO2 intensity of electricity supply. In its Figures 5 and 8, it shows a reduction from 912 g CO2 / kWh in 2010 to 600 g CO2 / kWh in 2030. This is a reduction in CO2 intensity of 34% over the period. Total emission would depend on actual electricity generation.

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Figure 9: GHG emissions in various IRP 2010 scenarios Source: based on data in IRP 2010, Tables 8-13 (DoE 2011)

5.3.3 Renewable energy independent power producer procurement programme The DoE’s renewable energy independent power producer procurement programme (REI4P) has dramatically increased installed capacity from tens of MW before 2011. Initial studies have documented rapid progress over the last four years, during which four rounds of bidding were completed by an IPP procurement unit, with staff from National Treasury playing an important role in overseeing procurement of private investors. A study for the World Bank found that in the first three rounds, in which a total of 3922 MW were installed, prices dropped dramatically. – 68% for solar photovoltaic (PV); wind dropping by 42 % (in nominal terms). The projects were expected to generate 9% of electricity demand, once all are connected (Eberhard , Kolker & Leigland 2014). In the fourth round, the average cost of wind power project fell a further 25% to 62 c/ kWh (ZA cents) and photovolatics by another 29% to 79 c / kWh. This followed price reductions of 30-40% in rounds 2 and 3 and it based on firm prices of approved bids. By comparison, costs of new coal in energy modeling suggest at least 75 c / kWh, though this is probably a low estimate. The request for proposal for new coal set a price cap of 82 c / kWh. The final cost of electricity from Medupi and Kusile, two large new coal-fired power stations being constructed, will only be known on completion, but will very likely exceed 100c / kWh; some informal estimates are 120 c / kWh. Wind is now cheaper than new coal, and PV at parity at least. Additional projects were considered in Round 4, taking the total to 92 renewable energy IPP projects approved. Total installed capacity of nearly 6300 MW and private investment estimated of ZAR 192 billion (US$ 16 billion) flowing into South Africa betweeen 2011 and June 2015. The Department of Energy reported to the Parliamentary Portfolio Committee on Energy that 37 renewables projects had been connected to the grid as of June 2015.10 The Council for Scientific and Industrial Research (CSIR) has published updates of a study of the financial benefits of renewable energy in South Africa; the latest update being in August

10

See http://www.engineeringnews.co.za/article/ipp-office-shifts-coal-bid-deadline-to-nov-after-request-frombidders-2015-09-17/rep_id:3182. The $ value of investment depends on exchange rate, which has fluctuated over the last years, the conversion here assumes ZAR12 / US$1).

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2015.11 The CSIR found net benefits of R4.0 billion for 2015; mostly due to avoided diesel and coal fuel costs (R3.6 billion) and with a greater range of uncertainty reducing unserved energy (R1.2-4.6 billion). The Energy Minister has published a determination for an additional 6300 MW of renewable energy in the REI4P in the Government Gazette (No. 39111 of 18 August 2015), in terms of Electricity Regulation Act (ERA). While shares can be reallocated by DoE across renewable energy technologies, almost half of the capacity is expected to come from on-shore wind, with the next largest portion from photovoltaics (22%). 5.3.4 Investment in public transport Investment in public transport infrastructure was US$ 0.5 billion in 2012, and is expected to continue growing at 5% per year. South Africa established a South African Green Fund with an allocated US$ 0.11 billion in the 2011–2013 budgets to support catalytic and demonstration green economy initiatives. Resources for the Fund will have to be increased in future to enable and support the scaling=up of viable and successful initiatives, including contributions from domestic, private sector and international sources. 5.3.5 Carbon tax National Treasury started commissioning research on environmental fiscal reform, including a carbon tax, as early as 2003. It issued a ‘framework for considering market-based instruments’ a few years later (National Treasury 2006). The year after Copenhagen, a discussion document was released for public comment (National Treasury 2010). Following the adoption of national climate policy in 2011, a carbon tax policy paper was issued (National Treasury 2013a). Treasury indicated that the primary objective of the carbon tax is to achieve GHG emissions reductions, aiming to do so in three main ways – changing producer and consumer behaviour; contributing to mitigation and adaptation being taken into account in investment decisions (including on infrastructure); and creating incentives for low-carbon technologies. A nominal rate is R120 / t CO2-eq is proposed, with tax-free thresholds, increases in the tax rate over time, off-sets, and adjustments to reward good practice within sectors (Z-factors) determining the rate seen by individual firms. The tax is to be levied as a fuel input tax (base is coal, crude oil and natural gas inputs) on six gases in principle, but effectively CO2, CH4, N20 and PFCs (SF6 and HFCs not listed in any sectors). The proposal is for an economy-wide tax, though agriculture, forestry and land use (AFOLU) and waste get 100% exemption in the first phase. The first phase is expected to run from 2016 to 2020. The tax rate is proposed to increase 10% per year. There would be revisions to the design for future five-year periods, including the rate of increase to be announced in February of the final year of the previous phase. 5.3.6 Creating employment in the green economy and green industries The New Growth Path (NGP) set a target to create five million new jobs, to reduce unemployment from 25% (official level, in 2010) to 15% in 2020 (EDD 2011). The NGP framework does not refer explicitly to mitigation commitments in the Copenhagen pledge, but sees the green economy as one of six drivers of employment – focusing on the opportunities that mitigation presents (Trollip & Tyler 2011). The plan targets 300 000 jobs to explicitly emerge in the ‘green economy’. The NGP suggests that 80 000 of these jobs could be created around ‘environmentally friendly infrastructure’ in the manufacturing sector, and the other 220 000 in construction and maintenance. Particular focus is given to natural resource management, renewable energy construction and manufacturing, with support to renewable energy and energy efficiency (Rennkamp 2012). Perhaps most significant is the NGP’s identification of South Africa’s history of economic growth – including bottlenecks and imbalances, and that it identifies opportunity for structural change in the economy. The NGP ‘identifies where viable changes in the structure and character of production can generate a more inclusive and greener economy over the medium to long run’ (EDD 2011).

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The result of the study are available online at http://www.csir.co.za/media_releases/docs/Financial%20benefits%20of%20Wind%20and%20PV%202015.pdf.

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The Department of Trade and Industry launched South Africa’s Industrial Policy Action Plan (IPAP) in 2007 and released an update in 2010, within a ten-year economic outlook (RSA 2010). There is potential alignment of a focus on a knowledge economy, that is labour-intensive and – at least in some sectors – also low-carbon. IPAP does not explicitly address mitigation goals such as the Copenhagen pledge. Instead, the IPAP 2011/12 to 2012/13 addresses mitigation through green economy and green industries. Green industries identified for action programmes include the roll-out of a national solar-water heating programme – manufacturing and installation capacity; solar and wind energy initiatives; an industrial energy-efficiency programme; strengthening water-efficiency standards; demonstrate the viability of concentrated solar thermal power as a major renewable energy generation source; biomass energy initiatives; clean and multi-energy stoves; water- and energy-efficient appliances; efficient motors, variable-speed drives, energy metering and control and electricity storage (batteries and fuel cells); waste and waste water treatment. Green industries in the IPAP have the potential to address both mitigation and adaptation. To further mainstream the climate change response across all of industrial policy, the integration of metrics such as emissions intensity – and the improvement in efficiency that this represents – might be considered. Desired emission reduction outcomes to guide sectors in long-, medium and short-term, company-level carbon budgets and mix of measures As part of the implementation of the National Climate Change Response White Paper, work is being conducted to develop and allocate desired emission reduction outcomes (DEROs) from the peak, plateau and decline trajectory to sectors and sub-sectors of the economy. In the longer term, DEROs will be allocated to three timeframes – short- (2020), medium- (2030) and longterm (2050). In the first phase, to 2020, only the short- and medium-term DEROs will be derived, before the full system is rolled out after 2020. A diverse set of mitigation measures is being developed to achieve the DEROs, coupled with a carbon budgeting system for large emitters and a carbon tax.

