NMB Community Cooperative and its efforts in energy cooperatives and community collaborations

Meeting report

Nelson Mandela Bay Community Cooperative's efforts in energy cooperatives and community collaborations

Prof Janet Cherry, Professor of Developmental Studies, Nelson Mandela University, along with her colleagues, briefed the Committee on the ongoing efforts of the Nelson Mandela Bay (NMB) Community Cooperative in the realm of energy cooperatives and community collaborations. The discussion provided comprehensive insights into their pioneering project in KwaZakhele township, which served as a model for community-owned renewable energy initiatives.

She provided context to the project's inception, emphasising its roots in the concept of a transition township. This vision aimed to facilitate a just energy transition by fostering community ownership of productive assets, focusing mainly on renewable energy, food production, and waste management. She underscored the potential for economic transformation within marginalised communities, highlighting the project's dual role in addressing energy inequality and contributing to climate change mitigation efforts.

The Saltuba Gap Tap Pilot Project, initiated in 2019, marked a significant milestone in this endeavour. The project demonstrated the feasibility of social ownership of renewable energy assets with a 25-household pilot equipped with a 5-kilowatt solar photovoltaic (PV) array connected to the municipal grid. The choice of KwaZakhele township was strategic, considering its existing infrastructure and workforce with industry experience.

The briefing outlined a conceptual framework for neighbourhood production systems. This envisioned a decentralised network of energy, food production, waste management, and water collection systems within the township. Each household would be allocated a small-scale renewable energy installation, contributing to a substantial city-wide renewable energy capacity.

The briefing delved into the intricacies of establishing cooperative structures and navigating regulatory frameworks for selling electricity back to the grid. Challenges such as securing remuneration for electricity production and accessing finance were highlighted, emphasising the need for supportive policy and regulatory environments. Recent regulatory changes allowing independent producers to sell electricity were acknowledged as a step forward, but further refinement was necessary to fully realise the potential of community-owned renewable energy projects.

Additionally, the briefing addressed the project's broader implications, including its potential to empower marginalised communities economically and socially. The project aimed to shift the paradigm from passive consumers by enabling community members to become electricity producers. Moreover, the aspiration for widespread participation in renewable energy production beyond affluent neighbourhoods was emphasised as a crucial aspect for achieving a just energy transition.

In conclusion, the presentation underscored the significance of the Nelson Mandela Bay Community Cooperative's initiatives in pioneering community-owned renewable energy projects. Despite challenges, the project exemplified a proactive approach towards sustainable development and social empowerment. The insights gleaned from this pilot project held promise for scaling up similar initiatives nationwide, contributing to South Africa's energy security, socio-economic development, and climate resilience goals.

See attached for full presentation

Discussion

Ms A Cassiem (EFF) sought clarification on the reported annual income of R900 per participant in the pilot study mentioned on slide six. She queried whether this amount was collectively earned by all participants, and requested clarity on the number of participants involved. She inquired about the current remuneration received by participants from the municipality for selling renewable energy, focusing on present figures rather than future projections. Lastly, she requested a breakdown of the projected R600 million annual revenues for KwaZakhele, as mentioned on slide eight, including how this figure was calculated and the anticipated earnings per household.

Ms N Nkondlo (ANC) built on Ms Cassiem's questions, and sought clarification on the definition of a community in the project's context, and the governance structure of the community ownership scheme. She also asked about the cost per unit of electricity generated from the scheme and its cost-effectiveness compared to Eskom's rates. Lastly, she raised concerns about previous government-led solar rooftop initiatives, highlighting functionality and community trust issues. She requested insights from the project's experience and proposed strategies for addressing similar challenges.

Response

Prof Cherry responded comprehensively to Ms Nkondlo's inquiry regarding the definition of community within the project's context. She clarified that the term community encompassed residents sharing a geographical location, such as a village or township, along with socio-economically disadvantaged individuals with common interests. She also emphasised the importance of recognising potential conflicts of interest within communities and the necessity of social relationships and organisation for successful social ownership.

