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The National Energy Bill

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Title: The National Energy Bill


1
The National Energy Bill
  • The DME briefing to Parliamentary Portfolio
    Committee
  • 29 July 2008

2
The team from Department
  • Nhlanhla Gumede
  • DDG Hydrocarbons Energy Planning
  • Jeff Subramoney
  • Director Energy Planning
  • Masego Sephoti
  • Director Compliance Monitoring

3
The Bill background
  • Was first developed in 2003 to cover all EWP not
    covered that far
  • Cabinet approved public consultation in 2004
  • Widely consulted in 2004
  • Withdrawn in 2006 to effect certain changes
  • Focus now largely energy security

4
White Paper on Energy Policy, 1998 (EWP)
  • White Paper on Energy policy is 10 years old
  • Requires a review and a renewal, a process
    started last year
  • Some assumptions underpinning the EWP - no longer
    valid
  • Assumed that energy security can be achieved
    through greater diversification and flexibility
    of supply
  • Asserted that the energy sector relied on
    market-based pricing
  • Placed greater emphasis on commercialisation and
    competition
  • However acknowledged that competitive energy
    markets need sophisticated regulatory regimes
  • Assumed that government will promote investment
    into energy sector rather than use energy to
    drive investment in other sectors of the economy
  • Also assumed that there will be a healthy balance
    between the interest of capital and national
    objectives
  • Experiences in other competitive markets have
    shown that markets work well in a situation of
    over capacity
  • In 1998, RSA had over capacity in all areas of
    energy
  • In drafting the Bill, validity of the assumptions
    underpinning the policy was a concern

5
World Banks - renewed approach to energy
  • Lessons learned from the 90s
  • Respond to country demand, strategy needs to be
    tailored to each country situation
  • Privatization not panacea, role for both public
    and private investment
  • Design of contracts in a changing environment is
    much more complex than initially anticipated
  • Efficiency is critical, regardless of ownership
  • Clean energy has major role, especially hydro and
    other renewables
  • Managing natural resource wealth raises complex
    issues

Source Makhtar Diop, Director (2008), Strategy
and Operations, Latin America and the Caribbean,
The World Bank, Afrolac Conference, Cancún,
México, April 3, 2008
6
Interface with other legislation
  • Energy Bill interfaces with a number of pieces of
    legislations

7
National Energy Bill in perspective
  • Whilst most of existing legislation are about the
    past and present, the National Energy Bill is
    about future

Key Energy Legislations
Other Energy legislation
Energy Bill
  • Governance redress
  • Competition and industry structure issues
  • Economic issues (mainly prices and tariffs)
  • Standards specifications
  • Quality of supply
  • Health Safety
  • Social and national objectives
  • Industry structuring restructuring
  • Securing our energy future
  • Data information
  • Modelling planning
  • Future fuels
  • Sustainable access
  • Maintaining affordability
  • Energy research
  • Climate change
  • Security of supply

8
Energy Security Framework
  • Energy Bill aims to address all energy security
    issues

Foreign policy
Local production
Reserve margins
Climate change (mitigation adaptation)
Energy infrastructure planning
Energy security
Standards specifications
Role of state in productive sectors
Demand management
Energy Research
Diversity of supply
Macro-economic framework
Import Export policies
9
The essence of the Bill
  • The National Energy Bill is essentially about
  • Provision of energy data and information
  • Energy modelling and integrated energy planning
  • Energy development
  • Alternative and future energy
  • Efficient production use
  • Coordinated research on carriers technologies
  • Security of supply (both carriers feedstock)
  • State participation in key energy infrastructure
    planning and development

10
General guiding principles
  • The Energy Bill does not seek to replace existing
    institutions but to strengthen them
  • Energy is the lifeblood of energy economy
  • Economic decisions made w/o consideration of
    energy availability and price are problematic
  • Focuses on issues intended to strengthen energy
    security
  • Seeks to complement data collection and
    facilitate sharing

11
Source Energy Geopolitics, Professor Michael J.
Economides,
12
The Bill structure
  • Ch 1Definitions Objects of the Act
  • Ch 2 Energy Supply, optimisation and utilisation
  • Provision of Data and Access to Data
  • Safety, Health and Environment
  • Energy Access by Households
  • Energy Related International Obligations
  • Ch 3 Energy Modelling and Information Agency
  • Ch 4 Integrated Energy Planning
  • Ch 5 Energy Development Institute
  • Renewable Energy
  • Energy Efficiency
  • Energy Research
  • Ch 6 Security of supply
  • Ch 7 Energy Infrastructure
  • Ch 8 General Provisions

13
Long title
  • To ensure that diverse energy resources are
    available, in sustainable quantities and at
    affordable prices, to the South African economy
    in support of economic growth and poverty
    alleviation, taking into account environmental
    management requirements, international
    commitments and obligations and interactions
    amongst economic sectors to establish
    institutions to be responsible for promotion of
    efficient generation and consumption of energy,
    energy modelling and planning, increased
    generation and consumption of renewable energies,
    energy research, contingency energy supply,
    holding of strategic energy minerals, adequate
    investment in, appropriate upkeep of and
    equitable access to energy infrastructure to
    provide measures for the furnishing of certain
    data and information regarding energy demand,
    supply and generation and to provide for matters
    connected therewith.

