Summary


 
Figure 1_CERs_that_have_reached_the_issuing_stage_as_a_percentage_of_registered_CERsThe Umdoni municipal area consists of mainly poor, rural communities. Half of these communities are grid-connected to Eskom (the South African electricity utility), and half are not.  51% of Umdoni households use electricity for cooking and 61% for lighting (Umdoni,2011). South Africa has an energy policy aimed at providing poor communities with at least some access to modern energy services. This is done through the Free Basic Electricity Policy (FBE) for grid-connected households and the the Free Basic Alternative Energy Policy (FBAE) for non-grid-connected households.

 

In the case of the Umdoni target group, which is not grid-connected, the Umdoni Municipality decided to supply gel stoves and bioethanol gel fuel. Gel stoves, which burn bioethanol gel fuel, are intrinsically and less polluting than kerosene (paraffin) or wood-burning stoves, as well as producing less greenhouse gas emissions because bioethanol gel is carbon-neutral. This decision was made in consultation with the affected community and with the help of the project developer, PPT, and PACE, the project proponent, who managed the carbon accounting aspects. The project started in 2007 with the delivery of the first 1 000 gel stoves. This was increased by about 1 000 stoves each year. In 2008 PACE came on the scene with a plan to generate carbon revenue by selling carbon credits through Credible Carbon, a small voluntary carbon registry.

 

The voluntary carbon market rather than the Clean Development Mechanism (CDM) was chosen because of the barriers to successful CDM implementation that face small projects such as Umdoni. These barriers are: the high CDM transaction costs (at least Euro 50 000), the long lead times (up to three years for African projects) and the low CDM success rate – only 13% of registered CDM projects have reached the ready-for-sale point and in Africa, only 1% of registered projects reached the issuing or selling stage, see Figure 1 below (Atkins & Prasad, 2012)

 

In 2012 the community received about R 500 000 (Euro 50 000) through the sale of their carbon credits to South African businesses. This money will be used by the community to fund another energy-related project – the supply of 1 100 efficient wood cookstoves. This decision on what to spend the money on was made by the Umdoni community and the Umdoni Municipal Council, with technical advice from PPT.

 

Contents
  1. Objective
  2. Target Group
  3. Output
  4. Key Features of the Case
  5. Sustainable Financing
  6. Supportive Policies and Institutional Environment
  7. Building Local Capacity and Skills
  8. Community Participation and Including Local Stakeholders
  9. Achieving Co-Benefits
  10. Affordability and Technical Issues
  11. Local Champions
  12. Monitoring and Evaluation
  13. Replicability and Scaling-up
  14. Contact
  15. References and Further Reading

 

Objective


Reduce greenhouse gas emissions, poverty alleviation and improve health and safety.

 

Target Group


  • Poor, rural households  with no grid connection in the Umdoni Municipal area in KwaZulu-Natal in South Africa.

 

  • The initial group numbered 1 000 in 2008 and this has grown to about 4 000 in 2012.

 

  • Female-headed or child headed households, as these households (many of which have been created by the HIV/ Aids pandemic) are typically most needy and most exposed to indoor air pollution impacts and increasing firewood gathering costs and dangers.

 


Output


  • Generated carbon revenue from the carbon emission reductions

 

  • Reduced particulate emissions and indoor air pollution thus reducing health problems

 

  • Reduced indoor fire accidents through the use of safer fuel

 

  • Reduced the need for firewood and dung collection for fuel thus improving sustainability and reducing the time spent on fuel gathering

 

  • Generated local employment opportunities through gel fuel distribution and supported local gel fuel manufacturing

 

Key Features of the Case


  • Well-implemented energy poverty alleviation policies, that is, the Free Basic Alternative Energy Policy, in which poor households, not connected to the electricity grid,  receive some form of free basic energy, in this case, bioethanol gel fuel for cooking

 

  • A proactive local authority in the form of the Umdoni Municipality and its Community Development department which implements the Free Basic Alternative Energy Policy

 

  • A receptive target community of poor households who receive and use the ethanol gel stoves and seven litres of bioethanol gel per month

