1. Overview of SANERI KM Nassiep Chief Executive Officer

2. 2 Contents About SANERI Background Structure Focus SANERI Programmatic Areas – Focal areas Advanced Fossil Fuel Use Clean Energy Solutions Energy Data and Knowledge Management End Use and Infrastructure Management

3. 3 Background to SANERI establishment Established in response to concerns from government regarding perceived threat to indigenous energy research capacity Eskom Research Facilities in Rosherville, Johannesburg CSIR Enertech capacity Established under Ministerial Directive in October 2004 Reports to both DME (strategy) and DST (funding) in terms of governance Is directed by the objectives of the Draft National Energy R&D Strategy of South Africa (10 th Order Draft, 2007) Has mandate to conduct own research or solicit work from external parties

4. 4 SANERI is 100% state funded at present, receiving grants via DST A total of R70 million has been transferred to SANERI from government, since 2004/5 An amount of R42 million has been made available in 2007/8 for activities related to: Flagship project development Chairs of Energy Research Programme Bursary Support Programme Establishment costs SANERI mandated to leverage additional funds through grants, royalty income and through collaborative projects Current levels of state funding insufficient to support in-house research or to fund projects to the required level State Funding of SANERI

5. 5 CEF Group Structure Minister of Minerals & Energy CEF Board of Directors Chairman CEF (Pty) Ltd CEO Wholly incorporated divisions e.g. NEEA, EDC Part Shareholding Funds Wholly owned Subsidiaries, including SANERI (Pty) Ltd

6. 6 SANERI Management Structure

7. 7 SANERI Key Objectives Ensure long term health of energy research capacity in the country and assist in stimulating a culture of innovation in the energy research environment Support government goals of energy security of supply through identifying viable and sustainable diversified energy supply options Address deficiencies in current race, gender and age profile of postgraduate students, academia and scientists Stimulate socio-economic upliftment through improved access to modern, clean and affordable energy services Support economic growth through development of flagship projects that will ultimately result in commercial rollout

8. 8 Key Challenges Faced by SANERI Low PIER&D spend in SA – about 0.8% of GDP is spent on R&D, of which about 6% is Energy Low contribution from Black scientists – measured in publications where about 8% is produced from Black Scientists Percentage women in energy R&D sector is low, about 26.5% in 2004, which is well below equity targets of government Challenge of meeting ASGI-SA goals with consequent increase in demand of natural resources and energy Access to modern, clean and affordable energy remains a challenge for about 30% of South Africans Long-term funding is not secure, proposed budget allocation of R42 million for 2007/8 not adequate for future research needs Skills loss in Energy R&D sector, particularly Eskom Research Limited funding for SANERI makes better coordination and ownership of PIER&D facilities impossible

9. 9 Thematic Areas addressed by SANERI (proposed) 9 thematic areas identified Energy infrastructure optimisation Energy Efficiency and DSM Understanding the impact of energy use on the environment Stimulating socio-economic development through the productive use of energy Cleaner fossil fuels, including clean coal technology Renewable energy Alternative energy, including hydrogen economy and fuel cells Energy planning and modelling and Energy policy research

10. 10 Key Strategic Focus Areas Energy R&D Agenda Human Capital Development and Transformation Energy Research Chairs at Universities Renewable Energy and Sustainable Energy Hub at the University of Stellenbosch Bursary Support Programme Cooperative Energy R&D Activities Flagship projects Governance

11. 11 Research Policy SANERI to operate initially as research management function, but focus to shift to mainly in- house research from 2008/9 For SANERI to consider in-house research it must consider the following: skills loss in sector, e.g. Eskom ERID establishment of Centres of Excellence additional Research Chairs Most of research supported should be applied, incremental research Exclusions are nuclear energy and standards development Small percentage should be devoted to fundamental research (pure basic), to generate intellectual property rights for sustainability BEE procurement supported Support to women – either as researchers or project developers will be encouraged Strategic alliances, including the development of collaborative projects, will be sought

12. 12 Programmatic Areas This next section deals with the focus of the four individual programmatic areas currently in place in SANERI An additional focus on 2010 Green Transportation is to be added in 2007/8 – this will be a 5-year programme and is funded separately funded by the Department of Science and Technology

13. 13 Advanced Fossil fuel Use: Advanced Clean Coal Statement of Problem Coal is currently SA’s only Economically Energy Resource Coal Resources Finite Long-Term Mining Seen ‘Cherry Picking’ and Decline in Quality Further Understanding of Current Mined Coal Characteristics Synfuels to Supplement Dwindling International Oil Supply Natural Gas a New Entry to SA Energy Economy Environmental Pressures: Lower Greenhouse Gas Emissions Efficiency Measures

