presentation to the portfolio committee on energy on the department‘s response to: - the 2012 sona...

PRESENTATION TO THE PORTFOLIO COMMITTEE ON ENERGY ON THE DEPARTMENT‘S RESPONSE TO:

- the 2012 SONA

- MDGs, Govt priority outcomes,

SOOGs 1 to 4 and SIPs

1

Introduction SONA – energy issues from the SONA

• Growing the economy• Job creation• The country’s 20 year plan (National Development Plan)• Infrastructure development drive• Department’s role in the electricity price path• Renewable energy• Demand side management• NEPAD and SADC engagements (refer to the International

Activities presentation)• Women and Youth Empowerment• State Owned Entities • Alignment of the Government Outcomes, MDGs, SOOGs

and Department’s Programmes

2

Draft Integrated Energy Plan (IEP) Report covering the period up to 2050 completed - approved by Cabinet and published for public consultation - Integrated Resource Plan (IRP) for electricity –

• IPP - Financial Close was reached for Window 1 projects under the REIPP – 1 416 megawatts of renewable energy out of the 3 625 total required - bidding documents for base-load programme partially completed

• Ministerial and Cabinet approval of the Eskom Committed Capital Expenditure programme received

3

Growing the Economy (1)Security of energy supply

Nuclear – • Cabinet approved establishment of NNEECC to lead,

monitor, ensure oversight and take key strategic decisions on nuclear

• Cabinet endorsed Phased Decision Making Approach, Communication and Stakeholder Engagement Strategy

• Cabinet affirmed Eskom as the owner-operator• INIR conducted by IAEA• 9,6 GW to be generated by 2029 through new Nuclear

power plants

4

Growing the Economy (2)Security of energy supply

Liquid Fuels Roadmap – • In process of developing a 20 year Liquid Fuels

Infrastructure Road Map• Audit of refineries has been completed

LP Gas and Gas Infrastructure Plans –• developed a discussion document on the Maximum Refinery

Gate Price (MRGP) of LPG which was published• comments were received and a stakeholder workshop were

held• draft report for the second phase of the SA Coal Roadmap

was developed

5

Growing the economy (2)Security of energy supply

IPP’s – R47 billion was invested as part of Window 1 Eskom Committed Capital Expenditure programme INEP funded the construction/upgrade of the following:

• 4 new substations completed• 5 upgraded substations • 275 km of new medium voltage lines• 85 km of upgraded medium voltage lines

4 additional Integrated Energy Centres (IEC’s) were operationalised Economically recoverable coal seam and shale gas reserves - exploration for

and exploitation of minerals is the mandate of DMR – DoE will support these endeavours by an enabling regulatory framework

Exploitation of gas reserves is the mandate of PetroSA who operate a gas-to-fuel refinery on the West Coast and is in the process of expanding these operations

6

Growing the Economy (3)Investments in the industry

IPP - criteria-based bidding approach for proposals - includes consideration of potential for the creation of a local industry, job creation, black economic empowerment and technology transfer

Nuclear - deployment of new nuclear power plants & associated industrialisation and localisation as well as related training and skills development

NECSA’s functions include to undertake and promote research on nuclear energy, radiation sciences and technology

DoE initiated and sustained multilateral and bilateral relations that focus on ensuring that the country has access to, amongst others, technology, capacity building and requisite skills to be able to deploy technology intensive projects, promote localisation and job creation

Doe implemented other empowerment and skills learning programmes, targeting vulnerable sections such as women and youth –

• Learners Focus Week held in Mangaung• Road Show in the Eastern Cape• Side event at the UN Commission on the Status of Women

7

Growing the Economy (4)Increased modern technology and skills & Localisation

DoE not a primary job creator – catalyst -• IPP procurement programme• Renewable energy industry in the rural areas• Localisation• New to industry service stations• Infrastructure upgrades - refineries upgrade =

