To enable the purchase of renewable energy to match the consumption of the electricity for the event, Renewable Energy Certificates (RECs) were purchased from GreenX Energy a local company trading in Renewable Energy Certificates.
The energy is generated from renewable sources such as wind, solar, small hydro and in this case from bagasse in the sugar industry in KwazuluNatal. An additional levy was paid to enable the purchase of RECs and thus support the production and distribution of renewable energy in South Africa in line with Government targets.

SOME FREQUENTLY ASKED QUESTIONS

What is Green Electricity?
Green Electricity – also called Green Power – is electricity which is derived
from renewable energy resources and which is generated in a sustainable
manner. The Association of Issuing Bodies (http://www.aib-net.org/) defines
green electricity as that generated by wind, solar, water (small hydro, wave,
tide), geothermal, biomass. It excludes electricity generated from nuclear
energy and landfill waste.

What are RECs and how do they work?
Renewable Energy Certificates (RECs) represent units of certified green
electricity. In essence, a REC is an auditable financial instrument that reflects
the attributes of green energy independently of the actual units of energy –
i.e. the ‘greenness’ value is separated from the electrons. RECs are normally
denominated in 1MWh units.
A green generator (suitably registered as such) produces electricity which is
distributed into the national grid and becomes undifferentiated from normal
coal generated electricity. However at the time of generation the green
generator also produces a certificate (REC), which certifies the quantity and
type of green electricity produced. This certificate can be marketed and
sold separately from the associated electricity. A consumer purchases the
certificate and when electricity is consumed together with the purchase of
the green certificate, effectively green electricity has been consumed. The
REC is redeemed at this point and the consumer is able to claim the benefits
(environmental and others) at this stage.

Why the REC concept?
By using renewable resources, generation directly avoids climate change
emissions. Because the certificate is transferable, it allows the consumption to
be separated from generation – i.e. it isn’t necessary to have a renewable
generator on one’s premises in order to realise the benefits of green
electricity. The concept is designed to stimulate investment in renewable
energy projects by providing a revenue stream for developers thus
stimulating the renewable energy generation industry. Further it directly
matches buyers and sellers in the most efficient and cheapest way, and
finally enables customers to use any quantity of green electricity up to 100%.
The green benefits experienced by the consumers are as real as they would
be with direct local supply.

What are the benefits of purchasing RECs?
RECs provide proof of an enterprise’s procurement choice in terms of energy.
Using green electricity, as reflected in terms of RECs, makes a significant
contribution to a company’s sustainability targets and triple bottom line
reporting. RECs have the significant advantage that there is no physical
impact on the customer – i.e. no additional equipment required. It is the
cheapest way to procure renewable energy as it optimises the use of existing
transmission and distribution infrastructure.
By outsourcing the local carbon issue to achieve economy of scale, the REC
based certificate system allows generation to be at optimal sites and the
benefits to accrue at a customer site anywhere. Further, greater system
diversity provides protection against future fossil fuel price uncertainty as well
as supply security in the economy.

How does a generator get registered in order to produce RECs?
Renewable energy generation plant may be registered as a Green Power
Generator (known as a Renewable Energy Production Device) by
completing the Renewable Energy Declaration process and the Registration
of a Renewable Energy Production Device. This document is completed on
the basis of an in-depth inspection of the generation system under the
auspices of the South African Tradable Renewable Energy Certificate Issuing
Body (SATIB). Currently SATIB is in the process of being formed – the
Department of Minerals and Energy (DME) in South Africa has commissioned
a study to examine the industry and confirm the appropriate governance
mechanism.

How are RECs priced?
Currently in South Africa, electricity generation is by the state utility Eskom
and is based on low grade coal production. As a result Eskom electricity is
amongst the cheapest electricity worldwide. The costs of renewable energy
generation are considerably higher than that supplied by Eskom. RECs are
priced at the differential between the cost of new renewable energy
generation and the Eskom supplied cost for existing coal-fired plant. This
premium will provide the new green energy generation an income stream to
ensure that the generation project goes ahead.
Normal administration and marketing costs are added to arrive at the final
REC price. The cost of Eskom power will rise significantly in the near future as
the costs of investment in new capacity are factored into the pricing
structure. This will have the effect of reducing the apparent premium on
Green Power.

Is there an independent governance body and, if so, what is its role?
The green electricity certificate industry is in its infancy in South Africa. The
South African Government has ratified the Kyoto Protocol and, through the
Department of Minerals and Energy (DME), has published, in the Energy White
Paper in 2003, a renewable energy target. The DME has commissioned a
study to examine the most effective way to stimulate the growth in
renewable energy generation and as part of the study will consider the
industry governance issues. The SATIB (SA TREC Issuing Body) is in the process
of formation and will ultimately be the governance authority for the industry.
It will be based on the European AIB (Association of Issuing Bodies). In the
meantime the registration of Production Devices is undertaken by suitably
qualified energy consultancies and GreenX Energy maintains the central
certificate register.