 

  • Efficient and committed project participants who included the target community, the Umdoni Municipality (who supplies the gel stoves and gel fuel), PACE (as the coordinator of the carbon side of the project) and PPT (as the project developer)

 

  • The generation of revenue through the sale of carbon reduction credits on the voluntary carbon market through the Credible Carbon Registry, 70% of this revenue was then re-invested back into the community

 

 

 

Sustainable Financing


The Umdoni project was fortunate in having pro-active local government participation through the Umdoni Municipality Community Development Department. The project was further strengthened by effective project management carried out by the project developer, the Project Preparation Trust, and by the involvement of PACE, which manages the carbon revenue aspects.

 

The funding for the stoves has been provided by the Umdoni Municipality but the details of amount of funding are not readily available- it has probably been about of ZAR 1.2m (Euro 114 000), assuming 4 000 stoves at ZAR 350 per stove (Euro 33).

 

The on-going funding of the bioethanol gel has been provided through the Free Basic Alternative Energy Policy by the Umdoni Municipality and currently is in the region of ZAR 2.7m per year (Euro 0.3m per year) for the 4 000 households, assuming ZAR 57/household/month (Euro 5.4). However, this amounts to only seven litres of bioethanol gel per household per month which lasts for seven days per month.

 

The cumulative carbon credits generated and sold from 2008 to 2011 amounted to about ZAR 750 000 (Euro 71 000), and 70% or ZAR 500 000 (Euro 47 000) of this went to the community. The balance of 30% was used, as per the agreements, to pay for the services of PPT and PACE over the years.

 

The supply of bioethanol gel fuel is sustainable as long as the FBAE policy (see Supportive Policies and Institutions below) remains in force.

The carbon revenue will be used to fund a new sustainable energy project which will deliver about 1 000 efficient wood stoves to the community. These will supplement the bioethanol gel fuel, which only lasts for about seven days each month. The higher efficiency of these stoves means less firewood, less air pollution, a reduction in CO2 emissions and the opportunity to generate additional carbon revenue.

 

There have been some problems with the methodologies used for the calculation of the greenhouse gas reductions which has resulted in the reduction of carbon credits from 2012 onwards. This is explained below in the Monitoring and Evaluation section.

 

Supportive Policies and Institutional Environment


The key policies relevant to this project are outlined in the Free Basic Electricity Policy (DME,2003) and the Free Basic Alternate Energy Policy (DME,2007). The Free Basic Electricity Policy (FBE) covers grid-connected households and currently gives low-consumption households 50 kWh/mth free electricity, whilst the Free Basic Alternative Energy Policy (FBAE) attempts to provide free energy access equivalent to that provided by the FBE to those without grid connections.

 

The FBAE is applicable to "indigent" or poor households, where "poor" is interpreted by each municipality in its own way. The FBAE grant was set at ZAR 55/household/month (Euro 5.2) in 2007 and this amount was to be inflated at the "inflation rate" (presumably the Consumer Price Index) plus 1.5% each year. So, in 2012, it should be set at about ZAR 80 (Euro 7.6) per household per month (Statistics SA, 2012).

 

As has been mentioned previously, the Umdoni Municipality has been proactive and supportive in the on-going implementation of the FBAE. The relationship between the various role-players has been important in the success of the project for many reasons:

 

  • It is always difficult to engage with an informal community because there are often no formal or established structures to work with and different people want different thngs - in these cases one needs facilitators who speak the language, are accepted and trusted by the community and have influence in their own organisations. In this respect, the main players are Nana Ndlovu of PPT and Siya Hlongwane of the Umdoni Community Development department.

 

  • In the Umdoni case, there could have been a problem in that the Umdoni initially had full control of the project, but when PPT and PACE came on the scene, they had to give up or delegate some of this power. This was only possible due to the trust that had been built up between the Municipality (Siya mainly), PPT (Nana) and PACE (Anton Cartwright)

 

  • This trust was then formalised through PACE producing legal agreements that spelt out who was responsible for what.

 

  • Another essential relationship is that between the potential buyers of the carbon credits, Credible Carbon and PACE (Anton Cartwright).