14
Chapter 1 Definitions
  • Board means the Board of the South African
    National Energy Development Institute
    contemplated in section 18
  • Central Energy Fund Act means the Central
    Energy Fund Act, 1977 (Act No. 38 of 1977)
  • Department means the Department of Minerals
    and Energy
  • Director-General means the Director-General
    of the Department of Minerals and Energy or
    anyone appointed to act on his or her behalf
  • energy carrier means a substance or system
    that moves or carries energy in a usable form
    from one place to another
  • energy data means energy-related statistics,
    facts, figures, information and records of the
    energy industry and all other economic sectors
  • energy efficiency means economical and
    efficient production and utilisation of an energy
    carrier or resource
  • energy modelling means a mathematical
    representation, by a set of logical and
    quantitative parameters, of economic and other
    related processes within the energy sector as
    well as the interactions amongst the processes
    and other factors which have a relationship with
    the energy sector
  • energy security means availability of diverse
    energy resources, in sustainable quantities and
    at affordable prices, to the South African
    economy in support of economic growth and poverty
    alleviation, whilst taking into account
    environmental management requirements,
    international commitments and interactions among
    economic sectors

15
Chapter 1 Definitions
  • greenhouse gases means gases present in the
    atmosphere, which reduce the loss of heat into
    space, thereby contributing to an increase in
    global temperatures through a process known as
    the greenhouse effect
  • Integrated Energy Masterplan means national
    energy plan contemplated in section 16, approved
    by Cabinet and published in the Gazette by the
    Minister
  • Minister means the Minister of Minerals and
    Energy
  • organ of state means an organ of state as
    defined in section 239 of the Constitution
  • prescribed means prescribed by regulation
  • Promotion of Access to Information Act means
    the Promotion of Access to Information Act, 2000
    (Act No. 2 of 2000)
  • Public Finance Management Act means the
    Public Finance Management Act, 1999 (Act No. 1 of
    1999)
  • regulation means any regulation made in terms
    of this Act
  • renewable energy means energy generated from
    natural non-depleting resources, including solar
    energy, wind energy, biomass energy, biological
    waste energy, hydro energy, geothermal energy and
    ocean and tidal energy
  • this Act includes regulations made in terms
    of this Act.

16
Objects of the Act
  • 2. The objects of this Act are to
  • ensure uninterrupted supply of energy to the
    Republic
  • promote diversity of supply of energy and its
    sources
  • facilitate effective management of energy demand
    and its conservation
  • promote energy research
  • promote appropriate standards and specifications
    for the equipment, systems and processes used for
    producing, supplying and consuming energy
  • ensure collection of data and information
    relating to energy supply, transportation and
    demand
  • promote evidence-driven energy and related
    sectors policy formulation

17
Objects of the Act (cont)
  • 2. The objects of this Act are to
  • provide for optimal supply, transformation,
    transportation, storage and demand of energy that
    are planned, organised and implemented in
    accordance with a balanced consideration of
    security of supply, economics, consumer
    protection and a sustainable development
  • provide for safety, health and environment
    matters that pertain to energy
  • facilitate improvement of the quality of life of
    the people of the Republic
  • commercialise energy-related technologies
  • ensure effective planning for energy supply,
    transportation and consumption
  • promote sustainable development of South Africas
    economy
  • ensure the fulfilment of international
    commitments and obligations pertaining to energy

18
Chapter 2 Energy supply, optimisation and
utilisation
  • Provision of data and access to data sources
  • 3. (1) The Minister to prescribe
  • (a) mandatory provision of any data and
    information where such data is not already made
    available
  • (b) connection to any data and information
    management system within the public
    administration observe Promotion of Access to
    Information Act and Statistics Act
  • (2) The Minister may (subject to confidentiality
    of information) permit sharing of information
    with any state entity
  • (3) The information provided under the Act
    subject to provisions of Promotion of Access to
    Information Act

19
Chapter 2 Energy supply, optimisation and
utilisation
  • Safety, health and environment
  • 4. (1) The Minister may, after consulting with
    the Ministers of Trade Industry and
    Environmental Affairs and Tourism,
  • establish a programme (s), not in other
    legislation, for safety, health and environmental
  • for safe, healthy and environmentally purposes,
    prescribe standards and specifications, not
    elsewhere legislated or regulated
  • Energy access by households
  • 5. (1) The Minister may establish a programme (s)
    for universal access to appropriate forms of
    energy affordable prices

20
Chapter 2 Energy supply, optimisation and
utilisation
  • Energy-related international obligations
  • 6. (1) The Minister may, in consultation with the
    Ministers of Foreign Affairs, of Environment
    Affairs and Tourism and of Trade and Industry
  • (a) institute programmes
  • (b) establish agencies or entities and
  • (c) take any other reasonable steps,
  • to give effect to the energy international
    agreements ratified by Government
  • (2) The Minister may prescribe measures to give
    effect to subsection (1) provided that compliance
    with Public Finance Management Act.

21
Energy Bill energy data modelling 1998 White
Paper on Energy policy
  • P19
  • For various reasons South Africa has very limited
    energy data and, furthermore, very limited
    capacity to perform this sort of policy analysis
  • P81
  • Informed decision making, at all levels, is only
    possible when suitable and credible statistics
    and information are available
  • There is currently a national lack of renewables
    energy data, and information on renewable energy
    system applications, system specifications,
    systems standards, installation and performance
    guides, technical and economic characteristics
    and many other related issues
  • Government will establish suitable information
    systems of renewable energy statistics, where
    justifiable, and will assist with the
    dissemination thereof

22
Energy Bill energy data modelling 1998 White
Paper on Energy policy
  • P84
  • Government will ensure that the necessary
    resources are made available to establish
    structures and systems, and put in place
    legislation to facilitate the specification,
    collection, acquisition, storage, maintenance and
    supply of energy data, and energy-related data,
    according to the requirements of integrated
    energy planning and international standards.
    Government will facilitate the establishment of
    information databases.
  • Government will provide information to the public
    at a reasonable price. The provision of this
    information will not compromise the commercial
    position of parties supplying data to government.

