Transcript Energy Bill Comments

Energy Research Centre
Energy Research Centre (ERC)
Multi-disciplinary research group in the Faculty of Engineering & Built
Environment at the University of Cape Town with the following targeted
research activities:
 Energy, poverty and development: concerned with energy issues that
affect sustainable development and improved livelihoods for poorer
communities.
 Energy efficiency : dealing at the energy demand level, looking at the
effects on single businesses and the national picture.
 Energy systems analysis and planning: dedicated to energy modelling with
the aim of assisting local industry and government identify and assess
technology and policy options.
 Energy, environment and climate change: researching the intersection
between energy, local environment and global climate change.
Postgraduate opportunities at the Masters and PhD levels and conducts
targeted and relevant research in the following areas:
ERC involvement in Energy Analysis
 Dates back to the 1970s with research in energy
consumption across all sectors
 More recently involved in key energy efficiency, climate
change and integrated energy planning initiatives:
 Energy Efficiency Strategy (CABEERE/DME)
 Integrated Energy Planning (IEP/DME)
 Long Term Mitigation Scenarios (LTMS/DEAT)
 Training and Capacity building in Energy Modelling and
Analysis in South Africa and elsewhere.
Overall comments on Bill (1)
 The Bill aims to establish a "National Energy Modelling and
Information Agency" which is clearly needed and should be
welcomed.
 Another positive development is the commitment to publish
energy data, assumptions, and modelling results. If well framed,
this will establish an important resource for South Africa.
 The scope of energy issues has widened considerably, and it is
important that the institutions contemplated in the Bill meet not
only the DME’s requirements, but also those of other government
departments, as well as different levels of government.
Overall concerns on Bill (2)
 Bill focuses on supply and underplays the importance
of demand side considerations.
 Demand side solutions will continue to play an important role in
energy efficiency, South Africa’s climate response, the
competitiveness of the economy, response to energy supply
shortages etc and should receive greater attention in the bill.
 There appears to be some risk of fragmenting
responsibility for mitigation to climate change both at
international and national level, unless more carefully
defined. It is not clear how the DME mitigation plans
would relate to those developed by DEAT. The Bill
seems to suggest that the DME Minister only needs to
consult colleagues on implementing "energy-related
international obligations"
Overall concerns on Bill (3)
The Bill aims to establish SANEDI
which replaces SANERI. SANERI has a
clear research focus, SANEDI does
not. In SANEDI, research is a small
subsidiary component in a division
and it is very unclear in SANEDI
what funds or portion of funds
would be available for research. It is
not clear what the merits of moving
SANERI into a new institution are.
SANEDI
EE
REN
RESEARCH
?
Specific Comments
Introductory paragraph
 suggest the term “generation” be replaced with
“transformation”, as generation is usually only used in
relation to electricity.
 The phrase “holding of strategic energy minerals” should
be replaced with “holding of strategic stocks of energy
carriers where applicable”.
 “strategic stocks” is a more widely-used phrase, and
broader in its application (for instance, it would be
applicable to refined liquid fuels and to nuclear fuel as well,
which fit uneasily under the phrase “energy minerals”)
Specific Comments
Chapter 1: Definitions:
 Integrated Energy Masterplan: a clear definition is not
given here or in Section 16. We would propose that the
more widely-used and internationally-recognised phrase
“Integrated Energy Plan” (IEP) be used throughout
instead.
Specific Comments
Chapter 2
Clause 3
the aims of this clause are laudable, and will promote better energy policy
formulation. However, we can see no reason for clause 3 (3) and would
suggest that unless the information can be shown to be harmful to
commercial interests, all information collected under this act should be
placed in the public domain. This will ensure that the information is available
for research and benchmarking purposes thus ensuring that maximum
benefit comes from the collection of the information. Thus, we would
propose that clause 3 (3) be rephrased as follows:
3 (3) The information provided under this Act must be placed in the public
domain. If the information provider can demonstrate that publicizing the
information will significantly harm the provider’s commercial interests by
conveying commercially-sensitive information to competitors, or such
provision will conflict with the terms of other legislation, the provider may
make representations to the Minister for the information not to be released.
The Minister may then order that the information not be placed in the public
domain.
Specific Comments
Chapter 2
Clause 5. 2
 This section is focused on supply and makes little mention of demand
technologies. We would propose that the title of the section be amended
to “Access to affordable and safe energy services by households”, and
that the section be expanded to include a range of demand-side
strategies, which include energy efficiency for households, and also
include interaction with other government departments such as housing
whose work is closely related to energy provision for households, as well
as with local authorities.
 We would also propose that the Minister be obliged (maybe an extension
of section 3) to establish a function in government which collects data on
households relevant to this end, i.e. on service provision / delivery of
energy services to households. This would include data on what
households do and do not have access to appropriate energy services,
what the impacts of energy use in households are, and how successful
programmes have been to date,. This data should be published annually.
Specific Comments
Chapter 2
Clause 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, including authorising officials in the Department;
(b) establish agencies or entities; and
(c) take any other reasonable steps, to give effect to the energy implications of
international agreements entered into or ratified by the Government of the
Republic"
Some questions which arise from clause 6 above are:
1.If South Africa signed up to an agreement in Copenhagen at COP-15 in 2009, would
the energy component be decided by DME?