 

  • And lastly we have the carbon auditors - these are chosen by Credible Carbon for their expertise, independence and objectivity, but the auditors alos have to be able to work with all the role players to do their job effectively.

 

Building Local Capacity and Skills


Awareness raising and some training was provided as part of this project in collaboration with the local municipality's development officer and PPT.

 

The aim of this outreach was to ensure effective use of the bioethanol gel and stoves, to ensure that the gel is being used to support the most vulnerable households and to explore suitable alternative technologies that may improve livelihoods in Umdoni.

 

In addition local people are employed by the Umdoni Municipality to carry out the monthly distribution of bioethanol gel containers to the community.

 

Community Participation and Including Local Stakeholders


The Umdoni Municipality Community Development staff did the initial community consultations in 2007. Since then PPT has also become heavily involved.

 

Initially, the only real decisions were made by the municipality and those were to do with what form of alternative energy services to provide with the limited national funding that was available. They chose bioethanol gel, because of its health and safety potential and the fact that it was perceived as "green". The choice of the beneficiaries was also made by the municipality - the choice criteria appear to have been:

 

  • households not likely to get electricity grid connections in the near future
  • households grouped together so as to facilitate the installation and on-going delivery of the gel fuel
  • households most in need (poor, child-headed, women-headed households)
 

The more recent decisions requiring community involvement was about what to do with the accumulated carbon revenue (Euro 48 000). The community wanted efficient wood stoves, more gel fuel, gel fuel shower heaters, and PV panels for lighting, radio and TV. Through community meetings and discussions the decision to choose the efficient wood stoves was eventually made. It is noteworthy that the Umdoni Municipality favoured PV panels (presumably because of the strong, green image), but bowed to the community's preference.

 Project role_players

 

Achieving Co-Benefits


The expected benefits were:

  • Generate carbon revenue from the carbon emission reductions
  • Reduce particulate emissions and indoor air pollution thus reducing health problems
  • Reduce indoor fire accidents through the use of safer fuel
  • Reduce the need for firewood and dung collection for fuel thus improving sustainability and reducing the time spent on fuel gathering
  • Generate local employment opportunities

 

The two audits confirmed the following:

  • Carbon revenue was generated, although after the second audit the amounts were drastically reduced
  • Health improvements have been achieved according to the audit report although no quantitative data was obtained
  • Similarly the auditors reported that there had been a reduction in kerosene-related accidents
  • Less time has been spent on firewood collection, freeing up time for more productive and less dangerous activities
  • Some households also reported a reduction in money spent on kerosene (around Euro 5 per month - this sounds modest, but the average household incomes are extremely low)

 

Affordability and Technical Issues


It was found that the seven litres of bioethanol gel fuel supplied through the FBAE only lasts a household for about a week. For the rest of the month they have to revert to using biomass, and if they can afford it, kerosene. It was initially hoped that the project would be able to get additional gel fuel from the municipality, donors or from the carbon revenue, but that has not happened.

 

In terms of the FBAE policy, the benefit should be escalated by inflation plus 1.5% per year – this has not been established yet, but at least the quantity of bioethanol gel fuel has remained at seven litres, so there has been some degree of inflation-proofing.

 

On the technical side, the original gel stoves became badly corroded after a few years – this mainly affected the air-control vents, so there was some loss of efficiency and heat control. The Umdoni Municipality subsequently replaced all the stoves with a better model.

 

Together, the Umdoni Community Development and the Project Preparation Trust representatives monitor the stoves and resolve most problems.

 

Local Champions


Judging by the scarcity of other, similar projects in South Africa, the Umdoni project has been very fortunate in the quality and enthusiasm of the people involved. This has been essential to the on-going success of the project and its sustainability.

 

The key people are:

 

  • Siya Hlongwane of the Umdoni Municipality, Community Development
  • Nana Ndlovu of PPT
  • Anton Cartwright of PACE and Credible Carbon (the voluntary carbon registry)
  • The buyers of the carbon credits, headed by Nedbank, who have been very supportive
  • And of course the target community itself and its leaders

 

Monitoring and Evaluation


It is vital in a project of this nature to keep tight control on all the processes and manage the use of the technology effectively.