1 000 + jobs• Department’s Internship programme = 56• INEP = 33 interns as part of an in-service

electrical engineering training programme

Job Creation

20 Year Liquid Fuels Infrastructure Roadmap• Audit of South Africa’s refineries completed• Liquid fuels infrastructure expansion needs – NMPP grant

funding transferred to Transnet• Improved liquid fuels storage and distribution - national

strategic fuels stock policy submitted to Cabinet - sets out the framework for the storage of fuels stock by government as well as industry - also seeks to guide the necessary investment decisions

Nuclear Procurement Programme (discussed on slide 4) Nuclear Fuel Cycle Infrastructure is not critical to the Nuclear

Programme as it forms part of the Phased Decision-Making Approach - rescheduled to 2013/14

The Country’s 20 year Plan (1)

Integrated National Electrification Programme (INEP) -• Electrified 175 473 households

Eskom connections – 118 926Municipal connections - 47 204

• Non-Grid connections - 9 343• Also funded the construction/upgrade of the following:

4 new substations5 upgraded substations275 km of new medium voltage lines85 km of upgraded medium voltage lines

The Country’s 20 year Plan (2)

Electricity generation capacity• IPP - 2 416 megawatts of renewable energy out

of the 3 625 total required by 2016 • Ministerial and Cabinet approval of the Eskom

Committed Capital Expenditure programme• Nuclear - 9,6 GW to be generated by 2029

through new Nuclear power plants

INFRASTRUCTURE DEVELOPMENT DRIVE (1)

Electricity distribution infrastructure• Improved electricity supply-demand situation -

critical to address the problems facing the electricity distribution network

• Approach to Distribution Asset Management (ADAM) programme has been launched to rehabilitate the identified municipal infrastructure which poses a risk to energy security

• R320 million allocated to implement a ADAM pilot project

• Two metros and seven municipalities were identified for this pilot


Independent Power Producers• Financial Close was reached for Window 1

projects under the REIPP – awarded preferred bidder status to 28 proposals out of the 53 - 1 416 megawatts of renewable energy out of the 3 625 total required

• Window 1 surpassed the targeted 1 000 megawatts which was to be reached by the end of 2012/13.

• Bidding documents for base-load programme partially completed


Renewable Energy investments – R47 billion was invested in REIPP in Windows 1

Nuclear Build programme underwent internal and Cabinet processes during the year• Cabinet approved establishment of NNEECC -

lead, monitor, ensure oversight and take key strategic decisions on nuclear

• Cabinet endorsed Phased Decision Making Approach, Communication and Stakeholder Engagement Strategy

• Cabinet affirmed Eskom as the owner-operator• INIR conducted by IAEA


Liquid fuels infrastructure– Transnet’s NMPP (New Multi-Products Pipeline)

• Trunk line commissioned in January 2012 (will only transport diesel until end of 2013, while the DJP will transport other products)

• Construction of accumulation terminals (Jameson Park & Durban) and auxiliary infrastructure for completion by Dec-2013

• Last tranche of R1.5bn (a total of R4.5bn over 3 years from 2010/11 FY) to be disbursed to the project in 2012/13


• Liquid fuels infrastructure– Project Mthombo Refinery

• New crude oil refinery by PetroSA in the Coega IDZ, Eastern Cape

• Studies revising the capacity of the proposed refinery downwards, in line with RSA’s liquid fuels supply / demand balance, are underway - outcome of the studies is expected by mid-2012


• Liquid fuels infrastructure

– Refinery Upgrades For Cleaner Fuels Two (CF2)

• Refinery infrastructure upgrades to meet new fuel specifications & standards (CF2 specs), being finalised but will to come into effect in 2017

• Oil companies’ decisions to invest depend on the outcomes of the investigation into the cost recovery mechanism


Liquid fuels infrastructure

– Sasol’s Project Mafutha

• 80,000 barrels per day coal-to-liquids (CTL) project in Lephalale, Limpopo

• Sasol decided to slow down the project, reporting that it would not "progress into the feasibility phase within the originally envisaged timeline", pending clarity on "the large-scale coal gasification tests and the provision of a commercially viable carbon capture and storage (CCS) solution".

