Integrated Analysis Energy Baseline Report

Integrated Analysis
Energy Baseline Report

Submitted by
The Sustainability Institute, Lynedoch, South Africa

E-Systems, Holland
under UNF-funded project,
“Integrated Resources Management for Urban Development”
(UNDP Project No. 00038512)
Trustees: EG Annecke, ADH Enthoven, EA Pieterse, G Goven, L Boya, R Shabodien

Trust Reg. No.: IT3011/99. Vat Reg. No: 4110198795
P O Box 162, Lynedoch, 7603. Tel: 021 881 3196. Fax: 021 881 3294
R310, Lynedoch, Stellenbosch, South Africa
NPO reg no: 051-245-NPO
Acknowledgements
Andrew Janisch from Sustainable Energy Africa for report compilation
Barry Coetzee from the City of Cape Town for information on policy and other legislative issues
Brian Jones from the City of Cape Town for information and workshop inputs
Shirene Rosenberg from the City of Cape Town for information, and report review
Wouter Roggen from the City of Cape Town for information, and report review
Craig Haskins from the City of Cape Town for information, and report review
Integrated Analysis Energy Baseline Report: SI UNDP Cape Town Project v: Final Draft 18-Jul-07, p. i
EXECUTIVE SUMMARY
This report has five areas of focus.
1. A listing of all the existing legislation, regulatory and institutional bodies, policies, strategies
and studies relating to energy and future energy planning.
The South African energy market is highly regulated. There are several Acts dealing with energy
issues, which are accompanied by relevant government bodies to uphold them. The three major
energy sources in South Africa – electricity, petrol and diesel - are regulated, along with paraffin which
is regulated and VAT free as a poverty alleviation measure. Nuclear energy and fuel and gas pipelines
are also regulated.
Both the City of Cape Town and the Western Cape provincial government have strategies in place to
move the city and province onto a more sustainable path. Some studies have been made to determine
the future of energy use in Cape Town and the Western Cape, and scenarios showing the benefits of
energy efficiency and renewable energy interventions have been developed.
Athough there are no tax incentives for energy efficiency and renewable energy, energy incentive
options such as subsidy schemes from Eskom and the Department of Minerals and Energy, and
carbon credits are available.
2. A baseline energy analysis of Cape Town, determining as accurately as possible the current
status quo of energy consumption in the City, and associated greenhouse gas emissions.
The results of this study showed that electricity (29%), petrol (28%) and diesel (18%) are Cape Town‟s
chief energy sources, with all remaining sources – paraffin (3%), jet fuel (9%), LPG (2%), HFO (3%),
coal (7%) and wood (1%) making up the last 25%. Due to the inefficiency of coal power stations,
electricity produces 59% of all the CO2 generated from Cape Towns energy use. The analysis also
looked at current user needs per sector, and determined their consumption figures in as
disaggregated a form as possible.
3. Determining what current power generation (fossil, nuclear and renewable) and energy
efficiency technologies are available, and what their potential impact could be on Cape Town in
the future.
The Western Cape has the potential to produce nearly 7500MW of renewable energy, the majority
being wind, solar thermal, pumped storage and ocean generated. Energy efficiency measures such as
Integrated Analysis Energy Baseline Report: SI UNDP Cape Town Project v: Final Draft 18-Jul-07, p. ii ii
solar water heaters, efficient lighting, ceilings in low income houses and efficient use of HVAC can
create a cumulative saving of nearly 15 TWh in the next 20 years if targets set by the City of Cape
Town are met. A 10% modal shift in transport in the city from private to public modes by 2020 will
create a cumulative energy saving of 150 million GJ.
4. Establishing the financial picture behind the flow of energy in and out of Cape Town.
Getting detailed financial information out of Eskom and the local Caltex refinery was not possible.
They are not obliged for competitive reasons to disclose any details of their operations to the general
public. Only financial data coming from the regulation of petrol, diesel and paraffin could be
determined. Generalised information from Eskom‟s and SAPIA‟s annual reports assisted in getting a
clearer picture of overall profit margins. The City of Cape Town‟s electricity department provided all
the information requested, and a thorough breakdown of their operation was achieved.
5. Determining the challenges, constraints and future plans for energy development in the
Western Cape.
What is apparent from all the operations studied is that energy is big business, and a huge creator of
wealth and employment in Cape Town. Indications are that demand for all the major energy sources
is set to increase in the future, so the industry is unlikely to change its current unsustainable path of
using fossil fuels and enriched uranium for energy in the immediate future.
There is however a real opportunity for renewable energy to be developed in the Western Cape in the
next few years, and these opportunities should be supported in every way possible by government at
all levels. The greatest challenge for renewable energy is to develop on site energy storage solutions,
to make renewable energy compete with base load systems like coal and nuclear. The other challenge
is to make the cost of producing renewable energy comparable to those of traditional energy sources.
With increased expenses for new power stations which have to be built, Eskom is expected to raise
their tariffs steeply in the future, opening the door for a more competitive renewable energy market.
Integrated Analysis Energy Baseline Report: SI UNDP Cape Town Project v: Final Draft 18-Jul-07, p. iii iii
Table of Contents
EXECUTIVE SUMMARY .......................................................................................................... II
1. INTRODUCTION .................................................................................................................. 5
2. POLICY AND KNOWLEDGE CONTEXT ............................................................................. 5
2.1 Relevant Documents, Studies, Legislation, Information ..................................................................................... 5

2.1.1 National Policy and Legislative Context ...................................................................................................................... 5
2.1.2 Provincial Government ................................................................................................................................................ 8
2.1.3 Local Government ....................................................................................................................................................... 8
2.2 Summary of Cape Town’s Energy System .............................................................................................................. 8

2.2.1 REDs .......................................................................................................................................................................... 10
2.2.2 The Western Cape Energy Crisis ............................................................................................................................... 10
2.2.3 The Unsustainability of Cape Town’s Energy System............................................................................................... 12
2.3 Relevant Policy and Planning Frameworks ........................................................................................................... 14

2.3.1 Planning projections ................................................................................................................................................... 15
2.3.2 Renewable Energy Incentives .................................................................................................................................... 15
3. REGULATORY AND INSTITUTIONAL ENVIRONMENT .................................................. 16
3.1 Overview ......................................................................................................................................................................... 16
3.2 Key Institutions Governing Energy Regulation, Infrastructure Development and Distribution .............. 16
4. CAPE TOWN’S ENERGY SUPPLY AND DEMAND .......................................................... 19
4.1 Sources of Energy Supply in Cape Town .............................................................................................................. 19

4.1.1 Electricity ................................................................................................................................................................... 19
4.1.2 Liquid Fuels ............................................................................................................................................................... 22
4.1.3 Coal ............................................................................................................................................................................ 23
4.1.4 Wood .......................................................................................................................................................................... 23
4.2 Energy Demand ............................................................................................................................................................ 23

4.2.1 Residential.................................................................................................................................................................. 24
Source: CCT Electricity Dept, SAPIA, CTSOER 2003 ....................................................................................................... 24
4.2.2 Transport .................................................................................................................................................................... 24
4.2.3 Commerce and Industry ............................................................................................................................................. 25
4.2.4 Public Sector .............................................................................................................................................................. 25
4.3 Supply distribution ...................................................................................................................................................... 26

4.3.1 Electricity ................................................................................................................................................................... 26
4.3.2 Petrol and Diesel ........................................................................................................................................................ 27
4.3.3 Paraffin....................................................................................................................................................................... 28
4.3.4 Liquified Petroleum Gas (LPG) ................................................................................................................................. 28
4.3.5 Jet Fuel ....................................................................................................................................................................... 28
4.3.6 Coal ............................................................................................................................................................................ 28
4.3.7 Wood .......................................................................................................................................................................... 29
Integrated Analysis Energy Baseline Report: SI UNDP Cape Town Project v: Final Draft 18-Jul-07, p. 2 2
4.4 Nuclear Energy ............................................................................................................................................................. 29
4.4.1 PBMR ........................................................................................................................................................................ 29
4.4.2 PWR ........................................................................................................................................................................... 29
4.4.3 Koeberg’s Nuclear Waste Disposal Plan ................................................................................................................... 30
4.5 Users and Needs .......................................................................................................................................................... 31

4.5.1 Cape Town Summary................................................................................................................................................. 31
4.5.2 City of Cape Town Supply Area: ............................................................................................................................... 31
4.5.3 ESKOM Supply Area for CCT .................................................................................................................................. 33
4.6 Average household consumption ............................................................................................................................ 34
4.7 Average Non Residential Consumption ................................................................................................................. 36
4.8 Seasonal and daily load profiles .............................................................................................................................. 37
4.9 GHG Emissions in CT ................................................................................................................................................. 41
4.10 Demand Side Management ...................................................................................................................................... 42
5. TECHNOLOGICAL INTERVENTIONS............................................................................... 43
5.1 Existing supply and generation technologies ...................................................................................................... 43
5.2 Current research on alternatives in W Cape and Energy Saving Potential .................................................. 43
5.3 Actual savings from EE interventions - key technologies ................................................................................ 44

5.3.1Solar water heaters (SWH) ......................................................................................................................................... 45
5.3.2 Efficient Lighting ....................................................................................................................................................... 45
5.3.3 Ceilings on Houses .................................................................................................................................................... 46
5.3.4Efficient HVAC .......................................................................................................................................................... 46
5.3.5 Transport Modal Shift ................................................................................................................................................ 47
5.3.6 Total Savings ............................................................................................................................................................. 47
Source: SEA:2007 ............................................................................................................................................................... 48
5.4 Feed in tariffs ................................................................................................................................................................ 48
5.5 Overview of environmental impacts of current technologies .......................................................................... 49
6. FINANCIAL ASPECTS....................................................................................................... 50
6.1 Quantification and Analysis of electricity flow in financial terms ................................................................... 50

6.1.1 City of Cape Town Electricity Energy and Cash Flow (2006-2007) ......................................................................... 50
6.1.2 Eskom Controlled Electricity Energy and Cash Flow (2006-2007) ........................................................................... 53
6.2 Quantification of liquid fuel flow in financial terms ............................................................................................ 53

6.2.1 Petrol .......................................................................................................................................................................... 55
Source: SAPIA Annual Report 20056.2.2 Diesel ................................................................................................................ 55
6.2.2 Diesel ......................................................................................................................................................................... 56
6.2.3 Paraffin....................................................................................................................................................................... 56
6.2.4 Jet Fuel ....................................................................................................................................................................... 57
6.2.5 LPG + HFO ................................................................................................................................................................ 57
6.3 Billing systems used by Eskom & municipality ................................................................................................... 58

6.3.1 City of Cape Town Billing System ............................................................................................................................ 58
6.3.2 Eskom Billing System ................................................................................................................................................ 60
6.3.3 Comparison of Eskom and CCT tariffs based on average consumption figures: ....................................................... 61
6.4 Analysis of margins made by municipality and Eskom ..................................................................................... 62

6.4.1 City of Cape Town ..................................................................................................................................................... 62
6.4.2 Eskom ........................................................................................................................................................................ 62
6.5 Capital Budgets ............................................................................................................................................................ 63

6.5.1 CCT Capital Budget ................................................................................................................................................... 63
6.5.2 Eskom Capital Budget ............................................................................................................................................... 63
6.6 Breakdown of operating and maintenance ........................................................................................................... 64

6.6.1 CCT ............................................................................................................................................................................ 64
6.6.2 Eskom ........................................................................................................................................................................ 66
6.7 Aggregate of all flows of energy payments ........................................................................................................... 67

6.7.1 Electricity (June 2006- July 2007) ............................................................................................................................. 67
6.7.2 Liquid Fuels (2006) .................................................................................................................................................... 68
7. CHALLENGES, CONSTRAINTS AND FUTURE PLANS .................................................. 68
7.1 Ten year outlook – constraints and opportunities .............................................................................................. 68

7.1.1 Electricity ................................................................................................................................................................... 68
7.1.2 Liquid Fuels ............................................................................................................................................................... 69
7.1.3 Coal ............................................................................................................................................................................ 70
7.2 What future plans are envisaged, and how are they likely to shape sustainable outcomes positively
or negatively......................................................................................................................................................................... 70
7.2.1 Electricity ................................................................................................................................................................... 70
7.2.2 Liquid Fuels ............................................................................................................................................................... 71
8. CONCLUSION .................................................................................................................... 71
BIBLIOGRAPHY .................................................................................................................... 73
1. Introduction
This report is an effort to better understand the flow of energy within Cape Town and the financial
interactions which occur in parallel with this. The focus has mainly fallen on electricity supply and
distribution and liquid fuels supply and distribution. While other energy sources such as coal and wood
are considered, detailed and well sourced data is difficult to obtain in these areas.
By understanding the status quo of Cape Town‟s energy picture and its accompanying financial side, it
is envisaged that it will empower planners to make more informed decisions about future sustainable
interventions in the city.
Energy will be considered from the supply side right through to the end user where possible, giving a
baseline energy summary Cape Town at present. Further insight will given into the electricity crisis in
the Western Cape and the current progress of the Regional Electricity Distributers (REDs), as well as
to why Cape Town‟s current energy profile is unsustainable.
An analysis will be made of currently available renewable energy and energy efficiency technologies
and the impact they could have on future energy use in Cape Town.
The financial aspect of the Cape Town‟s current energy flow will then be captured at all levels of
payment where possible from supply to end user.
Lastly a brief analysis of future energy plans for Cape Town will be made, and conclusions drawn.
2. Policy and knowledge context

2.1 Relevant Documents, Studies, Legislation, Information
2.1.1 National Policy and Legislative Context
Before 1994, as a response by the National Party Government to sanctions imposed by the
international community, the Energy Policy of South Africa was driven by social security, self-
sufficiency and secrecy. This resulted in an over-reliance on dirty, inefficient fuels, and inadequate
supply of affordable and safe fuels to millions of poor households. The current policy and regulatory
environment represents a significant change in direction, with substantial focus on improving access to
energy and participation in energy sector operation by previously disadvantaged sectors of society.
While the environmental sustainability theme clearly has greater focus than previously, it still is far
from a central priority.
Energy White Paper of 1998

The Energy White Paper of 1998 aims to increase access to affordable energy services, improve
energy governance, manage energy-related environmental impacts, and secure supply through
diversity. Amongst the overarching objectives are: Increasing access to affordable energy services;
stimulating economic development – including encouraging energy sector actors to facilitate economic
empowerment through the creation of SMMEs and by assisting previously disadvantaged people to
gain entry to the energy sector; reregulation in the liquid fuels industry to allow unrestricted market
access; and managing energy-related environmental impacts. In general, the policy enforces a move
to opening markets, promoting export industries, restructuring government assets, and re-regulating
the energy industry.
Integrated Resource Planning
The White Paper advocates use of the Integrated Resource Planning (IRP) tool to guide strategic
decision making for all substantial new investments in energy infrastructure. Among its main functions,
IRP supports demand-side needs and options being considered as well as supply-side options and
includes social and environmental factors and externalities in the assessment of the way forward. In
the case of Cape Town, the Electricity Department has produced a local IRP for the electricity sector
in the metro area, which has been approved by Council.
Municipal Systems Act No 32 of 2000