14. 14 Advanced Clean Coal Vision Characterisation of New Coals Characterisation of Coal Combustion Lower Emissions [local & global] Higher Efficiency Conversion to Liquid Fuels Optimisation of Resources Lower Environmental Impacts Towards Compliance with Kyoto and Successor Lower Local Emissions Operationalisation of Phase I SANERI Fossil Fuel Laboratories

15. 15 Advanced Clean Coal Research Focus Areas Coal Characterization Coal Preparation Parameters Coal Beneficiation Handling & Storage Marketing & Economics Combustion and Electricity Generation Industrial and Household utilisation Gasification and Conversion Metallurgical Uses Environment: Mitigation Environment: Adaptation Liquid Fuels Blue Skies

16. 16 What are Clean Energy Solutions ? Clean Energy Solutions Renewable energy that flows from natural sources Biomass Solar Wind Hydro Ocean (wave and tidal) Alternative Energy Hydrogen Economy Fuel Cells

17. 17 Drivers? Climate Change Global warming CO 2 emissions Energy supply diversification Imbalance of reserves Energy security National Policy National target – Renewable Energy Production of 10 000 GWh by 2013

18. 18 Barriers? “About 13 percent of primary energy globally comes from renewables and the technical potential for their use is very large.” Cost Availability Reliability Environmental and social impacts Land and water use

19. 19 Focus? Biomass Biofuels Feedstocks 3rd Generation conversion technologies Value Chain Understanding Waste gasification Solar PV – material and solar cells, module characterisation and design Renewable Energy Technologies in Buildings Integration in house design and planning Wind Wind speed mapping Component design

20. 20 Focus? Ocean (wave and tidal) Low key investment and cooperate with Eskom on ongoing research and track international landscape Alternative Energy Support from DST Capacity Building

21. 21 Energy Data and Knowledge Management : Relevant National Government Prerogatives Energy Planning Requires ongoing updating of energy data Requires consistency in data collection Requires an appropriate energy model system with good assumptions Energy Policy Development Needs to be from an informed view Proposed policies need to be modeled to study likely impacts Energy Research & Technology Development Information on ongoing research activities is needed to reduce duplication of public funding A system that makes it easy for possible (local and international) collaboration research areas to be identified is needed as this enhances research Gaps in research activities need to be identified and quickly addressed Research output needs to be monitored

22. 22 Ongoing National Government Initiatives Planned establishment of National Energy Planning Institute Preparation for Integrated Energy Planning II Programme for identifying a suitable energy model system for the South African energy sector is underway Establishment of energy data and information system is proposed SANERI established to undertake and oversee energy research and technology development

23. 23 Proposed focus areas for division Research on trends in energy statistics Will better inform assumptions in energy models Will study impact of policies Might improve data collection methods and increase consistency Might help develop appropriate regional energy planning models Will ensure human capital development in energy planning and modelling Energy research information system Baseline data will be used to measure SANERI’s performance Trends in energy research outputs can be used to measure strength of research in the country Will reduce duplication of funding and disseminate research outputs/information Will help to increase research collaboration

24. 24 End Use and Infrastructure: Energy efficiency: Electricity sector DSM Focus is in 4 sectors (Commercial, Residential, Industrial, Transport) Looking at new DSM technologies e.g. Superconductors to reduce line losses in power sector Motor efficiency Lighting Thermal insulation Solar Looking at energy optimization techniques Assisting NEEA with technology development and testing Load management Load shifting /clipping techniques Wider application of interruptible load tariffs Understanding customer responses in the different sectors

25. 25 Energy Efficiency: Transport sector Supply side Focus is on sustainability Environmental impacts (Climate change) Socio-economic development (Second economy) Growth Diversification of fuel options New propulsion technologies Electric vehicles Trains, buses, cars Fuel cells Hydrogen economy Public transport Change management strategies to deal with Behaviour change in support of public transport Support for new technologies

26. 26 Energy Efficiency: Transport sector Demand side management Concerned with how to change behaviour from private to public transport Pricing options Load management Introduction of tolls Private vehicle fuel taxes

27. 27 Infrastructure Major focus is on sustainability and energy security and optimisation Sustainability Carbon capture and storage ( oil and gas and electricity) Emissions Energy security Alternative fuel sources (solar, gas, batteries) Support the development of the hydrogen economy Planning for capacity expansion (what, when, how) New technologies to deal with capacity expansion (choices) Optimisation Asset management (oil and gas and electricity sectors) – increasing the life-cycle of existing assets, efficiency Electricity sector network automation

28. Thank You