• Sasol said that project progress depends on: Finding a storage

solution for the CO2 emitted; Alignment to South Africa's fiscal

priorities; Climate commitments; and Imposition of tax on carbon emissions investigated by the National Treasury


DEPARTMENTS ROLE IN THE ELECTRICITY PRICE PATH

Update of IRP2010-2030 to be completed by end 2013 Tariff implications to be modelled over the period up to 2030 and

beyond Tariff trajectory to be projected in line with the Electricity Pricing Policy Critical parameters for considerations include:

Asset valuation methodology Capital asset pricing model, including discounting approach Rate of return allowed

This will inform the policy framework NERSA will apply during the next multi-year price determination (MYPD)

Renewable Energy Renewable Energy Independent Power ProducersIndependent Power Producers

Bid Programme and Solar Water Bid Programme and Solar Water Heater ProgrammeHeater Programme

Background

• IRP 2010-30 is a living Strategy– To be revised regularly

– Indicates preferred electricity generation expansion

– Does not indicate which entity will construct this capacity

• Implementation – Critical Issues – Developing a funding plan to support the construction of the

capacity, which reviews the potential future pricing of electricity and different forms of funding the capacity expansion

– Identify the schedule for implementing the underlying programmes in the IRP and key decision points

– Consider contingencies for programmes

21

Approved Integrated Resource Plan

Total additional new capacity (without committed) until 2030 in GW

5

20

15

10

0

Wind

CSP

Solar PV

1,0

Peak -

OCGT

Coal

3,9

8,4

9,6

6,3

8,4

17,8

Renew-ables

Nuclear Gas -

CCGT

2,42,6

Hydro

25

Policy-Adjusted IRP 2010 -2030

10,1 0,0 0,05 0,0 1,0 1,0Committednew builds

Existing fleet (2010)

35,5 1,8 2,1 0,0 2,4 0,0

Import

65% 20% 5% 1% < 0,1% 9%

90% 5% 5% 0% < 0,1% 0%Energy share

in 2010

in 2030

15% 23% 6% 6% 9% 42%Share of total new GW

= 260TWh

= 454TWh

22

New generation capacity through Private Public Partnerships

• Programme based on financial incentives derived from electricity tariff

• Organs of State (s239 of Constitution) like Eskom, CEF, municipalities,

etc. are excluded from participating as project developers. Rationale is

Risk transfer to private sector, in a private public partnership

Leveraging of outside investment, particularly Foreign Direct

Investment

Creation of new employment opportunities throughout value chain

Skills development in various technologies

Regulatory provisions for PPPs

24

Planning (IRP)Determination by Minister

Power purchase agreement

Grid connection

• Balancing supply/demand plus meeting other objectives- Carbon- Supply

adequacy- Water- Price

• Minister commissions feasibility study, with outcomes relating to:• allocation of

financial, technical and operational risk between buyer and generator

• Whether appropriate generator should be Eskom or an IPP

• In consultation with Regulator – on licensing matters

• Concurrence with National Treasury – buyer support

• Standardized provisions for risk allocation to IPP

• Regulator to ensure that buyer able to recover costs incurred by buyer over PPA term

• Eskom required to enter into PPA with buyer

• Buying function to be undertaken initially by ring-fenced entity within Eskom, ultimately separated out into ISMO

• Non-discriminatory access

• Transmission connection and expansion to facilitate the implementation of IRP (incl IPPs)

- evacuation corridors

Preferred Bidders Salient Terms: Solar Photovoltaic

25

Bid Window 2 Bid Window 1Price: Fully Indexed (Ave Rand per MWh)