23
Energy Bill Energy planning 1998 White Paper
on Energy policy
  • EWP84
  • The data should be collected, stored and reported
    in accordance with international specifications
    and standards to facilitate easy comparison,
    integration and exchange
  • Data should be collected regularly and the
    database kept up to date
  • EWP90
  • The Department of Minerals and Energy will
    include explicit environmental considerations
    into studies regarding energy suppliers and
    users, and will integrate these results through
    Integrated Energy Planning

24
Data collection, integrated energy modelling
planning
  • Provision of high-quality, energy information, in
    manner that promotes sound policymaking,
    efficient markets and public understanding, to
  • Cabinet
  • National, provincial local governments
  • Markets (for efficient market operation)
  • Public (communication)

Planning An integrated planning approach to
ensure that all the constituting elements are
addressed in a coordinated manner
Modelling An integrated energy modeling
capability which would be instrumental in the
development of energy plans and evaluation of
options that are proposed by policy-makers
25
Modelling vs. Planning
Modelling
Planning
  • Should be descriptive and avoids policy advocacy
  • Modeling should, as a basis for the development
    of energy plans, be undertaken in such a way as
    to use
  • prevailing policy,
  • legislative arrangements,
  • proven or almost proven technology or industry
    structural conditions
  • Is essentially prescriptive, and advocates for
    certain policy approaches.
  • Involves deliberate policy choices, which may go
    beyond empirical evidence
  • Should be about handling of sometimes conflicting
    objectives

26
Integrated Energy Modelling Planning
Coordination
Integrated Energy Planning
Policy, Options, Strategies
Other factors
Modelling Agency
Energy Modelling
Government Departments SOEs
Eskom
PetroSA
Transnet
DoT
Entity
Entity n
Individual Policies, Strategies, Plans,
(Infrastructure)
27
Energy Bill Energy planning 1998 White Paper
on Energy policy
  • EWP6
  • To cope with multiple causal linkages, energy
    policy analysis usually commences with the demand
    side by means of the process entitled-
    integrated energy planning. This recognises
    that energy is not an end-good but is rather
    consumed as a means to an end. Policy must
    facilitate optimal energy consumption and
    production to meet social needs. This requires
    consumer choice and the operation of market
    forces.
  • Integrated energy planning suffers from the same
    drawbacks as other ideal models. It requires a
    great deal of data and analysis to implement, of
    which South Africa has a scarcity. Nonetheless,
    this white paper identifies integrated energy
    planning as the most suitable base for planning
    purposes and also addresses the issue of data
    scarcity

28
Energy Bill Energy planning 1998 White Paper
on Energy policy
  • EWP82 clearly articulates the IEP Integrated
    energy planning (IEP) is a process which entails
    the following technical functions
  • interpreting the requirements of national
    economic, social and environmental policies for
    the energy sector
  • analysing energy needs in terms of how their
    fulfilment will contribute towards attaining
    national economic and social goals
  • analysing the potential of energy supply systems
    and demand side management to meet current and
    potential future energy needs. This would include
    analyses of individual supply sub-sectors and the
    linkages between sub-sectors
  • analysing energy sector linkages to the
    macro-economy
  • analysing the potential effects on the energy
    sector of global and technological developments
  • evaluating the effects of legislative,
    institutional and industry structure arrangements
    on energy supply and demand
  • specifying, sourcing and presenting data on
    energy supply and demand, energy sector
    institutions, and linkages with economic and
    social factors in order to provide a statistical
    description of the energy sectors historic
    evolution and current impact on economic and
    social development

29
Energy Bill Energy planning 1998 White Paper
on Energy policy
  • EWP82
  • Government will facilitate the provision of the
    necessary resources to establish IEP structures
    and systems to develop energy policy
  • The Department of Minerals and Energy will ensure
    that an integrated resource planning approach is
    adopted for large investment decisions by energy
    suppliers and service providers, in terms of
    which comprehensive evaluations of the economic,
    social and environmental implications of all
    feasible supply and demand side investments will
    have to be undertaken.
  • In the electricity sectors case, the National
    Electricity Regulator will only license new
    facilities upon the satisfactory completion of an
    integrated resource plan

30
Energy Bill Energy planning 1998 White Paper
on Energy policy
  • EWP84
  • Not only is good data required for the energy
    policy process but it is fundamental to the
    implementation of integrated energy planning. To
    facilitate integrated energy planning a database
    needs to be maintained covering at least the
    following areas
  • energy resources
  • energy production from indigenous resources
    (mining, renewables, oil and gas)
  • international energy trade (imports and exports)
  • energy transformation (production of liquid fuels
    and electricity from other sources)
  • storage, transport and distribution of energy
  • national energy trade (wholesale and retail)
  • investment in plant and infrastructure associated
    with the above areas
  • disaggregated energy usage, expressed in energy
    and cost terms
  • energy efficiency
  • energy related environmental emissions
  • average sectoral energy prices and taxes
  • institutions linked to all the above areas
  • similar data from regional and international
    sources

31
Energy Modelling System (NIEMS)
32
NIEMS approach
  • Require a model that can forecast as well as
    explain energy policy impacts on the economy
    using key government concerns
  • Inflation
  • Unemployment
  • Taxes
  • Government spending
  • Trade
  • Require detailed energy models that
  • explain technology
  • energy use within each sector
  • We also have to address adjustment costs

33
Proposed energy modelling
  • Represents energy supply, conversion, and demand
    in a unified, but modular system
  • Detailed structural and process models in most
    energy sectors
  • Typically a bottom up approach of model
    formulation
  • Models real consumer, supplier and equipment
    behaviour

