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ENERGY PRESENTATION

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Understanding key players in the sector. Public entities reporting to the Minister ... to integrate supply, demand, macroeconomics, geopolitics and climate change ... – PowerPoint PPT presentation

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Title: ENERGY PRESENTATION


1
  • ENERGY PRESENTATION
  • Joint Portfolio Committees on Minerals and Energy

2
OUTLINE
  • Energy Legal Framework
  • Understanding key players in the sector
  • Public entities reporting to the Minister
  • Other Key Players
  • Energy Security Masterplan
  • Status of ESMP Projects
  • Challenges
  • Performance over the last cycle
  • The Electricity Scene
  • Energy Security Policy
  • Interventions
  • Renewable energy
  • Energy efficiency
  • Socioeconomic Indicators

3
ELECTRICITY VALUE CHAIN
4
ENERGY LEGAL FRAMEWORK
  • Petroleum Products Act 2003, No.120 of 1977
  • Gas Act 2001, No. 48 of 2001
  • Gas Regulator Levies Act, 2002, No. 75 of 2002
  • Petroleum Pipelines Act, 2003, No.60 of 2003
  • Petroleum Pipelines Levies Act, 2004, No. 28 of
    2004
  • National Energy Act, 2008, No.34 of 2008
  • Central Energy Fund Act, Act No.38 of 1977
  • Electricity Regulation Act
  • National Nuclear Regulator Act
  • Nuclear Energy Act
  • National Radioactive Waste Disposal Institute Act

5
PUBLIC ENTITIES REPORTING TO MINISTER
CEF Group iGas, Strategic Fuel Fund (SFF), Oil
Pollution Control of South Africa, South African
National Energy Research Institute (SANERI),
African Exploration, CEF Carbon, Petroleum Agency
of South Africa (PASA), South African Supplier
Development Agency (SASDA), Energy Development
Corporation (EDC) AND Petroleum and Gas
Corporation of South Africa SANEDI (To be
Established in terms of National Energy Act of
2008 incorporating SANERI) NECSA (South African
Nuclear Energy Corporation) NNR (National
Nuclear Regulator) NERSA (National Energy
Regulator of South Africa) EDI HOLDINGS
(distribution industry restructuring)
6
UNDERSTANDING THE KEY PLAYERS
Sasol Owns Two Refineries in Sasolburg and
Secunda Engen One Refinery in Durban BP
Co-owns Refinery with Shell in Durban Shell
Co-owns Refinery with BP in Durban Total
Co-owns Sasolburg Refinery with Sasol Chevron
Owns Refinery in Cape Town PetroSA Owns
Refinery in Mossel Bay All belong to association
called SAPIA (South African Petroleum Industry
Association) Eskom vertically integrated state
owned electricity monopoly
7
OTHER KEY ROLEPLAYERS
Transnet Pipelines, Rail, Ports NAAMSA, Fuel
Retailers Associations Nuclear Fuels Corporation
(NUFCOR) Pebble Bed Modular Reactor Company
(PBMR) Organised Labour Key Depts DPE,
Treasury, DoT, DWAEA, DTI
8
ENERGY SECURITY MASTER PLAN (ESMP) LIQUID FUELS
  • The Energy Security Master Plan on liquid fuels
    was approved by Cabinet in September 2007
  • The Master plan sought to allow for the making of
    well-informed choices in respect of energy
    supply, energy carriers, demand sector
    strategies, as well as energy transformation
    approaches, cognisant of the need to minimize
    negative impacts on the environment and the
    economy
  • In the short-term
  • the Master Plan focuses on developing supply
    chain solutions to South Africas liquid fuels
    supply challenges, management of liquid fuels
    demand and emergency response tactics.
  • In the medium to long-term
  • the approach is broader and begins to integrate
    supply, demand, macroeconomics, geopolitics and
    climate change

9
STATUS OF ESMP PROJECTS
  • Proposed refinery at Coega Feasibility stage
  • Proposed Coal to Liquid plant by Sasol
    Feasibility stage
  • Transnet constructing Pipeline
  • Oil companies building storage capacity
  • Not sufficient progress on Clean fuels
  • Strategic Stocks Policy not revised

10
CHALLENGES LIQUID FUELS
  • Refining Capacity cannot meet demand Huge
    import bill
  • Port infrastructure needs to be upgraded
    Limited room for unplanned incidents at ports
  • Ability to supply inland market is challenged
  • Inadequate storage infrastructure to supply
    demand e.g. Airports
  • Rail infrastructure needs to play a bigger role
  • Human and Financial Capacity in the Department
    must be enhanced
  • Alignment of State Departments and Entities

11
PERFORMANCE FROM PREVIOUS CYCLE
  • Promulgation of Energy Act, 2008 No 34 of 2008
    Integrated Energy Planning, Energy Efficiency,
    Energy Research
  • Ratlou Integrated Energy Centre in North West
    launched bringing the number to 6 nationally
    Kuruman, Matatiele, Mutale, Eshane
  • 4387 Licence applications processed (Retail,
    Wholesale licences)
  • Implementation Plan for the ESMP
  • Planning for National Integrated Energy Modelling
    system started
  • Planning for World Cup Fuel Supply Airports
    identified as areas requiring focus

