Study on Sustainable Low-Income Energy Services for Cape Town

Under the CICLIA Programme and Framework Contract.

The City of Cape Town (CCT) carried out an Energy Optimisation Study aiming to bring the City’s energy services business model up to date with current trends and technological changes in the energy sector. OneWorld was appointed as the technical lead of a study component aimed at deepening CCT’s understanding of the costs and benefits of providing energy services for low-income households (LIHHs), with a view to optimising service delivery models for these households and to analyse the concomitant costs for the City of Cape Town against its existing financial model.

The CCT recognises the need to take a developmental approach to providing energy services to LIHHs, and to consider socioeconomic as well as technical and financial sustainability implications. This approach is central to implementing the CCT Low-Income Energy Service Delivery Programme. This study was funded under the AFD Cities and Climate change in Sub-Saharan Africa Initiative (CICLIA), which is aimed at assisting between 20 and 25 Sub-Saharan African cities over a 4-year period in the preparation of projects with climate co-benefits, covering a variety of urban planning sectors. This project took place within a consortium led by SAFEGE/Suez Consulting.

Findings of the study included: climate change and human behaviour is driving increased dwelling fires. Paraffin and candles are the primary cause, while increasing wind days are spreading the fires further and faster, severely impacting human health and livelihoods. This, coupled with increased pressure on public health and fire services, is driving the need for larger investments in safe and affordable energy for LIHHs.

The OneWorld-led study had three main outcomes:

• Extensive analysis of the financial and economic cost of optimal energy service options, enabling CCT to compare with current practices. This analysis revealed an array of socioeconomic benefits resulting from the provision of safe and clean energy, incl. reduced dwelling fires and improved household health and opportunities for job creation and small enterprise development.
• An advanced understanding of who bears the cost of different energy service options, between the City, and the consumers, and of the sustainability of these approaches into the future, including an assessment of possible ways that CCT could afford to pay for an increased level of the service.
• A set of decision-making tools (Financial Model and Risk and Cost Benefit Analysis), which can support CCT decision-making with regards to providing LIHH energy services.

The project also included two capacity building workshops to design alternate energy futures for LIHHs