Financing Options To Enable RET Deployment By Langiwe Chandi

Transcription

1 Financing Options To Enable RET Deployment By Langiwe Chandi A Presentation at the Experts Meeting on RETS and Green Energy For Rural Development 9-11 February 2010 Geneva

2 Content Energy Profile Renewable Energy Availability and Opportunities Identified Challenges In Zambia Renewable Energy /Policy Framework Challenges in financing RETS Financing Options to Promote RETS Conclusion

3 Map of Southern Africa

4 About Zambia Draws its name from Zambezi River Land area :752,614 Sqm Population:10.3 million Urban Population:40% Local currency : Zambian Kwacha GNP Per Capita:$320 The major export copper Others include: cobalt, cotton and non traditional exports such as main import commodities include capital goods, chemical products, crude oil, fertilisers, petroleum products and raw materials Well endowed with natural resources such as land, water, wildlife, and energy resources. For example 40% of fresh water in SADC region is in Zambia However total poverty levels stand at 64% (80% in rural areas as at 2006

5 Energy Sources Energy Source Biomass Charcoal Firewood Agric residues Electricity Petroleum Coal Major Consumer and contribution to Total Energy Supply (TES) Households Over 70% (TES) Mines, Commerce and Industry ( only 27% of population has acess to energy) rural 3% 13% TES Transport Sector 12% TES Mines, Commerce and Industry 5% (TES) Resource Availability 50 million hectares of woodlands 66% of total land cover 1980 Installed Capacity Estm Potential 6000MW Only suspected oil reserves and companies have shown interest in prospecting 30 million tonnes proven reserves Over 100m estimated reserves

6 Energy Sources Renewable Energy Source Solar Opportunities Thermal Resource Availability 6-8 Sunshine hours a day Wind Electricity Mechanical - Water Pumping ( irrigation) Electricity Potential energy output: 5.5Kwh/m 2 per day Average 3m/s Other areas with 6m/s Micro Hydro Mini grids for electricity Reasonably extensive but requires elaboration Geothermal Electricity Generation 80 hot springs 1 project in Northern Province

7 Energy Sources Renewable Energy Source Biomass Combustion and Gasification Opportunities Electricity generation Resource Availability Agro, forest, sawmill wastes Biomethanation Electricity generation Animal, municipal and industrial waste Extraction and Processing for transport Household Energy Ethanol Biodiesel Improved charcoal production Efficient biomass stoves Sugar cane Sweet sorghum jatropha Woodlands

8 ZESCO GRID (66 330kV) To Sumbuwanga CHIENGI KAPUTA MPULUNGU 8 o ANGOLA CHAVUMA ZAMBEZI CHIKATA FALLS (3.5MW) WEST LUNGA KANSANSHI at West Lunga River (2.5MW) SOLWEZI LUMWANA KABOMPO Gorge (Mine) (34MW) MUFUMBWE KABOMPO MWINILUNGA KASEMPA D R CONGO LUANO MICHELO KITWE MAPOSA MPONGWE MANSA LUAPULA RIVER KANSUSWA SAMFYA MOMBUTUTA KAPIRI MPOSHI SERENJE PENSULO CHAMBESHI RIVER LUSIWASI (12MW) MSORO MPIKA MFUE LUNDAZI CHIPATA TANZANIA LUNZUA MBALA KUNDABWIKA (0.75MW) (101MW) KASHIKISHI MPOROKOSO NAKONDE NCHELENGE KABWELUME (62MW) Kawambwa KALUNGWISHI RIVER MBERESHI Town KAWAMBWA CHISHIMBA FALLS TEA MAMBILIMA KASAMA ISOKA Chambasitu MUSONDA FALLS LUWINGU (5MW) MUYOMBE CHINSALI BWANA MKUBWA Mkushi Mkushi Central Mkushi Farm Block LUSIWASI EXTENSION (40MW) CHAMA MALAWI 22 o East KALABO SHANGOMBO ZAMBEZI RIVER LUKULU KATIMA MULILO MONGU SENANGA NAMIBIA SESHEKE KATIMA MULILO KAOMA ITEZHI TEZHI (120MW) BOTSWANA KAFUE RIVER VICTORIA FALLS (108MW) BATOKA GORGE (800MW) KABWE MUMBWA ROMA LUSAKA WEST NAMPUNDWE LUNSEMFWA (18MW) MULUNGUSHI (20MW) Luangwa CHONGWE Bridge LEOPARDS HILL LUANGWA KAFUE WEST KAFUE TOWN KAFUE LOWER KAFUE GORGE (750MW) 900MW(1080MW) KARIBA NORTH CHIRUNDU MAZABUKA (600MW(750MW) KARIBA NORTH EXTENSION (600MW(750MW) KARIBA SOUTH MUZUMA LAKE KARIBA DEVILS GORGE (800MW) MAAMBA 18 o COV. ZIMBABWE PETAUKE AZELE EXISTING POWER\SUBSTATIONS AND POWER LINES 330kV 220kV 132kV 88kV 66kV HYDRO POWERSTATION SUBSTATION DIESEL STATION 33.5 o East MOZAMBIQUE PROPOSED POWER\SUBSTATIONS AND POWER LINES 330kV 220kV 132kV 88kV 66kV PROPOSED HYDROPOWERSTATION PROPOSED SUBSTATION PROPOSED DIESEL STATION