5.3.7

5.4 Co-benefits of mitigation Consistent with its development and climate approach, South Africa attaches great importance to the socio-economic implications of mitigation. Climate change mitigation is understood to have local developmental co-benefits. The IPCC has defined co-benefits as ‘The positive effects that a policy or measure aimed at one objective might have on other objectives, without yet evaluating the net effect on overall social welfare. Co-benefits are often subject to uncertainty and depend on, among others, local circumstances and implementation practices’ (IPCC 2014). South Africa has previously suggested formalising the sustainable development benefit of mitigation in SD-PAMs - sustainable development policies and measures (RSA 2006). Analysis has been undertaken on methods to quantify the benefits of SD-PAMs (Winkler, Höhne & Den Elzen 2008). To illustrate a concrete example, industrial energy efficiency has been found to ‘include significant reductions in local air pollutants; improved environmental health; creation of additional jobs; reduced electricity demand; and delays in new investments in electricity generation’ (Winkler, Howells & Baumert 2007).

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Table 1: Implications of industrial energy efficiency on costs, pollutants and jobs Source: Winkler et al. (2007)

Annual energy savings

2014

% saving in total energy system

2020

% saving in total energy system

Units for absolute numbers

76

3%

93

3%

PJ

Annual cost savings

4.1

12

est. 8%

1.2

est. 2%

Billion Rand

Avoided investment in power stations

3600

est. 7%

4400

est. 7%

MW saved

Pollutants avoided Carbon dioxide

20

Est. 4%

24

est. 5%

MtCO2

Oxides of nitrogen

84

Est. 5%

102

est. 5%

kt NOx

Sulphur dioxide

204

Est. 6%

252

est. 6%

kt SO2

Total suspended particulates

23

Est. 4%

28

est. 4%

kt TSP

Water savings

455

Est. 5%

558

est. 5%

Gl (10 litres)

Additional jobs created

40 000

Cost of abatement

60 000

Jobs

13

-34

9

-8

$ / tCO2-eq

The SD-PAMs concept has also been analysed for several other countries and by experts outside South Africa (Baumert & Winkler 2005; Ellis et al. 2007; Linnér et al. 2012; Román & Hoffmaister 2012; Roy et al. 2007). More recent analysis of wind power (Rennkamp & Westin 2013), electric vehicles (Dane 2013) and roll-out of solar water heaters also reports co-benefits (Wlokas & Ellis 2013), using the ‘Action impact matrix’ methodology (MIND 2005). Table 2: Co-benefits of selected mitigation actions Source: Based on (MIND 2005) and sources in text above Mitigation actions Explicit LCD targets Methodology

Wind energy Modelling Input

Expert rating

Solar water heating

Electromobility

Case study input

Expert rating

Modelling and case study input

Expert rating

Emissions reductions

R2000 /tCO2 (109 Mt = 28.5% compared to baseline)

5

R3997.74 / tCO2 per annum (250Mt over the period)

5

R54 000 / tCO2-eq

4

Poverty

2.17%

4

Improved physical health, increased well-being through a more comfortable life and time saved, transferred knowledge and skills around SWH and additional employment are major contributors to human capital. Social capital is stimulated through additional and intensified connections between people and communities. Physical capital increased. Energy saving costs.

5

None

3

12

13

Of which approximately three hundred million, or 7%, is attributed to a reduction in fuel costs. Most of the savings are from avoided power station investment. Abatement costs increase between 2014 and 2020, since most of the savings are achieved early on in the period.

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Mitigation actions Explicit LCD targets Methodology

Wind energy Modelling Input

Expert rating

Solar water heating

Electromobility

Case study input

Expert rating

Modelling and case study input

Expert rating

Inequality

1.48%

4

Impacted through job creation 4

Negative (minor). Benefits will accrue to rich mare than poor deciles

3

Jobs

91,601

4

241 000 jobs per annum

5

Negative (minor): imported vehicles (and components) replace some locally produced vehicles

4

GDP

2.70%

4

5

None (minor potential for negative impact if a significant demand for imported Evs)

4

Renewable energy

76 766

5

Each solar heater has the 5 potential to save 1869 kWh of electricity per year, that would otherwise be used for heating water

None (there is potential for distributed electricity generation)

4

Other energy mix

Replace 9.6MW nuclear with 30 114 MW wind

5

No impact or less pressure

Positive impact (minor): 4 consump-tion smoothing (off-peak charging and batteries act as a store of electricity to supplement use during peak demand periods).

5

5.5 Support for mitigation needed in future 5.5.1 Analysis of finance and investment flows South Africa’s Department of Environmental Affairs has commissioned a high-level synthesis of the key barriers and recommendations relating to climate finance identified through research published by the private sector and civil society, local government and through work commissioned by the DEA and National Treasury on the flagship programmes and monitoring of climate finance (DEA 2014a). Key themes are identified relevant to climate finance and the National Climate Change Response Policy (NCCRP). The climate finance discussion document identifies core components of a national climate finance strategy for South Africa for consideration. South Africa has a stable and well regulated financial sector with an estimated R5.5 trillion assets under management (Naidoo 2011). South Africa allocated R800 million in the 2011 Budget to fund ‘green economy’ initiatives and establish a domestic Green Fund14 signals serious intent to mainstream spending into the national budget frameworks. This represents a small portion of total estimated finance committed since 2003, which has been put at R20 billion (DBSA 2011). National Treasury reviewed public environmental expenditure and found a total allocation for the environmentally-related functional areas for the period 2009/10 to 2015/16 amounting to R12.8 billion (National Treasury 2013b). Analysis has been conducted on financial support that would be required for mitigation actions, and combined ‘packages’ of actions. Information on mitigation actions modelled in the longterm mitigation scenarios provided information on incremental costs (aggregate over the period; and annual), including the following mitigation actions (ERC 2007a, 2007b; Hughes et al. 2007; 14

http://www.sagreenfund.org.za/about-the-green-fund/

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Winkler et al. 2007). Ensuring that electricity is decarbonised by 2050 (50% renewable energy, 50% nuclear), is estimated to have an incremental cost of $ 348.5 billion over the period 2003 to 2050, or US$3 billion per year. Storing 23 Mt of already concentrated carbon emission from existing coal-to-liquid operations in geological formations might cost an additional US $0.45 billion. Electric vehicles – assuming a cleaner grid, $513 billion over the 43-year period; much less at $345 billion with a ‘Growth without constraints’ grid, but in that case emission reductions are a fraction. Introducing hybrid electric vehicles so that 20% or private cars are hybrids by 2030 is modelled to cost an additional US $488 billion over the period, or US $3.9 billion per year. These cases indicate that large mitigation actions have significant incremental costs and require large investments. Readers should take care to note that incremental costs calculated using system models differ from more detailed financial analysis. The energy and economy-wide models used in the longterm mitigation scenarios produce what may be termed economic costs. In other words, they consider the overall costs to the energy system (in a partial equilibrium energy model such as Markal, see (Hughes et al. 2007)) or to the economy (in a computable general equilibrium model (Kearney 2008; Pauw 2007)). The purpose of such assessments is to compare different mitigation options in the energy sector, for which energy models are a suitable tool; and to understand the indirect costs (including forward and backward linkages beyond the energy sector), for which CGE models are considered appropriate. These costs might be termed ‘economic costs’, or in the case of economy-wide models socio-economic costs and benefits. These costs are one form of information to consider the socio-economic implications of mitigation. Economic costs should be understood with these purposes and methodologies in mind. They should not be confused with financial analysis. Financial analysts would use entirely different methodologies to support decisions related to investment decisions. The economic costs reported here are not considered an appropriate basis for any ‘bankable project’. Further work is needed to prepare detailed business plans for finance and investment in mitigation. Those caveats noted, in the case of renewable energy, the results from energy modelling indicated that for the period 2003–2050, a scenario increasing the share of renewable energy to 50% by 2030 and assuming that the unit costs of renewable energy technologies decline, with annual costs were calculated as US$0.76 billion, or approximately R4.5 billion per year (assuming R6/US$ 1). A financial model was run by the SA Renewables Initiative,15 in order to achieve a target of 20-23 GW of renewable energy by 2020 – about half the current grid, but probably slightly smaller than a 2030 grid. SARi’s analysis was that achieving that scale of capacity by 2020 to 2025 would result in investment between ‘US$55–60 billion based on estimated capital costs and capacity factors’ (Fleischer 2011).16 The updated mitigation potential analysis calculated the net annual cost (NAC) for a measure in a given year (DEA 2014d). The NAC is the sum of the equivalent annual cost and the annual operation and maintenance cost (Opex), minus the energy cost saving, all in units of R/year. Across 140 measures for which a net annual cost was reported, there are many with significant positive costs, and many others with negative costs or savings. On balance, implementing all the MPA measures for which NACs are a available, South Africa would save R22.6 billion in 2025, have to invest R0.65 billion in 2030, but see savings again in 2050 of R14.3 billion. (Joubert et al. 2014). For further details, see Appendix 3 and the underlying analysis. 5.5.2 Technologies identified The table below identifies thirteen technologies for inclusion in South Africa’s mitigation technology implementation plan. These include renewable energy, but also other technologies: energy efficient lighting; variable speed drives and efficient motors; energy efficient appliances;

15

16

SARi was launched as an International Partnership of South Africa with Denmark, Germany, Norway and the UK, in December 2011 during COP 17 in Durban; see https://sarenewablesinitiative.wordpress.com . Note the recent bid prices for renewable energy IPP projects, and total actual investment of ZAR 168 billion by May 2015; see section 5.3.3.