34
Residential and Commercial Demand Modules
  • Track changes to building stock and equipment
    appliance stock by type and region
  • Rely on data from residential and commercial
    energy surveys
  • Choose new or replacement equipment for each
    energy service based on cost and performance
    characteristics and modelled economic behaviour
  • Technology characteristics to reflect future cost
    reductions and performance improvements, and
    mandated efficiency standards and building
    regulations

35
Buildings (Residential/Commercial) Sector
Projections
  • Sector energy consumption
  • By fuel type (electricity, coal, gas, etc)
  • End-use (heat, lighting, cooking, etc),
  • Building/housing type
  • Region
  • Households and floor space
  • New construction, surviving, building type
  • Energy consumption intensity (use per square
    foot)
  • Delivered (site), electricity losses, total
    (primary)
  • Sector carbon emissions by fuel type
  • Average residential equipment stock efficiency
  • By end-use
  • By fuel type (commercial),
  • By equipment (residential)
  • Stock (residential)

36
Residential End Use Services
  • Heating
  • Cooling
  • Water Heating
  • Refrigeration
  • Freezers
  • Cooking
  • Clothes Drying
  • Clothes Washing
  • Coffee Makers
  • Handheld Rechargeables
  • Lighting
  • Dishwashers
  • Televisions
  • PCs
  • Furnace Fans
  • Spas
  • Security Systems
  • Home Audio
  • Microwaves
  • Ceiling Fans

37
Commercial End Use Services
  • Heating
  • Cooling
  • Water Heating
  • Ventilation
  • Refrigeration
  • Cooking
  • Lighting
  • Office Equipment (PCs)
  • Office Equipment (non-PCs)
  • Other

38
Industrial Demand Module
  • Industry sector decomposed into manufacturing
    industries, agriculture, construction and mining
  • Energy use estimated by major process steps or
    end uses based on major technology bundles
  • Energy intensity for each bundle declines based
    on time, rate of capacity additions, and energy
    prices
  • Motor stock model included for manufacturing
    industries
  • Combined heat and power (CHP) technology adoption
    simulated
  • Fuel switching, recycling, and byproducts included

39
Industrial Model Flowchart
40
Transportation Demand Module
  • Distinct approaches for light-duty vehicles,
    trucks, rail, shipping and air travel.
  • Energy use in light-duty vehicles
  • Vehicle-miles traveled estimated based on cost of
    driving, income, and demographics
  • Tracks light-duty vehicle stocks by type and age
  • Fuel-saving technologies selected for cost
    effectiveness and compliance with fuel economy
    standards
  • Alternative-fuel and advanced technology vehicle
    sales are a function of technology attributes,
    costs, and fuel prices
  • Freight truck and air are also vintaged stock
    models
  • Commercial, medium, and heavy trucks
  • Regional, narrow, and wide body aircraft

41
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42
NIEMS Macroeconomic Activity Module
  • Could use Global Insight Macro Model
  • Links all energy variables within the GI model to
    NIEMS energy variables
  • Global Insight model has 26 energy variables
  • Uses Input/Output model with dynamic
    specification for industrial output
  • Global Insight model has 60 industrial sectors
  • We would require an employment model
  • We could calibrate existing similar models to
    suit South Africa

43
NIEMS Macroeconomic Activity Module
  • Regional Model
  • Forecasts regional product, wages and salaries,
    disposable income, consumer prices, population
    and housing activity
  • Uses Census projections for population and
    national concepts to estimate regional results
  • Regional commercial floor space model estimates
    floor space stock and additions for floor space
    types
  • Major explanatory variables include income,
    interest rates, population by region

44
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45
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46
OGSM Interface with other NEMS Modules
Delivered Petroleum Product Prices
PMM
Petroleum Products Consumed
Oil Production
OGSM Supply Functions
Oil Wellhead Price
Exogenous Input
NIEMS
Drilling, Reserves,
Production
Proved Natural Gas Reserves Natural Gas
Production-to-Reserves Ratio
NGTDM Gas Production Functions
Natural Gas Wellhead Price Natural Gas Production
Natural Gas Consumption
Delivered Natural Gas Prices
Year t
47
PMM Inputs/Outputs
Petroleum Product Demands
Crude Product Supply Curves
International Energy Module
Demand Modules
Petroleum Product Prices
Petroleum Supply Data
Domestic Crude Production
Oil Gas Supply Module
Refinery Revenue
Macro Module
Domestic Crude Price
Petroleum Market Module
Refinery Coal Consumption
System Controlling Information
Coal Supply Module
Coal Supply Curves
Integrating Module
Electricity Prices Petroleum Product Demand
Natural Gas Production and Price
Natural Gas Transportation Distribution Module
Electric Utility Market Module
Petroleum Product Prices
Biomass Cost
Biomass Consumption
Renewable Fuels Module
48
Cap on CO2 Emissions
  • Emissions accounting included in NIEMS design
  • Each solution generates and accounts for GHGs and
    other emissions
  • Embedded cap and trade system
  • Marginal abatement cost for other GHGs to
    simulate reductions under economy-wide policies
  • All other environmental issues are determined in
    each module

49
Chapter 3 National Energy Modelling and
Information Agency
  • 7. The National Energy Modelling and Information
    Agency is established as a juristic person
  • Functions of National Energy Modelling and
    Information Agency
  • 8. (1) The functions of the National Energy
    Modelling and Information Agency
  • (a) collect, collate and analyse relevant energy
    data and information
  • (b) manage data and information
  • (c) provide reliable information
  • (d) develop and maintain supply, demand,
    infrastructure and macro-economic modelling
    capability
  • (e) provide energy data and information for
    international obligations
  • (f) produce and publish energy supply and use
    reviews and forecasts
  • (g) produce and publish energy models, including
    assumptions all other information relevant for
    the purposes of verification
  • (h) support governments by conducting a policy
    impact analysis and
  • (i) make available energy statistics and energy
    information to the public