Section 23 of the Municipal Systems Act No 32 of 2000 requires municipalities to produce integrated
development plans for the medium-term development of their municipal areas to meet the needs of
their communities. The Act directs municipalities to provide sustainable services to their communities,
promoting increased community involvement in the provision of energy services.
White Paper on Renewable Energy and Clean Energy Development (Draft 2002)
Deregulation and restructuring of the electricity supply industry is intended to open the market to
opportunities for renewable production. In a recently released draft White Paper on „Renewable
Energy and Clean Energy Development‟, government recognises the important role of renewables in
the long-term sustainability of South Africa‟s energy profile, and sets a ten-year target of increasing
the use of renewable energy in final energy consumption. The purpose of the policy “is to set out
Governments‟ principles, goals, and objectives for renewable energy. It furthermore commits
Government to a number of actions to ensure that renewable energy becomes a significant part of its
energy portfolio over the next 10 years.” However, in spite of the clear and promising purpose
statement, the draft document provides little specific direction on promoting different renewables
sources, and as it stands may be of limited help in moving to a more sustainable mix. In particular, two
economically and environmentally sound options - solar water heating and passive solar building
design - are not adequately stressed given their proven track record, financial feasibility and potential
impact. The next version of the policy document is expected soon, and hopefully will provide clearer
guidance of how the very sound „purpose statement‟ is to be translated into reality.
National Energy Regulator Act of 2004

This Act mandates NERSA to regulate South Africa's electricity, piped gas and petroleum industries
and to collect levies from people holding title to gas and petroleum. The idea behind a single regulator
for the three industries was to improve efficiency and cut costs. It is also expected to boost private
sector participation in the energy sector.
As an economic regulator, NERSA will ensure a level playing field and prevent abuse by monopolies.
While legislation exists to govern the gas and petroleum pipeline industries, they were previously not
subject to control by a regulatory body.
The regulator is important as it will encourage greater access and competition in a sector dominated
by single major players: Eskom in electricity, Petronet in petroleum and Sasol in gas.
Petroleum Products Amendment Act 2003, Act 58 of 2003

Promotes an efficient manufacturing, wholesaling and retailing petroleum industry;
Facilitates an environment conducive to efficient and commercially justifiable investment;
Promotes the advancement of historically disadvantaged individuals; and
Creates employment opportunities and small businesses in the petroleum sector.
Gas Act of 2001

Provides a regulatory framework for storage, transmission, distribution and trading of gas. Key issues
in the Gas Bill are the establishment of a regulator and access to transmission by third parties.
Central Energy Fund, 1977 (Act No. 38 of 1977), as amended
Empowerment Charter of November 2000
2.1.2 Provincial Government
Sustainable Energy Strategy for the Western Cape, May 2007
A document which highlights areas where sustainable interventions are possible in the Western Cape,
and which develops action plans around how to achieve them.
Renewable Energy Plan of Action for the Western Cape, 2007

A detailed analysis of the potential for renewable energy use in the Western Cape. Several scenarios
from conservative to aggressive renewable use are considered, and a renewable energy strategy is
suggested.
2.1.3 Local Government

State of Energy Report for Cape Town, 2003
A comprehensive baseline summary of energy supply and demand per sector in Cape Town. This
report is currently being updated, and should be available in July 2007.
City of Cape Town (2005) Cape Town Energy and Climate Change Strategy
Developing from the State of Energy report, this document sets sustainable goals on the supply side
and per sector on the demand side, and lists short term and long term measures to be taken in order
to achieve these goals. It then sets targets in order to achieve these
Cape Town Energy Futures Report, January 2005

A study which establishes a demand baseline for the city and projects Cape Town‟s energy
consumption for the future, based on certain policies.
City of Cape Town Draft Solar Water Heater Bylaw, June 2007
An effort by the CCT to introduce legislation requiring all new houses above 100m2 to be fitted with
solar water heaters.
2.2 Summary of Cape Town’s Energy System

Cape Town, like all South African cities has a complex and intense energy picture. It is impossible to
place an energy „fence‟ around Cape Town and analyse the city in isolation. This is due to the fact that
most of the city‟s energy supply comes from external sources. The energy flow is therefore not city
based, but national (in the case of electricity, coal and liquid fuels supply) and international (liquid
fuels, enriched uranium).
Cape Town‟s energy use profile for 2006 shows that electricity (29%), petrol (28%) and diesel (18%)
are the chief energy sources, with all remaining sources – paraffin, jet fuel, LPG, HFO, coal and wood
making up 25%. While good data exists for electricity and liquid fuels, it is very difficult to determine
fuel use in the unregulated coal market, as well as the use of biomass, which in Cape Town is
predominantly wood1.
Summary of Cape Town’s Energy Consumption (2006)

Heavy
User
Electricity Petrol Diesel Furnace Paraffin Jet Fuel LPG Coal Wood Total Total %
Group
Oil
GJ GJ GJ GJ GJ GJ GJ GJ GJ GJ %
Households 17969125 - - - 2586691 - 546992 43400 359100 21505308 14%

Industry &
24755476 - 13160174 4696351 443648 - 2718138 10788000 561317 57123104 38%
Commerce
Local
1747292 118729 234394 - - - - - - 2100415 1%
Authority
Transport 42294067 14336799 - - 13615542 - - - 70246408 47%
Total 44471893 42412796 27731367 4696351 3030339 13615542 3265130 10831400 920417 150975235 100%
Total % 29% 28% 18% 3% 2% 9% 2% 7% 1% 100%
Sources: Fuel:SAPIA; Electricity: City of Cape Town Electricity Dept, CT State of Energy Report 2003, SA State
of Cities Report (SEA 2006), CT Energy Futures Report (2005), Household Numbers in Cape Town-Discussion
Document (CCT, Aug 2006); Coal: Imibono Fuels Personal Discussion, CT State of Energy Report 2003; Wood:
CTSOER 2003
Most of Cape Town‟s electricity is provided by the Eskom grid, a mix of coal, nuclear, hydro and gas
turbine power stations. The City of Cape Town provides some electricity from its Steenbras pumped
storage scheme. An independent power producer (IPP), the Darling Wind Farm will shortly be selling
electricity to Cape Town from its wind driven power station in Darling.
Liquid fuels (petrol, diesel, HFO, Jet Fuel, Paraffin, LPG) are largely supplied by the only refinery in
Cape Town – Calref2. Cape Town‟s current average demand for refined liquid fuels stands at 46213
barrels per day3. Calref has the capacity to process 100000 barrels per day4. The balance of refined
product is distributed around the province, and extra product (mostly diesel) is exported.
Very little data exists on coal and wood consumption. Coal sold to industry is monitored by the CCT
but no figures are available for domestic consumption. Although studies conducted are by no means
1
State of Energy Report for Cape Town, SEA 2003
2
State of Energy Report for Cape Town, SEA 2003
3
SAPIA fuel sales data for 2006, SAPIA 2007
4
SAPIA Annual Report 2005
comprehensive, the indication is that the contribution of wood and coal in households to Cape Town‟s
energy picture is minimal in comparison to the other energy sources5.
2.2.1 REDs6
The distribution of electricity in South Africa is currently receiving national attention. The electricity
distribution industry is presently highly fragmented. This has resulted in inefficiencies, disparities in
tariffs, unequal treatment of customers, inadequate maintenance of networks, the inability to capitalize
on economies of scale and limited ability to introduce competition.
The government has called for the electricity distribution industry to be consolidated, with Eskom
distribution and 187 municipal electricity utilities being amalgamated into six Regional Electricity
Distributors (REDs). However, prior to this decision (taken by cabinet in October 2006), the plan was
that the RED system would be metro based. To this end RED1 was formed in Cape Town in July
2005, with the mandate to be the electricity service provider for the entire jurisdictional municipal area
served by the City of Cape Town and the entire jurisdictional municipal area served by Eskom.
The cabinet decision calling for the „wall to wall‟ REDs went beyond the mandate of RED1, and the
City of Cape Town requested that NERSA revoke RED1‟s distribution licence, and that the status quo
prior to RED1 be re-established. This was granted and RED1 was closed down. The process of
establishing the six „wall-to-wall‟ REDs is currently being undertaken, and is being managed by EDI
Holdings (Pty) Limited, a company set up by the Department of Minerals and Energy.
The process has received some resistance from municipalities, as they have argued that electricity
distribution is one of their key functions in terms of the constitution. However, the Municipal Systems
Act of 2000 does provide that the distribution function may be through an internal or external
mechanism. Electricity is also a large source of income for municipalities, and they are not eager to
lose this revenue stream.
2.2.2 The Western Cape Energy Crisis

Problems do occur in any electricity generation, transmission and distribution network. These need to
be managed in such a way that the supply to the customer is as unaffected as possible. Worldwide
5
Cape Town Energy Futures Report, 2005
6
Details taken from the Report to the minerals and energy portfolio committee, Wednesday 28 February
2007
accepted reserve margins to accommodate supply problems stand between 15-30%. This means that
a 4300MW peak load system like the Western Cape‟s should ideally have a supply capacity 4950MW
or greater to ensure an uninterruptible supply.
Current Western Cape Supply Limitations:
Transmission Lines from Eskom Network +/- 2600MW

Koeberg Unit 1 900MW
Koeberg Unit 2 900MW
Palmiet Pumped Storage (Peak) 400MW
Steenbras Pumped Storage (Peak) 168MW
Acacia Gas Turbine 171MW
Total Generation Capacity 5139MW
Sources: Eskom, CCT Electricity Dept, Andrew Kenny Presentation (Mar 2006)
This capacity shows a reserve margin of just under 15%. However, the Western Cape supply is
handicapped by the size of Koeberg‟s reactor units. Each unit (900MW) constitutes 18% of the total
generation capacity for the Western Cape. Should one of its units be shut down, the supply to the
Western Cape will fall below peak demand requirements, and load shedding will most likely have to
occur to avoid a system overload.
This vulnerability in the supply system was the cause of the blackouts and load shedding that occurred
in 2005 and 2006. Whether the transmission lines trip (11 November 2005), or a Koeberg unit needs
to be shut down (16 November 2005, 23 November 2005, 25 December 2005, 18-19 February 2006,
28 February 2006)7 the Western Cape to a greater or lesser degree will be affected. Eskom Demand
Side Management (DSM) has pursued an aggressive interventions approach to reduce the amount of
electricity consumed as well as to reduce the peak load levels. 5.3 million CFLs and 140 thousand
geyser blankets were distributed, resulting in a 500-700MW saving in the winter of 20068.
Although the situation is currently vulnerable, the introduction of an extra 1050MW in the form of 2
Open cycle gas turbines in June will do much to avert crises like those that occurred in 2005 and
2006, for the time being.
7
National Nuclear Regulator Annual Report 2005/2006
8
Eskom DSM website, 2007
2.2.3 The Unsustainability of Cape Town’s Energy System
Electricity supply system

The vast majority of Cape Town‟s electricity supply is a combination of „dirty‟ power from Eskom‟s
fossil fuel burning power stations, and from the nuclear facility at Koeberg. Coal and liquid fuels are
dwindling resources, and their use in power stations is a major contributer to South Africa‟s
greenhouse gas emissions. Nuclear power, while being marketed as „green‟ power is far from it.
Uranium is not a renewable resource, and current estimates predict that high-grade lower-cost
uranium supplies will be exhausted by 2050, and that is not taking into account the rapid expansion of
nuclear power currently being embarked on worldwide9. Besides this, a substantial amount of energy
is used and CO2 produced in the mining, extraction and production of enriched uranium10 (although
these CO2 levels are some 25-30 times less per energy unit generated by a coal power station).
There is also the uncomfortable issue of taking responsibility of a waste product that will be highly
radioactive for at least 20000 years. The Department of Public Enterprises has identified that nuclear
power will play a big role in the electricity supply of the future. Eskom is looking to construct further
nuclear capacity in the form of Pebble Bed reactors in the vicinity of Koeberg in the short term.
Construction of the first one is planned for 2009. In the medium term, a further pressurized water
reactor (PWR) nuclear power station like Koeberg is also planned for the Western Cape.
While the electricity system is essential to the functioning of Cape Town, the sustainable challenges
are
i) to improve energy efficiency in all spheres of energy use.

ii) to reduce the amount of „dirty‟ coal generated power used
iii) increase the use of cleaner fuel power stations
iv) increase the contribution of renewable energies to the grid system.
There is a real opportunity to increase the renewable energy component of Cape Town‟s electricity
supply. Combinations of wind, solar and tidal technologies can contribute at least 10% to the city‟s
electricity mix11. This is reflected in the City of Cape Town‟s Energy and Climate Change Strategy.
Eskom does not seem to be taking these technologies too seriously and is pushing forward with plans
for more coal, gas and nuclear power stations in the future. The wind farm at Darling is currently the
9
Renewable City, Peter Droege 2006
10
Calculations using Uranium Calculator: World Information Service on Energy – Uranium Project (www.wise-
uranium.org)
11
CCT Draft Energy and Climate Change Strategy
only major contributer here. Photovoltaic (PV) panels are also used on a very small scale by
individuals and companies to reduce their use of grid electricity.
Liquid Fuel
Cape Town is, like all cities, heavily dependent on liquid fuel. This is used mainly for transport,
industrial heating and household cooking and heating. Liquid fuels currently make up 60% of all
energy used in Cape Town.
National figures have shown an increase of 3.5% in refined product sold between 2005 and 2006, with
2006 being the sixth consecutive year that aggregate sales of petroleum product has grown. Current
figures indicate that this trend looks set to continue into 2007. The highest increase in demand has
been for diesel (7.1% in 2006) and jet fuel (4.1% in 2006).12
Extract from SAPIA 2005 Annual Report showing national consumption of liquid fuel products. It is
assumed Cape Town’s consumption pattern is similar (but not exact) to the national picture.
Source: SAPIA Annual Report 2005
12
SAPIA Annual Report 2005, www.sapia.org.za
Alternative and more sustainable sources of fuel are being investigated in an attempt to compensate
for this decline. Biodiesel is being pushed as the fuel of the future, but a strong argument against it is
that it will begin to compete with food crops, and may result in farmers choosing to feed into the
biodiesel market for better profits. This could potentially lead to increased food prices and food
shortages.
Solutions need to be found to reduce the amount of fuel use within a city. Huge changes in the
transport infrastructure will be required to achieve this, integrating and modernizing transport in such a
way that there will be a shift in Cape Town‟s transport mode use from private to public in the future.
Paraffin
Paraffin is currently widely used in poor households which have limited or no access to electricity13.
Paraffin poses health hazards by reducing indoor air quality, and by being a major contributer to fires
in poor areas. Paraffin is not subject to VAT, an effort by the government to make energy more
affordable to the poor. Safer and cleaner alternatives to paraffin are LPG and bioethanol gel. Efforts
have been made to change paraffin users over to safer LPG systems, but the barriers that need to be
overcome are the accessibility of gas suppliers, the initial high capital investment of a cylinder and gas
appliance and the perception that gas is not safe. Bioethanol is still a fledgeling industry, and does not
have the capacity to take over the large paraffin market. The product still has to be proved to be as
effective, easy to access and as well priced as paraffin for it to grow in the low income market.
LPG
The Western Cape accounts for 25% of the country‟s LPG consumption. LPG is a cleaner and safer
technology than paraffin. The price of LPG is currently partially regulated by the DME in that refineries
have to sell it to marketing companies at a monthly adjusted price driven by the basic fuel price (BFP).
Efforts have been made to keep the price of using LPG cheaper than using paraffin or electricity, but
this has proved difficult with the substantial increases in the fuel price over the last year, and the fact
that paraffin is VAT free. Although LPG is a more sustainable alternative than electricity and paraffin,
low current reserve and pipeline capacity means that unless major infrastructure changes are brought
about, the industry will not grow significantly in the future.
2.3 Relevant Policy and Planning Frameworks

