2 nd National Energy Efficiency Strategy Review EELN Consultation Workshop 24 April

2 nd NEES Review Process The second review of the National Energy Efficiency Strategy (NEES) started in 2011, with public and sector workshops to discuss the scope and elements of the NEES that needs review. The draft second NEES review document was then presented to the Government’s Infrastructure Development Cluster on the 10 th October 2012, and later to Cabinet by end October Cabinet approved the publication of the draft second NEES review document for public comment, and was then published through the government gazette on the 29 th November The closing date for the submission of the comments was 30 th January 2013.

2 nd NEES Review Process Cont… All comments have been analysed, and response provided resulting in an adjusted NEES document. The comments have been discussed in a Government and Private Sector workshop that was held on the 8 th March 2013, and March 2103 respectively. However, this workshop is exclusively for those who have submitted comments, and there is no intention of opening another process for public consultation. During this period more than 30 comments were received, and these includes – (i) use of year 2000 baselines, (ii) whether NEES targets are aspirational or mandatory, – (iii) the need for an organisational structure, (iv) definition of energy efficiency as it relates to the mining sector, (v) use of green procurement, (vi) energy services company development and support, – (vii) alignment with National Development Plan, (viii) inclusion of energy efficiency indicators, – (ix) monitoring and verification of energy savings, (x) funding mechanism for energy efficiency measures, etc.

2 nd NEES Review Process Cont… In addition to the NEES comments, the Department will also present the NEEAP activities to address some of the comments, and also to kick start the consultation process for NEEAP development. It is however, expected that the final reviewed 2013 NEES and final NEEAP will then be presented to Cabinet for approval by end of April 2013.

Proposal for SA NEEAP Structure NEEAP for South Africa High Level Contextual Environment, Objectives and Targets – with reference to National EE Strategy Sector 1 Sector 2 Sector 4 Sector 3 Sector Breakdown – as defined in the National EE Strategy Sector outline, overall targets and approach. Opportunities and challenges. Methodological approach. Applicable legislation Targeted / priority areas Details of specific initiative number 1 Compliance with legislation or policy Details of specific initiative number 1 Programme analysis and detail activities Details of specific initiative number 2 Compliance with legislation or policy Details of specific initiative number 2 Programme analysis and detail activities Energy Efficiency Trends in South Africa 2000 – 2015 (to be conducted) Alignment between individual programmes and overall objectives 5

SUMMARY OF NEES COMMENTS (1) 6 COMMENTSDoE Responses 1.Use of 2000 baseline or base year The 2015 target against the baseline of 2000 remains a government policy. The targets are aspirational targets and set for broad energy-use sectors. From these aspirational targets, individual energy users are expected to develop their own baselines and performance targets within this NEEAP cycle (up to 2015). The baseline from which improvements will be measured remains the year Target (mandatory or aspirational?) Targets in the NEES are aspirational with the final year of assessment being Develop/include a program management structure and system to ensure successful implementation of the strategy. Institutional arrangement will be included in the NEEAP. 4. EE definition (impact on mining sector)Reduction in energy intensity (however, there is a need to discuss this with the Chamber of Mines).

SUMMARY OF NEES COMMENTS (2) 7 COMMENTSDoE Responses 5. Cogeneration (waste etc), IPPs (relationship with cogen) The reuse of waste in energy generation, efficient use of energy resources is not prohibited however at the same time the is a need to ensure responsible usage that does not impact negatively on ambient air quality. Therefore co- gen as envisaged in the NEES would be implemented in accordance with the prescripts of Air Quality and Waste Acts. 6. Implementation plan The department through the support of GIZ is developing a detailed National Energy Efficiency Action Plan (NEEAP) that will guide successful implementation of initiatives aimed at ensuring the achievement of the target. 7. Training and skills development – Done As government we would support the establishment of a skills development programme aimed at advancing competency in energy management measurement and auditing. 8. ProcurementStrategy: Government will ensure that it procures energy efficient technologies through its green procurement framework.