2.Does this change the role of DEAT as focal point on climate change internationally, or
is the intention only to implement agreements in the energy sector?
3.If the latter, it should be made clearer that DME would implement the agreements
SA signs up to internationally.
Specific Comments
Chapter 3: National climate change mitigation plans
Clauses 8 (1) d. vi and 8 (2) a.v:
1.In terms of national mitigation plans, how would the plans be
developed nationally, in particular the Long-term mitigation
scenarios (LTMS)?
Several new institutions which are envisaged by the Bill would
have responsibility for energy-related mitigation plans. This
would be helpful if framed as part of implementation of an
agreed and integrated national plan. But it does raise the
question:
2.What are the provisions for alignment with other components
of such a plan?
Specific Comments
Chapter 3
Clause 11:
This section is too restrictive and contains many clauses which
are probably inappropriate for legislation. 11 (1) a is far too
restrictive and should be removed, as it will prevent the agency
from fulfilling functions contemplated in Clause 8; since the
function of modelling is to explore alternative policies and
measures, mostly before these have become official
government policy. If the agency is restricted to “published
policies”, it will not be able to do its job, which is to compare the
outcomes of different policy options. There may well, for
example, be policies which are highly successful in other
countries, and government agencies might well want to know
what impact these would have in South Africa.
Specific Comments
Chapter 3
Subclause 11 (1)b:
while laudable, is meaningless without a legal definition of “private agendas”. This is
not legal language. The aim of excluding obvious influence from parties which might
have interests in specific outcomes could probably better be accommodated in some
other way.
Subclause 11 (1)c:
this should be up to the discretion of modellers, and depend on their technical
competence, since “near-proven” is a meaningless term (something is either “proven”
or “unproven”). Whether a technology is “proven” is a matter of judgement. There
may be instances where it is desirable to model “unproven” technologies (for instance,
the PBMR).
Subclause 11(1)d:
this seems redundant, since no technically competent energy modeller would model
scenarios which were not bound in this way.
Clause 11 (3):
It is unclear what the intention or meaning of this point is. Surely what NEMIA
publishes should consist of its analysis and not express views of other bodies?
Specific Comments
Chapter 4
Clause 16 (1):
This is a very good principle, but it should have a start date
attached to it: we would propose adding “..commencing
within six months of the passing into law of this
legislation”
Clause 16 (2):
The term “energy” should be replaced with the term
“energy and demand for energy services”, since the plan
should consider non-energy ways of providing energy
services; for instance, household insulation.
Specific Comments
Chapter 4
Clause 16 (3)d:
the phrase “correct technology” is technically incorrect – this
could be replaced with something like “optimal technology,
given existing policy objectives of government for the energy
system” or “ technology with the most appropriate
characteristics”.
Specific Comments
Chapter 4
Clause 16 (5):
The Integrated Energy Masterplan “must have a planning
horizon of 25 years”.
This also seems unduly restrictive – why not 20, why not 30
or 50? What might help would be clarification that the
modelling can have different time horizons, even if this
particular plan is 25 years. Even then, a single duration
seems to box in future decisions. Different time periods are
appropriate for different requirements.
Specific Comments
Chapter 5: Energy research and SANEDI
Clause 18 (2):
Composition of the Board – this is too narrow:
There should be broader representation from national government
(for instance DPE, DPLG, Housing), as well as some representation
from provincial and local government
There should be broader representation from the energy sector (not
only supply industries)
There should be civil society representation
Specific Comments
Chapter 5
Clause 27
Does the REFSO replace the one that exists within DME?.
It is not clear that the Tradeable Renewable Certificates
System (TRECs) will be the preferred policy instrument to
promote renewable energy; currently NERSA seems to be
favouring a feed-in tariff. Thus, it seems inappropriate to
mention this in legislation.
Specific Comments
Chapter 5: SANEDI Research?
What relationship is envisaged between NEMIA and the R&D
division of the new SANEDI with regard to energy modelling?
2. What is the rationale for establishing two new institutions ?
3. How would areas of overlap between them be managed?
1.
SANEDI as it is proposed has very little R&D focus. The EE and RE
sections (26,27,28 and 29) make no mention of research and
this does not seem to be consistent with what DST intended
when SANERI was established.
 Is there a justifiable reason to incorporate SANERI into
SANEDI?
Specific Comments
Chapter 8: Clause 36.1.a
A 5 million Rand fine does not seem an adequate
penalty for non-compliance and is also very harsh
for smaller companies and almost negligible for
larger companies. Our concern is that the energy
sector in South Africa is dominated by large
companies which may choose to ignore requests
for data from the Minister at a cost of only R5
million per year.
We suggest that this clause be replaced by a
maximum fine defined in terms of a predefined
fraction of annual turnover. There is a precendent
for this in government: Competition Tribunal
fines are levied on the same basis. For instance, a
maximum of 10% of a company’s annual
turnover.
Energy Research Centre
University of Cape Town
Private Bag Rondebosch 7701
Cape Town
021 650 3230