Tag Archives: Funding

Energy Efficiency in South Africa – Ineffective Strategy and Unpredictable Successes and Failures

Mark Borchers from SEA writes on the difficulties faced in and with energy efficiency programs and policies in South Africa. South Africa has had an official, approved energy efficiency strategy since 2004. Therein were sensible targets such as 15% industrial energy efficiency improvement by 2014 and 10% residential efficiency by 2014, with an overall efficiency target of 12% by 2014.  And our work in the area supported this potential for saving.  At the time we were hopeful that this would be the start of a more energy efficient, lower carbon trajectory for the country with corresponding economic benefits which are always mentioned in association with energy efficiency.  These were fairly naïve days for us however, as we believed that there was a necessary link between an official government strategy and something actually changing on the ground.  In 2008 the strategy was reviewed and updated partly because it was clear that the earlier strategy had been largely ineffectual. The revised strategy was done with due diligence and stakeholder participation, like the earlier one, and listed similar or higher targets as being reasonable and achievable.    My opinion is that, in spite of a reasonably sound efficiency programme run by the national utility Eskom,  the new strategy was headed along the same ineffectual trajectory as the earlier one… until South Africa hit a power crisis – but I’ll come back to that.

Here I feel it is worth emphasizing an often observed but still not widely internalized fact: that an official strategy is a useful and necessary step, but it is one small factor in creating an enabling environment in which a transition can take place.  How many officials, researchers, consultants and international development organisations are willing to rest on their laurels once the strategy is in place with the belief that the ship has now left the harbor and will arrive at its destination in due course?  The truth is that the strategy is the easy part – its just identifying that the ship should undertake a journey and the approximate route of that journey.  The crew, the skills, the supplies, the money, and the equipment have not been given much thought at this point typically.  Even if the strategy identifies where the money should come from (for example) that is a far cry from actually sourcing the money.   If the strategy development is undertaken in a participatory manner with proper background analysis, it has clear value in capacity building and alignment of stakeholders as well as plotting an appropriate journey, so it is certainly a prerequisite to progress, but my point is that it can very easily lead nowhere after this point unless we are aware that it is just one milestone on a journey of many miles, and should never be regarded as an endpoint of our work.  It is appropriate to pause and look upon the still-warm strategy document with pride, even to hold an official launch, but then to roll up your sleeves and start on the journey of embedding the strategy in the world.

…back to South Africa: Then along came South Africa’s power crisis and steep power price increases.  This caused a flurry of activity, including energy efficiency initiatives in all sectors of the economy, most of which had little or nothing to do with the official energy efficiency strategy!  National Treasury also put aside money for local government efficiency and allocated it to municipalities with binding reporting requirements and timeframes.  The main drivers for efficiency in the country have therefore been power failures, price increases and direct allocation of Treasury funds within a mandatory framework, not the existence of an Energy Efficiency Strategy. There are lessons here for policy development work, capacity building activities, knowledge exchange research and implementation support activities: constraints to transition are mostly not to do with the existence of appropriate policies and strategies, which are often sound and well founded, but rather the detailed and complicated dynamics of the space between policy and implementation, which is generally messy, under-capacitated, and full of conflicting interests and misalignment of priorities.  This fact is a central tenet around which the design of the SAMSET project was formulated.

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Cape Town Electricity Department Meeting – 11th November 2014

Xavier Lemaire and Daniel Kerr from UCL, and Yachika Reddy from SEA, recently met with Maurisha Hammer and Zwelethu Zulu, representatives from the Cape Town Municipal Electricity Department’s Electrification Division, to discuss the city’s approach to the electrification of informal settlements, and the challenges facing informal settlement electrification across South Africa.

The Cape Town approach to informal settlement electrification is pioneering compared to the approaches of other countries and metropolitan areas. Informal settlement electrification is under a separate project management procedure to that of formal settlement electrification in the municipality. Formal settlements are project managed by developers, housing associations and “Section 21” companies, which are non-profit housing project developers. Informal settlement electrification is directly project-managed by the Electrification Department, and projects are selected in-situ, i.e. any existing informal settlement has the potential to be electrified under the Council approved Residential Electricity Reticulation policy that requires that  it is a stable settlement (i.e. not transient) and has not been identified for upgrading or relocation . To be considered for electrification, an informal settlement may not be situated

  • in a road or rail reserve or in a servitude, unless otherwise permitted by land owner;
  • in an area below the 1:50 year flood return period contour;
  • in a storm water detention pond; or
  • on unstable land.

This approach is in contrast to other countries’ and cities’ experiences with informal settlement electrification. For example, while cases exist for “slum” electrification in India (notably Chennai and Mumbai) and Thailand (Bangkok), these are processes dependant on the formalisation of property rights for informal dwellers. Part of the rationale behind the Cape Town approach is to do with the constitutional mandate for municipalities in South Africa to provide basic municipal services (electricity, water, sanitation, and refuse management) to all inhabitants of the municipality. Whilst funding constraints prevent the fulfilment of this mandate in many municipalities, Cape Town seems to be succeeding in doing so through this program.

Another major contributor to the success of the program is the community engagement aspect of informal settlement operations. Repeated meetings with community leaders, and notably members of the community themselves, throughout the duration of an electrification project, significantly contribute to investment and participation of the community in the project, nurturing trust in the services and engendering community spirit, cutting down on electricity theft and grid overloading. The opportunity is also used to get cooperation from the community to open up access ways in densely populated areas, not only to facilitate the installation of an electricity reticulation network but also to be maintained as access ways for health emergency services as well as the provision of other basic services such as water and sanitation where possible

The electrification of informal dwellings in the backyards of formal housing developments is a recent initiative. Two pilot projects have been successfully completed in what many regard as a first-of-its-kind program. The main challenge with these projects is the reinforcement of the existing reticulation network serving these properties. In most cases the additional load posed by backyard dwellings makes it necessary to replace the backbone infrastructure. At this stage the programme is restricted to backyard dwellings on properties owned by the City (rental housing) due to legal restrictions around enhancing private properties with public funds.

South African municipalities generate significant income from electricity distribution, and are responsible under their mandate to electrify urban areas, with rural areas under the jurisdiction of ESKOM, the national utility. Given the low rates of return for informal settlement electrification, for less affluent South African municipalities, replicating the Cape Town experience may prove challenging. While the electrification of informal settlements and backyard dwellings may not make financial sense if viewed with too narrow a perspective, the City emphasises wider benefits such as better living conditions, economic stimulation, health and safety, job creation and education opportunities. In view of the challenges faced with the delivery of free formal housing due to growing demand faced with urbanisation and historic spatial planning legacies amongst others in formal housing, informal housing has an important interim role to play and will not disappear overnight. It is with this knowledge that the City Of Cape Town decided more than a decade ago to provide electricity to those living in informal settlements.

In all, the Cape Town experience in informal electrification has useful implications for the SAMSET project. The management of informal electrification projects by the municipality has served to mitigate a number of risks inherent in informal settlement electrification, and this experience -under a number of conditions – could be cross-applied to great effect in other metropolitan areas in developing countries globally, particularly in the Sub-Saharan African context.