Transcript energy security policy

ENERGY PRESENTATION
Joint Portfolio Committees on Minerals and Energy
OUTLINE
Energy Legal Framework
Understanding key players in the sector
Public entities reporting to the Minister
Other Key Players
Energy Security Masterplan
Status of ESMP Projects
Challenges
Performance over the last cycle
The Electricity Scene
Energy Security Policy
Interventions
Renewable energy
Energy efficiency
Socioeconomic Indicators
ELECTRICITY VALUE CHAIN
ENERGY LEGAL FRAMEWORK
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Petroleum Products Act 2003, No.120 of 1977
Gas Act 2001, No. 48 of 2001
Gas Regulator Levies Act, 2002, No. 75 of 2002
Petroleum Pipelines Act, 2003, No.60 of 2003
Petroleum Pipelines Levies Act, 2004, No. 28 of
2004
National Energy Act, 2008, No.34 of 2008
Central Energy Fund Act, Act No.38 of 1977
Electricity Regulation Act
National Nuclear Regulator Act
Nuclear Energy Act
National Radioactive Waste Disposal Institute Act
PUBLIC ENTITIES REPORTING TO MINISTER
CEF Group – iGas, Strategic Fuel Fund (SFF), Oil Pollution Control of South
Africa, South African National Energy Research Institute (SANERI),
African Exploration, CEF Carbon, Petroleum Agency of South Africa
(PASA), South African Supplier Development Agency (SASDA), Energy
Development Corporation (EDC) AND Petroleum and Gas
Corporation of South Africa
SANEDI (To be Established in terms of National Energy Act of 2008;
incorporating SANERI)
NECSA (South African Nuclear Energy Corporation)
NNR (National Nuclear Regulator)
NERSA (National Energy Regulator of South Africa)
EDI HOLDINGS (distribution industry restructuring)
UNDERSTANDING THE KEY PLAYERS
Sasol – Owns Two Refineries in Sasolburg and Secunda
Engen – One Refinery in Durban
BP – Co-owns Refinery with Shell in Durban
Shell – Co-owns Refinery with BP in Durban
Total – Co-owns Sasolburg Refinery with Sasol
Chevron –Owns Refinery in Cape Town
PetroSA – Owns Refinery in Mossel Bay
All belong to association called SAPIA (South African Petroleum Industry
Association)
Eskom – vertically integrated state owned electricity monopoly
OTHER KEY ROLEPLAYERS
Transnet – Pipelines, Rail, Ports
NAAMSA, Fuel Retailers Associations
Nuclear Fuels Corporation (NUFCOR)
Pebble Bed Modular Reactor Company (PBMR)
Organised Labour
Key Depts: DPE, Treasury, DoT, DWAEA, DTI
ENERGY SECURITY MASTER PLAN (ESMP) LIQUID FUELS
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The Energy Security Master Plan on liquid fuels was approved by
Cabinet in September 2007
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The Master plan sought to allow for the making of well-informed choices
in respect of energy supply, energy carriers, demand sector strategies,
as well as energy transformation approaches, cognisant of the need to
minimize negative impacts on the environment and the economy
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In the short-term
– the Master Plan focuses on developing supply chain solutions to
South Africa’s liquid fuels supply challenges, management of liquid
fuels demand and emergency response tactics.
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In the medium to long-term
– the approach is broader and begins to integrate supply, demand,
macroeconomics, geopolitics and climate change
STATUS OF ESMP PROJECTS
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Proposed refinery at Coega – Feasibility stage
Proposed Coal to Liquid plant by Sasol – Feasibility stage
Transnet constructing Pipeline
Oil companies building storage capacity
Not sufficient progress on Clean fuels
Strategic Stocks Policy not revised
CHALLENGES – LIQUID FUELS
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Refining Capacity cannot meet demand – Huge import bill
Port infrastructure needs to be upgraded – Limited room for unplanned
incidents at ports
Ability to supply inland market is challenged
Inadequate storage infrastructure to supply demand – e.g. Airports
Rail infrastructure needs to play a bigger role
Human and Financial Capacity in the Department must be enhanced
Alignment of State Departments and Entities
PERFORMANCE FROM PREVIOUS CYCLE
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Promulgation of Energy Act, 2008 No 34 of 2008 – Integrated Energy
Planning, Energy Efficiency, Energy Research
Ratlou Integrated Energy Centre in North West launched bringing the
number to 6 nationally – Kuruman, Matatiele, Mutale, Eshane
4387 Licence applications processed (Retail, Wholesale licences)
Implementation Plan for the ESMP
Planning for National Integrated Energy Modelling system started
Planning for World Cup Fuel Supply – Airports identified as areas
requiring focus
THE ELECTRICITY SCENE
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“blackouts” and “brownouts” continue
Used to be municipalities mainly, now also Eskom (January 2008)
 Recovery plan in place for short-medium term, with NERT in place
as per Cabinet decision
• Intensified energy efficiency
• Cogeneration and renewable energy IPPs
Eskom financing model being developed
 Nersa will make tariff determination soon and pricing rising to long
run marginal cost
 Additional support to Eskom being considrered by National
Treasury
Improved regulatory environment
 Electricity Regulation Act operational from October 2006
 New proposed regulations – integrated resource planning, new
generation capacity, energy efficiency and demand side
management
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THE ELECTRICITY SCENE