50
Chapter 3 National Energy Modelling and
Information Agency
  • 8 (2) The National Energy Modelling and
    Information Agency to
  • (a) advise the Minister on
  • (i) the strategic risks
  • (ii) the relationship with energy sector global
    counterparts
  • (iii) the capacity expansion of energy
    infrastructure
  • (iv) the economic impact of regulation
  • (v) GHG emissions from the energy
  • (b) provide analyses to the Minister on
  • (i) possible impact of energy policy
  • (ii) continued availability of energy
  • (iii) the cost of energy
  • (c) provide analyses to Cabinet on possible
    impact of any policy, strategy or plan
  • (d) consider any energy-related matter referred
    to it by the Minister
  • (e) report to the Minister in accordance with
    section 55 of PFMA

51
Chapter 3 National Energy Modelling and
Information Agency
  • Constitution of National Energy Modelling and
    Information Agency
  • 9. (1) Agency comprises of an Energy Information
    Administrator as its head, and its data
    management and modelling staff
  • (2) The Minister to appoint a person with
    suitable qualifications and experience as
    Administrator for five years (renewable)
  • (4) The Minister may designate any other person
    within the Agency, to act
  • (5) The Minister to (with the Minister of
    Finance), determine the Administrators
    remuneration, allowances, benefits and other
    terms and conditions of employment, taking into
    account the demands of the job and the equivalent
    compensation for such position paid in the
    private sector.
  • (6) No person to be appointed as or remain as
    Administrator if
  • (a) is not a South African citizen or the holder
    of a permanent resident permit
  • (b) is an unrehabilitated insolvent
  • (c) Has been convicted of an offence involving
    dishonesty or served a sentence of imprisonment
    without the option of a fine for any other
    offence or
  • (d) has after his or her appointment been
    convicted or sentenced to imprisonment

52
Chapter 3 National Energy Modelling and
Information Agency
  • Constitution of National Energy Modelling and
    Information Agency
  • (7) The Administrator is responsible for
  • (a) the day-to-day management Agency
  • (b) the appointment of employees and contracting
  • (c) administration over the personnel of the
    Agency
  • (8) The remuneration and allowances of personnel
    of Agency to be market-related
  • (9) The Administrator to appoint personnel to the
    Agency who
  • (a) collectively have an understanding of
  • (i) all primary energy resources and carriers
  • (ii) all energy-demand sectors
  • (iii) all energy infrastructure
  • (iv) the South African macro-economic
    structure and
  • (v) the geopolitics of energy
  • (b) collectively have extensive knowledge of
  • (i) economic, financial and optimisation
    modelling
  • (ii) collecting and managing data and
    information
  • (iii) processing and analysing data and
    information and
  • (iv) publishing financial, economic and related
    information and reports
  • (c) are broadly representative of the people of
    the Republic and

53
Chapter 3 National Energy Modelling and
Information Agency
  • Vacation of office by Administrator
  • 10. (1) The Energy Information Administrator to
    vacate office
  • (a) if of unsound mind
  • (b) upon resignation by written notification (at
    least one month notice)
  • (c) materially fails to perform duty
  • (d) becomes disqualified on i.t.o s9(6)
  • (2) The Minister may terminate services of an
    Administrator if in contravention of s15

54
Chapter 3 National Energy Modelling and
Information Agency
  • Operating principles governing Agency
  • 11. (1) Energy modelling conducted by Agency
    must
  • (a) only take into account published government
    policies
  • (b) not be driven by private agendas
  • (c) only include proven energy production
    technologies, or near-proven energy production
    technologies
  • (d) bound by technological, socio-economic and
    other realities
  • (e) clearly indicate all assumptions
  • (f) only use proven and generally accepted
    financial, economic and technical theories
  • (g) only be data- and information-driven and
  • (h) if based on a model of another country or
    another application, be fully calibrated with
    South African data and information
  • (2) The models used by Agency, with assumptions
    and any other information deemed relevant for the
    purposes of verifying the models and their
    outputs, must be published electronically on the
    Agencys website
  • (3) The reports that are published by Agency must
    be influenced only by its analysis
  • (4) The Agency to promote integration with
    national databases and information systems for
    efficiency of data sourcing and for minimal
    duplication

55
Chapter 3 National Energy Modelling and
Information Agency
  • Duties of personnel of Agency
  • 12. The personnel of the Agency must
  • (a) perform all their functions in terms of this
    Act
  • (b) act in a justifiable and transparent manner
  • (c) at all times, act in the interest of the
    Republic and not in their own
  • (d) act independent of any undue influence or
    instruction
  • (e) act in a manner that is required and expected
    from the holder of a public office
  • Publications by the Agency
  • 13. (1) The Agency must annually, before the end
    of May, publish
  • (a) a review of energy demand and supply for
    previous year
  • (b) a forecast of energy supply and demand for 25
    years
  • (2) Any publication made by the Agency must
  • (a) be based on the collective analysis of the
    personnel of the Agency
  • (b) be in the public interest
  • (c) be within the powers as set out in this Act
  • (d) be approved by the majority of the senior
    personnel of the Agency
  • (e) include minority views
  • (f) be in writing