 

The key process is the supply and distribution of the stoves and the monthly supply of bioethanol gel. This was done by the Umdoni Municipality and the Umdoni community and facilitated by PPT.

 

The Monitoring and Evaluation consists of two parts:

  • The on-going involvement of the Project Preparation Trust ensures that they are aware of any problems with the stoves or the gel fuel supply
  • The periodic carbon audits check whether the carbon emissions are being achieved or not, identify any problems being experienced by the community (based on sample interviews) and generally confirm that the project is carrying on as planned

 

The audits have identified some gaps in the monitoring of gel fuel being delivered compared to the gel fuel being supplied by the municipality - these need to be resolved.

 

In the case of the Umdoni project, there was insufficient data on fuel usage before and after the intervention and not enough information to assess the actual efficiency of kerosene versus gel stoves. So the auditors had to rely on what has been done elsewhere and this is always likely to vary from auditor to auditor.

The audited, accumulated carbon revenue from 2008 to 2010 is shown below:

 

Technology                                              Year             Total emission savings (tCO2e)

Avoided CO2 through gel fuel cook stoves     2008                512

Avoided CO2 through gel fuel cook stoves     2009              1 814

Avoided CO2 through gel fuel cook stoves     2010              3 208

Total Avoided CO2 from project to date         2008 to 2010  5 535

 

Source: Carbon Audit by SouthSouthNorth (Wesselink & Moosa, 2011)

 

Then, as is best practice in the carbon credit industry, PACE appointed a different auditor to audit the 2011 to 2012 carbon credits. This audit picked up some questionable assumptions that were made in the original calculations done by PACE as well as other problems in the first audit.

 

The net result was that the carbon credits from 2011 have been drastically reduced. The new estimate of avoided carbon emissions was 0.214 tCO2e per household per year or 0.856 tCO2e per year for 4 000 households. The previous audit estimated the reductions at 1.02 tCO2e per household per year; this was a reduction by a factor of 4 to 5.

 

This huge reduction in GHG reduction estimates was due to the initial project assumption that the monthly FBAE gel fuel, plus additional gel fuel bought with the carbon revenue would be enough to last for the full month. In practice this didn't happen and the seven litres typically only lasted for a quarter of the month and no additional gel fuel was supplied.

 

The first official audit failed to pick this up and then used a different calculation which relied on an unsubstantiated household emissions figure of 4 tCO2e per household per year. Then, assuming that the gel fuel displaced a quarter of the household energy and thus a quarter of the emissions, the auditors also arrived at a figure of 1 tCO2e reduction per year per household (because bioethanol gel is assumed to be carbon neutral).

 

The most recent audit took a third approach and worked out how much kerosene would be displaced by the gel fuel using community-supplied estimates of how long a litre of kerosene lasted compared to a litre of gel fuel. This method is also likely to be inaccurate because of the lack of reliable data on how long the different fuels actually last and how comparable the operating conditions are in practice. It doesn't help to do a purely theoretical calculation based on laboratory conditions and published calorific values and stove thermal efficiencies because of the variations introduced by the operation of the stoves, type of pot used, wind conditions etc.

 

There are some calculation methodology changes currently being discussed by the Clean Development Mechanism Executive Board, which might benefit the Umdoni project. (These approved calculation methodologies are widely used in the voluntary carbon market in attempt to provide consistency across the industry.) One such new methodology, which builds on the CDM's suppressed demand principle, could allow Umdoni to use the 50 kWh per month per household supplied through the FBE policy as the baseline for CO2 emission reduction calculations, instead of kerosene.

 

Naturally, the huge reduction in carbon revenue has been a disappointment to everyone. The carbon revenue going forward will now be about ZAR 77 000 (Euro 7 000) per household per year (based on 4 000 households, 0.214 tCO2 per year and a carbon price of ZAR 90/tCO2 or Euro 8.6/tCO2). The project will go on regardless of the carbon revenue because it is sustained by the FBAE policy, but there will be less money to invest back into the community. 