City of Cape Town’s Draft Energy and Climate Change Strategy, 2005
13
Cowan & Mohlakoana (2004); (Simmonds & Mammon (1996: 75)
Developing from the State of Energy report, this document sets sustainable goals on the supply side
and per sector on the demand side, and lists short term and long term measures to be taken in order
to achieve these goals. It then sets targets in order to achieve this.
Sustainable Energy Strategy and Plan of Action for the Western Cape, 2007
This document lays out a strategy with targets and action plans, with the aim to achieve a more
sustainable province in the next 10 to 15 years.
Renewable Energy Plan of Action for the Western Cape, 2007

A detailed study of the potential for renewable energy projects in the Western Cape. It considers five
potential scenarios ranging from very conservative to very aggressive and lays out the sustainable
implications of each.
2.3.1 Planning projections

The City of Cape Town‟s State of Cape Town report predicts that
the city‟s population growth will slow dramatically over the next 15 years, with an expected
increase in population of 300 000 by 2021. The report also states that there is a housing
backlog of between 265 000 and 300 000 units.
manufacturing is on the decline, as is employment in the government, while increases have
occurred in the services and real estate sectors.
GGP has remained at 4.5% over the last 4 years, and short term predictions are that growth
will remain around 4%
The city has two planning departments: Land Use Planning and Spatial Planning. The challenge
facing these departments is to regenerate areas where sprawl has occurred and to optimize the
spatial development of Cape Town. To this end the city has developed a draft Metropolitan Spatial
Development Framework. However this has not been formally adopted yet.
2.3.2 Renewable Energy Incentives

There are currently very few incentives for renewable energy developers. REFSO, a body set up by
the DME offers funding of R250 per kW of generation potential for renewable energy projects
undertaken. This is not going to make a great impact on renewable development, but it does create
the message that the DME supports renewable energy initiatives.
Eskom through its Demand Side Management (DSM) branch has created an incentive scheme for
people who wish to install a solar water heater. The incentive ranges from R2000 – R4000 per system,
and will amount to roughly a 15% subsidy. This may not be sufficient to swing people over to solar
water heater use, but it is considered a positive step in the right direction.
Projects which can be proved to be carbon savers are in line for international funding via the carbon
credits system. Subsidisation of renewable projects can occur either through the informal route of
selling carbon credits to international companies with a sustainable agenda, or through the more
formal Cleaner Development Mechanism.
3. Regulatory and Institutional Environment

3.1 Overview
Only certain areas of the energy sector are regulated by government. These are electricity, petrol,
diesel, paraffin, fuel pipelines and nuclear.
The National Energy Regulator (NERSA) awards licenses for the generation, transmission and
distribution of electricity in South Africa. It also regulates gas and fuel pipelines throughout the country.
The National Nuclear Regulator grants licenses for the construction of any nuclear installation or
vessel in the country.
The prices of petrol, diesel and paraffin are regulated by the Department of Minerals and Energy
(DME) based on a formula determined by the basic fuel price (BFP). These prices are recalculated
and adjusted monthly. Petrol is regulated to retail price, while diesel and paraffin are regulated to
wholesale price. Paraffin is further regulated in that it is VAT exempt.
No regulation currently exists with regards to LPG, jet fuel, heavy fuel oil, coal or wood.
3.2 Key Institutions Governing Energy Regulation, Infrastructure

Development and Distribution
National Energy Regulator of South Africa
The National Energy Regulator Act of 2004 (Act No. 40 of 2004), mandates NERSA (National
Energy Regulator of South Africa) to undertake the functions of the Gas Regulator as set out in the
Gas Act of 2001, the Petroleum Pipelines Regulatory Authority as set out in the Petroleum Pipelines
Act of 2003 and the National Electricity Regulator as set out in the Electricity Act of 1987 as
amended.
The idea behind a single regulator for the three industries was to improve efficiency and cut costs. It is
also expected to boost private sector participation in the energy sector. As an economic regulator,
NERSA works to ensure a level playing field and prevent abuse by monopolies. While legislation
exists to govern the gas and petroleum pipeline industries, they were previously not subject to control
by a regulatory body. The regulator is important as it will encourage greater access and competition in
a sector dominated by single major players: Eskom in electricity, Petronet in petroleum and Sasol in
gas.
NERSA‟s mandate is further derived from written government policies as well as Regulations issued
by the Minister of Minerals and Energy. NERSA is expected to proactively take necessary regulatory
actions in anticipation of and in response to the changing circumstances in the energy industry.
National Nuclear Regulator (NNR)14

The NNR is the national institution established by the National Nuclear Regulator Act, Act No 47 of
1999, for the protection of the public, property and environment against nuclear damage. The
Regulator is governed and controlled in accordance to this Act by a Board of Directors and is operated
by an Executive comprising the Chief Executive Officer (CEO) and the staff of the NNR. The Minister
of Minerals and Energy is the Executive Authority responsible for the NNR and appoints the NNR
Board. The Board consists of up to thirteen directors which include a representative from organized
labour, organized business, one person representing communities that might be affected by nuclear
activities, an official of the Department of Minerals and Energy, and the Department of Environment
Affairs and Tourism; and no more than seven other Directors. The Minister may appoint two Directors
to serve as alternates in the absence of Directors representing the Department of Minerals and Energy
and the Department of Environmental Affairs and Tourism. The Chief Executive Officer (CEO) is a
member of the Board. The Directors of the Board of the NNR are appointed on a part-time basis.
The Minister appoints the CEO after consultation with the Board and the CEO is responsible for
appointing the staff of the NNR as directed by the Board of Directors. In order to carry out the mandate
of the NNR as it is set out in the NNR Act, the NNR staff is structured into the following five divisions:
the Power Reactor Division; the Nuclear Technology and Natural Sources Division; the Assessment
Group; the Regulatory Strategy Development Division; and Corporate Support Services. Within these
14
NNR Annual Report 2005/6
divisions, staff of the NNR carries out technical assessment, authorization and compliance assurance
functions and provide the necessary infrastructural support for the effective regulation of safety,
including nuclear, waste, radiation and transport safety.
Department of Minerals and Energy

The Department of Minerals and Energy (DME) is responsible for the administration of laws and
government policies. Under the apartheid government the involvement of state-owned institutions in
the liquid fuels sector was strong for security reasons. In recent years, the regulatory and policy
environment has been substantially reformed and these institutions have been rationalised and
redirected according to the current priorities of government.
PetroSA
Petroleum Oil and Gas Corporation of South Africa (PetroSA), a new state oil company, was formed
largely from a merger with Soekor and Mossgas. It owns and operates all of South Africa's
government-owned oil and gas holdings and is mandated to explore and develop South Africa's
natural resources of oil and gas in a competitive manner.
Central Energy Fund (CEF)

The CEF is involved in the search for appropriate energy solutions to meet the future energy needs
of South Africa, the Southern African Development Community and the sub-Saharan African region.
This includes oil, gas, electrical power, solar energy, low-smoke fuels, biomass, wind and renewable
energy sources. The CEF also manages the operation and development of the oil and gas assets and
operations of the South African government.
The CEF, through its integrated oil company subsidiary, PetroSA, is involved in the exploration for oil
and gas onshore and offshore in South Africa and the rest of Africa. It is also involved in the
production of environmentally friendly petroleum fuels and petrochemical products from gas and
condensate at its synfuels refinery outside Mossel Bay and the management of oil-storage facilities.
The Strategic Fuel Fund manages South Africa's strategic crude oil reserves.
Oil Pollution Control SA, a CEF subsidiary company, provides oil prevention, control and clean-up
services, mainly in South African ports and coastal areas, in terms of South Africa's National
Environmental Management Act 1998, Act 107 of 1998.
Through its subsidiary, the Petroleum Agency of South Africa (PASA), the CEF manages the
promotion and licensing of oil and gas exploration, development and production in South Africa and
the coastal areas offshore, as part of creating a viable upstream oil industry in the country.
CEF subsidiary iGas acts as the official agent of the government for the development of the
hydrocarbon gas industry, comprising liquefied natural gas and LPG in South Africa.
Industry associations
The South African Petroleum Industries Association (SAPIA) was formed to promote the interests
of the refining and distribution operations of the original, white-owned, companies. Recently an
alternative association has been established to represent the interests of the black oil companies – the
African Mineral and Energy Forum (AMEF).
The Paraffin Safety Association of South Africa (PASASA) is an oil company funded organisation
which aims to promote the safety of paraffin use in households.
The Liquified Petroleum Gas Association of South Africa (LPGSA) provides training and
accreditation around LPG safety issues, undertakes LPG marketing, and represents the LPG industry
to government where necessary.
Black Economic Empowerment

Greater black participation in the South African oil industry is an important factor for the new
government of national unity. The liquid fuels sub-sector has had specific policy guidance in this
respect. The Energy Policy White Paper sets a goal of 25% participation by black groups in all facets
of the industry. In November 2000, all oil companies signed an Empowerment Charter, which defines
how the 25% participation is to be measured. Many companies have already made significant
progress in this regard.
4. Cape Town’s Energy Supply and Demand

4.1 Sources of Energy Supply in Cape Town
4.1.1 Electricity
Eskom
Eskom provides the majority of Cape Town with electricity sourced directly off the national grid. Eskom
controls the generation and transmission of its electricity, but shares the distribution of electricity with
the City of Cape Town. Eskom generation plants in the vicinity of Cape Town include Koeberg nuclear
power station (1800MW net capacity), emergency gas turbines at Acacia (171MW capacity), and the
Palmiet pumped storage scheme for national grid load management (400MW capacity). Electricity
from the national grid comes in the form of a 400kV line which can deliver a maximum of 2600MW to
the Western Cape. Although in theory Koeberg could meet almost all of CCT‟s electricity demand, in
reality it is merely one of a mix of generation plants feeding into the national electricity grid. Also,
Koeberg comprises 2x900MW units, one of which is often down for maintenance or other routine
reasons. Koeberg has 18 years of economic life left. Two open cycle gas turbine plants, with a total
capacity of approximately 1050MW capacity are being built at a cost of R3.5bn, in Atlantis and Mossel
Bay. These are liquid-fuel plants which are primarily designed for peaking capacity. Current schedule
indicates that they will be completed before the winter of 2007.
Eskom is currently evaluating the potential of power generation from wind at the Klipheuwel wind farm,
but no major wind farm developments are planned for in the short term.
Average unit retail price:

To distributer: 16.13c/kWh
To residential: 40.08c/kWh
To commercial: 22.69c/kWh
To industrial: 14.75c/kWh
(Source: Eskom 2006 annual report)
City of Cape Town

The City of Cape Town (CCT) generates very little of its own energy - the vast majority is purchased
from Eskom.
Steenbras Pumped Storage Plant
CCT owns a 160MW pumped storage plant at Steenbras, which pumps water to the Steenbras Dam in
off-peak (cheap electricity) periods, and generates electricity from running the water down again in
peak periods (i.e. hydro generation). Steenbras is used for load management rather than being a
base-load generator. Depending on the amount of water flowing into upper Steenbras dam, the
pumped storage plant can be either a net consumer or a net producer of electricity. Steenbras
provided a net of 20GWh into the Cape Town grid over the last financial year15.
Emergency Gas Turbines
Two gas turbines (40MW capacity each) situated at Roggebaai and Athlone respectively are currently
requiring maintenance and are not in use. The CCT only plans to use these for emergency duty, as
they have a very high running cost16.
Average CCT unit retail price: See table in 5.1 later in report
15
CCT Electricity Sent to System Spreadsheet, 2006
16
Wouter Roggen, CCT, Personal Communications, 17 May 2007
Independent Power Producers
Darling Wind Farm
The Darling Wind Farm (DWF) is the first independent wind farm to be built in South Africa. An
expected annual 13.2 GigaWatt hours of Green Electricity from DWF will be generated by four 1.3MW
wind turbines and injected onto the national grid managed by Eskom. From there it will be “wheeled”
through the national grid to a substation at Atlantis where it will be introduced onto the City‟s electrical
network and then sold onward to willing buyers at an additional premium of 25c per kWh (ex VAT)17 .
Darling Wind Farm plans to later add another six wind turbines to the wind farm, followed by another
ten in the longer term, adding that global demand for the wind turbines is so high that the earliest
additional wind turbines would be available only by 2008.
Average unit retail price:

CCT rates + 25c/kWh
Solar Water Heaters

Solar water heaters use the energy of the sun to heat potable water in the domestic and commercial
sector. As such they can be seen as an offset on the city‟s electricity load requirements. There are
estimated to be 10 000 solar water heaters in Cape Town (SEA 2007). Assuming an average collector
size of 2.8 square meters, the average annual power generated from Cape Town‟s current solar water
heating installations is approximately 4.2MW th18.
Average unit retail price: 38c/kWh (Capital cost of R15000 expected to offset 2600kWh/year over
lifespan of 15 years )
PV
No figure exists on the amount of photovoltaic panels currently installed in Cape Town. The figure is
assumed to be low although indications are that the level of public interest in using them is rising.
There is a very high initial capital cost after which they should perform for 15 to 35 years (depending
on the system) with very little maintenance. Indications are that the costs are dropping, making the
technology more affordable.
17
CCT Electricity Tariff tables
18
Each square meter produces 150W of thermal power on average over 1 year in CT (Cape Town area = 2 017
kWh m-2 year , Efficiency 65%).
Average unit retail price: 193c/kWh (Based on R130000 2.5kW system, 5 hours of peak wattage per
day, 15% wire and inverter losses, lifespan of 25 years)
4.1.2 Liquid Fuels