R 1 645 R 2 758

MW allocation 417 MW 632 MW

Total Project Cost (R’million) R12 048 R21 937

Local Content Value (R’million) R5 727 R6 261

Local Content % 47.5% 28.5%

Job Creation : Construction (People) 4 557 10 386

Job Creation : Operations (People) 194 221

Preferred Bidders Salient Terms: Wind

26


R 897 R 1 143


Total Project Cost (R’million) R 10 897 R 12 724

Local Content Value (R’million) R 4 001 R 2 766


Job Creation : Construction (People) 1 579 1 869


Preferred Bidders Salient Terms: Small Hydro

27


R 1 030 N/A

MW allocation 14 MW N/A

Total Project Cost (R’million) R 631 N/A

Local Content Value (R’million) R 421 N/A

Local Content % 66.7% N/A

Job Creation : Construction (People) 261 N/A

Job Creation : Operations (People) 7 N/A

Preferred Bidder Salient Terms: Concentrated Solar Power

28


R 2 512 R 2 686


Total Project Cost (R’million) R 4 483 R 11 365

Local Content Value (R’million) R 1 638 R 2 391


Job Creation : Construction (People) 662 1 165


• Removing products that are not compliant with localization requirements

WRAPPING UP PHASE - SUPPLY OF PRODUCT UP

TO DEC 2012

11

QUALIFICATION PHASE – CONVERSION TO LOCAL

PRODUCT AS PER LOCAL CONTENT THRESHOLD

QUALIFICATION PHASE – CONVERSION TO LOCAL

PRODUCT AS PER LOCAL CONTENT THRESHOLD

22

• Designation of SWH local

content in Jan 2013 – min

70% local content

• Selection of qualified

local product suppliers through

bidding process

• Pilot the separation of Suppliers

and Installers using the carried

over allocations from 2011/12

(Musina, Polokwane & Buffalo

City)

• Contracting only with

pre-qualified local

manufacturers

EXCLUSIVE PHASE – ONLY LOCAL STANDARD

PRODUCT IS SUPPORTED

EXCLUSIVE PHASE – ONLY LOCAL STANDARD

PRODUCT IS SUPPORTED

33

29

Phased Approach - SWH New Contracting Model

30

Contracting Model - Manufacturers

Eskom Manufacturers

SABS

DoE

Provides policy framework & funding

Implements policy framework, Including procurement of systems, installation and sustainability

Supplies local product that meets requirements as per designation, standards

Provides the support in relation to independent testing and compliance

MoA

Supply Agreem

ent

Implementation

Agreement

31

Contracting Model - Installations

Eskom Accredited Installers

Municipalities

DoE

• Provides policy framework & funding • Project site selection • Monitoring and Evaluation of System Performance

Implements policy framework, Including appointment of Installers, maintenance, and reporting

Installers that meet requirements for installations and within the project site for maintenance purpose

Identify project area, provide support to installation, linked to monitoring system to ensure functionality of the systems

MoA

Installation

Agreement

Standard Offer Concept

• The Standard Offer Concept is based on the energy savings to be derived from an initiative, irrespective of the technology applied to achieve such savings. It is an intervention that is outcome based with the incentive flowing after delivery of the intervention, and subject to verification of the savings. The solar water heating system will have a deemed savings value. It is envisaged that the rebate will be attractive initially, in order to kick-start the market. Over time, it is predicted that costs will be reduced through economies of scale.

32

Funding requirements “unpacked”• Owner/user– The intention is to create a market where the cost of switching to solar

makes economic sense to the user/owner. Economic sense takes into account the cost of the unit, and the +/- 30% reduction of the household bill (factoring in tariff increases) over the repayment period of the Solar Water Heating geyser

• Fiscal– The Fiscus has already provided funding into this programme.

• Carbon credit– This income stream has been proven and is already benefitting

specific Solar Water Heating programmes in South Africa.

• Grants– There have been discussions with specific donors regarding grant

funding.

33

Funding requirements “unpacked”• MYPD3

– The intention was to use MYPD funding from the start of the programme. However, Eskom has committed the available MYPD2 funding. The Standard Offer will therefore run on a smaller scale until the new MYPD cycle kicks in, as this will allow for proper ring-fencing of the EEDSM funds within the next MYPD cycle.