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solar water heaters; hybrid electric vehicles; solar PV; wind power; carbon capture and sequestration; nuclear; and advanced biofuels. Table 3: Technologies for potential inclusion in South Africa’s mitigation technology implementation plan Source: (Cohen , Cloete & Lewis 2015) Technology group

Specific technologies considered

Existing government plans or analyses

Energy efficient lighting

Light emitting diodes (LEDs), as the other energy efficient lighting option, compact fluorescent lightbulbs (CFLs), is already well established in the market.

None provided by the steering committee

Variable speed drives and efficient motors

Electronic variable speed drives are the current best available technology and so are included in the plan. Efficient motors are considered as a single technology group.

None provided by the steering committee

Energy efficient appliances

Here a focus is placed on refrigerators, although the analysis could easily be applied to other appliances

None provided by the steering committee

Solar water heaters

Low-pressure solar water heaters are considered, as they are the focus of government intervention at present, and have a high potential for rollout.

Various documents have been produced surrounding solar water heater roll out. The document reviewed here is entitled Submission to the Minister of Trade and Industry: Solar Water Heater Designation by the DTI (Baron, 2015).

Hybrid electric vehicles

Hybrid vehicles are included in the plan rather than electric vehicles due to their high scores in terms of mitigation potential in the MPA. Having said that it is noted that the key focus nationally at present is on the latter (reinforced by the publication of the electric vehicle roadmap). Furthermore, it is recognised that the performance of hybrids over electric vehicles in the MPA is purely a function of assumptions made about penetration rates.

The ‘Electric vehicle roadmap’ has some considerations that inform the rollout for hybrids and is the document which is reviewed here.

Solar PV

Both centralised and decentralised PV are considered together, highlighting differences where relevant. Centralised PV refers to large-scale solar PV installations of the scale that have been installed under the REIPPPP. Decentralised PV refers to typically rooftop installations on residential, commercial and industrial buildings. These may or may not be grid connected.

For centralised PV: ‘The localisation potential of photovoltaics (PV) and a strategy to support large scale rollout in South Africa’ has been developed for the DTI by EScience Associates and UrbanEcon Development Economists is considered.

Wind power

Only onshore wind farms are considered, as this is where the greatest potential exists in South Africa.

‘The wind energy industry localisation roadmap in support of large-scale roll-out in South Africa’ prepared for the DTI by UrbanEcon Development Economists and EScience Associates is considered here.

Carbon capture and sequestration

No distinction is made between the different CCS technologies, given the early stage of technology development.

The Centre for Carbon Capture and Storage operated out of SANEDI has developed a CCS Roadmap for South Africa.

Nuclear

Pressurised water reactors (PWR).

It is understood that plans are in place although none were provided for review.

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For decentralised PV: ‘Development of a Customised Sector Programme for Small Scale Renewable Energy in South Africa’ was prepared for DTI by a consortium including Frost & Sullivan, Emergent Energy, 3E, Neil Townsend, and Chris Ahlfeldt is reviewed.

Technical background document – mitigation component of INDC

Technology group

Specific technologies considered

16

Existing government plans or analyses

Advanced biofuels

All biofuels (diesel and ethanol) are included.

Although there are strategies which have implications for first generation biofuels, there are none that focus on advanced biofuels.

Smart grids

Refers to a group of technologies that allow for digital communications to increase the efficiency of electricity transmission and distribution grids. Given the number of technologies that fall under this broad category, this item is considered at a very high level.

‘Smart grid 2030 vision’ developed by the South African Smart Grid Initiative (SASGI) policy workgroup is reviewed.

Energy storage technologies

Technology to be confirmed.

The technologies identified in Table 3 are for potential inclusion; the mitigation technology implementation plan nearing finalisation in a process led by the Department of Science and Technology. 5.5.3 Capacity building17 Addressing climate change in a meaningful way requires efforts from all countries. For example, some countries have to focus their efforts on cutting greenhouse gas emissions while others have to focus their efforts on adapting to climate change. With that said, not all countries have the capacity – the knowledge, the tools, the public support, the scientific expertise and the political know-how – to do so. It is for this reason, we argue, that capacity building is a crosscutting issue in nature, thus requiring a more coordinated approach with a view of strengthening both the ability and effectiveness of specific adaptation and mitigation actions aimed at implementing objectives of the Convention. South African considers capacity-building as an integral part of the 2015 agreement. It should be building on two frameworks, enshrined in decisions –2/cp.7 and 3/cp.7 and the establishment of the Durban Forum by decision 2/cp.17. The implementation of these frameworks can be enhanced by a permanent capacity building committee that would address: a)

measurement, reporting and verification of support received for capacity building against needs identified by Parties, such that capacity is not a barrier to implementation beyond 2020; and

b)

provision for the critical assessment of implementation of the effectiveness of capacity building interventions.

Developing and strengthening skills and knowledge, as well as providing opportunities for stakeholders and organisations to share experiences, and increase awareness to enable effective participation in climate change process cannot be neglected. South Africa has already contributed in terms of technical needs assessments, preparation and implementation of NAMAs and National Adaptation Plan (NAPs) and how much it needs to go further. A further capacity needs assessment is needed to evaluate the gap between the available capacity and capacity required to mitigate GHG emissions and adapt to climate change impacts. Such assessment would evaluate existing capacity gap between available capacity and capacity needed. The project should determine financial support required to build appropriate capacity in South Africa and such a financial gap should be covered by the developed countries either bilaterally or multilaterally.

17

This section is based on input from the Department of Environmental Affairs, which is gratefully acknowledged.

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6. Analysis of equitable access to sustainable development South Africa shares the objective of limiting temperature increase to well below 2°C above preindustrial levels with others. Whether the aggregate effect of INDCs communicated by Parties is adequate to limiting temperature increase to well below 2°C above pre-industrial levels can only be assessed collectively. We look forward to the synthesis report that the Secretariat will prepare by 1 November 2015 in this regard. South Africa has been mindful of the science, and particularly 2°C, in preparing its INDC. South Africa’s INDC states that ‘in the absence of a multi-laterally agreed equity reference framework, South African experts, applying Convention principles of responsibility, capability and access to equitable sustainable development, determined a carbon budget that is larger than the PPD trajectory range outlined in this INDC’. South Africa has used the evidence base in section 6.1 to evaluate whether its INDC is a fair effort relative to the goals stated above. Common indicators used in equity frameworks include cumulative historical emissions, GDP per capita, current emissions per capita, and level of development. In most cases cumulative historical emissions and current emissions are taken as a proxy for ‘responsibility’ in the UNFCCC (the inclusion of historical emissions varies), and GDP per capita (usually expressed in power purchasing parity) is taken as a proxy for ‘capability’. In addition some approaches, including the South African one described below, also uses a broader development indicator such as the UNDP’s Human Development Index. South Africa is an outlier in certain respects – the country has relatively high historical emissions (South Africa’s global share of historical emissions is roughly the same as its share of current emissions), relatively high currently emissions per capita for a middle-income developing country, and its development level reflected by the HDI is lower than comparable countries with a similar GDP per capita, which is also partly reflected in high levels of inequality in the country. The country’s large stock of high-carbon infrastructure, and these other factors, mean that equity frameworks which do not take a broader development context into account, and do not implicitly recognise the transition problem posed by existing infrastructure (for instance by using an emissions baseline approach), will tend to allocate a ‘share’ to South Africa which does not match short-term constraints to mitigation.