9 Identified Challenges in Zambia High Initial costs against high poverty levels and seasonal income Low levels of knowledge about RETS at different levels i.e. prospective financiers and end users Lack of end user acceptability Inadequate research on RETS to the Zambian Situation Lack of specialized training

10 Renewable Energy Policy Framework In Zambia Comes as part of National Energy Policy Ensure availability of data and information on market demand, resource assessment and applicability of RETS Strengthen Institutional Framework for R&D. Provide appropriate financial and fiscal instruments for stimulating the implementation of RETS Public awareness and capacity development Promote ehancement, development and deployment of RETS Promote renewable energy technologies for electricity generation

11 Key Institutions in Renewable Energy Ministry responsible for Energy ZESCO National Utility Rural Electrification Authority Research Instituions and Universities Ministries responsible for Agriculture, Health, Education and Science and Technology

12 Pre requisites Macro economic policy that encourages private sector participation. Information dissemination on the value of renewable energy in energy management, mitigating climate change and as an alternative energy supply especially where energy deficits exist. Regulations that encourage and reward the use of renewable energy such as using solar water heaters instead of electric geysers Attractive pricing mechanisms and feed in tariff policies

13 Government Initiatives Capacity Building project in collaboration with UNDP Development of 3 mini grids with UNIDO Solar energisation at clinics, schools and chief s palaces Rural Electrification by REA Wind Energy Pilot Programme Kapishya Geothermal Project

14 Financing Options for RETS in Rural Areas At international level the CDM avenue and similar initiatives can be used when presented as climate change projects. At national level: Ensuring that an equitable level of national resources is invested in renewable energy technologies - Using RETS to provide energy to government public institutions - Using the empowerment funds such as the Citizen s Economic Empowerment fund in Zambia to support RETS entrepreneurs..

15 Financing Options for RETS in Rural Areas Tax holidays and exemptions for entrepreneurs who invest in RETS in rural areas Public -Private Partnerships - ESCO model Zambia - Energy Kiosks run by co- operatives - Mini- grids run by co-operatives

16 Financing Options for RETS in Rural Areas Offer of guarantees to banks willing to lend to income generating RETS projects Provision of fiscal incentives and waivers on renewable energy equipment. Encouraging hire purchase and lay-bye schemes for purchase of RETS

17 Conclusion The main to consider for government are: Pricing mechanism e.g. feed in tariff policy Sensitization of prospective financiers so that they are willing to lend RETs businesses Offering well targeted subsidies Presenting RETS projects as climate change, energy management and alternative energy sources also offers financing opportunities such as CDM Encouraging private sector participation and private public partnerships.

18 THANK YOU FOR YOUR ATTENTION