Oil is South Africa‟s second largest primary energy source. The majority is imported, primarily in the
form of crude oil. South Africa has 5 crude oil refineries, of which Calref, the Chevron-owned refinery,
is located in Cape Town. Calref is a complex refinery with a distillation capacity of 100 000 barrels per
day and has a current replacement cost of about $1-billion19. Calref provides Cape Town with the
majority of its liquid fuel. It is unlikely that any more oil refineries will be built in South Africa. Currently
if demand exceeds the refinery‟s capacity, extra refined fuel is imported from refineries in Singapore
and Bahrain. The amount of refined fuel imported is expected to grow in the future as South Africa‟s
demand for fuel exceeds its ability to refine20. Calref produces petrol, diesel, paraffin, jet fuel and LPG.
Current Price (May 2007)
Petrol (Retail) 677c/l
Diesel (Wholesale) 606.5c/l
Paraffin (Wholesale) 456.2c/l
LPG (Retail) R16/kg
Jet Fuel (Retail) 579c/l
Source: SAPIA, Eddlesgas, Private aeroplane company
Table showing anticipated future shortfalls in liquid fuel refining capacity in SA
Table showing SA’s Source of Oil over 10 years
19
20
SAPIA Annual Report, 2005
Country of origin Thousands of metric tons
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Iran 11014 9301 9238 6757 5824 7414 5718 6239 7012 8166
Saudi Arabia 1114 384 1810 3346 8042 8545 7219 7364 9521 8137
South Africa - - 403 649 493 689 524 791 570 1482
Nigeria - - 971 287 1286 842 1246 3615 3450 1313
Angola 122 910 127 - 389 48 382 138 116 654
Yemen 353 299 216 354 - 140 475 62 179 338
Gabon - - - - - - 373 - - 191
UAE 520 765 387 897 300 758 734 70 106 109
Cameroon - - - - - - - - 271 106
Egypt 1024 1046 343 - - 292 - - 135 -
Kuwait 577 2863 2589 2094 833 858 431 342 - -
Russia - - 255 305 - - - 267 - -
Oman 120 131 91 313 71 - 610 8 - -
Iraq - - 943 413 137 - 343 - - -
Mexico - - 589 633 244 - - - - -
U.K. 1394 541 327 - 18 - - - - -
Qatar - - 137345 - 76130 - - -
Venezuela - - 127787 - - - - - -
Other 197186 - - - - - - - -
Total 16435 16426 18553 17180 17637 19662 18185 18896 21360 20496
4.1.3 Coal
Coal is transported directly from the coal mines to Cape Town, and is distributed to industry by 5
companies in Cape Town. Rail transport of coal is unreliable and slow (1 week delivery time), so
preference is shown by the distributers to transport their coal by road (2 days delivery time)21.
Coal currently wholesales around R700 per ton excluding VAT, depending on grade (usually B or C)
and transport costs22.
4.1.4 Wood
Very little data is available on wood, but it is assumed that most wood is locally sourced.
4.2 Energy Demand

Electricity demand has been increasing steadily in the CCT distribution area.
21
Imibono Fuel, Personal Communication, June 2007
22
Imibono Fuel, Personal Communication, June 2007
Electricity into CCT
Year System
02/03 9,114,271,393
03/04 9,489,275,805
04/05 9,767,333,152
05/06 9,972,008,301
06/07 10,000,000,000
Source: CCT Electricity Dept
4.2.1 Residential
Table Showing Residential Demand in Cape Town (2006/7)
Electricity (CCT): 13,758,225GJ or
3,821,729,250kWh (CCT)
Electricity (Eskom) 4,210,899GJ or
1,169,694,244kWh
Paraffin: 2586691 GJ
LPG: 546992 GJ
Coal: 43400 GJ
Wood: 359100 GJ
Source: CCT Electricity Dept, SAPIA, CTSOER 2003
4.2.2 Transport
Only liquid fuel consumption was considered for transport

Table Showing Transport Consumption in Cape Town (2006)
Petrol Diesel Jet Fuel

Public Transport (non
local Auth's) 82,185 27,620,542
Retail - garages 1,201,510,715 257,908,310
Road Haulage 1,294,982 62,366,370
Transnet 0 8,655,650 178,566,542
Total (l) 1,202,887,882 356,550,872 178,566,542
Energy (GJ) 41,138,766 13,762,864 6,892,669

Source: SAPIA
4.2.3 Commerce and Industry
Table Showing Commerce and Industry Demand in Cape Town (2006/7)

Electricity (CoCT): 17,942,730 GJ or 4,984,091,805
kWh
Electricity (Eskom) 8,285,862 GJ or 2,301,628,250
kWh
Liquid Fuel 32,655,261 GJ (See
disaggregated table below)
Coal 10,788,000 GJ
Source: SAPIA, CCT Electricity Dept, CTSOER 2003, Imibino Fuels
Liquid Fuel Consumption in Commerce and Industry (2006)
User Petrol Diesel Jet Fuel HFO Paraffin LPG
Agricultural Co-ops 1012213 3942092 349491
Construction 340081 15257262 577692 76869
Farmers 1089435 5118021 1222300
General Dealers 17514691 132249231 36475959 20439539
Local marine
342168 51026382 222256 29925777 1143358
fishing
Mining 1729582 54232911 226294 7246834
Remainder of
11640689 79111257 230922960 85225597 31390888 105764106
General Trade
Total (l) 33668859 340937156 231371510 116951366 76683399 126203645
Energy (GJ) 1151475 13160174 7635260 4642969 2821949 3243434
Source: SAPIA consumption figures 2006/2007
4.2.4 Public Sector
Table Showing Public Sector Demand in Cape Town (2006/7)

Electricity (CCT): 383,107,193 kWh
Liquid Fuels: 9,852,136 GJ (see disaggregated table below)
Source: CCT Electricity Dept, SAPIA
Liquid Fuel Consumption in the Public Sector (2006)
User Petrol Diesel Jet Fuel
Government 111,876 14,868,801 231,120,516

Local
Authorities 3,471,618 6,072,372
Total (l) 3,583,494 20,941,173 231,120,516
Energy (GJ) 122,555 808,329 8,921,252

Source: SAPIA
4.3 Supply distribution

4.3.1 Electricity
Eskom sells electricity in bulk to the City of Cape Town, who then distributes it. This accounts for
approximately 72.5% of electricity sold in the metro23. The remaining 27.5% is supplied and distributed
by Eskom. It is noteworthy that in terms of domestic users, the split between CCT and Eskom is 60%
to 40%, indicating that Eskom provides electricity to mostly low income and low energy users.
23
Data Collected for State of Energy of SA Cities, SEA, 2006
Source: CCT: Request for proposals: Athlone Power Station: Independent Power Project, 2004
Both Eskom and the City of Cape Town have different tariff structures depending on the end user and
its needs. Both supply electricity to the residential, commercial and industrial sectors. These will be
dealt with in more detail in a later section of this report.
4.3.2 Petrol and Diesel

Petrol and diesel are marketed by oil companies. In Cape Town refined petrol and diesel is bought
from the refinery by the oil companies. Most petrol (97%) is sold by service stations in Cape Town
while most diesel (64%) is sold in bulk24. Road tankers transport petrol and diesel from the oil
company‟s holding facility to service stations. Oil companies are increasingly outsourcing distribution
functions as well as being engaged in affirmative procurement programmes25.
Government intervention prevents oil companies from owning service stations (prohibition of vertical
integration). However, conditions linked to supply agreements require service station businesses to
keep to relatively demanding signage and service standards, which maintains oil company control.
Local authorities impose further stringent land zoning and safety requirements. It is thus financially
demanding to establish such a station.26
24
SAPIA consumption figures 2006/7
25
State of Energy Report for Cape Town, SEA, 2003
26
State of Energy Report for Cape Town, SEA, 2003
4.3.3 Paraffin
Paraffin is distributed from the refineries to oil company-owned bulk depots largely by road. Small
transport companies take it from the depots to the numerous medium and small outlets in urban areas.
In some areas service stations also sell paraffin.
The government regulates paraffin prices up to the retail level, specifying the maximum amount it can
be sold for. It has also made paraffin VAT exempt to ease the burden on poor households. This is
seen as an effective means of „subsidising‟ such households, as a very high proportion of all paraffin
sold is used by this income group. Paraffin supply chains reach into all urban areas. A study
undertaken in 1997 indicates that supply chains are not excessively long, and that price mark-ups are
usually not overly high27.
4.3.4 Liquified Petroleum Gas (LPG)

LPG is transported from the refineries to large distributors and then to medium distributors. It is
generally bottled at the refinery, although depots with mini-bulk tanks are becoming more common.
LPG distribution is through most oil companies as well as Afrox. The distribution network of LPG is not
nearly as well developed as that for paraffin, for various reasons. For one, it is not easy for small
outlets to establish themselves. Prospective new retailers need to undergo training and their premises
need to comply with various safety requirements. Further, the necessary space for safe LPG storage
is often not available in dense low-income settlements. LPG bottles are also difficult to transport to and
from distant outlets, which imposes a cost on dealers. There is also limited demand as the poor
households cannot generally afford the necessary bottles and appliances.
4.3.5 Jet Fuel

Jet fuel is not regulated and is sold in bulk to airports, the military, and commercially. In Cape Town,
the largest consumer of jet fuel is Cape Town International Airport (CCIA). Jet fuel is sold from the
refinery to Shell who have storage facilities at the airport. Shell then distributes the fuel to aeroplane
companies as demand requires.
4.3.6 Coal
Coal is transported into Cape Town by road from coal mines in the north. Road is preferred over
freight train due to the industry‟s experience of Spoornet‟s slow and unreliable service
27
SEA, Shell Foundation: Market Analysis of the SME energy sector 2002
4.3.7 Wood
Most wood used in Cape Town is assumed to be obtained from trees which grow in Cape Town and
its surrounds. Very little information exists on wood supply and consumption in Cape Town
4.4 Nuclear Energy

South Africa‟s only nuclear facility, Koeberg is based in the Cape Town metro‟s boundaries. The
facility has 2 reactors, with a combined net output of 1800MW. Koeberg provided 11293GWh of
electricity in 200628 , lower than usual due to its several unscheduled shutdowns during the year.
Koeberg has an economic life of a further 18 years (2025).
As the Western Cape is not a coal producing area, Eskom‟s short to mid term plan is amongst other
options to expand nuclear capacity to cope with increasing demand. This will most likely be in the form
of Pebble Bed Modular Reactors (PBMR) and a Pressurized Water Reactor (PWR).
4.4.1 PBMR
Each reactor will have a capacity of 165MW. A demonstration reactor near Koeberg is scheduled to
start construction in 2009 and the first fuel is planned to be loaded four years later (2013).
Construction of the fist commercial PBMR modules are planned to start three years after the first fuel
has been loaded into the demonstration reactor (2016)29.
Since 2004, the South African government has allocated significant funding to the project, while the
Minister of Public Enterprises, Mr Alec Erwin, stated an intent to eventually produce 4000MW to
5000MW of power from pebble bed reactors in South Africa. This equates to between 20 and 30
PBMR reactors of 165MW each. In June 2004, the South African cabinet also approved a programme
to train nuclear scientists.
4.4.2 PWR
The Eskom board has approved the investigation of another 4000MW Pressurised Water Reactor (like
Koeberg) in the Western Cape. They have currently listed several potential sites for its location.30
28
Eskom Annual Report, 2006
29
PBMR website, www.pbmr.com
30
Cape Times, 29 May 2007
Within Cape Town there is a level of discomfort on expanding the nuclear presence in the metropolitan
area, and the City holds the position that residents need to have a say in this matter.
4.4.3 Koeberg’s Nuclear Waste Disposal Plan31

Koeberg power station produces radioactive waste. Depending on its level of radioactivity, waste is
divided into three groups - low-level waste, intermediate-level waste and spent fuel. Waste can be
either solid, liquid or gaseous.
Low Level Waste

Low level waste contains low traces of radioactive contamination, and typically consists of day-to-day
refuse such as paper, gloves, insulation material, plastics and disposable overalls. This waste is
generated in the controlled radiological areas of the power station. These items are compressed into
sealed, clearly marked steel drums and stored on site until they are moved by road to the designated
waste disposal site at Vaalputs. On average 500 steel drums are shipped to Vaalputs every year.
Vaalputs is the national nuclear waste disposal site for low and intermediate-level waste and is
situated approximately 600 km north of Cape Town.
Intermediate Level Waste

This waste consists of purification sludge, radioactive resins, spent filter cartridges and irradiated
scrap metal pieces from normal maintenance work. It is more radioactive than low-level waste but
less radioactive than spent fuel. It is mixed in a very specific way with a sand/cement mixture, which
is poured into sealed and appropriately marked concrete drums, which are also transported to the
waste disposal site at Vaalputs. On average 100 concrete drums are produced annually.
The nature of the concrete used is such that should a drum fall off a truck or break open the
radioactive materials inside could not harm the public due to it being sealed inside the concrete.
Spent Fuel
Spent fuel is fuel that has been used in the fission process. It contains high levels of radioactivity.
One of the characteristics that distinguish spent fuel from less active waste is its thermal power.
31
ESKOM website, www.eskom.co.za
At Koeberg Nuclear Power Station, the spent fuel assemblies are stored under water in storage racks
with sufficient capacity to contain these assemblies for the life of the station. Water cools the fuel rods
and serves as an effective shield to protect workers in the fuel storage building from radiation.
Radiation starts decreasing immediately after the fission reaction has stopped and within
approximately 10 years has decreased by more than 95%. However, spent fuel contains a mix of
radioactive isotopes, the most dangerous of which is plutonium, which has a half life of approximately
24000 years. Spent fuel will either be sent to a reprocessing facility when uranium extraction becomes
economically viable, or it will be disposed of at an approved repository. To date no approved
repository has been established.
A pressurised water reactor type power station like Koeberg generates approximately 32 tons of spent
fuel each year. Over a 40-year lifetime that adds up to 1 280 tons.
4.5 Users and Needs

4.5.1 Cape Town Summary
Population 3.2 million

Projected Growth Rate 2%
Households (2005) 846121 broken up into:
731541 formal households
114580 informal households (CCT)
Unelectrified households 16900 or 2% (CT Energy Futures Report,
2005)
Electrified households 828100
Source: Household Numbers in Cape Town-Discussion Document (CCT, Aug 2006), CT Energy
Futures Report
Cape Town‟s houses are largely electrified. Only 2% of houses in the metropole do not have
electricity32
4.5.2 City of Cape Town Supply Area:

Domestic Users
32
Cape Town Energy Futures Report, 2005
The majority of domestic users (72%) are on the prepaid system. The tariff structure is simply broken
into Domestic 1 which suits electricity users who use more than 600kWh per month and Domestic 2
which suits users who consume less than 600kWh per month. Users who utilize 450kWh or less per
month over a 12 month average will qualify for 50kWh per month of free basic electricity (FBE).
Table of Domestic Consumers in CCT Distribution Area (2006/7)

Consumers Ave kWh/month
Domestic 1 Credit 82871 1089
Domestic 2 Credit 44374 304
Domestic 2 Credit - No FBE 16077 456
Domestic 3-Phase 9 711
Domestic with Off Peak Combination 245 45541
Domestic Cluster with Off Peak 9 21980
Domestic Cluster 184 12223
Sub Total 143769
Domestic 1 Prepaid 106796 916
Domestic 2 Prepaid 206314 283
Domestic 2 Prepaid - No FBE 65921 486
Domestic 3-Phase 110 839
Sub Total 379141
TOTAL DOMESTIC 522910
Source: CCT Electricity Consumption Figures (2006/7)