– The difference/shortfall between the total pool of funding required, and the sum of grants, carbon credit, fiscal and user/owner contributions will be funded by subsequent MYPD periods (in the same way as power stations are funded)

34

What happens to existing initiatives

• ESKOM Rebate– The ESKOM rebate currently makes an up-front capital subsidy

available for +/- 260000 units. Discussions with numerous players in industry has highlighted the need for a transitional period between the approaches (up-front capital subsidy vs standard offer). This rebate scheme will therefore run side-by-side with the Standard Offer for the remainder of MYPD2.

• Other programmes– All other known programmes are using the ESKOM rebate. These

will continue for as long as the +/- 260 000 rebates do not run out

35

How homeowner gets Solar Water Heater• There are currently a number of options available under the ESKOM

rebate programme. These options will remain in place until the +/- 260 000 rebates under this programme run out.

• Standard Offer programme will be administered by the Department of Energy, as a demand side initiative similar to the RE IPP Bidding Programme. At a high level

– An organisation will transact with a homeowner to give the homeowner the Solar Water Heating Unit in exchange for the home-owners’ claim to the Standard Offer rebate and a top-up payment as required.

– An individual not wanting to transact with an organisation, as described above, could purchase the Standard Offer him/herself and claim the standard offer rebate from an Energy Services Company or cooperative

– Whether this is an aggregated approach (ESCO) or at an individual homeowner level, the benefits can be illustrated in the following slides

36

Benefit Analysis – SWH...

Residential market targets Total Potential %

Reducing electricity

demand MW

Universal access

Offset rising electricity cost

Accelerated service delivery

Renewable energy targets

GWh/annum

Climate change

'000 tons

Upper income geyser replacement560,000 1,200,000 47% 347

Completely equitable across the markets. Plus

frees grid capacity

<60% of water heating costs

672 679

Mid/low income geyser replacement1,750,000 3,000,000 58% 1,085


Major impact

2,100 2121

Non Geyser delivery2,690,000 6,600,000 41% 1,668


Major impact

3,228 3260Insurance geyser replacement 55,000 0 34 66 67New build 110,000 0 68 132 133

5,165,000 10,800,000 48% 3,202 6,000 6,060

Residential market targets Total Potential %

Reducing electricity

demand MW

Access across all markets

Offset rising electricity cost

Accelerated service delivery

Renewable energy targets

GWh/annum

Climate change

'000 tons

Upper income geyser replacement236,500 1,380,000 17% 142

Completely equitable across the markets. Grid

capacity freed


284 358

Mid/low income geyser replacement440,259 3,550,000 12% 264


Major impact

528 1248

Non Geyser delivery383,389 6,320,000 6% 115


Major impact

460 842Insurance geyser replacement 31,343 19 38 91New build - SWH over geyser 123,631 74 148 182New build -non geyser delivery 142,000 43 1,458 2,721

1,357,122 11,250,000 12% 657

37

Cost Analysis - SWHProgramme MYPD Subsidy Needs

Residential market targets 2010 2011 2012 2013 2014 2015

Upper income geyser 92,089,800 143,250,800 255,805,000 270,130,080 252,735,340 212,829,760

150 litre SWH System 10,788,525 16,782,150 29,968,125 31,646,340 29,608,508 24,933,480

200 litre SWH System 49,838,085 77,525,910 138,439,125 146,191,716 136,777,856 115,181,352

250 litre SWH System 9,468,360 14,728,560 26,301,000 27,773,856 25,985,388 21,882,432

300 litre SWH System 21,994,830 34,214,180 61,096,750 64,518,168 60,363,589 50,832,496

Mid/low income geyser 76,708,800 150,409,412 270,736,941 391,064,471 451,228,235 752,047,059

Closed coupled 61,367,040 120,327,529 216,589,553 312,851,576 360,982,588 601,637,647

Split unit 15,341,760 30,081,882 54,147,388 78,212,894 90,245,647 150,409,412

Non Geyser delivery 14,016,324 60,834,740 134,761,117 225,407,313 363,159,065 730,016,883