SUMMARY OF NEES COMMENTS (3) 8 COMMENTSDoE Responses 9. Reporting The department is in the process of developing Regulations on the Mandatory Provision of Energy Management Plans (EMP) and this regulations will also address the reporting issue. Energy Users will be informed about the reporting process by the department. 10. Focus on power generation sector is only on demand side The implementation of the target in relation to this sector will purely be based on EE initiatives similar to the industrial processes. This shall purely exclude the thermodynamic part of the power generation process, but shall include energy consumed in all other electrical apparatus and machinery operating within the area.

SUMMARY OF NEES COMMENTS (4) 9 COMMENTSDoE Responses 11. Research and development Government through relevant departments such dst & the dti is providing R&D incentives such the technological research and development tax incentive provided under Section 11D of the Income Tax Act (more details should be obtained from this departments). SANEDI will also advice on how they will implement their EE R&D. 12. Monitoring and Verification The department is developing Energy Efficiency Target Monitoring System (EETMS) with the aim of fully implementing the system in the next financial to monitor and verify progress towards achievement of EE targets. 13. Alignment with National Development Plan It will be imperative to firstly aligned the Integrated Resource Plan (IRP) with the NDP and that will be considered when the IRP is being reviewed.

SUMMARY OF NEES COMMENTS (5) 10 COMMENTSDoE Responses 14. Industry and Mining should be separate sectors. The NEES currently has combined these sectors into one, with a target of 15%. It is acknowledged that the mining and the industry sector uses different indicators to measure energy efficiency improvement. However, the current target of 15% is a contribution from both the industry and mining until the next review in In the meantime ( ), sub-sector targets on industry will be developed by government in consultation with the industry stakeholders in line with the overall target review. 15. Progress to dateThe NEEAP being developed will provide a high level overview of the progress to date with respect to policy and programmes. In addition, through the EETMS, economic-wide improvement of the energy efficiency will be determined.

SUMMARY OF NEES COMMENTS (6) 11 COMMENTSDoE Responses 16. Grid code amendment A Work Group has been established by NERSA to review the grid code. 17. Role of government in transport sector Government has a role in the energy efficiency improvement from the transport sector. NEEAP will also define the role of government and recommend interventions in the improvement of energy efficiency in the transport. 18. Indicators not properly defined The energy efficiency indicators are being developed in the EEMS project, and this process will be consulted with stakeholders. The NEES is a high level strategic document, whilst indicators will be part of the monitoring system. 19. Finance mechanism (MPYD, Green Fund, Fiscus, support from the International Developmental Partners) An energy efficiency funding mechanism coordinated centrally will be explored in the proposed NEEAP period.

SUMMARY OF NEES COMMENTS (7) 12 COMMENTSDoE Responses 18. Status of the SA’s energy efficiency improvement based on the 2000 baseline and 2005 NEES Progress in the achievement of 2005 NEES sector targets, and overall EE improvement couldn’t not be assessed during this review process. However, Energy Efficiency Trends Analysis from 2000 to 2015 will for part of the NEEAP actions. 19. Inclusion of Energy Efficiency Flagship Projects in the NEES document (Policy Alignment) The NEES considers all the sector energy efficiency interventions that could be implemented within the first NEEAP period including what is being called ‘flagship’ project in the Climate Change Policy. Therefore the proposed actions in the NEEAP are not categorized into flagship or priority projects. 20. Sector selection and involvement of government departments The 2 nd NEES review didn’t consider adding or removing sectors, and hence targets were also not changed. The measurement and evaluation of progress that will consider including or determining new targets will for part of SA’s EE Trends Analysis ( )

SUMMARY OF NEES COMMENTS (8) 13 COMMENTSDoE Responses 21. NEES response to the National Climate Change Response Policy The energy efficiency programmes as proposed in the NEEAP will automatically respond to the NCCRP.