12
THE ELECTRICITY SCENE
  • blackouts and brownouts continue
  • Used to be municipalities mainly, now also Eskom
    (January 2008)
  • Recovery plan in place for short-medium term,
    with NERT in place as per Cabinet decision
  • Intensified energy efficiency
  • Cogeneration and renewable energy IPPs
  • Eskom financing model being developed
  • Nersa will make tariff determination soon and
    pricing rising to long run marginal cost
  • Additional support to Eskom being considrered by
    National Treasury
  • Improved regulatory environment
  • Electricity Regulation Act operational from
    October 2006
  • New proposed regulations integrated resource
    planning, new generation capacity, energy
    efficiency and demand side management

13
THE ELECTRICITY SCENE
  • Demand projections (assumption of 2.5 sales
    growth) indicate a need for power as indicated
    below
  • South Africa remains in the the top 7 of
    greenhouse gas emitters in the world
  • Nuclear will play a central role on the supply
    side from 2015 (LTMS)
  • Considering nuclear plant lead times, earliest
    can only be 2018
  • Decisions are urgently required
  • Only 76 of households have access to
    electricity
  • Free Basic Energy rollout does not provide the
    intended poverty relief

14
ENERGY SECURITY POLICY
  • Energy White Paper position provides for
    diversification of energy mix, including coal,
    nuclear, gas and renewable energy
  • Recall that Cabinet decision requires
  • Eskom to do 70 of new generation, and
  • Independent Power Producers (IPP) will do 30
  • By 2013, the RE share of generation capacity must
    be 10 000GWh
  • Nuclear energy policy approved by Cabinet
  • Framework for prospecting, mining, milling and
    use of nuclear materials for energy use
  • Radioactive waste management policy and strategy
    approved
  • Establishes radioactive waste governance
    framework
  • Establishment of a Cabinet Committee to oversee
    implementation

15
ENERGY SECURITY POLICY
  • Cabinet adopted Long term mitigation scenarios
    (LTMS)
  • Growth without constraints
  • Peak, Plateau and Decline (from 2035) in respect
    of GHG emissions
  • Start now scenario 27 nuclear by 2030
  • Scale up scenario 50 nuclear by 2050
  • By 2013, the RE share of generation capacity must
    be 10 000GWh
  • These scenarios must guide our mitigation plans
  • Even on scale up scenario, this would be
    inconsistent with the decrease in GHG emissions
    required by Science
  • This will likely put pressure on the RSA position
    post Copenhagen 2009

16
INTERVENTIONS
  • Eskom build program (nuclear decision
    finalization?)
  • Independent Power Producers (IPPs)
  • Renewable energy IPPs ( feed-in tariff)
  • Energy efficiency and demand side management
  • National Electricity Response Plan

17
RENEWABLE ENERGY
  • 100MW of wind farms planned across the country
  • REFSO project support is limited to projects
    under R100 million. subsidy rate is now R1million
    per MW. To date projects with total installed
    capacity of 24 MW have been subsidised to date at
    a total cost of R15m
  • Initiative to install over 500 000 solar water
    heaters
  • The Solar Water Heating programme has an enegy
    diversity and demand side management capability.
    At present, about 1000 systems have been
    implemented and plans and over 1.75 m planned for
    the next MTEF period
  • The financing framework for Biofuels has been
    established. Research into 2nd generation
    biofuels programme is currently underway
  • NERSA has approved REFIT for Wind , Small Hydro
    Schemes, Landfill and Solar Concentrated Power.

18
ENERGY EFFICIENCY
  • Energy Efficient Lighting programme has been
    implemented in government buildings and
    households in select municipalities
  • Involves exchange of incandescent lighting with
    compact fluorescent lighting (CFLs)
  • To date over 20 million CFLs have been replaced
  • Power Conservation Program to start in 2010
  • Facilitates trading in energy savings
  • Pilot Projects
  • 2010 Host Cities, involving CFLs and traffic
    lights

19
ENERGY EFFICIENCY
  • Designated National Authority (DNA)
  • Responsible for registering Clean Development
    Mechanism (CDM) projects
  • CDM is an intiative under the UN Framework
    Convention on Climate Change (mitigates against
    climate change)
  • 15 projects registered and over 120 in the
    pipeline
  • Tradeable Renewable Energy Certificate (TRECs)
    implementation framework is being finalised, to
    enable benefits to be derived from climate change
    benefits associated with renewable energy
    sources.

20
SOCIO-ECONOMIC INTERVENTIONS
  • Challenges
  • Universal access to energy (electricity and
    thermal energy)
  • Funding to align with universal access target of
    2014 for human settlements
  • Skills capacity related to accelerated program
    for 2014
  • Also opportunity for job creation Expanded
    Public Works
  • Structuring of poverty tariff to cushion the
    poor as prices rise
  • Increased access to Free Basic Energy (including
    alternative non-grid carriers)

21
BACKLOG AS AT 2007
22
  • Thank You.
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