Non-residential users
Table of Non Residential Users in CCT Distribution Area (2006/7)
Small Power 1 Credit 22523 3560
Small Power 2 Credit 3182 710
Small Power Users with Off Peak (>50kVA) 1791 18202
Small Power Users with Off Peak (Plant) 1 24174
Sub Total 27497
Small Power 1 Prepaid 187 2837
Small Power 2 Prepaid 1151 677
Sub Total 1338 979
TOTAL SMALL POWER 28835
Large Power LV 946 57871

Large Power MV 520 274866
Very Large Power 54 1992863
TOTAL LARGE POWER 1520
Off Peak Consumption (>50kVA) 3 5212

Off Peak Consumption (Dedicated Plant) 104 1565
Commercial Time Of Use 1 34835
TOTAL OFF PEAK 108
TOTAL NON-RESIDENTIAL 30463
Municipality
Table of Domestic Consumers in CCT Distribution Area (2006/7)

Domestic 1 (Municipal) 53 2406
Domestic 2 (Municipal) 391 504
Sub Total 444 731
Small Power 1 (Municipal) 1879 4385
Small Power 2 (Municipal) 54 1990
Small Power with Off Peak (Municipal) 2 21447
Sub Total 1935 4336
Large Power LV (Municipal) 467 4287
Large Power MV (Municipal) 26 287098
Sub Total 493 19202
Off Peak - Dedicated Plant (Municipal) 2 46296
Sub Total 2 46296
Street Lighting 1 10194676
Traffic Signals 1 1123436
TOTAL MUNICIPAL USERS 2874
4.5.3 ESKOM Supply Area for CCT

Domestic Users
Of the 828 100 electrified houses in Cape Town, the CCT supplies 522 910. This means that Eskom
distributes electricity to approximately 305 190 houses. The vast majority of areas serviced by Eskom
are low income. As Eskom has not been prepared to provide any up to date disaggregated user data,
the assumption has been made that roughly all houses are low income users in the Eskom controlled
distribution area.
2004 Consumption estimate (NER) 690390750 kWh

Domestic Users‟ electricity requirements 190kWh / month (approximately)
Source: NER 2004
These figures are approximately 80kWh per month lower than the CCT serviced low income areas. It
points towards being too low and is probably not a reliable source.
Other older data from Cape Town‟s State of Energy Report shows a higher consumption figure for
2000 than that obtained for 2004.
ESKOM AREAS WITHIN UNICITY (2000)
User No of Users Energy Consumed kWh/mth
Domestic – Conventional meters 45,000 460,000,000 851.9
Domestic – Energy dispensers 110,000 300,000,000 227.3
(Source CT State of Energy Report,2003)
These figures tie up better with the City of Cape Town users‟ needs, but the number of users (155000)
is old and this number has increased rapidly over the last 7 years with Eskom‟s electrification of Cape
Town‟s low income areas to 305190. If one makes the assumption that Eskom‟s distribution growth
since 2000 has all been predominantly low income, then the number of new low income users is
150190. An estimated energy use picture for the Eskom distribution area for the Cape Town would
then read as follows:-
User Type No of Users Energy Consumed (kWh) kWh/mth
Domestic – Conventional meters 45,000 460,000,000 851.9
Domestic – Energy dispensers 260,190 709,694,244 227.3
Total Domestic Users 305,190 1,169,694,244
Source: CTSOER 2003, Household Numbers in Cape Town-Discussion Document (CCT, Aug 2006),
CT Energy Futures Report
This can be considered the „best guess‟ estimate of this side of Cape Town‟s electricity consumption,
but these figures need to be verified with Eskom. The figures above, although not accurate, do
indicate the trend of increased electricity use in low income areas, and as such are a closer
approximation of reality than using older data.
Commercial and Industrial

Two consumption figures for this sector were sourced:-
2004 Consumption estimate (NER) = 2301628250 kWh

(Source: NER 2004)
ESKOM AREAS WITHIN UNICITY (2000) kWh/mth
Commercial – Small 1 & 2 3,500 480,000,000 11,428.6
Large & Very Large 1,700 1,300,000,000 63,725.5
(Source CT State of Energy Report,2003)
Without any better knowledge with regards to growth rates of commerce and industry in this area of
Cape Town, it is assumed that the 2004 figure is the best estimate available, and shall be used for this
report.
4.6 Average household consumption

Assumptions:
1. Due to that fact that Eskom will not release any information with regards to user base and
consumption figures, the assumption must be made that the average figures determined for
the City of Cape Town distribution area can be applied to the Eskom controlled users. The
estimated user figures for Eskom calculated above will not be used in this analysis.
2. All domestic users falling into the Free Basic Electricity category are low income households.
Based on the above the following data can be derived:
Average monthly electricity consumption of CCT Users divided by income category (2006/7)
Income
Category Users Ave kWh/m
Med-Hi 271665 837
Low 250688 286
Source: CCT Electricity Consumption Figures
These figures correlate closely with the Cape Town Energy Futures Report (CTEFR) (2005) of
774kWh for medium to high and 274kWh for low income. The CTEFR disaggregated these
consumption figures as such:
Electricity consumption for med- to high-income households by end use
End use Electricity consumption per end use
Lighting 108.3 kWh / month
Cooking 148.2 kWh/ month
Space heating 80.9 kWh/ month
Water heating 380.8 kWh/ month
Refrigeration 55.9 kWh/ month
Total 774.1 kWh/ month

Source: Cape Town Energy Futures Report (SEA et al. 2005)
Low income houses make use of a mix of electricity, paraffin and gas.
Energy used by electrified low-income households by end use
End use Electricity consumption per Other energy consumption

end use (units / month)
Lighting 32.3 kWh / month
Cooking 112.4 kWh/ month 3.3 litres paraffin /month

0.119 GJ
0.6kg LPG/month
Space heating 63.2 kWh/ month (3 months) 2.5 litres paraffin /month (3
months)
0.09 GJ
Water heating 20.3 kWh/ month 1.7 litre paraffin /month
0.06 GJ
Refrigeration 71.7 kWh/ month
Source: Cowan & Mohlakoana (2004); Simmonds & Mammon (1996: 75)
Very few households in Cape Town are unelectrified. The following table indicates the monthly
consumption of an average low income unelectrified house.
Energy used by unelectrified low-income households by end use
End use Paraffin (litres)/ month Number of Candles/month
Lighting 3 6
Cooking 9
Space heating 7 (3 months)
Water heating 4
Sources: Cowan & Mohlakoana (2004); (Simmonds & Mammon (1996: 75)
4.7 Average Non Residential Consumption
Assumptions
1. Due to that fact that Eskom will not release any information with regards to user base and
consumption figures, the assumption must be made that the average figures determined for
the City of Cape Town distribution area can be applied to the Eskom controlled users.
2. All small power clients in the CCT are Commercial clients, and all large power clients are
Industrial.
Table showing average non residential consumption in Cape Town (2006/7)
Sector Users Ave kWh/m
Commercial 28,835 4,036
Industrial 1,628 187,656
Municipal-Users 2,874 6,358
Municipal – Traffic Lights 1,123,436
Municipal – Street Lights 10,194,675
(Source: City of Cape Town Electricity Consumption Figures)
In the commercial sector, an „average‟ commercial building will have the following end use profile
End Use kWh/m
Lighting 1533
HVAC 1533
Other Electrical Appliances 970
(Source: Percentage breakdown based on Appendix B, CTEFR, 2005):
4.8 Seasonal and daily load profiles

Assumption:
Due to that fact that Eskom will not release any information with regards to user base and
consumption figures, the assumption must be made that the load profiles determined for the City of
Cape Town distribution area are of similar shape to those of the Eskom controlled domestic and
commercial users.
CCT Distribution Area Annual Energy Consumption Profile
Load Profie 2006 - Domestic
400,000,000
300,000,000
kWh
200,000,000
100,000,000
0
1 2 3 4 5 6 7 8 9 10 11 12
Months
Load Profile 2006 - Commercial and Industrial
600000000
500000000
400000000
kWh
300000000
200000000
100000000
0
1 2 3 4 5 6 7 8 9 10 11 12
Months
Load Profile 2006 - Municipal
50000000
40000000
30000000
kWh
20000000
10000000
0
1 2 3 4 5 6 7 8 9 10 11 12
Months

CCT Daily Load Profile
MW
MW
150
200
250
300
350
0
10
20
30
40
50
60
2006/06/05 00:00 2006/06/05 00:00
2006/06/05 01:00 2006/06/05 01:00
2006/06/05 02:00 2006/06/05 02:00
2006/06/05 03:00 2006/06/05 03:00
2006/06/05 04:00 2006/06/05 04:00

2006/06/05 05:00
2006/06/05 05:00
2006/06/05 06:00
2006/06/05 06:00
2006/06/05 07:00
2006/06/05 07:00
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2006/06/05 09:00
2006/06/05 10:00
2006/06/05 10:00

2006/06/05 11:00
2006/06/05 11:00
2006/06/05 12:00
2006/06/05 12:00 2006/06/05 13:00
2006/06/05 13:00 2006/06/05 14:00
2006/06/05 14:00 2006/06/05 15:00
2006/06/05 15:00 2006/06/05 16:00
2006/06/05 16:00 2006/06/05 17:00
2006/06/05 17:00 2006/06/05 18:00
Date/Time
2006/06/05 19:00
BLAAUWBERG
2006/06/05 18:00
Date/Time
2006/06/05 19:00 2006/06/05 20:00
TYGERBERG MUNIC MW
2006/06/05 21:00
2006/06/05 20:00
2006/06/05 22:00
2006/06/05 21:00
2006/06/05 23:00
2006/06/05 22:00
2006/06/06 00:00
2006/06/05 23:00
2006/06/06 01:00
2006/06/06 00:00
2006/06/06 02:00
2006/06/06 01:00
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2006/06/06 02:00
2006/06/06 04:00
2006/06/06 03:00 2006/06/06 05:00
2006/06/06 04:00 2006/06/06 06:00
2006/06/06 05:00 2006/06/06 07:00
2006/06/06 06:00 2006/06/06 08:00
2006/06/06 07:00 2006/06/06 09:00
2006/06/06 08:00 2006/06/06 10:00
2006/06/06 09:00
2006/06/06 10:00
Integrated Analysis Energy Baseline Report: SI UNDP Cape Town Project v: Final Draft 18-Jul-07, p. 39
The following set of graphs show the profiles for the various CCT controlled Municipalities on the
highest power demand day of the year in winter 2006. Peak demand reached 2290MW on this day.
39
MW MW
20
40
60
80
100
20
40
60
80
100
2006/06/05 00:00 2006/06/05 00:00
2006/06/05 01:00 2006/06/05 01:00
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2006/06/05 07:00 2006/06/05 07:00

2006/06/05 08:00
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2006/06/05 11:00
2006/06/05 11:00
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2006/06/05 18:00
Date/Time
2006/06/05 18:00
Date/Time
2006/06/05 19:00
2006/06/05 19:00
OOSTENBERG MUNIC MW
2006/06/05 20:00
HELDERBERG MUNIC MW
2006/06/05 20:00
2006/06/05 21:00
2006/06/05 21:00
2006/06/05 22:00
2006/06/05 22:00
2006/06/05 23:00
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2006/06/06 06:00 2006/06/06 07:00
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40
MW MW
150
200
250
300
350
400
450
600
800
1000
1200
1400
2006/06/05 00:00
2006/06/05 00:00 1600
2006/06/05 01:00
2006/06/05 01:00
2006/06/05 02:00
2006/06/05 02:00
2006/06/05 03:00
2006/06/05 03:00
in Cape Town.
2006/06/05 04:00
2006/06/05 04:00
2006/06/05 05:00
2006/06/05 05:00
2006/06/05 06:00
2006/06/05 06:00
2006/06/05 07:00
2006/06/05 07:00
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2006/06/05 09:00 2006/06/05 08:00
2006/06/05 10:00 2006/06/05 09:00

2006/06/05 11:00 2006/06/05 10:00
2006/06/05 12:00 2006/06/05 11:00
2006/06/05 13:00 2006/06/05 12:00

2006/06/05 14:00 2006/06/05 13:00
4.9 GHG Emissions in CT

2006/06/05 15:00 2006/06/05 14:00
2006/06/05 16:00 2006/06/05 15:00
2006/06/05 17:00 2006/06/05 16:00
2006/06/05 18:00 2006/06/05 17:00
Date/Time
2006/06/05 19:00 2006/06/05 18:00
Date/Time
2006/06/05 20:00 2006/06/05 19:00
ACACIA MONTAGUE GRDNS MW

2006/06/05 21:00 2006/06/05 20:00
CAPE METROPOL LOAD MW
2006/06/05 22:00 2006/06/05 21:00

2006/06/05 23:00
2006/06/05 22:00
2006/06/06 00:00
2006/06/05 23:00
2006/06/06 01:00
2006/06/06 00:00
2006/06/06 02:00
2006/06/06 01:00
2006/06/06 03:00
2006/06/06 02:00
2006/06/06 04:00
2006/06/06 03:00
2006/06/06 05:00
2006/06/06 04:00
2006/06/06 06:00
2006/06/06 05:00
2006/06/06 07:00
2006/06/06 06:00
2006/06/06 08:00
2006/06/06 07:00
2006/06/06 09:00
2006/06/06 08:00
2006/06/06 10:00
2006/06/06 09:00
2006/06/06 10:00
Electricity (59%) from Eskom‟s coal and nuclear powered grid is the largest source of CO2 emissions
41
Table Showing CO2 Emissions in CT (2006/7)
Heavy
User
Electricity Petrol Diesel Furnace Paraffin Jet Fuel LPG Coal Wood Total
Group
Oil
CO2 (t) CO2 (t) CO2 (t) CO2 (t) CO2 (t) CO2 (t) CO2 (t) CO2 (t) CO2 (t) CO2 (t) %
Households 4362575 - - - 189346 30085 4080 4586085 24%
Industry &
6648614 - 968720 346309 32475 149498 1014072 9159688 47%
Commerce
Local
469273 8768 17254 - - - - - 495295 3%
Authority
Transport 3123417 1055332 - - 996658 - - - 5175406 27%
Total 11480462 3132185 2041306 346309 221821 996658 179582 1018152 0 19416474 100%
Total % 59% 16% 11% 2% 1% 5% 1% 5% 0% 100%
Sources: Fuel:SAPIA; Electricity: City of Cape Town Electricity Dept, CT State of Energy Report 2003, SA State
of Cities Report (SEA 2006), CT Energy Futures Report (2005), Household Numbers in Cape Town-Discussion
Document (CCT, Aug 2006); Coal: Imibono Fuels Personal Discussion, CT State of Energy Report 2003; Wood:
CTSOER 2003
4.10 Demand Side Management

In order to reduce the peak load levels experienced in the winter of 2006 in the Western Cape, Eskom
Demand Side Management (DSM) pursued an aggressive approach to implementing interventions.
This has resulted in33:
5.3 million CFLs being distributed (229MW saving)