6.1 Analysis by South African experts South African experts followed an approach to allocating effort and deriving carbon budgets based on these principles, operationalised in a transparent model that applied quantitative proxies for principle-based criteria. The methodology was based on the Greenhouse Development Rights framework, which uses a baseline approach, and then also applied the HDI. The analysis (Winkler, Letete & Marquard 2013) assumed that 50:50 risk of exceeding 2°C would be acceptable, and that the remaining global carbon budget was 1440 GtCO2e for the first half of the 21st century (i.e. from 2000 to 2050), based on the best available assesments at the time (Meinshausen et al. 2009). The analysis by SA experts was undertaken at the same time as that by experts from other BASIC countries – Brazil, China and India. The results for South Africa included that the carbon budget for the period 2000–2049 was in a fairly narrow range: lowest (28 GtCO2e) when choosing a starting year of 1970 and excluding historical LULUCF; and highest (32 GtCO2e) when starting in 1850 and including LULUCF (Winkler et al. 2013). Note that the period in the analysis was 50 years, whereas the INDC is defined over 35 years (2016–2050). The carbon budget range on this basis is 20 to 22 Gt CO2-eq for the period 2016–2050. Hence SA considers the PPD trajectory, long-term goal and carbon budget ranges in its M-INDC to indicated a fair mitigation effort, given our national circumstances, and specifically our current development challenges. South Africa acknowledges that other principle-based criteria can be applied, and in this respect, we have examined the results from analytical approaches taken by other experts as well. The specific characteristics of South Africa which have a bearing on the outcome of the South African and other frameworks have been noted above.

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6.2 Analysis by experts from other BASIC countries The analysis by South African experts was undertaken at the same time as that by experts from other BASIC countries – Brazil, China and India. A joint paper was presented at a side-event to COP-17 in Durban (BASIC experts 2011). The key principle in both the Chinese and Indian cases is responsibility interpreted in terms of cumulative emissions per capita; for details see the papers by Chinese teams (CASS / DRC joint project team 2011) and Indian researchers (Jayaraman , Kanitkar & DSouza 2011). Table 4: Carbon budgets for South Africa based on the same future global carbon budget according to different allocation approaches, Gt CO2-eq for the period 2000–2049 Source: BASIC experts (2011); CASS / DRC joint project team (2011); Jayaraman et al. (2011) Carbon budget account proposal (CASS, DRC China)

The Indian approach (TISS)

Starting year 1850, (excluding historical LULUCF)

7

7

Starting year 1970, (Chinese approach excluding LULUCF, Indian approach with and without LULUCF)

8

11 (with), 8 (without)

The carbon budget approach of Chinese (CASS/DRC joint project team 2011) and Indian researchers (Jayaraman et al. 2011) allocates 7 Gt CO2-eq to South Africa for the period 2000– 2049, if a starting year of 1850 is assumed for historical responsibility. This increases in the Indian approach to 11 Gt, but this is approximately half of a national carbon budget derived as the area under the PPD curve. Note that the National Carbon Budget (NCB) is over a longer period – 50 years – than the 35 years from 2016–2050. The differences in NCBs, however, far outweigh this difference. If a later starting year is assumed, 1970, the CASS/DRC and TISS studies both derive a NCB of 8 Gt. In the TISS model, historical LULUCF emissions are included, the 11 Gt are derived. The difference between the South African and Chinese and Indian, approaches is due to: i) South Africa’s relatively high historical emissions; ii) the Indian and Chinese teams did not use a baseline approach; and iii) the lack of a broader indicator such as HDI.

6.3 Analysis of a range of metrics used in other international studies Many experts from other countries have applied indicators of equity, using many different models. A meta-analysis of different approaches shows some of the variation, in relation to South Africa’s PPD trajectory. The PRIMAP group at the Potsdam Institute for Climate Impact Research (PIK) and Climate Analytics have developed an Equity Analysis Tool for the assessment of equity principles and indicators. A short report has as its key finding: ‘For a global 2°C pathway, the resulting effort-sharing ranges suggest for South-Africa a 2016–2050 cumulative carbon budgets of around 7.6–13.7 GtCO2 – for a scenario with a 50% chance of staying below 2°C– and 6.7-13 GtCO2 – for a scenario of 66% chance of staying below 2°C – and emissions being on a downward trajectory by the early 2020s (emissions excl. LULUCF)’ (Rocha et al. 2015). The same assumption of a 50% probability was made by experts from South Africa and other BASIC countries for the analysis referred to in 6.2 above). It can also be seen that assuming a 66% rather than 50% probability of keeping temperatures below 2°C within the 21st century and excluding the approach by South African experts produces a relatively small shift in the range: With a higher probability of limiting temperature, the calculated national carbon budget is smaller by less than 1 Gt CO2-eq over the period (from 7.6 to 6.7 Gt at the lower end of the spectrum, and from 13.7 Gt to 13 Gt at the upper end). Further results and methodology are briefly explained in the following; readers wishing to understand more fully are referred to the short report and spreadsheet. Based on the selected low-carbon scenario, an emissions mitigation burden (Figure 1) is calculated as the difference

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between global business-as-usual emissions (RCP8.5) and an emissions trajectory that avoids the worst effects of global warming. Scenarios were designed with the goal of capturing the widest possible range of variability arising from: different methodologies (GDR, per capita convergence, South North Proposal, South African proposal,18 proposal based solely on historical responsibility, proposal based on historical responsibility and capability, proposal based on potential, historical responsibility and capability); different starting years for historical period (1950, 1970, 1990): different weighing schemes for the criteria (e.g. 50/50 responsibility and capability vs 75/25; different metrics for the criteria (e.g. capability measures in terms of HDI or GDP ppp and their different impacts for South Africa). Selected quantitative measures are weighted, normalized and added, to obtain an interim index. The index calculated is then used to split the mitigation burden across countries, in such way that the country’s index share of the sum of all indices will be proportional to its share of the mitigation burden. Countries with high indices will be attributed a high share of the mitigation burden and vice-versa. The most striking result is that the analysis of different effort-sharing approaches yields carbon budgets for South Africa that are significantly smaller than the PPD range. Only lower PPD is within the range calculated using the PRIMAP tool in 2020. In 2025 and 2030, none of the PPD values overlap with the calculated ranges. In the longer-term, that is a period of absolute decline of GHG emissions to 2050, the mid- and lower-range PPD values are within the range calculated by Climate Analytics using the PRIMARP tool; but upper PPD still exceeds what is required as a relative fair share by SA and to stay below 2°C. Another approach was used by the Climate Equity Reference Calculator, developed by the Stockholm Environment Institute and EcoEquity; for a similar global pathway, South Africa’s emissions budget to 2030 is significantly higher, but lower than in the South African analysis. Both approaches, as well as the PPD and South Africa’s INDC emissions goals contained in the INDC, are portrayed in Figure 10 below. Emissions are assumed to be around 520 Mt CO2-eq in 2015, and there is clearly a challenge in the short and medium term in adopting a more ambitious emissions pathway. 2025 and 2030 emissions ranges in the South African INDC

600

"Peak, Plateau and Decline" emissions trajectory range

400

300

Climate Action Tracker "equity range"

200

2050

2045

2035

2030

2020

2015

100

2025

Climate equity reference calculator (to 2030 only)

2040

Mt CO2-eq

500

Figure 10: Comparison of different equity approaches for South Africa 18

The PRIMAP model can include the analysis by SA experts, but since this is already presented in section 6.1 above, it is excluded here.