100lt Roof mounted 8,806,068 38,220,779 84,666,670 141,617,160 228,162,764 458,649,351

100lt Pole mounted 4,403,034 19,110,390 42,333,335 70,808,580 114,081,382 229,324,675

55lt Pole with hand pump 807,223 3,503,571 7,761,111 12,981,573 20,914,920 42,042,857

Insurance replacement 11,475,403 26,775,940 33,469,925 33,661,182 29,071,021 24,480,860

Totals 194,290,327 381,270,892 694,772,983 920,263,046 1,096,193,662 1,719,374,562

Programme MYPD CDM Needs

Residential market targets 2010 2011 2012 2013 2014 2015

Upper income subsidy 0 0 0 0 0 0

150 litre SWH System 0 0 0 0 0 0




Mid/low income geyser 77,333,357 151,634,033 272,941,259 394,248,486 454,902,099 758,170,165

Closed coupled 61,866,685 121,307,226 218,353,007 315,398,789 363,921,679 606,536,132

Split unit 15,466,671 30,326,807 54,588,252 78,849,697 90,980,420 151,634,033

Non Geyser delivery 10,502,649 45,584,416 100,978,597 168,901,200 272,120,727 547,012,987

100lt Roof mounted 6,301,590 27,350,649 60,587,158 101,340,720 163,272,436 328,207,792

100lt Pole mounted 3,150,795 13,675,325 30,293,579 50,670,360 81,636,218 164,103,896

55lt Pole with hand pump 1,050,265 4,558,442 10,097,860 16,890,120 27,212,073 54,701,299

Insurance replacement 0 0 0 0 0 0

Totals 87,836,006 197,218,449 373,919,857 563,149,686 727,022,826 1,305,183,152

38

• Youth Empowerment Week

• Youth Indaba

• Youth Month

• Learners focus week

• Gender Policy

• Participation in the UN initiatives on women empowerment

• Clean Energy Empowerment and Education (C3E)

• Women in Energy and Gas in South Africa (WOEA)

• Women in Nuclear in South Africa (WINSA)

• 16 Days Campaign of no violence against women and children

• Take a girl child to work

• Train 150 women on how to make wonder pots

• Increased entrepreneurship uptake by youth

WOMEN AND YOUTH EMPOWERMENT

SPECIAL COMMUNITY UPLIFTMENT PROJECTS

• Nelson Mandela Day – various activities

• Adopting a school – uniforms and bursaries. Over 300

uniforms been donated this year.

• Disability and old age centres - Special beds and

wheelchairs

• Men in the making programme - Men’s forum in the Energy

sector

• Take a boy child to work

• Men’s Day – 29 November

Alignment of the Government Outcomes, MDGs, SOOGs and Department’s Programmes

42

GOVERNMENT OUTCOME

UNITED NATIONS MILLENNIUM DEVELOPMENT GOALS (MDG’s)

DOE’s STRATEGIC OUTCOMES ORIENTED GOALS (SOOG’s)

DOE’s DELIVERABLES IN TERMS OF THE NATIONAL DEVELOPMENT PLAN

DOE’s CONTRIBUTION

Outcome 2 – A long and healthy life for all South Africans

MDG 1: Eradicate extreme poverty & hunger.

MDG 3: Promote gender & equality & empower women.

SOOG 4 – Universal Access and Transformation

- The Department continues to indirectly contribute to this outcome through the INEP, the introduction of more affordable and cleaner sources of energy and a regulatory framework that provides for, amongst others, Free Basic Electricity (FBE), Inclining Block Tariffs (IBT), etc.

43

GOVERNMENT OUTCOME





Outcome 4 – Decent employment through inclusive economic growth.

- SOOG 1 – Security of Supply

SOOG 3 – Regulation and Competition

Contribute to the creation of 11 million jobs by 2030.

The Department is currently assisting the DBE by serving on their technical advisory committee.

Jobs opportunities have been created through the:

- EEDSM Programme for both Eskom and municipalities;

- Integrated Electrification Programme; and

- SWH programme.