180000 geyser blankets being installed (no saving figure available)
a gas exchange programme being established which replaced 40332 two plate stoves, 125
electrical hobs, 2708 electrical stoves and 1328 heaters with gas equivalents (22MW)
an extensive electricity conservation drive involving widespread advertising of energy saving
tips (estimates at 150MW saving if 20% of population respond)
an incentive scheme for backup diesel generators (63MW)
Eskom has recently stated that the peak reduction achieved through its demand side management
programme for the winter of 2006 was estimated to be between 500-700MW.
Eskom DSM plans to continue with many of these schemes in the future, as well as solar water
heating subsidization. All of these interventions are sustainably wise choices when considering the
33
Data collected from presentation by Andrew Etzinger 2007, Eskom DSM
current energy picture. They resulted in reduced electricity consumption, and some involved changing
over from electricity to cleaner fuels (LPG).
Eskom has stated that the cost of building new generation capacity is about R10 million per megawatt.
The equivalent DSM savings in this light were around R5 billion in offset capacity.
5. Technological Interventions
5.1 Existing supply and generation technologies
South Africa currently has the cheapest energy in the world. This is largely due to an abundance of
coal, and a well established and paid for network of coal fired power stations. Now with the growth in
energy demand in the country, Eskom has to start considering installing new base load capacity for
the first time in many years. In order for Eskom to cover construction costs (estimated at R10 million
per megawatt) electricity tariffs are expected to increase sharply. This will play into the hands of
renewable energy technologies, which to date have not been able to compete with Eskom‟s low tariffs.
The following table indicates how close the gap will become with regards to new generation energy
production costs.
South African Costs for New and Existing Generation (NER 2005, Banks and Schaffler,2006)
Generation Technology c/kWh
New Coal 28
New Nuclear (PWR – like Koeberg) 50
New Nuclear (PBMR) 30
New Wind 40
New Gas Turbines 250
New Solar Thermal 40
New Solar PV 193
Existing (Eskom 2006) 14
Existing Pumped Storage (CCT) 8.7
Source: NER 2005, Renewable Energy Plan of Action for the Western Cape, 2007, Eskom Annual
Report 2006, CCT SOER 2003
5.2 Current research on alternatives in W Cape and Energy Saving

Potential
The Western Cape government has set a target of 12% renewable power source by 2014. In their
recently released „Renewable Energy Plan of Action for the Western Cape‟, they propose several
renewable energy scenarios from conservative to aggressive which will come close to and supercede
this target. The plan proposes large scale governmental support in the form of facilitating renewable
energy initiatives.
Graph showing the potential mix of renewables in the W Cape energy picture of the future
Transformation Results: Capacity

Scenario: Prog Ren Ref Dem, Capacity: All Capacities Biomass Cogen
Hydro
9,500 Municipal Waste
Pumped Storage
9,000
Solar PV off grid
8,500 Solar PV grid con.
Solar Th Elec no st.
8,000
Solar Th Elec with st.
7,500 Ocean Energy
Wind High CF
7,000
Wind Medium CF
6,500 Imp Ren Energy
New Nuclear
6,000 New foss mid and pk
5,500 New Fossil Base
Megawatts
Exist mid and peak

5,000 Existing Base
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
(Source: Renewable Energy Plan of Action for the Western Cape, 2007)
Table Showing Potential Power production from renewable sources – Western Cape
Wind 3000MW
Ocean 1000MW
Solar –PV 247MW
Hydro 15MW
Solar thermal 1400MW
Pumped Storage 1800MW
Total 7452MW
(Source: Renewable Energy Plan of Action for the Western Cape, 2007)
5.3 Actual savings from EE interventions - key technologies

Based on information generated by the LEAP modeling software the following interventions have been
modeled, based on the targets set by the City of Cape Town in their energy and climate change
strategy:
5.3.1Solar water heaters (SWH)

Target - Install SWH in 10% of Cape Town‟s houses by 2010 and 50% by 2024
Demand Results: Energy demand final units

Scenario: REF vs. RSWH, Fuel: All Fuels Residential
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
(Source: SEA:2007)
Cumulative energy saving of 5700GWh over 20yrs
Final peak load reduction of 375MW (50% SWH installed)
5.3.2 Efficient Lighting

Target – Commercial + Local Authorities 100% saturation by 2010, Residential 30% by 2010 and 90%
by 2020

Scenario: REF vs. CFLs - Res, Com and LA, Fuel: All Fuels Commerce
Transport
Local Authority
7,500 Residential
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
(Source: SEA:2007)
Cumulative energy saving of 7700GWh over 20yrs

Peak load reduction by 2024 of 290MW
5.3.3 Ceilings on Houses

CCT Target: Retrofit existing houses by 2020
Projected cumulative savings by 2024: 365 million kWh
(Assuming a 20% reduction in energy used for space heating)

Scenario: REF vs. Com, LA + Res HVAC, Fuel: All Fuels Residential
360
340
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
(Source: SEA:2007)
5.3.4Efficient HVAC
Target: 20% reduction in energy used by HVAC by 2020, achieved through changing behavioural
patterns and installing more efficient systems.
Projected cumulative saving by 2024: 950 million kWh
Scenario: REF vs. Com, LA + Res HVAC, Fuel: All Fuels Commerce
Local Authority
950
900
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
(Source: SEA:2007)
5.3.5 Transport Modal Shift

CCT Target: 10% transport modal shift from private to public by 2020
Projected cumulative saving by 2024: 150 million GJ

Scenario: REF vs. Tmodal shift, Fuel: All Fuels Transport
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
(Source: SEA:2007)
5.3.6 Total Savings

Solar Water Heaters 5700GWh
Efficient Lighting 7700GWh
Ceilings 365 GWh
Efficient HVAC 950GWh
Transport 150million GJ
Source: SEA:2007
5.4 Feed in tariffs

There has been talk of feed in tariffs of late, but it seems unlikely that anything of this nature will
materialize in the short term. Unless regulations change Eskom will continue to produce its own power
rather than buy in power generated by an independent power producer. Generation costs of current
technologies show that renewable systems cannot compete cost wise with current coal and nuclear
systems. This will change in the future as tariffs increase and come closer to renewable generation
tariffs.
5.5 Overview of environmental impacts of current technologies
Coal fired power station 986g of CO2 per kWh

Nuclear Power Station: 30g of CO2 per kWh
Open Cycle Gas 710g of CO2 per kWh
Turbines:
Pumped Storage: 220g of CO2 per kWh
Hydro: 0
Wind: 0
Solar Water Heaters: 0
Solar Thermal: 0
Solar PV 0
Ocean 0
Source: State of Energy Report for Cape Town, 2003
6. Financial aspects
6.1 Quantification and Analysis of electricity flow in financial terms
6.1.1 City of Cape Town Electricity Energy and Cash Flow (2006-2007)
The table that follows is a comprehensive breakdown of the City of Cape Town‟s electricity distribution
business. It includes all capital and operating expenditures for the department. This is to provide a
broad overview of how these costs tie in with energy bought and sold in the City of Cape Town.
Financial Analysis of CCT Electricity Flow: July 2006-June 2007 (Last 3 months projected)
Ave
Energy (kWh) Expenditure Income c/kWh
City of Cape Town Electricity
Employee Related Costs R 345,283,278
General Expenses R 94,599,901
Contracted Services R 33,898,952
Repairs & Maintenance (Primary) R 110,577,500

Repairs & Maintenance (Secondary) R 44,298,465
Repairs & Maintenance (Total) R 154,875,965
TOTAL CONTROLLABLE R 628,658,095

OTHER
Bulk Purchases (Eskom) -9,972,008,301 R 1,751,359,928 17.56
Collection Costs (Vendors Commission) R 30,180,000
Capital Charges R 177,564,007
Contributions
Bad Debts Provision/Working Capital
Reserve R 32,031,239
Housing Fund R 326,584
Grants and Donations (Capital Outlay) R 35,400,000
Medical Aid - Post Retirement R 15,638,123
Transfer to / from AFR
AFF - Capital projects funding R 123,105,255
Developers Contributions (BICL) R 21,000,000
TOTAL OTHER R 2,186,605,135

SECONDARY
Contribution to Rates R 296,896,666
Support Services R 133,399,468
Internal Utilities R 11,369,488
Insurance Department Premiums R 16,841,665
Activity Based Costs -R 66,967,895
Steenbras Pumped Storage -20,245,655 8.70
TOTAL SECONDARY R 391,539,393
Total Energy Input and Expenditure -9,992,253,956 R 3,206,802,623
Domestic
Domestic 1 Credit 1,082,662,547 R 383,175,485 35.39
Domestic 2 Credit 161,632,562 R 56,131,004 34.73
Domestic 2 Credit - No Free Basic
Electricity 87,964,138 R 35,758,767 40.65
Domestic 3-Phase 76,786 R 28,596 37.24
Domestic with Off Peak Combination 133,890,444 R 32,577,231 24.33
Domestic Cluster with Off Peak 2,373,823 R 580,797 24.47
Domestic Cluster 26,988,951 R 8,320,581 30.83
Sub Total 1,495,589,251 R 516,572,461 34.54
Domestic 1 Prepaid 1,173,502,471 R 422,357,770 35.99
Domestic 2 Prepaid 699,858,941 R 239,694,858 34.25
Domestic 2 Prepaid - No Free Basic
Electricity 384,588,575 R 158,048,964 41.10
Domestic 3-Phase 1,107,117 R 428,258 38.68
Sub Total 2,259,057,104 R 820,529,850 36.32
TOTAL DOMESTIC 3,754,646,355 R 1,337,102,311 35.61
Small Power (Commerce and
Industry)
Small Power 1 Credit 962,304,536 R 367,260,041 38.16
Small Power 2 Credit 27,112,095 R 14,268,484 52.63
Small Power Users with Off Peak
(>50kVA) 391,193,047 R 105,715,305 27.02
Small Power Users with Off Peak (Plant) 290,092 R 67,255 23.18
Sub Total 1,380,899,771 R 487,311,085 35.29
Small Power 1 Prepaid 6,365,326 R 2,412,714 37.90
Small Power 2 Prepaid 9,352,972 R 5,016,259 53.63
Sub Total 15,718,299 R 7,428,973 47.26
TOTAL SMALL POWER 1,396,618,069 R 494,740,058 35.42
Large Power (Commerce and
Industry)
Large Power LV 656,952,053 R 203,270,208 30.94
Large Power MV 1,715,162,800 R 458,356,007 26.72
Very Large Power 1,291,375,225 R 284,139,995 22.00
TOTAL LARGE POWER 3,663,490,079 R 945,766,209 25.82
Off Peak (Commerce and Industry)
Off Peak Consumption (>50kVA) 187,632 R 43,012 22.92
Off Peak Consumption (Dedicated
Plant) 1,953,513 R 316,325 16.19
Commercial Time Of Use 418,024 R 83,941 20.08
TOTAL OFF PEAK 2,559,170 R 443,278 17.32
Municipal
Domestic 1 (Municipal) 1,530,491 R 501,303 32.75
Domestic 2 (Municipal) 2,363,159 R 918,381 38.86
Sub Total 3,893,651 R 1,419,684 36.46
Small Power 1 (Municipal) 98,869,870 R 36,834,688 37.26
Small Power 2 (Municipal) 1,289,626 R 675,585 52.39
Small Power with Off Peak (Municipal) 514,720 R 135,807 26.38
Sub Total 100,674,216 R 37,646,081 37.39
Large Power LV (Municipal) 24,025,940 R 11,025,132 45.89
Large Power MV (Municipal) 89,574,627 R 22,675,880 25.32
Sub Total 113,600,567 R 33,701,012 29.67
Off Peak - Dedicated Plant (Municipal) 1,111,107 R 184,536 16.61
Sub Total 1,111,107 R 184,536 16.61
Street Lighting 122,336,107 R 39,881,571 32.60
Traffic Signals 13,481,232 R 4,394,882 32.60
Sub Total 135,817,339 R 44,276,452 32.60
TOTAL MUNICIPAL 355,096,880 R 117,227,765 33.01
Other revenue derived from Electricity
Distribution (Mainly Service Charges) R 213,020,379
Capital Grants + Donations R98,502,623
Total Energy Output and Income 9,172,410,553 R 3,206,802,623
Efficiency of System
(Energy out /Energy In) 91.8%
Source: CCT Electricity and Financial Figures (2006/7)
6.1.2 Eskom Controlled Electricity Energy and Cash Flow (2006-2007)

As this data has not been made available by Eskom, the following figures are based on the roughly
calculated data from Section 3.5.3 of this report, and Eskom‟s published national average c/kWh per
users for 2006.

Energy
No of Ave Income Income
User Type Consumed
Users c/kWh Annual Monthly
(kWh)
Domestic –
Conventional 45,000 460,000,000 40.08 R 184,368,000 R 15,364,000
meters
Domestic –
Energy 260,190 709,694,244 40.08 R 284,445,453 R 23,703,788
dispensers
Commercial –
3,500 620,663,798 22.69 R 140,828,616 R 11,735,718
Small 1 & 2
Large & Very
1,700 1,680,964,452 14.75 R 247,942,257 R 20,661,855
Large
CT Metro
1 9,972,008,301 17.56 R 1,751,084,658 R 145,923,721
Gross Income
13,443,330,795 R 2,608,668,983 R 217,389,082
Source: Eskom Annual Report 2006, NER, CTSOER 2003, Household Numbers in Cape Town-
Discussion Document (CCT, Aug 2006), CT Energy Futures Report
6.2 Quantification of liquid fuel flow in financial terms

In terms of liquid fuels, the price at which refineries sell their products is controlled by the State. This
price is determined by the “Basic Fuels Price” (BFP) which is the cost at which products could be
landed in South Africa if they had been sourced from a basket of refineries mainly in the Far East. The
mark-ups or „margins‟ of the South African refineries are therefore very similar to those in the Far East.
When the Far East market changes its nature, it has a direct and immediate effect on the economics
of the South African refineries.
Fuel prices are regulated to varying degrees by government::

Petrol is regulated right up to petrol station selling price.
Diesel is regulated up to the wholesale price. The dealers can determine their particular markup.
Paraffin is regulated to wholesale price (482.10c/l). The government places a cap on the maximum for
an unlabelled litre of paraffin at 602c/l. Paraffin is VAT exempt
LPG, jet fuel and HFO are affected by the BFP but are not regulated
Sapia publishes aggregated profit margins per litre of product sold over all products from all SAPIA
members per year. This is highly aggregated information, and provides little insight into the resource
flows per product or per refinery. However, it is useful for viewing the bigger liquid fuel financial
picture.
(Source SAPIA Annual Report 2005)

