| 4. In which ways is the initiative creative and innovative?
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Implementation Timelines
Quarterly air quality monitoring studies are conducted to monitor the concentration of gases. The flare system was also installed to calculate the amount of gases extracted on each sites and the environmental committee meetings are held quarterly with the surrounding landowners to understand the concern emanating from the landfill sites.
Below is Chronology of how the project was initiated:
Pikitup began investigating in 2001, and the project was kick-started with discussions in 2005. The first contract was signed in 2009, and the actual equipment was constructed in 2011.
2001 – 2005
• Pikitup seeks ways to finance an LFG project
2005 – 2007
• Infrastructure Services Department Executive Director decides to seek service provider for LFG project
• City of Joburg awards tender to private party in 2007
2008 – 2009
• Negotiations and due diligence carried out leading to final contract with EnerG Systems being signed in 2009, following viability study that reduces landfill sites from eight to five
• New Environmental Waste Act comes into effect, resulting in application having to go through new process for submission
• In 2009 the National Energy Regulator of South Africa (NERSA) invites IPPs to tender for renewable energies
2010 – 2011
• Environmental Impact Assessment (EIA) conducted in 2008; however, authorisation only received in 2010.
• Negotiations initiated for the PPA
• In 2010 the NERSA process is taken over by the Department of Energy; one category is LFG energy, for what is known as REBID, or renewable energy tariffs, and the tender is issued in 2011
• The process begins in 2010 to register the five landfill CDMs with UNFCCC to allow the sale of carbon credits
• Construction begins at Robinson Deep in February 2011 and is completed by May 2011, with flaring and gathering of VERs beginning 29 May 2012
2012
• Final registration under way for five CDMs with UNFCCC by no later than end of 2012, when the Kyoto Protocol expires
• Discussions under way for the PPA with Eskom and Wheeling Agreement with City Power to allow gas to be piped to their electrical grid
• Construction completed at Marie Louise for gas wells and 28 gas extraction pipes, and flaring begins
2013
• The City awarded a tender by the Government to Sell Electricity generated from the Site to Eskom.
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| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
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The mandate of the City of Johannesburg’s Environment Infrastructure and Service Department is to create favourable surroundings for living, business and recreation by managing air, water, land and noise pollution, and implementing measures to moderate pollutants.
The infrastructure and services section is positioned to work together with directorates such as Energy, Water, and Legal Compliance to assist entities such as Pikitup with strategic initiatives.
Pikitup was created in 2001 as a municipal-owned entity to service the City of Johannesburg’s 1 625 km2 area, with its 3.8 million people and 787 000 dwellings. It is the biggest waste management company in Africa, handling 1.6 million tonnes of waste annually and overseeing eight landfill sites.
These two departments, along with service provider EnerG Systems and City Power, Environment, Finance, and Legal and Compliance, became part of a multi-departmental steering committee that met quarterly to oversee the project. Under the steering committee was a technical team made up of members from EISD, Pikitup’s Landfill Operations Team and EnerG systems. EnerG systems was awarded the tender in 2007 and, after a feasibility study on the landfills, signed a contract with the City in 2009. They brought to the table their expertise on gas extraction from landfills throughout the world, and the capital and funding to purchase the equipment for the wells, gas extraction, gas flaring and the future linkages to the electrical grid.
Initial due diligence into the City of Johannesburg’s landfills indicated that only five of the initial eight originally targeted for the project were viable, as some would have generated less than 1MW. In the early stages of the project, the focus was primarily on generating electricity. These first five were identified as Robinson Deep, Marie Louise, Linbro Park, Goutkoppies, and Ennerdale. Four of the five were active, with Linbro Park closed due to lack of space. The original thinking was to start with Linbro Park, but the higher levels of gas, as well as specific issues to do with land usage at Linbro, led the project team to select Robinson Deep as the first roll-out location.
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| 6. How was the strategy implemented and what resources were mobilized?
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Public-Private Partnership brought in the funding and expertise. While other municipalities have sponsored their own projects, the city took a risk-averse process and has a private party come in to develop and invest in the project at no cost to the city. At a cost of R250 million to initiate one LFG project, the City had other priorities than this project on its own. The tender process brought several potential service providers, but EnerG Systems had put in systems in various places around the world, including South Africa, and had the capability, expertise and acumen with LFG extraction projects to add value to the City of Johannesburg’s systems.
One of the riskier aspects of LFG projects is the funding and income streams. While finding the funding is the service provider’s responsibility, without external capital the service provider might have difficulty in fully executing its contract. Since the project timespan covered several years, the viability of selling carbon credits alone as a revenue source was not enough to make the financing bankable.
