1. SA GHG Emission Reduction System: Progress and development of 2nd Phase of the DEROs and Carbon Budgets
PCEA 28 OCTOBER 2016

2. WHAT IS THE SA GHG EMISSION REDUCTION SYSTEM?
An organized structure that consists of interrelated and interdependent elements that are critical for the country’s greenhouse gas emission reduction
These elements directly and indirectly influence one another to maintain the existence of the system, and will include a range of measures as contemplated in the National Climate Change Response White Paper (NCCRWP), aimed at achieving the overall national goal

3. PURPOSE AND BACKGROUND
To provide an update on the development and implementation of South Africa’s Climate Change Mitigation System
In 2015, Cabinet approved South Africa’s climate change mitigation system framework. The system includes the following key elements:
Greenhouse gas inventory;
Mitigation Potential Analysis;
National Emissions Trajectory;
A carbon budget for each company;
Pollution prevention plans by companies with carbon budgets;
Desired emissions reduction outcomes for key economic sectors
A reporting system, to gather information on the actual emissions of users;
A variety of other measures to be applied to support and/or complement the carbon budget system including a carbon tax

4. PURPOSE AND BACKGROUND (2)
The system was introduced in phases.
Phase one ( ) will be voluntary as there is no legal basis to set emission limits for sectors or companies.
2nd and subsequent phases (post-2020 period) will only become mandatory when climate change response legislation is in place
Objective of the mitigation system is to ensure that SA’s emissions remain within the peak, plateau and decline trajectory range, set out in South Africa’s Intended Nationally Determined Contribution.

5. FRAMEWORK WAS APPROVED BY CABINET IN 2015
Phase 1
2016 to 2020
AQA Provisions

6. PHASE 2 IRP (2016/17) Mitigation Potential Analysis (2017/18)
Set carbon budget
(2018)
Call for pollution prevention plans (2018/19)
Annual reporting
(2021 – 25)
Assess compliance (end of the cycle – 2026)

7. Set the desired emission reduction outcomes (DEROs) for key sectors

8. PROGRESS WITH PHASE 1: GHG MITIGATION SYSTEM
Phase 1 carbon budget design document consulted with business.
Companies identified were requested to submit GHG data – (historical and projections)
A total of 18 companies finalised so far
Phase 1 - carbon budgets support the current operations of companies; Key outcome is to establish a workable system and to signal to companies that they must plan and implement the necessary investment to reduce their carbon footprint.

9. Alignment of carbon budget and carbon tax
Additional 5% allowance to companies participating in phase 1 ( ) of the carbon budget system
The additional 5% allowance will raise the overall maximum tax-free thresholds to 95% of GHG emissions for some companies.

10. GHG Reporting Regulations
To inform policy formulation, implementation and legislation;
meet reporting obligations under the UNFCCC
to establish and maintain a National Greenhouse Gas Inventory
Pollution Prevention Plan Regulations
Regulations prescribing requirements for Pollution Prevention Plans (PPP) ito section 29(3), and s53(a) and (o) of Air Quality Act
Guideline on preparing PPPs currently being drafted

11. OTHER ELEMENTS OF THE GHG MITIGATION SYSTEM
Desired Emission Reduction Outcomes
Obective is to set GHG reduction targets for key sectors (energy, transport, industry etc)
DEA has completed “Desired Emission Reduction Outcomes” for the short term (2020).
The approach to DEROs was informed by the cost-effective interventions identified in South Africa’s Greenhouse Gas Mitigation Potential Analysis
All interventions with a cost of zero Rands or less per ton are used as a basis for sectoral DEROs.