As the refineries and marketing companies do not wish to divulge their personal operating and
maintenance costs and capital budget, it is difficult to paint a more localized financial picture.
However, gross profits from sales of regulated products can be determined, and are represented in
the tables below.
6.2.1 Petrol
The refinery‟s profits are built into the basic fuel price. This information is not available.
Table Showing Financial flow of Petrol in Cape Town 2006/7
Petrol Beneficiary
Crude Oil Used (93% of Crude oil is
1,333,484,124
refined) (l)
Refined Product Sold in Cape Town (l) 1,240,140,235
Customs + Excise (4c/l) R 49,605,609 Government
Fuel Tax (121c/l) R 1,500,569,684 Government
Total Government income R 1,550,175,294
Wholesale margin (39c/l) R 483,654,692 Marketers
Service differential (7c/l) R 86,809,816 Marketers
Total Marketing Company income from
R 570,464,508
sales in Cape Town-2006/7
Petrol Station
Retail Margin (48c/l) (97% of product) R 576,725,143
Owner
Government
Road Accident Fund (41.5c/l) R 514,658,198
Fund
Source: SAPIA, DME regulation figures 2006
Marginal profit for oil companies (based on R 173,619,633 Importing,Refining,

14c/l SAPIA figure) Marketing
6.2.2 Diesel
Table Showing Financial flow of Diesel in Cape Town 2006/7

Diesel Beneficiary
772,504,517
refined) (l)
Refined Product Sold in Cape Town (l) 718,429,201
Customs + Excise (4c/l) R 28,737,168 Government
Fuel Tax (121c/l) R869,299,333 Government
Total Government income R 98,036,501
Wholesale margin (39c/l) (64% bulk) R 80,187,388 Marketers
Total Marketing Company income from
R 330,477,432
sales in Cape Town-2006
Retail Margin (approximately 48c/l) (34% Petrol Station
R 23,795,989
of sales) Owner
Road Accident Fund (41.5c/l) R 98,148,118 Government Fund
Source: SAPIA, DME regulation figures 2006
Marginal profit for oil companies (based Importing,Refining,

R 100,580,088
on 14c/l SAPIA figure) Marketing
Source: SAPIA
6.2.3 Paraffin
Table Showing Financial flow of Paraffin in Cape Town 2006/7

Paraffin Beneficiary
88,544,285
refined) (l)
Wholesale margin (39c/l) R 32,115,012 Marketers
Storage Cost (7c/l) R 5,764,233 Marketers
Distribution Cost (7.4c/l) R 6,093,618 Marketers
Total Marketing Company income from R 55,501,329
sales in Cape Town-2006
General dealer
Retail Margin (approximately 77c/l
R 25,996,691 (41% of CT
unbottled)
paraffin market)
Source: SAPIA, DME regulation figures 2006, paraffin spaza shop
Marginal profit for oil companies(based on R 11,528,466 Importing,Refining,

Source: SAPIA
6.2.4 Jet Fuel

The assumption is made that jet fuel and paraffin prices are very similar, as the process of producing
the two products is nearly identical. However, as this is an unregulated product, the specific sales
information in terms of margins is not freely available.
Considering the gate price for paraffin and jet fuel to be the same (399c/l), the profit margin to
aeroplane operators is approximately R1.80 today
Table Showing Financial flow of Jet Fuel in Cape Town 2006/7
Jet Fuel Beneficiary
443,647,502
refined) (l)
Wholesale margin (180c/l @ retail price of
R 42,665,919 Marketer
579c/l)
Source: SAPIA, Private Aeroplane Company
Marginal profit for oil companies (based on R 57,762,905 Importing,Refining,
Source: SAPIA Annual report 2005
6.2.5 LPG + HFO

A gate price for LPG and HFO is not available. Based on the SAPIA 14c/l net profit figure for
importing, refining and marketing, profit for sales in Cape Town will be:-
Table Showing Financial flow of LPG and HFO in Cape Town 2006/7
Product Litres sold Net marginal profit
LPG 127047856 R 17,786,700
HFO 118295985 R 16,561,438
Source: SAPIA, SAPIA Annual report 2005
6.3 Billing systems used by Eskom & municipality

6.3.1 City of Cape Town Billing System
The following table is taken off the CCT Electricity Website. This indicates all of the city‟s billing
systems for the period July 2006 – June 2007.
Domestic: Domestic 1 for high consumption users (above 600kWh/month) and Domestic 2 for low
consumption users (below 600kWh/month). Domestic 2 users will receive 50 free kWh per month if
they prove to use less than 450kWh/month on average for 12 months. Clusters are with dealt as 1
user, with the developer breaking up the bill per house within the cluster.
The following tariffs are applicable to Domestic Customers
1.1 Domestic 1 (High consumption – exceeding 600 kWh per month)
Daily Service Charge (R) 1.99
Energy Charge (c/kWh) 30.50
1.2 Domestic 2 (Low consumption – less than 600 kWh per month)
1.3 Domestic 3 (3 Phase)
Commercial:
2.1 Small Power Users (For supply up to a maximum of 500 kVA)
2.1.1 Small Power Users 1 (High consumption – exceeding 1 000 kWh per month)
2.1.2 Small Power Users 2 (Low consumption - less than 1 000 kWh per month)
2.2 Large Power Users
Commercial customers with installed capacity between 500 kVA and 1 MVA must take their
supply at either the Low Voltage or Medium Voltage Large Power Users tariff. No other
supply will be permitted. The demand charge will only be applicable on weekdays from
06:00 to 22:00 provided suitable metering is installed at the customers‟ premises.
2.2.1 Large Power Users (Low Voltage)
Demand Charge (R/kVA) 49.06
2.2.2 Large Power Users (Medium Voltage)
This tariff is compulsory for customers with installed capacity above 1 MVA unless they
elect to take supply at the Very Large Power User tariff.
2.3 Very Large Power Users
This tariff is only available at medium voltage and could be beneficial to customers using
more than 12 GW.h per annum.
Daily Service Charge (R) 1 751.20
3 Off Peak Tariff (For installed capacity above 50 kVA)
This tariff is available for customers supplied at the Domestic or Small Power Users tariffs
with installed capacity above 50 kVA. It will be applicable during the off peak periods from
22:00 to 06:00 on weekdays and from 22:00 on Friday to 06:00 on Monday.
Note: Customers charged at the Large or Very Large Power Users tariffs automatically
enjoy a similar benefit as the demand charge is not applicable during the off peak
periods provided suitable metering is installed.
Daily Minimum Charge (R) 18.06
4 Wheeling Tariff
5 Green Energy Tariff
Energy Surcharge (c/kWh) 25.00
6 The following tariffs are only applicable where the supply agreement already exists
6.1 Time-of-Use Tariff
Energy Charge: Peak (c/kWh) 48.53
Standard (c/kWh) 17.44
Off Peak (c/kWh) 8.72
6.2 Off Peak Tariff (For dedicated plant)
Daily Minimum Charge (R) 2.03
Energy Charge (c/kVA) 16.49
6.3.2 Eskom Billing System
Domestic Tariffs (Mar 2006- Feb 2007)
Homepower is directed at high usage residential customers. Homelight is directed at low usage
customers. Up to 350kWh per month Homelight is cheaper than Homepower.
Charges: Network Service Energy

Charge (per Charge (per Charge (per
day) day) kWh)
Homepower 1 (3 ph 40A/ph) R1.95
Homepower 2 (3 ph 80A/ph) R4.21 R1.27 27.81c
Homepower 3 (3ph 150A/ph) R8.48
Homepower 4 (1 phase 80A) R1.00
Homelight 1 (10A) N/A N/A 42.75c
Commercial Tariffs
Charges: Network Service Energy Charge
Charge (per Charge (per (per kWh)
day) day)
Businessrate 1 (<25kVA) R3.45 R3.59 25.06c
Businessrate 2 (>25 <50kVA) R4.97 R3.59 25.06c
Businessrate 3 (>50 <100kVA) R9.73 R3.59 25.06c
Businessrate 4 (<25kVA, N/A N/A 59.48c
<622kWh/m)
Industry Tariffs
Nightsave Megaflex (>1MVA) – Miniflex (100kVA-
(>1MVA)- Time of use differentials 5MVA) – Time of
Seasonal, Off peak use differentials
savings
Network Demand
Charge (per KVA) R 7.08 R 7.08 R 7.08
Network Access
Charge (per KVA) R 6.26 R 6.26 R 6.26
Service Charge R1.01(<100kVA)- R2.32 (<100kVA)
R62.22 (>1MVA)
(per day) R62.22(>1MVA) R62.22 (>1MVA)
Admin Charge (per R2.49(<100kVA)- R2.61(<100kVA)-
R35.89(>1MVA)
day) R33.39(>1MVA) R34.71(>1MVA)
Energy Demand R32.37 (Jun-Aug)
-
Charge (per kVA) 4.59 (Sep-May)
Active Energy
Charge (per kWh) - 55.30c (Jun-Aug) 56.55c (Jun-Aug)
-
Peak 15.69c (Sep-May) 17.44c (Sep-May)
Active Energy
Charge (per kWh) - 11.28c (Jun-Aug) 14.62c (Jun-Aug) 16.37c (Jun-Aug)
Standard 8.02c (Sep-May) 9.74c (Sep-May) 11.55c (Sep-May)
Active Energy
Charge (per kWh) - 7.95c (Jun-Aug) 7.87c (Jun-Aug)
-
Off Peak 6.90c (Sep-May) 6.82c (Sep-May)
6.3.3 Comparison of Eskom and CCT tariffs based on average consumption

figures:
It should be noted that the tariffs compared are the current rates as at the writing of this report. CCT
rates will go up in July 2007, While Eskom‟s will only go up in March 2008.
Domestic:
Ave lo income use 286 kWh/month
Ave hi income use 837 kWh/month
Ave days/month 30.4
Network Service Energy Total ave

Charge Charge Charge cost/month
1 Phase
Domestic (Hi
Income)
- 60.496 R 255.29 R 315.78
Domestic 1 (CCT)
Homepower 4
36.784 40.736 R 246.50 R 324.02
(Eskom)
3 Phase
Domestic
(Hi Income)
- 91.2 R 255.29 R 346.49
Domestic 3 (CCT)
Homepower 1
62.928 40.736 R 246.50 R 350.16
(Eskom)
1 Phase
Domestic
(Low Income)
- - R 116.26 R 116.26
Domestic 2 (CCT)
Homelight 1
- - R 129.47 R 129.47
(Eskom)
Tariffs compare very similarly between the two distributers for domestic supply.
It is difficult to compare business and Industry tariffs, as charges differ greatly from user to user,
depending on power requirements, and not enough detailed information is available on Eskom‟s
users.
6.4 Analysis of margins made by municipality and Eskom

6.4.1 City of Cape Town
The City of Cape Town is set to make a gross profit on electricity sales of R1.45 billion over this
operating year ending June 200734. However, taking O+M and capital expenditure costs into account,
the net profit is estimated to be R180million. Excluded in this figure is a contribution to the rates
account of a figure in the region of R150 - R300 million (see O+M budget breakdown). It is clear that
the electricity department is a net generator of income for the city, and that it subsidises other areas of
the council. The tariffs charged to users in the city are comparable to those charged by Eskom, so in
terms of competitiveness there is very little discrepancy.
Item R (2006) R/ month
Gross Income R 1,455,715,342 R 121,309,612
Costs -R 1,276,212,342 -R 106,351,029
Marginal Income R 179,503,000 R 14,958,583
6.4.2 Eskom
The average Eskom figure of total cost of energy sold of 14c/kWh for 2006 was used. This figure
includes operating costs and net interest, and is based on electricity sold, not generated.
Item kWh c/kWh R (2006) R/ month

Gross Income 13,443,330,795 R 2,608,668,983 R 217,389,082
Operating Costs -13,443,330,795 14c R -1,882,066,311 R -156,838,859
Marginal Income R 726,602,672 R 60,550,222
Source: Eskom Annual Report (2006)
34
CCT Electricity Department financial figures
6.5 Capital Budgets
6.5.1 CCT Capital Budget
2005 2006 2007

Actual Actual Projected
Capital Budget Item R'000 R'000 R'000
External Financing Fund
93,784 192,025 178,641
(EFF)
Grants 8,508 33,393 35,400
Asset Financing Fund
17,691 274,173 123,105
(AFF)
Developers
22,082 1,776 21,000
Contributions (DC)
Private Sector 26,054 11,750
Other Authorities 0 5,707
Revenue 202 1,452
Total 168,320 520,275 358,146
Current prioritisation in the capital budget is their high voltage (HV) network35.
6.5.2 Eskom Capital Budget

The Eskom capital budget for the Western Cape was R500 million for the year ending March 2007.
Projects are prioritised according to a weighted criteria schedule:
Criteria Weighting
Financial 40
Statutory Requirements 5
Technical Sustainability 30
Social Responsibility 5
Customer Focus 15
Strategic Objectives 5
Total 100
35
Donovan Leewendaal, CCT Electricty, Personal Communication, June 2007
Source: Eskom Employee, Personal Communication
6.6 Breakdown of operating and maintenance

6.6.1 CCT
The CCT electricity department are developing an overall maintenance strategy for the service. A
number of areas have proactive maintenance but mostly maintenance is reactive due to staff
constraints36.
The following table provides a full financial breakdown from the City of Cape Town‟s electricity
department. It includes O+M and capital costs and shows contributions to and from the rates system.
Capital costs are worked into this table, as this is the way the City presented the data to the
researchers.
2005 2006 2007

ACTUAL ACTUAL PROJECTED
R'000 R'000 R'000
INCOME
Revenue from sales of Electricity 2468530 2561495 2895280

Revenue from sales to Consumers (All sales from
tariffs) 2358678 2439074
Revenue from sales for own use 69400 75106
Revenue from sales for street and traffic lighting 40452 47315
Revenue from sales to other departments 0 0
Other revenue derived from electricity distribution 198413 303594 213020

Reconnection fees 2550 3081
Interest on Arrears 15200 19022
Electricity Service Charges 138932 214788
Other 41731 66703
Total revenue derived from electricity distribution 2666943 2865089 3108300
36
Donovan Leewendaal, CCT Electricty, Personal Communication, June 2007
Capital Grants and Donations 34262 31735 98500
TOTAL INCOME 2701205 2896824 3206800
EXPENDITURE
Purchases
Purchases (Bulk electricity) 1546599 1609564 1751360
Salaries and Maintenance 409280 449932 534058

Salaries, Wages and Allowances 290535 293787 345283
Contracted Services 12225 20945 33899
Repairs and Maintenance 106520 135200 154876
Cost of Capital 288740 201127 177564

Depreciation 108643 104576
Impairment of Assets 80304 51
Internal Interest 99793 96500
Contribution to Funds 53451 73510 47996

Provision for Medical Aid 24417 15423 15965
Provision for Bad debts 29034 58087 32031
Net Contribution to Rates account 155759 218100 296897

Contribution to Rates account 252000 288100
Contribution from Rates account -96241 -70000
Charges allocated from other Departments

(administrative) 24127 28078 28211
Charges allocated from other Departments (for

services) 85463 105605 133399
Charges allocated to other Departments -60445 -50712 -66968
General Expenses 100058 139336 124780
TOTAL EXPENDITURE 2603032 2774540 3027297
Surplus / (deficit) for the year 98173 122284 179503