While a carbon credit price of €11 was secured and an overseas buyer for the credits was in place, this was also contingent on the registration of the project with the UNFCCC, which was due to be completed only by the end of 2012. The City began to hold the service provider to the agreed-upon timelines to execute the project.
The bank that EnerG Systems was working with, Nedbank, required a PPA to be signed in order to release financing to the project. The PPA is contingent upon EnerG Systems winning the REBID tender, which will be announced, was announced in 2013. While the project was under way, the service provider had to find its own financing. However, future development will yiled results since REBID tender is awarded to the LFG project and the project will generate revenue from the sales of electricity.
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| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
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The importances of political will, political champions and inter-governmental alignment.
There has been measurable reduction in landfill odours and methane gas concentration as measured by the University of Witwatersrand team from the Department of Geography, Archaeology and Environmental Sciences. Compliance has been improved with regard to the National Environmental Management: Waste Act, Provincial Waste Management strategies and municipal Development of Integrated Waste Management Plan strategies for Integrated Development Plans.
the project has seen several key accomplishments, which include:
1. The construction of the gas wells, 68 gas extraction wells and flare systems at Robinson Deep
Landfill site has been completed, with gas extraction operational since May 2011.
2. Application is under way with the UNFCCC for registration of the CDM project for carbon credits under the Kyoto Protocol. Gas extraction since start-up can be accumulated as credits that can be sold on the open market once registered, so the City has accumulated a balance sheet of future revenue.
3. The contract with EnerG Systems was signed in 2009 to design, build and implement the LFG to
Energy CDM with the service provider, bringing in the required expertise, capital and maintenance costs of the project.
4. A Tender has been awarded by the Department of Energy (DOE) to EnerG Systems as an Independent Power Producer (IPP) for sale of the electricity to meet their bid for 19MW of landfill gas energy. Nedbank has indicated its willingness to finance the project, pending the signing of a Power Purchasing Agreement (PPA). Wheeling agreements are under discussion with City Power for gas extraction pipes to connect their electrical grid for wheel/transport electricity to the possible buyer.
5. Construction began at Marie Louise Landfill site in February 2012, where 28 gas extraction pipes were installed and the site was commissioned in April 2012.
6. There has been measurable reduction in landfill odours and methane gas concentration as measured by the University of Witwatersrand team from the Department of Geography, Archaeology and Environmental Sciences.
7. Compliance has been improved with regard to the National Environmental Management: Waste Act, Provincial Waste Management strategies and municipal Development of Integrated Waste Management Plan strategies for Integrated Development Plans.
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| 8. What were the most successful outputs and why was the initiative effective?
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Public-Private Partnership brought in the funding and expertise. While other municipalities have sponsored their own projects, the city took a risk-averse process and has a private party come in to develop and invest in the project at no cost to the city. At a cost of R250 million to initiate one LFG project, the City had other priorities than this project on its own. The tender process brought several potential service providers, but EnerG Systems had put in systems in various places around the world, including South Africa, and had the capability, expertise and acumen with LFG extraction projects to add value to the City of Johannesburg’s systems.
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| 9. What were the main obstacles encountered and how were they overcome?
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9. What were the main obstacles encountered and how were they overcome?
In no more than 300 words describe the main problems that were encountered during the implementation and how these were addressed and overcome.
The First challenge encountered was related to balancing between landfill sites operations and development of the operational sites. The second challenge was the legislative compliance that the project had to adhere to which had a bearing on the project. The following are identified seven pieces of legislation document requirements and agreements that had bearing on the project:
(1) Environmental Impact Assessments on each landfill site
(2) Consent Use to implement the LFG projects at each site
(3) Power Purchase Agreement between the DOE and service provider as an IPP for provision of electricity from the landfill gas
(4) Wheeling Agreement with City Power for the consent to use their infrastructure to connect the electricity grid to the buyer
(5) Connection Application for approval from City Power and Eskom to connect to their grids
(6) Power of Attorney from Johannesburg Property Company for land use at Linbro Park
(7) UNFCCC application for the project registration for permission to sell CERs, which has taken two and a half years to date, and is expected to be approved before end of 2012
An understanding of how each of these will impact timelines, outcomes, costs and results was critical.
The third challenge was related to securing a buyer of electricity from the project at a price that was to make a project viable. This challenge was addressed recently when a power purchaising agreement was signed by Eskom to buy electricity from the project at a viable price.
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