56
Chapter 3 National Energy Modelling and
Information Agency
  • Funding of the Agency
  • 14. The funds of the Agency consist of
  • (a) money appropriated by Parliament
  • (b) levies imposed by or under separate
    legislation
  • (c) donor funding
  • (d) any other appropriate source
  • Accounting by the Agency
  • 15. (1) The Agency must perform its functions in
    accordance with PFMA.
  • (2) The Administrator must open one or more
    accounts in the name of the National Energy
    Modelling and Information Agency
  • (3) The financial records of the Agency to be
    audited by the Auditor-General
  • (4) The financial year of the Agency starts on
    the first day of April ends on the thirty-first
    day of March of the following year

57
Chapter 4 Integrated Energy Planning
  • Integrated energy planning
  • 16. (1) The Minister to annually develop the
    Integrated Energy Masterplan to be published in
    the Gazette
  • (2) The Integrated Energy Masterplan to deal with
    issues relating to the supply, transformation,
    transport, storage and demand of energy in a way
    that accounts for
  • (a) a balanced consideration of security of
    supply
  • (b) economically available resources
  • (c) affordability
  • (d) accessibility
  • (e) social equity
  • (f) employment
  • (g) the environment
  • (h) international commitments
  • (i) consumer protection

58
Chapter 4 Integrated Energy Planning
  • (3) The Integrated Energy Masterplan to
  • (a) be based on the results of the energy
    modelling
  • (b) take account of plans relating to demand and
    supply sectors environment
  • (c) serve as a guide for energy infrastructure
    investments
  • (d) guide selection of the correct technology to
    meet energy demand
  • (e) guide, and be guided by plans from, all
    supply, production and demand sectors whose plans
    impact on or are impacted upon by the Masterplan.
  • (4) Integrated energy planning must take into
    account
  • (a) sustainable development
  • (b) optimal use of indigenous and regional
    resources
  • (c) balance between supply and demand
  • (d) economic viability
  • (e) environmental, health, safety and social
    impacts and
  • (f) developmental requirements of the Southern
    African region.
  • (5) A Integrated Energy Masterplan must have a 25
    years view
  • (6) The development of the Masterplan to be
    governed by the Promotion of Administrative
    Justice Act

59
Energy efficiency EWP 98
  • EWP deals energy efficiency in detail
  • P10
  • It is estimated that greater energy efficiency
    could save between 10 and 20 of current
    consumption. Government needs to facilitate
    increased energy efficiency. Obstacles include
  • inappropriate economic signals
  • lack of awareness, information and skills
  • lack of efficient technologies
  • high economic return criteria and
  • high capital costs.
  • Government commits itself to facilitate greater
    energy efficiency

60
Energy efficiency EWP 98
  • P14
  • Government will create an energy efficiency
    consciousness and will encourage energy
    efficiency in commerce and industry. Government
    will establish energy efficiency norms and
    standards for commercial buildings and industrial
    equipment, and voluntary guidelines for the
    thermal performance of housing. A domestic
    appliance-labelling programme may also be
    introduced. Publicity campaigns will be
    undertaken to ensure that appliance purchasers
    are aware of the purpose of appliance labels

61
Energy efficiency EWP 98
  • P15
  • Government's capacity to implement energy
    efficiency programmes is currently limited
  • Government will investigate the establishment of
    appropriate institutional infrastructure and
    capacity for the implementation of energy
    efficiency strategies (p29)
  • The functions of such an institution are outlined
  • Targets for industrial and commercial energy
    efficiency improvements will be set and monitored
  • P27
  • energy-efficiency targets will be established and
    programmes will be mounted to conserve energy

62
Energy efficiency EWP 98
  • P33 Government commits itself to the promotion
    of energy efficiency awareness in households
  • P34 Government commits itself to the promotion
    of energy efficiency and the development of
    holistic programmes for industry, mining, and
    commerce
  • P37 The Department of Minerals and Energy will
    provide information on the fuel use
    characteristics of new vehicles
  • P38 In general the Department of Minerals and
    Energy will assume the lead responsibility for
    policy formulation where the primary motivation
    for such policy is energy supply, energy
    efficiency or energy conservation
  • P78 Government will promote efficiency
    improvements in coal use
  • P85 Government will promote an energy efficiency
    awareness amongst industrial and commercial
    energy consumers, and will encourage the use of
    energy efficient practices by this sector
  • Government will establish energy efficiency norms
    and standards for commercial buildings

63
Energy efficiency EWP 98
  • P85
  • Government will promote the performance of
    audits, demonstrations, information
    dissemination, sectoral analyses and training
    programmes
  • Government will establish energy efficiency
    standards for industrial equipment
  • P86
  • Government will implement an energy efficiency
    programme to reduce consumption in its
    installations
  • Government will promote energy efficiency
    awareness in households and will facilitate the
    establishment of relevant standards and codes of
    practice for the thermal performance of
    dwellings, the inclusion thereof in the national
    building codes, and will promote their
    implementation through appropriate measures

64
Energy efficiency EWP87
  • Government's capacity to undertake the energy
    efficiency programmes described herein is rather
    limited. Other countries in similar circumstances
    have found the establishment of an agency to be
    an effective means of providing the necessary
    capacity and flexibility to implement such
    programmes. The functions of such an agency could
    include
  • building consumer awareness of energy utilisation
    and cost-saving measures
  • demonstrating to consumers the benefits of energy
    efficiency measures through audits,
    demonstrations, sectoral analyses and other
    activities
  • building the capacity to implement targeted
    energy efficiency programmes
  • training people in energy efficiency methods
  • identifying and facilitating the removal of
    barriers to energy efficiency
  • Government will further investigate the
    establishment of appropriate institutional
    infrastructure and capacity for the
    implementation of energy efficiency strategies