6.6.2 Eskom
Eskom‟s aggregated figure of 14c/kWh sold is the closest approximation of operating costs available
to the researchers. This then places the operating costs at R1,882,066,311 for supply and
distribution to Cape Town.
(Source: Eskom Annual Report 2006)
6.7 Aggregate of all flows of energy payments
6.7.1 Electricity (June 2006- July 2007)
Energy Consumed Ave Income
(kWh) c/kWh Income Annual Monthly
Eskom
Energy Into System/
Expenditure -13,443,330,795 14 R -1,882,066,311 R -156,838,859
Energy Out of System /
Income
Domestic – Conventional
meters 460,000,000 40.08 R 184,368,000 R 15,364,000
Domestic – Energy dispensers 709,694,244 40.08 R 284,445,453 R 23,703,788
Commercial – Small 1 & 2 620,663,798 22.69 R 140,828,616 R 11,735,718
Large & Very Large 1,680,964,452 14.75 R 247,942,257 R 20,661,855
Sold to CCT 9,972,008,301 17.56 R 1,751,084,658 R 145,923,721
Cape Town Total 13,443,330,795 R 2,608,668,984 R 217,389,082
Net Profit (Eskom) R 726,602,672 R 60,550,222
CCT
Energy Into System/
Expenditure
Total Energy Bought -9,972,008,301 17.56 R -1,751,084,658 R -145,923,721
O+M Costs R -918,066,342 R -76,505,529
Capital Costs R -358,146,000 R -29,845,500
Total (CCT) R -3,027,297,000 R -252,274,750
Energy Out of System/
Income
Domestic-Conventional meters 1,495,589,251 34.54 R 516,572,461 R 43,047,705
Domestic – Energy dispensers 2,259,057,104 36.32 R 820,529,850 R 68,377,488
Commercial – Small 1 & 2 1,396,618,069 35.42 R 494,740,058 R 41,228,338
Large & Very Large 3,663,490,079 25.82 R 945,766,209 R 78,813,851
Off Peak 2,559,170 17.32 R 443,278 R 36,940
Municipal 355,096,880 33.01 R 117,227,765 R 9,768,980
Distribution Service Charges R 213,020,379 R 17,751,698
Total Energy Sold 9,172,410,553 R 3,108,300,000 R 259,025,000
Distribution losses 799,597,748 R0
Capital Grants and Donations R 98,500,000 R 8,208,333
Total (CCT) 9,972,008,301 R 3,206,800,000 R 267,233,333
Gross Profit on Sales R 1,455,715,342 R 121,309,612

Net Profit (CCT) R 179,503,000 R 14,958,583
Source: City of Cape Town Electricity Dept, CT State of Energy Report 2003, SA State of Cities Report (SEA
2006), CT Energy Futures Report (2005), Household Numbers in Cape Town-Discussion Document (CCT, Aug
2006); CT State of Energy Report 2003, Eskom Annual Report 2006,
6.7.2 Liquid Fuels (2006)
Fuel Volume
(l) Income (R)
Oil Companies
Importing and Refining Gross Profit Unknown
Importing and Refining Operational
costs Unknown
Marketing Gross Profit -Petrol 1,240,140,235 R 570,464,508

Marketing Gross Profit -Diesel 718,429,201 R 330,477,432
Marketing Gross Profit -Paraffin 82,346,185 R 55,501,329
Marketing Gross Profit -Jet Fuel 412,592,177 R 42,665,919
Marketing Gross Profit -LPG 127,047,856 Unknown
Marketing Gross Profit -HFO 118,295,985 Unknown
Marketing Operational Costs Unknown
Oil Companies’ Net Profit-
Importing, Refining and
Marketing (14c/l) 2,698,851,639 R 377,839,229
Fuel Tax and Customs and
Excise
Government Income - Petrol 1,240,140,235 R 1,550,175,294
Government Income - Diesel 718,429,201 R 98,036,501
Government Income - Total R 1,648,211,795
Road Accident Fund
Road Accident Fund -Petrol 1,240,140,235 R 514,658,198
Road Accident Fund -Diesel 718,429,201 R 98,148,118
Road Accident Fund -Total R 612,806,316
Petrol Stations
Petrol Station Gross Profit - Petrol 1,202,936,028 R 576,725,143
Petrol Station Gross Profit - Diesel 258,634,512 R 23,795,989
Petrol Station Gross Profit - Total R 600,521,132
Other Retail Unknown
Source: SAPIA, SAPIA Annual Report 2005, DME Fuel Regulation Margins
7. Challenges, Constraints and Future Plans

7.1 Ten year outlook – constraints and opportunities
7.1.1 Electricity
With 98% of Cape Town‟s residents having access to electricity, the future challenges lie in:-
i. providing enough capacity to ensure that enough electricity is available to supply Cape Town‟s
growing demand in the future, and
ii. ensuring that as many energy efficiency and renewable measures as possible are put in place
to keep the growth rate of fossil and nuclear power demand as low as possible.
As indicated earlier in this report, Cape Town‟s electricity supply is limited by the capacity of the
transmission lines from the north, and by the size of Koeberg. Therefore, to accommodate increased
demand, new power stations need to be developed in the Western Cape, and/or the capacity of the
transmission line network from the north must be improved. As the national demand for electricity
grows and Eskom‟s generation capacity is stretched, it is becoming clear that Eskom will struggle to
provide the Western Cape‟s additional energy needs from its power stations in the north. Also huge
transmission losses of up to 20% are incurred in getting electricity to the Western Cape37. It therefore
makes more sense to develop power stations locally.
This can be seen as a great opportunity for the implementation of renewable power stations in the
province. Cape Town wishes to source at least 10% of its electricity from renewables by 2020, and the
Western Cape has a target of 15% by 2014. The potential for renewable developments has been
established by the Renewable Energy Plan of Action for the Western Cape, 2007. There is strong
potential for large scale wind, solar and tidal/wave power in the region. The challenge still lies in
developing renewable energy as a base load supply source, and not as an intermittent source, driven
by the forces of nature. Effective means of storing extra energy generated on site for later demand use
must be developed. When this becomes a reality, a real case can be made for using renewable
energy in the place of traditional base load stations (coal and nuclear).
In the meantime though, Eskom is pushing ahead with plans for more nuclear power stations in the
area (pebble bed and pressurized water reactors) to provide the base load requirements for the
anticipated increase in future demand. There is large scale concern that the full cost accounting
principle has not been taken into account with nuclear power. The cost of decommissioning a nuclear
power station and disposing of its spent fuel is estimated to be of a similar order of magnitude for
commissioning it.
7.1.2 Liquid Fuels

South Africa‟s demand for liquid fuels is expected to outstrip refining capacity in the next ten years38.
More refined product will be imported, further increasing the country‟s dependence on other countries
to provide its energy needs.
37
38
The largest growth areas in the industry are in jet fuel and diesel, with the demand for petrol, heavy
fuel oil and LPG also rising steadily. Paraffin demand is dropping with increased electrification of low
income areas39.
7.1.3 Coal
Coal is still a big factor in Cape Town‟s industrial energy picture. Very little information is available on
projected growth figures, and where the coal industry is headed in the future.
7.2 What future plans are envisaged, and how are they likely to shape
sustainable outcomes positively or negatively
Both the City of Cape Town and the Western Cape provincial government have developed strategies
to move towards sustainability in the future. These include energy efficiency, renewable energy and
carbon emissions reductions targets. While these targets are admirable and may have some impact
on the status quo of energy use, indications are that fossil fuel and nuclear energy use is likely to
increase for many more years before it declines.
7.2.1 Electricity
The following table shows definite plans currently in place to accommodate the growth in electricity
demand in Cape Town and the Western Cape.
Technology Capacity Target Sustainability profile

year
Open Cycle Gas 1050MW 2007 Cleaner than Coal
Turbine Unsustainable
Nuclear*
PebbleBed Modular 165MW 2013 Unsustainable
Reactor
Pressurised Water 4000MW 2020 Unsustainable
Reactors
Darling Wind Farm 20MW 2008- Sustainable
(*Falls into plan to generate 20000MW in South Africa using nuclear in the next 20yrs (ESKOM))
39
Expansion of Darling Wind Farm
Darling Wind Farm plans to add another six wind turbines (a further 7.8MW) to the wind farm, followed
by another ten (a further 13MW) in the longer term, adding that global demand for the wind turbines is
so high that the earliest additional wind turbines would be available only by 2008.
7.2.2 Liquid Fuels

General fuel consumption levels are predicted to increase in the future, and the oil companies in South
Africa are preparing to import extra refined fuel products as the country‟s demand for fuel outstrips its
capacity to refine.
The DME has set the target of biofuels making up 4.5% of South Africa‟s liquid fuel mix by 2013 (2%
ethanol, 8% biodiesel)40. These biofuels will be mixed in at the refinery prior to being distributed.
While there are obvious sustainable benefits to using biofuels, situations may transpire in the future
where land which should be used for food production will be used for biofuel crops due to better profit
margins.
8. Conclusion
It is clear from this study that Cape Town is still firmly on an unsustainable path of using fossil fuel and
enriched uranium for the majority of its energy needs. Energy demand is also on the increase, with
growth expected in both the electricity and liquid fuel industries in the next ten years. Both industries in
Cape Town are multibillion rand operations, and are key elements of Cape Town‟s economic and
employment base.
Government relies heavily on the liquid fuel industry for income, receiving R1.65 billion in fuel taxes
from fuel sold in Cape Town alone in 2006.
With new nuclear power stations being planned for the Western Cape, every effort should be made to
see where energy efficiency and renewable energy can replace these plans. This should be an item of
the highest priority, in order to avoid being locked into an unsustainable fixed nuclear program for the
next 10 to 15 years. Government will have to drive these changes through its regulatory bodies.
40
Draft Biofuels Industrial Strategy of the RSA, DME, November 2006
A sustainable biofuels program and spending on infrastructure to achieve a transport modal shift will
increase fuel security and decrease fuel consumption levels.
BIBLIOGRAPHY
CCT: State of Cape town Report 2006

CCT: Request for proposals: Athlone Power Station: Independent Power Project, 2004
CCT & Haskins C: Household Numbers in Cape Town-Discussion Document August 2006
CCT & Sustainable Energy Africa: State of Energy Report for Cape Town 2003
CCT & Sustainable Energy Africa: Draft Energy and Climate Change Strategy 2005
Cowan, B & Mohlakoana, N 2004. Barriers to access modern fuels in low-income households:
Khayelitsha. Cape Town, Energy Research Centre, University of Cape Town.
DME: Draft Biofuels Industrial Strategy of the RSA, November 2006
Droege, Peter: Renewable City, A Comprehensive Guide to an Urban Revolution, 2006
ESKOM: ESKOM Annual Report 2006
NNRA: National Nuclear Regulator Annual Report 2005/2006
SAPIA: SAPIA Annual Report 2005
Simmonds, G & Mammon, N 1996. Energy services in low-income urban South Africa: A quantitative
assessment. Cape Town, Energy & Development Research Centre, University of Cape Town.
Sustainable Energy Africa: State of Energy in South African Cities 2006
Sustainable Energy Africa, Shell Foundation: Market Analysis of the SME energy sector 2002
Western Cape Department of Environmental Affairs and Development Planning, Banks D, Schaffler J:
A proposed renewable energy plan of action for the Western Cape 2007
Winkler H, Borchers M, Hughs A, Visagie E, Heinrich G: Cape Town Energy Futures: Policies and
Scenarios for sustainable city energy development, Jan 2005

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Integrated Analysis

Energy Baseline Report

The Sustainability Institute, Lynedoch, South Africa

under UNF-funded project,

“Integrated Resources Management for Urban Development”

(UNDP Project No. 00038512)

Trustees: EG Annecke, ADH Enthoven, EA Pieterse, G Goven, L Boya, R Shabodien

Andrew Janisch from Sustainable Energy Africa for report compilation

This report has five areas of focus.

EXECUTIVE SUMMARY .......................................................................................................... II

2. POLICY AND KNOWLEDGE CONTEXT ............................................................................. 5

2.1 Relevant Documents, Studies, Legislation, Information ..................................................................................... 5

2.2 Summary of Cape Town’s Energy System .............................................................................................................. 8

2.3 Relevant Policy and Planning Frameworks ........................................................................................................... 14

3. REGULATORY AND INSTITUTIONAL ENVIRONMENT .................................................. 16

3.1 Overview ......................................................................................................................................................................... 16

4. CAPE TOWN’S ENERGY SUPPLY AND DEMAND .......................................................... 19

4.1 Sources of Energy Supply in Cape Town .............................................................................................................. 19

4.2 Energy Demand ............................................................................................................................................................ 23

4.3 Supply distribution ...................................................................................................................................................... 26

4.5 Users and Needs .......................................................................................................................................................... 31

4.6 Average household consumption ............................................................................................................................ 34

4.7 Average Non Residential Consumption ................................................................................................................. 36

4.8 Seasonal and daily load profiles .............................................................................................................................. 37

4.9 GHG Emissions in CT ................................................................................................................................................. 41

4.10 Demand Side Management ...................................................................................................................................... 42

5.1 Existing supply and generation technologies ...................................................................................................... 43

5.3 Actual savings from EE interventions - key technologies ................................................................................ 44

Source: SEA:2007 ............................................................................................................................................................... 48

5.4 Feed in tariffs ................................................................................................................................................................ 48

5.5 Overview of environmental impacts of current technologies .......................................................................... 49

6.1 Quantification and Analysis of electricity flow in financial terms ................................................................... 50

6.2 Quantification of liquid fuel flow in financial terms ............................................................................................ 53

6.3 Billing systems used by Eskom & municipality ................................................................................................... 58

6.4 Analysis of margins made by municipality and Eskom ..................................................................................... 62

6.5 Capital Budgets ............................................................................................................................................................ 63

6.6 Breakdown of operating and maintenance ........................................................................................................... 64

6.7 Aggregate of all flows of energy payments ........................................................................................................... 67

7. CHALLENGES, CONSTRAINTS AND FUTURE PLANS .................................................. 68

7.1 Ten year outlook – constraints and opportunities .............................................................................................. 68

2. Policy and knowledge context

Energy White Paper of 1998

Municipal Systems Act No 32 of 2000

National Energy Regulator Act of 2004

Petroleum Products Amendment Act 2003, Act 58 of 2003

Gas Act of 2001

Central Energy Fund, 1977 (Act No. 38 of 1977), as amended

Empowerment Charter of November 2000

Renewable Energy Plan of Action for the Western Cape, 2007

2.1.3 Local Government

Cape Town Energy Futures Report, January 2005

2.2 Summary of Cape Town’s Energy System

Summary of Cape Town’s Energy Consumption (2006)

Households 17969125 - - - 2586691 - 546992 43400 359100 21505308 14%

Total % 29% 28% 18% 3% 2% 9% 2% 7% 1% 100%

2.2.2 The Western Cape Energy Crisis

Current Western Cape Supply Limitations:

Transmission Lines from Eskom Network +/- 2600MW

Electricity supply system

i) to improve energy efficiency in all spheres of energy use.

Source: SAPIA Annual Report 2005

2.3 Relevant Policy and Planning Frameworks

Renewable Energy Plan of Action for the Western Cape, 2007

2.3.1 Planning projections