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Demand projections (assumption of 2.5% sales growth) indicate a
need for power as indicated below;
South Africa remains in the the top 7% of greenhouse gas emitters in
the world
Nuclear will play a central role on the supply side from 2015 (LTMS);
 Considering nuclear plant lead times, earliest can only be 2018;
 Decisions are urgently required
Only 76% of households have access to electricity;
Free Basic Energy rollout does not provide the intended poverty relief
ENERGY SECURITY POLICY
Energy White Paper position provides for diversification of energy mix,
including coal, nuclear, gas and renewable energy
Recall that Cabinet decision requires:
Eskom to do 70% of new generation, and
Independent Power Producers (IPP) will do 30%
By 2013, the RE share of generation capacity must be 10 000GWh
Nuclear energy policy approved by Cabinet:
Framework for prospecting, mining, milling and use of nuclear
materials for energy use
Radioactive waste management policy and strategy approved
 Establishes radioactive waste governance framework
Establishment of a Cabinet Committee to oversee implementation
ENERGY SECURITY POLICY
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Cabinet adopted Long term mitigation scenarios (LTMS):
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Growth without constraints
Peak, Plateau and Decline (from 2035) in respect of GHG emissions
 Start now scenario – 27% nuclear by 2030
 Scale up scenario – 50% nuclear by 2050
By 2013, the RE share of generation capacity must be 10 000GWh
These scenarios must guide our mitigation plans
 Even on scale up scenario, this would be inconsistent with the
decrease in GHG emissions required by “Science”
 This will likely put pressure on the RSA position post
Copenhagen 2009
INTERVENTIONS
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Eskom build program (nuclear decision finalization?)
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Independent Power Producers (IPPs)
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Renewable energy IPPs ( feed-in tariff)
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Energy efficiency and demand side management
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National Electricity Response Plan
RENEWABLE ENERGY
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100MW of wind farms planned across the country
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REFSO project support is limited to projects under R100 million. subsidy
rate is now R1million per MW. To date projects with total installed
capacity of 24 MW have been subsidised to date at a total cost of R15m
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Initiative to install over 500 000 solar water heaters
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The Solar Water Heating programme has an enegy diversity and
demand side management capability. At present, about 1000 systems
have been implemented and plans and over 1.75 m planned for the next
MTEF period
 The financing framework for Biofuels has been established. Research
into 2nd generation biofuels programme is currently underway
 NERSA has approved REFIT for Wind , Small Hydro Schemes, Landfill
and Solar Concentrated Power.
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ENERGY EFFICIENCY
– Energy Efficient Lighting programme has been implemented in
government buildings and households in select municipalities
– Involves exchange of incandescent lighting with compact fluorescent
lighting (CFLs)
– To date over 20 million CFLs have been replaced
– Power Conservation Program to start in 2010
• Facilitates trading in energy savings
– Pilot Projects:
• 2010 Host Cities, involving CFLs and traffic lights
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ENERGY EFFICIENCY
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Designated National Authority (DNA)
– Responsible for registering Clean Development Mechanism (CDM)
projects
– CDM is an intiative under the UN Framework Convention on Climate
Change (mitigates against climate change)
– 15 projects registered and over 120 in the pipeline;
– Tradeable Renewable Energy Certificate (TRECs) implementation
framework is being finalised, to enable benefits to be derived from
climate change benefits associated with renewable energy sources.
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SOCIO-ECONOMIC INTERVENTIONS
Challenges
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Universal access to energy (electricity and thermal energy)
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Funding to align with universal access target of 2014 for human
settlements
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Skills capacity related to accelerated program for 2014
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Also opportunity for job creation: Expanded Public Works
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Structuring of “poverty tariff” to cushion the poor as prices rise
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Increased access to Free Basic Energy (including alternative nongrid carriers)
BACKLOG AS AT 2007
No. of unelectrified households
National Backlog
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
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Limpopo
Mpumalanga
Gauteng
North West
Kwa-Zulu Natal
Free State
Eastern Cape
Northern Cape
Western Cape
Backlog
Thank You.