44

GOVERNMENT OUTCOME





Outcome 4 – Decent employment through inclusive economic growth (continued).

- SOOG 1 – Security of Supply (continued)

SOOG 3 – Regulation and Competition (continued)

Contribute to the creation of 11 million jobs by 2030.

Monitoring of job creation per project and compilation of related energy sector statistics has commenced and reported from the 2013/14 financial year. These figures will include job created in other departmental programmes like IPP and clean energy initiatives.

Energy security project implementation and local industrialisation of the main value chains to sustain economic growth and job creation will also create a significant number of jobs, i.e. the construction of IPP plants.

45

GOVERNMENT OUTCOME





Outcome 6 – An efficient, competitive and responsive economic infrastructure network.

- SOOG 2 – Infrastructure

Enable exploratory drilling to identify economically recoverable coal seam and shale gas reserves, while environmental investigations continue to ascertain whether sustainable exploitation is possible.

The exploration for, and exploitation of minerals is the mandate of the DMR. The Department will, however, support these endeavours by means of an enabling regulatory framework.

46

GOVERNMENT OUTCOME





Outcome 6 – An efficient, competitive and responsive economic infrastructure network (continued)

- SOOG 2 – Infrastructure (continued)

Development of coal seam and shale gas reserves and gas-to-power projects fast tracked (if gas reserves are proven and environmental concerns alleviated).

As part of the development of a strategy and plans for the expansion of LP Gas usage as a domestic modern thermal fuel, the Department developed a discussion document on the Maximum Refinery Gate Price (MRGP) of LPG which was published, comments received and a stakeholder workshop held.

47

GOVERNMENT OUTCOME







Development of coal seam and shale gas reserves and gas-to-power projects fast tracked (if gas reserves are proven and environmental concerns alleviated).

As part of the development of a strategy and plans for the expansion of LP Gas usage as a domestic modern thermal fuel, the Department developed a discussion document on the Maximum Refinery Gate Price (MRGP) of LPG which was published, comments received and a stakeholder workshop held.

48

GOVERNMENT OUTCOME







Fast track development of off-shore West Coast gas coupled with incremental power generation units.

The actual exploitation of gas reserves is within the mandate of PetroSA who operate a gas-to-fuel refinery on the West Coast and is in the process of expanding these operations.

49

GOVERNMENT OUTCOME







Develop infrastructure for the import of liquefied natural gas, mainly for power production.

Import infrastructure is the mandate of Transnet under the oversight of DPE, the DMR. The Department will, however, supported these endeavours by means of an enabling regulatory framework.

50

GOVERNMENT OUTCOME







Move Eskom’s system operator, planning, power procurement, power purchasing and power contracting functions to the independent operator and accelerated procurement of IPP’s.

The ISMO Bill and report have been submitted to the National Assembly.

Financial Close was reached for Window 1 projects under the REIPP. Bidding documents for base-load programme is partially completed.

51

GOVERNMENT OUTCOME







Move Eskom’s system operator, planning, power procurement, power purchasing and power contracting functions to the independent operator and accelerated procurement of IPP’s.

In Window 1, the Department awarded preferred bidder status to 28 proposals out of the 53 received. Window 1 project proposals secured commitment for the provision of 1 416 megawatts of renewable energy out of the 3 625 total required by the IRP. With this achievement, Window 1 surpassed the targeted 1 000 megawatts which was to be reached by the end of 2012/13.

52

GOVERNMENT OUTCOME







Ring-fence the electricity distribution businesses of the 12 largest municipalities, resolve maintenance and refurbishment backlogs and develop a financing plan, alongside investment in human capital.

The Report detailing a map of distribution assets status per secondary city was updated and pilot programmes will be executed in 12 municipalities in the 2013/14 financial year.

An amount of R 11 758 000 was appropriated to enable the Department to implement the “mini ADAM” project which will lead to the implementation of the first phase of the ADAM project to assist struggling distributors with their network planning.

