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• Withdrawn in 2006 to effect certain changes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• Some assumptions underpinning the EWP - no longer
  valid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