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6.4 Derivation of five-year carbon budgets Carbon budgets provide clarity on overall emission over a period of time. Clear information enables consideration of fair shares. The IPCC’s Working Group I reported significant analysis that has improved our understanding, from a physical science point of view, of the limited remaining global future carbon budget, if temperature increase is to be limited to 2°C or 1.5°C above pre-industrial levels (IPCC 2013). At the national level, carbon budgets provide temporal flexibility. Rather than specifying emissions for every single year, emissions can exceed in given year, as long as emissions are lower in another year, within an implementation or budget period. South African policy instruments, including DEROs and carbon tax, are considering five-year periods, starting with 2016–2020. For the INDC, five-year carbon budgets are derived as the sum of emissions under the PPD trajectory range. The range of carbon budgets is given by the upper and lower end of the PPD

trajectory. The time-periods are defined to end in 2025 and 2030, the two years under consideration in the ADP; therefore the periods are 2021–2025 and 2026–2030. For the latter, and upper PPD, the total carbon budget over five years is simply 614 Mt CO2-eq * 5 – 3 070 Mt CO2-eq; in this case trivially as in the ‘plateau’ phase, emissions are by definition the same each year. In the peaking phase, emissions still increase. It should be noted that these national carbon budgets have not been derived from the remaining future global carbon budget, but from national policy. Doing the sums in this manner, the national carbon budget range for the period 2021–2025 is 1.99–3.01 Gt CO2-eq and for 2026–2030 is in the range of 1.99 to 3.07 Gt CO2eq.

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Figure 11: Five-year carbon budgets consistent with upper PPD (upper panel) and lower PPD (lower panel), highlighting 2021–2025 and 2026–2030

Figure 11 shows successive five-year budgets, resulting from the methodology described above. The periods relevant to the INDC are highlighted in red (vertically striped) and orange (horizontally striped); the others included for illustrative purposes, in blue (solid).

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Appendix 1 Table 5: Specification of the Peak, Plateau and Decline trajectory (Mt CO2-eq) High

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

547

550

553

556

559

562

565

568

571

574

583

589

595

601

607

614

614

614

614

614

614

Mid

473

474

476

477

479

480

482

483

485

486

491

494

497

500

503

506

506

506

506

506

506

Low

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

398

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

High

614

614

614

614

614

602

589

577

564

552

540

527

515

502

490

478

465

453

440

428

Mid

506

506

506

506

506

494

481

469

456

444

432

419

407

394

382

370

357

345

332

320

Low

398

398

398

398

398

386

373

361

348

336

324

311

299

286

274

262

249

237

224

212

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Appendix 2 Table 6: Summary of mitigation actions modelled in LTMS, GHG emission reduction potentials and costs19,20 Source: (Winkler et al 2007)

21

and additional analysis based on LTMS results Annual Confiincremental dence average level: cost investment figures (billion US$) 2010-2020

Model description and parameters

GHG emission reduction, Mt CO2-eq, 2003-2050

Confidence level: GHG reduction potential

Mitigation cost (R / t CO2eq)22

Rank costs – lowest cost is no.1

Total Incremental investment required (billion US$) 2010-2050

An escalating CO2 tax is imposed on all energy-related CO2 emissions, including process emissions from Sasol plants.

12 287

High

42

20

115.77

1.76

High

Nuclear and Combines the extended renewables and nuclear scenarios renewable electricity, below. At 50% each, this is a zero-carbon electricity case extended

8 297

High

52

23

348.47

3.06

High

Electric vehicles with Electric vehicles are allowed to take up 10% of passenger nuclear, renewables kilometre demand between 2008 and 2015 increasing to 60% of demand in 2030 and remains at 60% to 2050

6 255

High

102

28

513.42

5.85

Low

Nuclear and renewables

Combines the individual nuclear and renewables cases. i.e. no electricity from fossil fuels by 2050

5 559

High

64

24

166.35

3.06

High

Industrial efficiency

Improved boiler efficiency, HVAC, refrigeration, water heating, lighting & air compressors, motors, compressed air management, building shell design optimising process control, energy management systems & introducing variable-speed drives

4 572

High

-34

8

27.30

-0.36

High

Renewables with learning, extended

Same as renewables extended (50%), but assuming that the unit costs of renewable energy technologies decline, as global installed capacity increases

3 990

High

3

13

46.99

0.76

High

Subsidy for renewables

-106 R/GJ, on electricity from power tower, trough, PV, wind, hydro, bagasse, LFG

3 887

Medium

125

30

228.48

3.99

High

Nuclear, extended

The bound on investment in new capacity for both PBMR and PWR were increased to 2050

3 467

High

20

17

43.69

0.47

High

Mitigation action

Escalating CO2 tax

19 20 21 22

N/A in the investment requirements columns means that the cost value is not available. Values in 2008 US$. Negative value of investment cost implies an investment saving compared to the baseline. Average of incremental costs of mitigation action vs. Base case, at 10% discount rate.

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Mitigation action

Model description and parameters

24

GHG emission reduction, Mt CO2-eq, 2003-2050

Confidence level: GHG reduction potential

Mitigation cost (R / t CO2eq)22

Rank costs – lowest cost is no.1

Total Incremental investment required (billion US$) 2010-2050

Annual Confiincremental dence average level: cost investment figures (billion US$) 2010-2020

Renewable electricity, extended

In an extended mitigation action, the bound on commissioning of new parabolic trough and solar power tower plant is increased to 2.5GW/year by 2050

3 285

High

92

27

260.54

2.10

High

Renewables with learning

Same as renewables (27%), but assuming that the unit costs of renewable energy technologies decline, as global installed capacity increases

2 757

High

-143

7

30.59

0.72

High

Renewable energy for electricity generation

15% of electricity dispatched from domestic renewable resources by 2020, and 27% by 2030, from local hydro, wind, solar thermal, landfill gas, PV, bagasse / pulp & paper.

2 010

High

52

22

51.66

1.25

High

Nuclear electricity

27% of electricity dispatched by 2030 is from nuclear, either PBMRs or conventional nuclear PWRs – model optimised for cost etc.

1 660

High

18

16

17.09

0.47

High

Synfuels CCS 23 Mt

Carbon capture and storage on coal-to-liquid plant, with maximum storage of 23 Mt CO2 per year, equivalent to concentrated emissions of existing plant

851

Medium

105

29

4.92

0.45

High

Improved vehicle efficiency

Improve energy efficiency of private cars and light commercial vehicles by 0.9%-1.2% per year (0.5% in base case).

758

High

-269

3

-17.89

-0.01

Medium

Biofuel subsidy

A subsidy of R1.06 per litre on biofuels applied as an incentive for biofuel take-up

573

Medium

697

35

-0.11

0.13

Low

Passenger modal shift

Passengers shift from private car to public transport and from domestic air to intercity rail/bus.–moving from 51.8% of passenger kms in 2003 to 75% by 2050

469

High

-1 131

2

-298.17

-0.62

Low

Land use: fire control 50% reduction in fire episodes in savannah from 2004 and savannah thickening

455

High

-15

10

N/A

N/A

N/A

Electric vehicles in GWC grid

Electric up to 60% of the private passenger car market, operating in an unchanged grid, i.e. largely coal-fired

450

High

607

34

344.65

2.92

Low

CCS on power stations, 20 Mt

A cap on CCS use is increased annually starting with 1 Mt in 2015, and reaching a peak of 20 Mt in 2024.

449

Medium

72

26

5.58

0.24

High

Waste management

Waste minimisation and composting

432

High

14

15

N/A

N/A

N/A

ENERGY RESEARCH CENTRE

Technical background document – mitigation component of INDC

25

Model description and parameters

GHG emission reduction, Mt CO2-eq, 2003-2050

Confidence level: GHG reduction potential

Mitigation cost (R / t CO2eq)22

Rank costs – lowest cost is no.1

Total Incremental investment required (billion US$) 2010-2050

Residential efficiency

Penetration of SWHs, passive solar design, efficient lighting, appliance labelling & STDs, geyser insulation, LPG for cooking, ‘Basa Njengo Magogo’ coal fire-lighting method

430

High

-198

6

-9.66

-0.28

High

Commercial efficiency

In new buildings: SWH, efficient water heating, efficient HVAC, efficient lighting, variable speed drives, efficient motors, efficient refrigeration, building energy management systems, and efficient building shell design. In existing buildings, retrofit equipment and energy management systems

381

High

-203

5

-4.95

-0.11

High

Hybrids

20% of private cars are hybrids by 2030 (ramped up from 0% in 2001 to 7% in 2015).

381

High

1 987

36

487.60

3.89

Low

Agriculture: enteric fermentation

Cattle herd reduced by 30% between 2006 and 2011; 45% of free-range herd transferred to feedlots from 2006; highprotein, high digestibility feed supplementation

313

High

50

21

N/A

N/A

N/A

SWH subsidy

The cost of SWHs in the residential sector was reduced. The cost after subsidy in 2001 is R534.7 mil /PJ/a, which reduces further to R336.77 mil /PJ/a in 2050

307

Medium

-208

4

-6.02

-0.20

High

CCS 2 Mt

A cap is placed on the amount of CO2 which can be stored annually by CCS to 2Mt.