In addressing concerns about previous government-led solar rooftop initiatives, Prof Cherry delved into the challenges faced, including issues with maintenance and functionality. She acknowledged that subsidised programmes often led to disillusionment among beneficiaries when installations failed to meet expectations. To mitigate such challenges, she stressed the importance of ensuring that PV solar installations adequately meet households' energy needs and provide tangible benefits.

It was highlighted that no formal governance structure currently existed for community ownership schemes. The project aimed to explore and establish suitable models, considering existing cooperative frameworks and renewable energy programmes.

In addressing questions about income projections from renewable energy production, a detailed insight into the pilot study conducted in KwaZakhele was provided. While exact figures were not provided during the response, estimates were based on production results and extrapolated to project potential earnings per household. Additionally, the potential for revenue generation from vegetable production and waste management was highlighted, contributing to the projected R600 million annual revenue for KwaZakhele.

In response to queries about remuneration for electricity sales, it was stated that community members had yet to receive any payment. However, while not lucrative, small-scale vegetable production provided additional household benefits, such as improved nutrition.

Further Discussion

Mr C Dugmore (ANC) inquired about the progress of lobbying efforts concerning the recommendations presented. He sought clarification on anticipated timeframes for implementing these recommendations and whether there were plans to extend the project to other towns or cities in the Eastern Cape.

Ms Nkondlo highlighted the importance of understanding the project's funding model and technical aspects. She commended the initiative for contributing to achieving a just transition in the energy sector. She raised questions regarding coherence between various policy positions and the potential utilisation of national incentives such as tax rebates to support community-owned schemes.

Mr A van der Westhuizen (DA) echoed Mr Dugmore's question regarding lobbying efforts, and raised concerns about the limitations of provincial government influence. He sought clarification on the extent of lobbying at the national and local government levels, considering that specific challenges and proposals may involve other spheres of government.

Responses

In response to the questions about the progress of lobbying efforts for the recommendations, Members were told that the People's Climate Change (PCC) report, which encapsulates these recommendations, was scheduled to be launched in the second week of March. This launch would be conducted through a public online event, serving as a platform for stakeholder engagement. It was important to note that the PCC did not follow a formal submission process to the national government. Instead, it fostered consensus among stakeholders, including business, government and civil society, regarding the just transition.

It was highlighted that there were intentions to collaborate closely with specific municipalities and provincial governments. Notably, there was a memorandum of understanding (MOU) with the Limpopo provincial government, and engagements had been initiated with the Eastern Cape provincial government. Moreover, research funding has been secured through the National Research Foundation (NRF) to expand or replicate these pilots in the Eastern Cape and Limpopo provinces, with an anticipated timeline within the next year or two, pending further developments.

Regarding the funding model and tax rebates for solar panel installation, it was noted that tax rebates currently do not apply to households in KwaZakhele, where the pilot project was being implemented. While tax rebates applied to businesses or middle-class households, they were not extended to the working-class households targeted by the project. Therefore, alternative forms of subsidy or benefit were being explored to extend to households with lower incomes. The aim was to ensure inclusivity and accessibility to renewable energy initiatives, particularly for those who may not benefit from existing incentives due to their socio-economic status. Additionally, avenues for support from the global financing for the Just Transition Partners International Partnership were being explored, specifically focusing on allocating resources for social ownership of renewable energy.

Concerns had been raised about lobbying efforts and collaboration with different levels of government. However, while provincial governments may have limited influence, there were active efforts to seek collaboration and support at various levels of governance to advance the objectives. The focus remained on fostering partnerships and advocating policy coherence to facilitate the implementation and scalability of community-owned renewable energy projects. The dedication to advancing the goals of the Nelson Mandela Bay Community Cooperative and promoting sustainable development through inclusive and participatory approaches was reiterated.

Conclusion

Following the presentation, the meeting concluded with discussions on resolutions and actions.

The Chairperson expressed gratitude to Professor Cherry, and proposed sending a letter to convey thanks and gather details about the launch of the PCC report. Mr Dugmore suggested conducting an oversight visit to the launch in Gqeberha, which was noted as a recommendation. Ms Nkondlo also suggested involving the Department of Economic Development to explore similar initiatives in the Western Cape context.

The meeting was adjourned.