Cogeneration 24 July 2013

Agenda Who we are Challenges Benefits & Constraints Wheeling Recommendations

Who we are - Infographic

Challenges

South Africa’s Challenge is Formidable Co Generation? Long Road to Less Carbon

Why Co Generation? One of the most effective GHG Mitigating Options for Industry/Mining

Why Co Generation? Improves Energy Efficiency

The Global Challenge Is to find ways to Change the Nature of Growth!

Cogeneration Reduces Energy Intensity

Benefits & Constraints

Co-generation Types Own Use Sell Produce on site Produce at energy source, To National Buyer Wheel to a customers & use at site wheel to use at site “Bilateral”

Benefit/Burden for South Africa from Eskom and IPP Generators Neutral Burden Own Generating On Site Own Generating Off Site Bilateral Generating to sell To Entries of State Eskom RISK Planning Regulatory National Price Path Use of Tx/Dx System Load/Supply Balancing

Constraints on Co-generation Investments Non-Eskom Eskom Level of Constraint Low Own Use Sell Some High Produce on site Produce at energy source, To National Buyer Wheel to a customers Very High & use at site wheel to use at site “Bilateral” Issue Guaranteed Cost Recover Sovereign Guarantees Protection against Risk Wheeling Source: EIUG No Policy to Promote Co-generation Policy

Constraints through the Tariff Methodology 2011 BUT It gets Worse Source: AT Kearny ; Various government and company sources

Preventing IPP entry into RSA with Tariff Methodology Source: Derived from Eskom MYPD3 Submission

RECOMMENDATIONS Recognise the full benefit to RSA Framework to promote Co-generation Recycle “Environmental” Taxes to promote. Fair Equitable Wheeling Charges & Arrangements: Eskom and, Municipalities Simple, Quick, Fair and Equitable Processes