306

High

67

25

7.71

0.39

High

Land use: afforestation

Rate of commercial afforestation will increase between 2008 to 2030 so that an additional 760 000 ha of commercial forests are planted by 2030

202

High

39

19

N/A

N/A

N/A

Cleaner coal for 27% of electricity dispatched by supercritical coal and /or electricity generation IGCC coal technologies by 2030; first plant could be commissioned by 2015.

167

High

-4.8

11

1.99

0

High

Biofuels

Biofuel blends increased to 8% ethanol with petrol and 2% biodiesel with diesel in 2013. Thereafter the percentage of ethanol in petrol is taken up to an assumed maximum of 20% and biodiesel to a maximum of 5% in 2030.

154

High

524

33

0.93

0.12

Low

Synfuels methane capture

Capture CH4 emissions from existing CTL plants from 2010

146

High

8

14

0.02

0

High

Agriculture: reduced tillage

Reduced tillage is adopted from 2007 on either 30% or 80% (more costly) of cropland

100

High

24

18

N/A

N/A

N/A

Mitigation action

ENERGY RESEARCH CENTRE

Annual Confiincremental dence average level: cost investment figures (billion US$) 2010-2020

Technical background document – mitigation component of INDC

Mitigation action

Model description and parameters

26

GHG emission reduction, Mt CO2-eq, 2003-2050

Confidence level: GHG reduction potential

Mitigation cost (R / t CO2eq)22

Rank costs – lowest cost is no.1

Total Incremental investment required (billion US$) 2010-2050

Annual Confiincremental dence average level: cost investment figures (billion US$) 2010-2020

Synfuels CCS 2 Mt

Carbon capture and storage on coal-to-liquid plant, with maximum storage of 23 Mt CO2 per year, equivalent to the largest planned storage at the time.

78

High

476

32

1.96

0.18

High

Coalmine methane reduction (50%)

Capture 25% or 50% (at higher cost) of methane emissions from coal mines, starting in 2020, and reaching goal by 2030

61

High

346

31

3.30

0.14

Medium

Agriculture: manure management

Percentage of feedlot manure from beef, poultry and pigs which is scraped and dried (does not undergo anaerobic decompositions) raised to 80% by 2010

47

High

-19

9

N/A

N/A

N/A

Aluminium: PFC 23 capture

Capture of PFCs from existing aluminium plant, starting in 2011, and reaching 100% by 2020

29

High

0.2

12

0

0

High

18

High

-4 404

1

-43.39

-0.25

Medium

Limit on less efficient SUVs limited to 2% of private passenger kms by 2030 vehicles

23

Investment for aluminium is only required once in 2006.

ENERGY RESEARCH CENTRE

Technical background document – mitigation component of INDC

27

Appendix 3 Table 7: Net annual costs of measures in MPA Source: (DEA 2014d; Joubert et al. 2014) Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

2050

Energy

Non-power

Other energy industries

Increase onsite gas-fired power generation - using internal combustion engines

-435.4

-293.2

-14.6

Energy

Non-power

Other energy industries

Waste heat recovery power generation

-423.3

-591.0

-591.0

Energy

Non-power

Other energy industries

Waste gas recovery and utilisation

61.2

27.9

-57.3

Energy

Non-power

Other energy industries

Ccs - process emissions from existing plants (storage onshore)

4387.8

4396.2

-101.5

-143.4

-168.3

-51.0

-55.5

-69.4

Energy

Non-power

Other energy industries

Energy monitoring and management system

Energy

Non-power

Other energy industries

Improved process control

Energy

Non-power

Other energy industries

Improved electric motor system controls and vsds

-330.9

-429.2

-429.2

-174.1

-174.1

-920.6

-920.6

13500.7

13527.4

Energy

Non-power

Other energy industries

Energy efficient utility systems

-134.4

Energy

Non-power

Other energy industries

Improved heat systems

-706.1

Energy

Non-power

Other energy industries

Ccs - process emissions from existing plants (storage offshore)

Energy

Non-power

Other energy industries

Ccs - process emissions from new plants

4532.3

13616.8

Energy

Non-power

Petroleum refining

Improve steam generating boiler efficiency

-27.7

-32.3

-43.3

Energy

Non-power

Petroleum refining

Improve process heater efficiency

-12.4

-14.5

-19.6

Energy

Non-power

Petroleum refining

Waste heat recovery and utilization

11.7

3.5

-25.7

Energy

Non-power

Petroleum refining

Minimise flaring and utilise flare gas as fuel

13.4

13.4

13.4

Energy

Non-power

Petroleum refining

Efficient energy production (ccgt and chp)

31.9

79.7

107.0

Energy

Non-power

Petroleum refining

Waste heat boiler and expander applied to flue gas from the fcc regenerator

15.0

11.4

2.7

Energy

Non-power

Petroleum refining

Ccs - existing refineries

1742.0

1860.2

Energy

Non-power

Petroleum refining

Energy monitoring and management system

-40.0

-44.4

-55.7

Energy

Non-power

Petroleum refining

Improved process control

-15.0

-19.4

-30.8

Energy

Non-power

Petroleum refining

Improved heat exchanger efficiencies

2.5

-2.3

-14.0

Improved electric motor system controls and vsds

5.4

8.5

9.5

Energy

Non-power

ENERGY RESEARCH CENTRE

Petroleum refining

Technical background document – mitigation component of INDC

28

Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

-3.9

2050

-4.3

-3.6

1384.1

2855.0

Energy

Non-power

Petroleum refining

Energy-efficient utility systems

Energy

Non-power

Petroleum refining

Ccs - new refineries

Energy

Non-power

Coal mining

Coal mine methane recovery and utilisation for power and/or heat generation

1.3

4.3

14.4

Energy

Non-power

Coal mining

Coal mine methane recovery and destruction by flaring

5.5

12.2

40.9

Energy

Non-power

Coal mining

Use of 1st generation biodiesel (b5) for transport and handling equipment

4.3

4.9

Energy

Non-power

Coal mining

Improve energy efficiency of mine haul and transport operations

39.0

14.6

-159.6

Energy

Non-power

Coal mining

Use of 2nd generation biodiesel (b50) for transport and handling equipment

11.6

27.4

53.9

Energy

Non-power

Coal mining

Use of 2nd generation biodiesel (b100) for transport and handling equipment

Energy

Non-power

Coal mining

Process, demand & energy management system

Energy

Non-power

Coal mining

Energy efficient lighting

Energy

Non-power

Coal mining

Install energy-efficient electric motor systems

Energy

Non-power

Coal mining

Optimise existing electric motor systems (controls and vsds)

Energy

Non-power

Coal mining

Onsite clean power generation

97.3 -44.4

-64.0

-107.8

-8.0

-11.5

-19.3

-113.5

-161.5

-272.0

-86.5

-124.5

-209.7

199.8

298.6

502.9

6698.4

16745.9

Energy

Power

Electricity and heating

Nuclear (pwr)

2511.9

Energy

Power

Electricity and heating

Gas ccgt

3147.1

6743.2

29395.1

Energy

Power

Electricity and heating

Onshore wind

4755.6

6638.9

15663.7

1304.5

1791.1

3343.3

12596.3

16411.9

42425.8

-521.3

-160.5

-847.1

Energy

Power

Electricity and heating

Solar csp (parabolic trough)

Energy

Power

Electricity and heating

Solar pv (concentrated)

Energy

Power

Electricity and heating

Import (hydro)

