The scheme, which is being pursued jointly by the JSE-listed Ellies group and EcoMetrix Africa, falls under the CDM’s so-called ‘programme of activities’ framework.
This programme allows a number of smaller emission-reduction projects in developing countries to be grouped together to earn credits for verifiable CO2 emission reductions.
Credits, known as certified emission reduction (CER) credits, can be traded and used by industrialised countries to a meet a part of their emission reduction targets under the Kyoto Protocol.
EcoMetrix Africa MD Henk Sa says that the credits will continue to be tradable in the European Union until at least 2020 even if climate negotiators are unable to find a way of extending the Kyoto Protocol beyond its current expiration date of the end of 2012.
The project, which is currently wending its way through the UN’s approval processes, will enable South Africa’s solar water heater (SWH) programmes to collectively access CERs in a way that makes economic sense.
The country has an aspiration of deploying one-million SWH by 2014/15, but is also currently assessing the funding options. Hitherto, an Eskom rebate has been available, but the utility believes that a competitive bidding process for a small number of large implementation contracts could be more a more effective model for reaching the target.
Should the Ellies-EcoMetrix Africa scheme gain accreditation, it would be the second SWH scheme accepted by UN Framework Convention for Climate Change. In April 2011, the Solar Academy of sub-Saharan Africa-Tasol programme received CDM accreditation, enabling it to earn certified carbon credits, which are sold to Standard Bank through an emission reduction purchase agreement.
Sa says the Ellies-EcoMetrix Africa scheme is open to any SWH providers willing to invest in the initiative that will eventually earn CERs that currently trade at around R100.
The grouping of SWH projects is necessary, owing to the fact that a single geyser offers modest emission reductions. But when grouped with thousands of others under a programme of activities, “the economics begins to make sense”.
Various buy-in options, ranging in price from R50 000 to R400 000, have been developed by Ellies-EcoMetrix Africa and are currently being marketed to South Africa’s expanding SWH industry. The programme embraces both low- and high-pressure SWHs and heat pumps and Ellies is also offering financing options.
“We are now at the validation stage, whereby an independent auditor is checking that all our documentation and procedures are in place. Once that has been completed it will be submitted to the UN, which will check it again and sign off on the project. We expect registration in April 2012,” Sa reports.