City of Cape Town starts selling 'Green Electricity'

At last it will be possible to switch to ‘green electricity’ because the City, ever more serious about sustainability, will now be selling Green Electricity Certificates (GECs). This green electricity is generated at South Africa’s first commercial wind farm, the Darling Wind Farm on the West Coast.

‘Green electricity’, also known as green power or renewable energy, is electricity generated from renewable sources such as wind, sun and wave. It is an environmentally responsible alternative to conventional electricity generated from fossil fuels such as coal and oil. The burning of fossil fuels is the major cause of greenhouse gas emissions (such as carbon dioxide), and as a result, climate change.

The City of Cape Town aims to source at least 10% of the metro’s energy from renewable sources by 2020, and an important contributor to this goal is the Darling Wind Farm.

The City helped start the Darling Wind Farm Project in 2006 by entering into a Power Purchase Agreement with Darling Wind Power. The Darling Wind Farm is a R70 million national pilot project comprising four 1.3 megawatt wind turbines on a hill alongside the R27 West Coast Road. The turbines began generating in May 2008, and the City will purchase the entire production for 20 years.

GECs, an internationally accepted mechanism for trading green electricity, represent units of green electricity. In essence, a GEC is an auditable financial instrument that reflects the attributes of green energy independently of the actual units of energy – ie, the ‘greenness’ value is separated from the electrons.

A green generator, in this case, the Darling Wind Farm, produces electricity that is distributed into the national grid and becomes undifferentiated from normal coal-generated electricity. Following generation, an electronic record called a “Green Electricity Certificate”, is created which represents the quantity and type of green electricity produced. This certificate can be marketed and sold separately from the associated electricity. A consumer wanting to “green” their electricity consumption would purchase a number of units of GECs equivalent to the units of electricity consumed by the facility or production process to be greened.

In addition to this National Demonstration Pilot Project, designed to explore the technical, commercial and environmental viability of converting wind energy into electricity, the City is also working on other sustainable energy projects. These include Green Buildings Guidelines; the Greening of Procurement Policy (such as fuel efficiency in fleet tenders), an Efficient Water Heating by-law; Solar Water Heating in the City’s nature reserves; and Solar Water Heating in low-income housing projects, and land for methane gas capture and electricity generation.

The Darling Wind Farm is funded by:

* The Central Energy Fund (CEF)
* The Development Bank of South Africa
* The Danish Government (Danida)
* A private developer: Darling Independent Power Producer

The certificates will be offered for sale once or twice a year, depending on how much green electricity has been generated and how much Green Certificate Stock has been accumulated. Click here to participate in the initial sale of 10 GWH (10 000 000 kilowatt hours).

Income from the sale of the GECs is intended to cover the premium the City has to pay for purchasing the green electricity. The GECs will be sold initially at a price of 25c (excluding VAT) per unit (1 kilowatt). This purchase is an additional purchase and an additional expense to the cost of the normal electricity bill.

By Martin Pollack
30 April 2010
http://www.capetown.gov.za/en/Pages/default.aspx