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Regional Consultation Meeting for Africa Cairo, 2123 October 2007

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Title: Regional Consultation Meeting for Africa Cairo, 2123 October 2007


1
Regional Consultation Meeting for AfricaCairo,
21-23 October 2007
  • Case for Sustainable Low Carbon Options in
    Africa
  • Stephen Karekezi and John Kimani
  • AFREPREN/FWD

2
Presentation Outline
  • Brief overview
  • Rationale for low carbon options in Africa
  • Case examples of low carbon initiatives
  • Electricity generation
  • Transport
  • Potential opportunities for sustainable low
    carbon options

3
Overview
  • Global trends in CO2 emissions

4
Overview
5
World Sectoral Emission by Sector 2003
Sectoral Emission by Sector in Africa 2003
6
Overview
  • Why low emissions?
  • Limited industrialization
  • Low levels of modern energy access and consumption

7
Overview
  • Africa capturing limited financing for
    promoting low carbon development e.g GEF

8
Rationale for Low Carbon Options in Africa
  • Economic Benefits
  • Rising prices of hydrocarbons (petroleum coal)
  • Reduction in imported energy bill
  • Enhancing risk profiles
  • Opportunities for technological advancement
  • Enhancing power system stability
  • Opportunities for carbon financing/trading
  • Potential for employment potential

9
Estimated Job Creation Potential
10
Rationale for Low Carbon Options in Africa
  • Social Benefits
  • Enhancing modern energy access among the poor
    rural areas

11
Case Examples of Low Carbon Initiatives
  • Low carbon initiatives in electricity sector
  • Mauritius (Bagasse-based Cogeneration)
  • Standard feed-in tariff
  • Kenya (Geothermal)
  • Explicit target for share of renewables
  • Low carbon initiatives in transport sector
  • Malawi (Ethanol blending)
  • Public-Private Partnership
  • Kenya Zimbabwe (Ethanol blending past
    initiatives)
  • South Africa, Zambia, Mozambique, Nigeria, Ghana
    Mauritius (Ethanol bio-diesel planned
    initiatives)

12
  • Mauritius
  • Standard Feed-in Prices for Bagasse-based
    Cogeneration

?
13
Background
  • 40 years of consistent efforts by the local sugar
    industry
  • 1957 Sales of 0.28 GWh
  • 1982 Sales of 70 GWh
  • 2004 Sales of 725 GWh
  • Governments realization of cogeneration
    potential
  • Technical Committee established at Min. of
    Energy
  • Avoid need for each sugar factory to negotiate
    with utility
  • Address energy pricing and PPAs
  • Develop a price setting mechanism

14
Outcomes
  • All available electricity from cogeneration to be
    bought by utility
  • Price setting Based on avoided cost of 22 MW
    plant
  • Continuous power plants (bagasse only)
  • Firm power plants (bagassecoal)
  • Intermittent plants (bagasse)
  • Continuous power plants
  • Price USc 4 indexed on price of oil
  • PPA 15 years
  • Minimum sales 16 GWh
  • Firm power plants
  • Price USc 5.5 indexed on price of coal and
    exchange rates (US and )
  • PPA 18 years
  • Minimum sales 180 GWh

15
Trends in Cogen-based Electricity Generation
  • Successful in Mauritius (40 of power supply of
    which 25 bagasse)
  • Equitable sharing of revenue from cogeneration
    ensures even smallest low-income farmer gets a
    portion of revenue

16
Kenya Explicit Target for Share of Renewables
Case of Geothermal
?
17
Background
  • Kenyas geothermal power potential is estimated
    at over 3,000 MW.
  • Most of Kenya's Geothermal potential areas (20
    fields) occur within the Kenya Rift.
  • Current installed geothermal power KenGen 115 MW
    and IPPs 13 MW.
  • From above values, only a small fraction of the
    estimated resource has been harnessed.

18
Kenyas Planned Capacity Expansion
Kenyas Geothermal Potential
25 National energy policy target for geothermal
in 2020
19
Incentives for Geothermal Energy Development
  • Tax holiday on investment
  • 10 years for plants of at least 50 MW
  • 7 years for 30 49 MW
  • 5 years for 10 29 MW
  • 7 year tax holidays on dividend incomes for
    investment from domestic sources
  • Duty and tax exemptions on the procurement of
    plant, equipment and spare parts for generation
    and transmission
  • Outcome Growth of capacity from 45 MW to 128 MW
  • 13 MW exploited by ORMAT International an IPP

20
Malawi Public Private Partnership - Case of
Ethanol
?
21
Background
  • Ethanol production started in 1982
  • Dwangwa Sugar Mill, Ethanol Co. of Malawi (1982)
  • Nchalo Sugar Mill, Press Cane (2004)
  • Total production capacity of 30 million litres
    per year
  • Nearly 250 million litres produced since 1982
  • Malawi, only African country blending petrol
  • Utilizing only half of annual production

22
Benefits of Government Involvement
  • Creating a conducive private investment
    environment
  • Piggy-backing on existing investment (sugar
    mills)
  • Explicit targets for blending ratio i.e. 8020
  • 1982 Feb 2006 20 blending in leaded petrol
  • Feb 2006 to date 10 blending in unleaded
    petrol
  • Government involvement in research and
    development of flex-fuel
  • Government Endorsement of Ethanol-driven vehicles

23
Potential Opportunities for Sustainable Low
Carbon Options
  • Cogeneration
  • Geothermal
  • Small Hydro
  • Ethanol Blending
  • Wind Energy
  • Solar
  • Other renewables

24
Renewable Energy Potential
25
Cogeneration Potential for Replacing Oil
26
To sum up
  • Promotion of low carbon options requires policy
    regulatory measures focussing on
  • Favourable pricing for clean energy (Standard
    offer)
  • Removing barriers for new entrants (Standard
    PPAs)
  • Local participation in investments
  • Government involvement commitment
  • Explicit targets
  • Favourable taxation
  • Enforcement through policies regulation
  • Direct investment through Private-Public
    Partnerships

27
Thank You
  • AFREPREN/FWD
  • Tel 254 20 3866032/3871467
  • Fax 254 20 3861464
  • Email afrepren_at_africaonline.co.ke
  • Website http//www.afrepren.org
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