12. OTHER ELEMENTS OF THE GHG MITIGATION SYSTEM cont…
Mix of Measures
The mapping of government measures to assist in emission reductions has been completed
The aim of this work was to identify measures government has put in place to support climate change mitigation in South Africa

13. SCOPE OF WORK OF THE MITIGATION SYSTEM PHASE 2

14. EMISSION REDUCTION SYSTEM FOR THE SECOND AND SUBSEQUENT PHASES
Key issue: phase 2 of GHG mitigation system requires a legal basis.
Key elements below: (presented in cycles:
Step 1: GHG Inventory
Step 2: Mitigation Potential Analysis
Step 3: Policies and Measures
Step 4: National emissions trajectory
Step 5: Desired Emission Reduction Outcomes
Step 6: Carbon Budgets
Step 7: Mitigation Plans
Step 8: Monitoring and Evaluation

15. International commitments
2021
GHG Inventory
Policies and Measures 2
STEP 10
Compliance Review of DEROs,
Carbon budgets
2022
Mitigation Potential Analysis 3
DEROs 3
Carbon Budgets 3
Global stocktaking
2023
2024
Review of LEDs
2025
Policies and Measures 3
INDC
Submission 2
Web-based M&E System 2
2027
2030
Submission 3
Web-based M&E System Update 3
2028
DEROs 4
National Emissions Trajectory 4
Mitigation Potential Analysis 4
Carbon Budgets 4
2029
Policies and Measures 4
Mitigation Plans 4
National Com
BUR
BUR
STEP 3
Policies and Measures
Assessment 1
GHG Inventory
STEP 6
Carbon Budgets
STEP 5
DEROs 2
STEP 4
National Emissions Trajectory
STEP 2
Mitigation Potential Analysis 2
STEP 1
2000 – 2012
GHG Inventory Management System
STEP 8
GHG Emissions Reporting System (via NAEIS)
STEP 7
Mitigation Plans 2
STEP 9
Web-Based M&E 1
National Emissions Trajectory 3
2016
2017
2018
2019
2020
2026
Compliance Review of DEROs,
Carbon budgets
Mitigation Plans 3
BUR
National Com
BUR
International commitments
2009 Pledge Assessment
LEDs
National Com
BUR
GHG Inventory
GHG Inventory
BUR
Mitigation System Elements

16. Renewable Energy Developments
South Africa has significant solar and wind resources
Renewable energy technology costs have dropped dramatically and this presents an opportunity for the scale up of solar and wind technologies
RE implementation - REIPPPP since 2011:
8.1 GW of RE allocated for procurement in all bid windows
Approx 2.5GW operational
2014: PV and wind production -1% of electricity supply
2015: PV and wind production – 2% of electricity supply (Avoided 3.3 Mt CO2e and saved 3.2 Ml of water)
First half of 2016: PV and wind – 2.2% electricity supply

17. Summary of the REIPPP programme in terms of Ministerial Determinations (as of 31 March 2016)
Bid window
Capacity
Bid window 1 MW
Bid window 2 MW
Bid window 3 MW
Bid window 3.5
200 MW CSP
Bid window 4 and 4 additional
2 205 MW

18. Summary of the REIPPP programme in terms of Ministerial Determinations (as of 31 March 2016) cont…
Bid window
Capacity
Bid window Expedited
1 800 MW
Bid window 5
1 566 MW
Small renewables First Stage Two
49 MW
Small renewables Second Stage Two
51 MW
Small Renewables Bid Window 3
100 MW

19. CSIR Analysis of REIPPPP tariffs
All tariffs
in R/kWh
Base Month/Year
REIPPPP
BW 1
BW 2
BW 3
BW 4
BW 4 additional
Coal IPP BW1
BW 4 expedited
Bid submission
4 Nov 2011
5 March 2012
19 Aug 2013
18 Aug 2014
2 Nov 2015
11 Nov 2015
Solar PV
632 MW
417 MW
435 MW
415MW
398 MW
520 MW
April 2014
3.29
1.96
1.05
0.79
0.85
0.56
April 2015
3.44
2.05
1.10
0.82
0.89
0.58
April 2016
3.65
2.18
1.17
0.87
0.95
0.62
Wind
634 MW
563 MW
787 MW
676 MW
686 MW
650 MW
1.36
1.07
0.78
0.72
1.42
1.12
0.65
0.75
1.51
1.19
0.69
0.80
Coal
863 MW
0.93
0.97
1.03

20. Emission reduction from the REIPPPP
Energy produced and supplied to the grid GWh
Emission reduction realised from the programme Mton CO2 equivalent