 

 

Replicability and Scaling-up


The Umdoni project is highly replicable, and it is the intention of the Umdoni Municipality to replicate it elsewhere. The project is attractive because it is "green", it has a beneficial impact on health – particularly that of women and girl children, who are most exposed to indoor air pollution from kerosene or wood cookstoves – and it generates some carbon revenue which is put back into the community.

 

However, in a recent interview with the Umdoni Municipality representative, it appears that they will first undertake a project to supply efficient wood stoves before expanding the bioethanol gel fuel project to more households.

 

There are several other similar projects in Africa, for instance CleanStar in Mozambique ("CleanStar," 2012) which appears to be a large-scale project.

 

 

Contact


  • PACE and Credible Carbon, Peter Atkins, This email address is being protected from spambots. You need JavaScript enabled to view it., +27 74 104 2944

 

 

 

  • Energy Research Centre, University of Cape Town, Dr Gisela Prasad, This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

 

References and Further Reading


Atkins, P. S., & Prasad, G. (2012). Leveraging carbon for poverty alleviation. Strategies to Overcome Poverty & Inequality: Towards Carnegie 3. Cape Town: Energy Research Centre, UCT.

 

CleanStar. (2012).CleanStar. Retrieved October 2, 2012, from www.cleanstarmozambique.com/local-stories-mozambique/thelma

 

DME Electricity Basic Support Tariff (Free Basic Electricity) Policy. , Pub. L. No. 25088 (2003). South African Government Gazette.

 

DME Free Basic Alternative Energy Policy. , Pub. L. No. Notice 391 of 2007 (2007). South African Government Gazette. Retrieved from www.polity.org.za/article/free-basic-alternative-energy-policy-households-energy-support-programme-notice-391-of-2007-2007-05-07

 

Statistics South Africa. (2008). Statistical release Community Survey , 2007 Basic Results: Municipalities P0301.1 (p. 112). Pretoria. Retrieved from www.statssa.gov.za/Publications/P03011/P030112007.pdf

 

Umdoni. (2011). Umdoni municipality annual report 2011-2012 (p. 228). Scottburgh. Retrieved from www.umdoni.gov.za/pdf/Annual Report 2010-2011.pdf

 

Wesselink, C., & Moosa, S. (2011). Carbon Check for Credible Carbon Umdoni Gel Stoves. Randburg. Retrieved from www.crediblecarbon.com

Name:

Capturing Carbon Cash through Bioethanol Gel Stoves

Country:

South Africa

Location:

Print

Implementer:

Local Government - Umdoni Municipality Community Development:

http://www.umdonionline.co.za

 

Project Proponent: PACE (Promoting Access to Carbon Equity), www.carbon.org.za

Established in 2004, PACE aims to reduce the cost of making the carbon market work in Southern Africa by offering support, advice and access to the voluntary carbon market.

 

Project Developer: PPT (Project Preparation Trust), www.pptrust.org.za

Established in 1994, PPT specialises in initiating and managing developmental projects for disadvantaged communities as well as helping to raise capital and access other resources as required.

 

Voluntary Carbon Registry: Credible Carbon, www.crediblecarbon.com 

Established in 2004 and currently part of PACE, Credible Carbon is a voluntary carbon registry which trades carbon reductions from African poverty alleviating projects.

 

Contact:

  • PACE and Credible Carbon, Peter Atkins, This email address is being protected from spambots. You need JavaScript enabled to view it., +27 74 104 2944

 

 

 

  • Energy Research Centre, University of Cape Town, Dr Gisela Prasad, This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

Technology:

Gel Stove

Energy resource:

  • Biofuel

Sub type:

  • Bioethanol

Sector:

  • Household

Service:

  • Cooking

Grid:

  • Off-Grid

Targeted area:

  • Rural

Geographical scope:

Local

Project status:

Ongoing project

Project start:

2008

End date:

2018

Implementing approach:

NGO

Funding Type:

  • Grant
  • Donation

Budget (Euro):

>100,000