65
Energy research EWP 98
  • P15 Government expects energy suppliers and the
    private sector to carry out appropriate research
  • P28
  • Stimulate energy research and development
    partnerships between local role players and
    international agencies
  • Facilitate the development of a research strategy
    to improve energy research and development
  • P29 Develop and implement an appropriate system
    to co-ordinate energy research
  • P64 promote research, technology development and
    technology transfer to stimulate the optimal
    development of the countrys oil and gas
    resources
  • P94
  • Energy research is currently supported by
    government, government agencies, parastatals and
    the private sector
  • The Department of Minerals and Energy manages a
    limited non - nuclear research programme

66
EWP and Energy Research
  • P95
  • In developing policy on research, development and
    demonstration, government needs to address the
    following policy challenges
  • correcting the skewed allocation of funds towards
    nuclear energy
  • improving energy research co-ordination and the
    reporting of activities and results
  • providing clarity on a national energy research
    strategy, including a focus on priority issues
    and the involvement of stakeholders
  • clarifying the roles of government, energy
    suppliers and the private sector in funding RD
  • facilitating local participation in international
    and bi-national research activities, particularly
    in technology oriented research
  • Department of Arts, Culture Science and
    Technology to review and co-ordinate all
    government sponsored research

67
EWP and Energy Research
  • P96
  • Government will consider the development of a
    system to prioritise national research funding
    into the three main research categories in order
    to address the medium to long-term research needs
    in the energy sector. This will consist of an
    integrated, multi-year, national, needs-driven,
    energy research strategy, developed from time to
    time by an experienced team of experts appointed
    by the Minister. This strategy will identify
    medium and long-term priority programmes and
    themes
  • Extensive energy-related research is taking place
    in other countries, the results of which may be
    of value in South Africa. These developments are
    monitored by researchers, energy industries,
    energy consumers and others

68
Renewable energy EWP
  • P7 The research and development of alternative
    and renewable energy sources is also being
    promoted
  • P14
  • Government believes that renewables can in many
    cases provide the least cost energy service,
    particularly when social and environmental costs
    are included
  • Government will also promote appropriate
    standards, guidelines and codes of practice for
    renewable energy and will establish suitable
    renewable energy information systems
  • P29 Investigate an environmental levy on energy
    sales to fund the development of renewable
    energy, energy efficiency and sustainable energy
    activities

69
Renewable energy EWP
  • P79 Government policy on renewable energy is
    thus concerned with meeting the following
    challenges
  • ensuring that economically feasible technologies
    and applications are implemented
  • ensuring that an equitable level of national
    resources is invested in renewable technologies,
    given their potential and compared to investments
    in other energy supply options and
  • addressing constraints on the development of the
    renewable industry
  • P80
  • Government will provide focused support for the
    development, demonstration and implementation of
    renewable energy sources for both small and
    large-scale applications
  • Government will support renewable energy
    technologies for application in specific markets
    on the basis of researched priorities

70
Renewable energy EWP
  • P81
  • Government will promote the development and
    implementation of appropriate standards and
    guidelines and codes of practice for the correct
    use of renewable energy technologies
  • Government will establish suitable information
    systems of renewable energy statistics, where
    justifiable, and will assist with the
    dissemination thereof
  • The capacity of the Department of Minerals and
    Energy is presently being improved in order to
    cater for the need to implement the proposed
    renewable energy policies and programmes

71
Chapter 5 South African National Energy
Development Institute
  • Establishment of South African National Energy
    Development Institute
  • 17. (1) The South African National Energy
    Development Institute is hereby established as a
    juristic person.
  • (2) The South African National Energy Development
    Institute must undertake the functions of the
  • (a) Renewable Energy Division contemplated in
    section 26, including its programmes and
    initiatives
  • (b) National Energy Efficiency Division
    contemplated in section 28, including all its
    programmes and initiatives and
  • (c) Energy Research and Development Division
    contemplated in section 30

72
Chapter 5 South African National Energy
Development Institute
  • Constitution of South African National Energy
    Development Institute
  • 18. (1) Subject to this Act, the South African
    National Energy Development Institute is managed
    and controlled by a Board, which
  • (a) must determine the South African National
    Energy Development Institutes policies and
    procedures
  • (b) must exercise control over the performance of
    the South African National Energy Development
    Institutes functions and
  • (c) has the same powers and authority as are
    conferred upon the South African National Energy
    Development Institute in terms of this Act
  • (2) The Minister must, in consultation with the
    Minister of Science and Technology, appoint as
    members of the Board
  • (a) a Chairperson
  • (b) a Deputy Chairperson
  • (c) representatives from the Departments of
    Minerals and Energy, Trade and Industry, Science
    and Technology, Environmental Affairs and Tourism
    and Transport
  • (d) a representative from the electricity
    industry
  • (e) a representative from the mineral oil
    industry and
  • (f) a representative from one of the academic
    institutions undertaking energy research