From where does GreenX Energy source RECs?
RECs can be sourced from any green generator that has completed the
Renewable Energy Declaration process and has been registered as a
Renewable Energy Production Device as laid out in the Principles and Rules
of Operation of the AIB.

GreenX Energy currently sources RECs which are based on electricity
generated in the sugar industry in South Africa. Green electricity is produced
from burning of bagasse (fibrous residue from the sugar production process)
in boilers to produce steam which is converted into electricity in turbine
alternators. Bagasse is a renewable energy source as the sugar cane plant is
an annual crop which absorbs carbon dioxide in its growth cycle. Each
turbine has a calibrated meter which records the production output.
Currently, GreenX Energy is negotiating to purchase wind generated RECs
from a new wind turbine in Namibia, as well as RECs generated from a rural
Solar Water Heating project, and also looking at sourcing RECs from a small
hydro plant.

Who are some of GreenX Energy’s clients?
GreenX Energy numbers amongst its client base multinational corporations
such as oil major BP and pharmaceuticals giant Johnson & Johnson. The
agreements vary in duration but generally extend for between 3-6 years.
Longer term contracts are attractive because they recognize the essence of
green electricity – price consistency over a long period.
In addition, GreenX Energy supplies RECs to numerous conferences that
desire to operate a carbon neutral conference.
Emissions saving in South Africa from green electricity generation
Electricity in South Africa is produced primarily by the state owned utility,
Eskom, using fossil fuels, mainly low grade coal. By displacing “dirty”
electricity through the use of green electricity, the emissions eliminated and
resources saved per 1 MWh – i.e. per REC, are as follows:
• Water consumption saved: 1290 liters
• Coal consumption saved: 500kg
• Ash production avoided: 142 kg
• Ash emitted avoided: 0.28 kg
• SO2 emissions avoided: 8.22 Kg
• NO emissions avoided: 3.62 Kg
• CO2 emissions avoided: 1000 kg (including transmission losses)
(Source: Eskom Annual Report)

What is the difference between RECs and carbon offsets via CDM?
Certified Emission Reductions (CERs) form part of the Clean Development
Mechanism (CDM) process establish at Kyoto. RECs and CERs are different
but complementary in as much as RECs provide a mechanism to supply
green electricity within a voluntary market (in Southern Africa) and CERs
provide a framework for funding and transacting global emission reductions
in terms of the Kyoto Protocol.
In essence, CERs can be generated from any project that reduces emissions
(the project needs to be duly registered as part of the CDM process) whereas
RECs access the wide ranging benefits associated with green electricity
generation e.g. not only emissions reductions but also increased price
certainty, generation diversification, better job creation opportunities and the
establishment of a viable renewable energy generation industry.

How long has GreenX Energy been in business?
GreenX Energy is a privately owned company (100% subsidiary of AGAMA
Energy (Pty) Ltd) with offices at the Green Building in Westlake, Cape Town,
South Africa.
It was established in 2003 based largely on the experience derived from a
pilot Green Power trading project in 2002. The project supplied 854 RECs
(corresponding to 854 MWh of electricity) to two of the main venues for the
World Summit on Sustainable Development (WSSD) in Johannesburg in 2002.
Glynn Morris, one of the founders of GreenX Energy, secured a budget and
was the project leader of the Green Power for the WSSD Project. The project
was implemented by AGAMA Energy and other partner organisations
including the National Energy Regulator (now the National Energy Regulator
of SA, NERSA).

What is the nature of the GreenX Energy business?
Essentially GreenX Energy markets and sells green electricity certificates,
Renewable Energy Certificates (RECs), also known as RECs, green tags, or
green certificates. The primary aim of the company is to value the
‘greenness’ or non-energy benefits of renewable energy production and
provide a commercial mechanism for trading this value in a Green Power
market. Initially, GreenX Energy’s customers are predominantly multi-national
corporations (in retail, manufacturing and commerce). We are currently
looking at ways to provide Green Power solutions to the individual household
customers.

What products does GreenX Energy market?
As already mentioned, GreenX Energy sells Renewable Energy Certificates
(RECs) which attest to the fact that the customer is paying for the benefits of
green (or cleaner) electricity.

Where can I get more info?
For additional info about green energy, renewable energy
certificates or GreenX, contact GreenX Energy (Pty) Ltd,
The Green Building, 9b Bell Crescent Close, Westlake
Business Park, 7945, South Africa, or visit the website on
www.greenxenergy.com or contact Marisa Naude on 021-
701 1755 or marisa.naude@greenxenergy.com