Energy

Power

Electricity and heating

Coal ccs

895.0

1621.8

17723.5

Energy

Power

Electricity and heating

Biomass

763.3

1134.8

4823.0

Energy

Power

Electricity and heating

Lfg

277.5

333.0

1094.2

Energy

Power

Electricity and heating

Energy from waste

3755.7

6259.4

7824.3

ENERGY RESEARCH CENTRE

Technical background document – mitigation component of INDC

29

Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

2050

Industry

Metals

Primary aluminium production

Best process selection for primary aluminium smelting

-307.4

-346.7

-708.0

Industry

Metals

Primary aluminium production

Switch to secondary production and increase recycling

-264.0

-601.1

-2517.8

Industry

Metals

Primary aluminium production

Energy monitoring & management system

-21.1

-24.2

-51.3

-98.7

-114.4

-249.1

1.3

7.6

44.3

14.8

20.3

58.8

-631.9

-968.0

-1989.8

-1274.0

-2037.0

-4670.5

-754.3

-1154.7

-1991.9

Industry

Metals

Primary aluminium production

Improved process control

Industry

Metals

Primary aluminium production

Improved electric motor system controls and variable speed drives

Industry

Metals

Primary aluminium production

Energy-efficient utility systems

Industry

Metals

Ferroalloys production

Implementing best available production techniques

Industry

Metals

Ferroalloys production

Replace submerged arc furnace semi-closed with closed type

Industry

Metals

Ferroalloys production

Waste gas recovery and power generation - co from closed furnace

Industry

Metals

Ferroalloys production

Waste heat recovery and power generation from semi-closed furnace - rankine cycle

632.4

772.4

2093.8

Industry

Metals

Ferroalloys production

Waste heat recovery and power generation from semi-closed furnace - organic rankine cycle

715.4

869.2

2333.6

Industry

Metals

Ferroalloys production

Use biocarbon reductants instead of coal/coke

Industry

Metals

Ferroalloys production

Energy monitoring and management system

Industry

Metals

Ferroalloys production

Improved electric motor system controls and variable speed drives

Industry

Metals

Ferroalloys production

Industry

Metals

Ferroalloys production

409.7

689.9

1769.3

-260.7

-307.2

-675.4

16.6

28.9

115.2

Energy-efficient utility systems

-27.7

-26.1

-20.8

Improved heat exchanger efficiencies

-97.1

-112.8

-238.5

-20.2

31.7

Industry

Metals

Iron and steel production

Bof waste heat and gas recovery

-85.7

Industry

Metals

Iron and steel production

Top gas pressure recovery turbine

-55.6

-46.3

-82.9

Industry

Metals

Iron and steel production

Electric arc furnaces (eaf) and secondary production route

-5.6

-15.2

-12.8

Industry

Metals

Iron and steel production

State-of-the-art power plant

1327.8

1933.5

4924.2

Industry

Metals

Iron and steel production

Top gas-recycling blast furnace (with ccs)

1288.8

2968.8

Industry

Metals

Iron and steel production

Ccs - blast furnace (post-combustion)

1748.7

3972.2

Industry

Metals

Iron and steel production

State-of-the-art power plant (with ccs)

4747.1

11616.7

ENERGY RESEARCH CENTRE

Technical background document – mitigation component of INDC

30

Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

2050

Industry

Metals

Iron and steel production

Dri - midrex

496.0

660.1

1621.0

Industry

Metals

Iron and steel production

Dri - hyl

425.6

564.9

1386.2

Industry

Metals

Iron and steel production

Dri - ulcored

242.3

646.1

1589.0

-13.0

-16.5

-38.6

45.4

55.2

144.4

-29.3

-19.7

38.5

47.6

58.8

147.6

Industry

Metals

Iron and steel production

Energy monitoring and management system

Industry

Metals

Iron and steel production

Improved process control

Industry

Metals

Iron and steel production

Improved electric motor system controls and variable speed drives

Industry

Metals

Iron and steel production

Energy efficient boiler systems and kilns

Industry

Metals

Iron and steel production

Energy-efficient utility systems

-19.5

-13.1

25.7

Industry

Metals

Iron and steel production

Improved heat exchanger efficiencies

-11.3

-14.6

-32.2

Industry

Minerals

Cement production

Improved process control

29.4

36.1

130.0

Industry

Minerals

Cement production

Reduction of clinker content of cement products

-162.3

-268.7

-586.5

Industry

Minerals

Cement production

Waste heat recovery from kilns and coolers/cogeneration

11.5

32.1

161.9

Industry

Minerals

Cement production

Utilise waste material as fuel

23.2

36.5

88.2

Industry

Minerals

Cement production

Geopolymer cement production

21.7

47.1

177.7

Industry

Minerals

Cement production

Ccs - back-end chemical absorption

4222.6

Industry

Minerals

Cement production

Ccs - oxyfuelling

1902.5

Industry

Minerals

Cement production

Energy monitoring and management system

-9.8

-10.2

-15.5

-16.2

-17.8

12.0

Industry

Minerals

Cement production

Improved electric motor system controls and variable speed drives

Industry

Minerals

Cement production

Energy-efficient utility systems

5.1

13.5

64.0

Industry

Minerals

Lime production

Installation of shaft preheaters

-41.9

-69.4

-145.8

Industry

Minerals

Lime production

Replace rotary kilns with vertical kilns or pfrk

76.1

126.4

650.4

Industry

Minerals

Lime production

Use alternative fuels including waste and biomass

41.0

101.8

Industry

Minerals

Lime production

Ccs for lime production

Industry

Minerals

Lime production

Energy monitoring and management system

-2.7

-3.3

-6.7

Industry

Minerals

Lime production

Improved process control

-1.6

-2.0

-3.3

ENERGY RESEARCH CENTRE

471.2 4309.2

Technical background document – mitigation component of INDC

31

Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

Industry

Minerals

Lime production

Improved electric motor system controls and vsds

-1.0

Industry

Minerals

Lime production

Energy-efficient utility systems

-0.3

Industry

Minerals

Lime production

Improved heat exchanger efficiencies

-2.3

2050

-0.6

1.9

0.0

2.8

-2.8

-5.9

64.3

552.9

-80.6

-93.6

58.0

4.3

5.4

13.5

-58.2

-88.3

-162.6

-9.2

-17.6

-44.1

-101.5

-140.5

-176.3

Industry

Chemicals production

Chemicals production

Ccs for new ammonia production plants process emissions

Industry

Chemicals production

Chemicals production

Revamp: increase capacity and energy efficiency

Industry

Chemicals production

Chemicals production

N2o abatement for new production plants

Industry

Chemicals production

Chemicals production

Energy monitoring and management system

Industry

Chemicals production

Chemicals production

Advanced process control

Industry

Chemicals production

Chemicals production

Improved electric motor system controls and vsds

Industry

Chemicals production

Chemicals production

Energy efficient utility systems

-10.2

-7.5

39.9

Industry

Chemicals production

Chemicals production

Increase process integration and improved heat systems

-30.3

-54.8

-137.5

Industry

Chemicals production

Chemicals production

Combined heat and power (chp)

160.5

382.8

1509.0

Industry

Mining

Surface and underground mining

Use of 1st generation biodiesel (b5) for transport and handling equipment

9.1

11.8

Industry

Mining

Surface and underground mining

Improve energy efficiency of mine haul and transport operations

112.8

16.0

-937.7

Industry

Mining

Surface and underground mining

Use of 2nd generation biodiesel (b50) for transport and handling equipment

32.1

84.7

234.3

Industry

Mining

Surface and underground mining

Use of 2nd generation biodiesel (b100) for transport and handling equipment

Industry

Mining

Surface and underground mining

Process, demand & energy management system

-919.3

-1453.3

-3325.9

Industry

Mining

Surface and underground mining

Energy efficient lighting

-165.0

-260.2

-595.4

ENERGY RESEARCH CENTRE

447.1

Technical background document – mitigation component of INDC

32

Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

2050

-3665.9

-8389.6

Industry

Mining

Surface and underground mining

Install energy-efficient electric motor systems

-2347.8

Industry

Mining

Surface and underground mining

Optimise existing electric motor systems (controls and vsds)

-1788.8

-2826.1

-6467.7

Industry

Mining

Surface and underground mining

Onsite clean power generation

4408.4

7221.7

16527.1

-370.8

-653.6

-2000.6

Industry

Other

Pulp and paper production

Convert fuel from coal to biomass/residual wood waste

Industry

Other

Pulp and paper production

Application of co-generation of heat and power (chp)

854.7

1509.0

4014.0

Industry

Other

Pulp and paper production

Energy recovery system

-79.4

-114.2

-355.6

Industry

Other

Pulp and paper production

Energy monitoring and management system

-20.3

-33.7

-83.0

Industry

Other

Pulp and paper production

Energy efficient electric motors, improved controls and variable speed drives

-24.3

-32.2

-46.2

Industry

Other

Pulp and paper production

Energy-efficient utility systems (e.g. Lighting, refrigeration, compressed air)