73
Chapter 5 South African National Energy
Development Institute
  • (3) The Chief Executive Officer appointed in
    terms of section 21, or if unavailable, an
    employee of the South African National Energy
    Development Institute designated by the Chief
    Executive Officer, must attend all meetings of
    the Board and has the right to speak, but not to
    vote, at such meetings
  • (4) If the Chairperson cannot perform his or her
    duties, the Deputy Chairperson must perform such
    duties until the Chairperson can resume his or
    her duties or until the Minister, in consultation
    with the Minister of Science and Technology, has
    appointed a replacement for him or her
  • (5) The Chairperson or Deputy Chairperson
    presides at any meeting of the Board
  • (6) A member of the Board, excluding the Chief
    Executive Officer, holds office for a period not
    exceeding four years, but may be reappointed.
  • (7) The members of the Board, with the exclusion
    of those members who are in the full-time
    employment of an organ of state, must be
    appointed on such conditions, including
    conditions relating to the payment of
    remuneration and allowances, as the Minister may,
    with the concurrence of the Ministers of Finance
    and of Science and Technology, determine.
  • (8) The members of the Board must be persons who
    have relevant qualifications and experience or
    who have special knowledge or experience in
    relation to one or other aspect of the South
    African National Energy Development Institutes
    functions.
  • (9) The Minister may, from time to time, reserve
    any matter provided for in this Act as a matter
    in respect of which a decision of the Board will
    be subject to the consent of the Minister and the
    Minister of Science and Technology.
  • (10) The Minister and the Minister of Finance may
    jointly from time to time reserve any financial
    matter provided for in this Act, as a matter in
    respect of which a decision of the Board shall be
    subject to the consent of the Minister with the
    concurrence of the Minister of Finance

74
Chapter 5 South African National Energy
Development Institute
  • South African National Energy Development
    Institute committees for specific purposes
  • 19. (1) The Board may nominate any of its members
    to join one or more committees, which must,
    subject to the instructions of the Board, perform
    those functions of the Board as the Board may
    determine.
  • (2) (a) A committee contemplated in subsection
    (1) consists of such number of persons, including
    employees of the South African National Energy
    Development Institute, as the Board deems
    necessary.
  • (b) The Board may at any time dissolve or
    reconstitute a committee.
  • (3) If a committee referred to in subsection (1)
    consists of more than one member, the Board must
    designate one member as a Chairperson.
  • (4) The South African National Energy Development
    Institute may pay the members of a committee
    referred to in subsection (1) who are
  • (a) not in the full-time service of the State
  • (b) not employees of the South African National
    Energy Development Institute and
  • (c) not a member of the Board,
  • the remuneration and allowances determined by the
    Minister, with the concurrence of the Minister of
    Finance.
  • (5) The Board shall not be discharged from their
    responsibility from any function performed in
    terms of this section by any committee of the
    Board

75
Chapter 5 South African National Energy
Development Institute
  • Meetings of Board of South African National
    Energy Development Institute
  • 20. (1) The meetings of the Board must be held at
    such times and places as determined by the
    Chairperson of the Board.
  • (2) The Chairperson, or in his or her absence,
    the Deputy Chairperson, may at any time call a
    special meeting of the Board, which must be held
    at such time and place as the Chairperson or the
    Deputy Chairperson, as the case may be, may
    direct.
  • (3) The quorum for a meeting of the Board is the
    majority of its members.
  • (4) Subject to subsection (3), a decision of the
    Board is taken by resolution of a majority of the
    members present at any meeting of the Board and,
    in the event of an equality of votes on any
    matter, the person presiding at the meeting in
    question shall have a casting vote in addition to
    his or her deliberative vote as a member of the
    Board.
  • (5) No decision taken by or act performed under
    the authority of the Board shall be invalid by
    reason only of
  • (a) a vacancy on the Board or
  • (b) the fact that a person who was not entitled
    to sit as a member of the Board, sat as a member
    at the time when the decision was taken or the
    act was authorised, if the decision was taken or
    the act was authorised by the requisite majority
    of the members of the Board who were present at
    the time and entitled to sit as members

76
Chapter 5 South African National Energy
Development Institute
  • Chief Executive Officer of South African National
    Energy Development Institute
  • 21. (1) The Board appoints the Chief Executive
    Officer of the South African National Energy
    Development Institute.
  • (2) The Chief Executive Officer
  • (a) is responsible for and exercises control over
    the performance of the functions of the South
    African National Energy Development Institute
    and
  • (b) must report on the affairs of the South
    African National Energy Development Institute to
    the Board as may be required of him or her by the
    Board.
  • (3) If the Chief Executive Officer is absent or
    unable to carry out his or her duties, or in the
    event of a vacancy, the Board may appoint an
    employee of the South African National Energy
    Development Institute to act as Chief Executive
    Officer, and that employee shall, while so
    acting, have all the powers and perform all the
    duties of the Chief Executive Officer.
  • (4) The Chief Executive Officer is appointed for
    a period of not more than five years on the
    conditions, including conditions relating to the
    payment of remuneration and allowances, which the
    Board may determine in accordance with a system
    approved, from time to time, by the Minister,
    with the concurrence of the Ministers of Finance
    and of Science and Technology.

77
Chapter 5 South African National Energy
Development Institute
  • South African National Energy Development
    Institute employees and conditions of service
  • 22. (1) The Chief Executive Officer of the South
    African National Energy Development Institute
    may, on the conditions which must be determined
    by the Board, appoint the employees of the South
    African National Energy Development Institute
    whom it deems necessary to assist the South
    African National Energy Development Institute in
    the performance of its functions.
  • (2) The South African National Energy Development
    Institute must pay its employees such
    remuneration, allowances, subsidies and other
    benefits as the Board may determine, in
    accordance with a system approved from time to
    time by the Minister, with the concurrence of the
    Minister of Finance.
  • (3) The South African National Energy Development
    Institute may, in addition to employees referred
    to in subsection (1), be assisted in the
    performance of its functions by officers and
    employees in the public service who have been
    placed at the disposal of the South African
    National Energy Development Institute in terms of
    the Public Service Act, 1994 (Proclamation No.
    103 of 1994).
  • (4) The Board may, on such conditions as it may
    deem fit and for a fixed period of time, second
    an employee of the South African National Energy
    Development Institute to perform a particular
    service for an organ of state or for the
    government of any other country or territory,
    provided that
  • (a) such an employees rights
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