1. Thought Leadership in Climate Change
ITTCC
Thought Leadership in
Climate Change

2. Transforming our Energy System
1. Reduce Poverty, Inequity & Unemployment
3. Reduce Carbon Intensity
2. Reduce Energy Intensity
Policy Duplication/Incoherance
Carbon Budgeting
Carbon Tax
Capping CO2 Emissions in IRP
Bubble Size is Capita/GDP i.e. an Indicator of Poverty, Inequity and Unemployment

3. IRP
Carbon mitigation

4. …resulting in an implicit carbon price for the consumers
Doc ID 3
Impact of IRP
Impact of environment levy1
Increased electricity tariff from policies
ZARc/kWh
13.7
13.9
13.9
14.1
13.8
14.3
13.6
12.4
12.3
11.2
10.2
10.6
7.2
4.6
2.5
2.8
3.1
2.0
2.0
1.9
1.9
1.9
1.9
1.9
1.8
1.8
1.8
1.7
1.6
1.5
1.4
1.4
1.4
1.3
1.2
1.2
2013 15 20 25
2030
Implicit carbon price2 from policies
ZAR/tCO2e
148
150
151
152
149
155
147
134
133
121
110
115 78
128
132
133
136
140 27 31 33
115
134
132
119 21 50
107
102 21 21 20 20 20 20 20 20 19 17 17 15 15 15 14 13 13
2013 15 20 25
2030
1 Assume full environmental levy is passed on to the customers. Cost per kWh will decrease over time as share of fossil fuels in the production mix is dilluted
2 Implicit carbon price is calculated as the carbon price per ton that would give the same cost effect for consumers, assuming base case generation mix
SOURCE: IRP ; Eskom

5. Carbon Tax Impact on a South African Multi-National
SOURCE: CRU

6. If we build too fast and too much Prices run away
If we build too fast and too much Prices run away! We must contain the price path or face “stranded investments”!
IRP2010 Price was a comparative price NOT indicative. See page 23 of Gazetted IRP 2010
Sources: IRP2010, Eskom, Frost & Sullivan, EIUG

7. A Collapse in Industrial Demand will Create a Price Tipping Point
Source: Eskom and The U.S. Energy Information Administration (EIA)

8. Current prices already impair Competitiveness and Jobs - Eskom's MYPD3 Application will exacerbate the problem
RSA
Silicon
Ferro Chrome
RSA
Si Manganese
A survey of energy intensive users, indicate that electricity portion of total input costs, has on average increased from 9 -18% between
RSA

9. World Chrome Ore resources Market share for FeCr production
Already High Electricity Prices are contributing to Flight of South African Industry Jobs!
World Chrome Ore resources
Market share for FeCr production
Commodity
World Rank in reserves
RSA % share of known total global reserves
PGM's 1
88%
Manganese
80%
Chromium
72%
Gold
14%

10. Foundry Industry is shrinking – SA will struggle to reach the goals of the New Growth Path
Source: National Foundry Technology Network
Recent Plant closures:
2010- Eclipse West Plant- 500 jobs lost
2010- Eclipse East Plant partial closure
2011- Eclipse Dimbaza in EC- 350 jobs lost
2011 Krynie Brothers in Gauteng – 22 jobs lost
2011 Belmec in EC– 70 jobs lost
2011 Alfa Foundries Springs – 60 jobs lost
2012 Crown Cast closed its doors – 130 jobs lost

11. Residential tariffs breaching affordability - USA vs
Residential tariffs breaching affordability - USA vs. RSA average residential prices US c/kWh
USDc/kWh
Source: : EIA, Eskom, Meter-it

12. Thank You

13. Company database: top 30 companies (scope 1 and 2)
Doc ID
Scope 1 and 2 emissions Mt CO2e
Eskom
224.7
African Rainbow
2.7
Scope 1
Sasol
71.2
Lafarge SA
2.4
Scope 2
Anglo American
17.1
Mondi Group
2.2
ArcelorMittal SA
16.3
Lonmin
1.6
BHP Billiton
16.2
Group Five
1.0
Xstrata
9.4
Tongaat Hulett
1.0
Merafe Resources
8.5
Palabora Mining
0.9
Gold Fields Limited
5.9
Omnia Holdings
0.8
PPC
5.8
Pick ’n Pay
0.7
Rio Tinto
4.5
Tiger Brands
0.7
Sappi (Pty) Ltd
4.3
DRD Gold Limited
0.7
Harmony Gold
3.5
SABMiller
0.7
Anglogold Ashanti
3.4
Murray & Roberts
0.6
Impala Platinum
3.4
Northam Platinum
0.6
Exxaro Resources
2.7
Aquarius Platinum
0.6
SOURCE: Firm disclosed emissions estimates based on Carbon Disclosure Project Report, 2010; team analysis

14. Company database: top 30 companies (scope 1 only)
Doc ID
Scope 1 emissions Mt CO2e
Eskom
224.7
Tongaat Hulett
0.7
Sasol
62.0
Impala Platinum
0.6
ArcelorMittal SA
11.9
Palabora Mining
0.6
PPC
5.3
Exxaro Resources
0.5
Anglo American
3.7
Omnia Holdings
0.5
Xstrata
3.5
Tiger Brands
0.5
BHP Billiton
3.4
Aveng Limited
0.4
Merafe Resources
3.2
Murray & Roberts
0.4
Rio Tinto
3.0
SABMiller
0.3
Sappi
2.8
AECI Ltd Ord
0.3
Lafarge SA
2.2
Oceana
0.2
African Rainbow
1.8
Pick ’n Pay
0.2
Mondi Group
1.1
Optimum Coal
0.1
Gold Fields Limited
1.0
Anglogold Ashanti
0.1
Group Five
0.8
Hulamin Limited
0.1
SOURCE: Firm disclosed emissions estimates based on Carbon Disclosure Project Report, 2010; team analysis

15. Doc ID
Doc ID 1
Government is planning to de-carbonize the power sector through the targets in IRP 2010, reducing coal share of total capacity below 50%
Installed capacity by technology until 2030 GW …
Coal as percentage of total 90
Other1
Hydro 77
Wind 65
Solar PV 55
Solar CSP
Nuclear 45
Gas OCGT
Gas CCGT 81 74 72 54 46
Coal
2010
2015
2020
2025
2030
1 Includes pumped hydro storage, diesel, and cogeneration
SOURCE: IRP ; Eskom 15 15