10.1

19.5

57.4

Industry

Other

Pulp and paper production

Improved process control

-0.1

-8.8

-66.0

Industry

Other

Pulp and paper production

Energy efficient boiler systems and kilns and improved heat systems

-49.7

-98.1

-318.4

Industry

Buildings

Residential

Energy efficient appliances

-1108.6

-1319.9

-2530.3

Industry

Buildings

Residential

Geyser blankets

-601.0

-849.8

-2249.9

Industry

Buildings

Residential

Improved insulation - new buildings

-245.7

-317.3

-1174.2

Industry

Buildings

Residential

Improved insulation - existing buildings

161.6

209.6

154.0

Industry

Buildings

Residential

Efficient lighting - fls

-7553.9

-8317.9

-10043.4

Industry

Buildings

Residential

Efficient lighting - leds

Industry

Buildings

Residential

Solar water heating

Industry

Buildings

Residential

Lpg for cooking

Industry

Buildings

Residential

Industry

Buildings

Commercial/institutional

Industry

Buildings

Commercial/institutional

Heat pumps - existing buildings

Industry

Buildings

Commercial/institutional

Heat pumps - new buildings

Industry

Buildings

Commercial/institutional

Hvac: with heat recovery - new buildings

Industry

Buildings

Commercial/institutional

Hvac: variable speed drives - existing buildings

ENERGY RESEARCH CENTRE

-361.8

-507.5

-1228.9

-1706.1

-2408.0

-6243.5

8.7

11.9

25.0

Passive building/improved thermal design - new buildings

-1718.2

-2279.4

-6051.2

Efficient lighting

-1394.9

-1876.3

-5467.8

-145.3

-174.4

-406.2

-195.6

-239.5

-579.5

-1768.6

-2567.4

-8690.6

-743.4

-994.8

-2899.0

Technical background document – mitigation component of INDC

33

Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

Industry

Buildings

Commercial/institutional

Hvac: variable speed drives - new buildings

-940.9

Industry

Buildings

Commercial/institutional

Hvac: central air conditioners - new buildings

-178.2

Industry

Buildings

Commercial/institutional

Energy efficient appliances

2030

2050

-1260.4

-3673.1

-235.2

-685.5

-290.1

-389.9

-1136.1

-4873.4

-7072.0

-23919.0

Industry

Buildings

Commercial/institutional

Passive building/improved thermal design - new buildings

Transport

Road

Road

Road - alternative fuels - cng

-83.4

-194.2

-2146.9

Transport

Road

Road

Road - alternative fuels - diesel phev

213.9

233.0

74.6

Transport

Road

Road

Road - improved efficiency - petrol ice

2593.0

2379.6

-8466.1

Transport

Road

Road

Road - alternative fuels - petrol hev

1810.5

1799.8

271.1

Transport

Road

Road

Road - improved efficiency - diesel ice

5751.0

5151.5

168.7

Transport

Road

Road

Road - alternative fuels - petrol phev

344.2

308.6

-751.0

Transport

Road

Road

Road - alternative fuels - fcev

2.4

9.7

83.1

Transport

Road

Road

Road - alternative fuels - diesel hev

1304.1

1547.1

3150.8

Transport

Road

Road

Road - alternative fuels - ev

27.5

110.1

-261.3

Transport

Road

Road

Road - shifting passengers from cars to public transport

3745.8

2250.2

-10600.6

Transport

Road

Road

Road - shifting freight from road to rail

3951.7

5689.9

4484.9

Transport

Road

Road

Road - biofuels

7467.4

9178.3

7049.2

Transport

Rail

Rail

Rail - improved efficiency - emus

52.1

208.5

484.9

Transport

Rail

Rail

Rail - improved efficiency - diesel

-10.8

-27.4

-214.1

Transport

Rail

Rail

Rail - alternative fuels - hybrid diesel

3.2

12.6

-13.7

Transport

Rail

Rail

Rail - alternative fuels - cng

0.0

0.0

-2.4

Transport

Rail

Rail

Rail - biofuels

77.1

98.2

355.8

Transport

Aviation

Aviation

Aviation - biofuels

345.1

360.6

-16.8

Waste

Municipal solid waste

Municipal solid waste

Lfg recovery and generation

551.4

772.5

1911.2

Waste

Municipal solid waste

Municipal solid waste

Lfg recovery and flaring

215.6

251.8

259.6

Waste

Municipal solid waste

Municipal solid waste

Paper recycling

773.3

1005.9

2024.9

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Total annualised net cost in year (R millions) Sector

Subsector

Sub-subsector

Intervention

2020

2030

2050

Waste

Municipal solid waste

Municipal solid waste

Energy from waste

180.6

Waste

Municipal solid waste

Municipal solid waste

Home composting

560.6

1090.3

2599.5

Waste

Municipal solid waste

Municipal solid waste

Windrow composting

107.6

100.8

200.4

Waste

Municipal solid waste

Municipal solid waste

In-vessel composting

332.5

520.4

1030.0

Waste

Municipal solid waste

Municipal solid waste

Anaerobic digestion

646.5

1081.8

2139.2

AFOLU

AFOLU

AFOLU

Expanding plantations

-867.4

-1897.8

0.0

AFOLU

AFOLU

AFOLU

Biochar addition to cropland

-39.5

-51.8

-207.8

AFOLU

AFOLU

AFOLU

Treatment of livestock waste

-48.4

-125.7

-125.7

AFOLU

AFOLU

AFOLU

Rural tree planting (thickets)

43.0

47.2

2.4

AFOLU

AFOLU

AFOLU

Urban tree planting

AFOLU

AFOLU

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AFOLU

Restoration of mesic grasslands

41.2

129.4

44.3

75.6

56.1

267.7

533.6

626.2

Technical background document – mitigation component of INDC

35

Appendix 4 South Africa is a middle-income developing country with an economy traditionally based on minerals extraction and processing. While mining and minerals processing comprise a small part of the overall economy, these sectors are at the heart of the economy’s historical development, and many other parts of the economy provide goods and services as inputs to these sectors. Minerals also play a dominant role in South Africa’s exports. As a result, South Africa’s economy is relatively energy-intensive, and electricity-intensive. The key source of primary energy in South Africa’s energy system is coal, with a minor role for crude oil. This means that energy production in South Africa is peculiarly emissions-intensive, both because of the overwhelming reliance of the electricity system on coal-fired power generation (over 90%), and also because of the production of 30% of the country’s liquid fuels from coal. In addition to this, coal is widely used in industry for combustion, a reductant and a chemical feedstock. Other fossil fuels such as natural gas play a minor role at present, as do nuclear and renewable energy sources. South Africa’s latest national emissions inventory highlights these challenges.24

Figure 12: South Africa's GHG emissions, 2000-2010 Source: Data from the GHG inventory (DEA 2014b)

As is clearly illustrated in Figure 12 and Figure 13, the source of South Africa’s emissions is primarily the energy sector (82% in 2010), and of those, 55% are from electricity generation. South Africa’s mitigation challenges therefore lie primarily in the energy sector, diversifying away from coal, and particularly in the electricity sector.

24

South Africa’s most recent national GHG inventory, covering the years 2000-2010, is available at https://www.environment.gov.za/sites/default/files/reports/2000_2010_nationalghginventoryreport.pdf

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Figure 13: South African energy emissions, 2000-2010 Source: Data from the GHG inventory (DEA 2014b)

At the same time, South Africa faces a number of urgent development challenges, including high unemployment levels, high levels of social and economic inequality, challenges in infrastructure provision and a lack of basic services including the provision of health, education and housing. Many of these challenges are an ongoing legacy of apartheid, abolished in 1994, but leaving a legacy of underinvestment in infrastructure, education, health and housing which is still confronting the country. The combination of these factors – an energy-intensive, emissions-intensive economy, combined with urgent development challenges, means that South Africa’s mitigation challenge needs to be addressed in a development context. Over the decade 2000-2010, South Africa’s GHG intensity has dropped significantly, as a combination of i) diversification of the economy towards service sectors, ii) improved energy efficiency incentivised by rising energy prices. More recent developments not captured in the figure below include the large-scale deployment of wind and solar power since 2010.

Figure 14: GHG intensity of the South African economy, 2000–2010 Source: Data from the GHG inventory (DEA 2014b)

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