53

GOVERNMENT OUTCOME







Upgrade refineries to ensure that they meet the new fuel quality standards.

Insist on strategic fuel stocks to ensure security of supply.

Continue to import refined fuels, ensuring that the growing deficit in petroleum products is met, and defer decision on a new refinery.

The Department is in the process of developing a 20 year Liquid Fuels Infrastructure Road Map and the audit of refineries has been completed.

54

GOVERNMENT OUTCOME







Investigate the implications of nuclear energy, including its costs, financing options, institutional arrangements, safety, environmental costs and benefits, localisation and employment opportunities, uranium enrichment, and fuel fabrication possibilities.

The IRP provides for 9,6 GW to be generated by 2029 through new Nuclear power plants.

To this effect, the IAEA Integrated Nuclear Infrastructure Review (INIR) mission was concluded. The INIR is a self-evaluation process in accordance with the IAEA INIR methodology. It is aimed at evaluating the readiness of South Africa to implement the nuclear build programme as envisaged in the IRP 2010-2030.

55

GOVERNMENT OUTCOME







Investigate the implications of nuclear energy, including its costs, financing options, institutional arrangements, safety, environmental costs and benefits, localisation and employment opportunities, uranium enrichment, and fuel fabrication possibilities.

During the 2012/13 financial year, a service provider was also appointed to undertake a study and provide advisory services on the funding options related to the new nuclear build fleet programme.

The NNEECC, chaired by the President, will make the final decision on South Africa’s nuclear future.

56

GOVERNMENT OUTCOME







- INEP funded the construction/upgrade of the following:

2012/13 - 4 new substations, 5 upgraded substations, 275 km of new medium voltage lines and 85 km of upgraded medium voltage lines.

57

GOVERNMENT OUTCOME





Outcome 7 – Vibrant, equitable and sustainable rural communities and food security for all.




- Approximately 75% of the figures reported under outcome 8 for grid connections and all the non-grid connections of the Integrated National Electrification Programme electrified were rural household connections.

The 7 operational IEC reported under outcome 8 are all situated in rural areas.

58

GOVERNMENT OUTCOME





Outcome 8 – Sustainable human settlement and improved quality of household life.




Revise national electrification plan and achieve 90 percent access to energy.

The new Household Electrification Strategy was approved by Cabinet on 26 June 2013, and aims to achieve universal access of 97% of households by 2025.

The Integrated National Electrification Programme electrified the following number of households in this financial period:

2012/13 – 175 473 (166 130 grid and 9 343 non-grid)

59

GOVERNMENT OUTCOME





Outcome 8 – Sustainable human settlement and improved quality of household life (continued)


MDG 3: Promote gender & equality & empower women (continued)

SOOG 4 – Universal Access and Transformation (continued)

Revise national electrification plan and achieve 90 percent access to energy (continued)

4 additional Integrated Energy Centres (IEC’s) were operationalised in this period bringing the total to 7 IEC’s operational.

SWH was installed in the following number of households:

2010/11 – 124 218

2011/12 – 250 041

2012/13 – 353 188 (accumulative)

60

GOVERNMENT OUTCOME





Outcome 9: A responsive, accountable, effective and efficient local government system.




- Electrification of households through INEP increased service delivery by municipalities. Of the figures reported under outcome 8, the following figures were funded through INEP for electrification by municipalities:

2012/13 – 47 204

61

GOVERNMENT OUTCOME





Outcome 10 – Environmental assets and natural resources that are well protected and continually enhanced.

MDG 7: Ensure environmental sustainability.

SOOG 5 – Environmental Assets

SOOG 6 – Climate Change

Move to less carbon-intensive electricity production.

The Integrated Resource Plan (IRP2010) makes provision for 42% of all new generation capacity to be based on renewable energy technologies to reduce carbon emissions.

presentation to the portfolio committee on energy on the department‘s response to: - the 2012 sona...

Documents

nuclear energy

introductionsona energy

megawatts of renewable

lp gas

new nuclear power plants

gas infrastructure plans

cabinet approval

new substations completed5