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2. 2 Department of Energy 2009/10 MTEF Strategic Plan presentation to The Select Committee on Economic Development Acting Director-General Ms. Nelisiwe Magubane

3. 3 Outline of presentation Introduction Programmes SOE’s Reporting to the Minister of Energy Strategic Planning 2009/10: –Policy Plans –Main Priorities –Budget allocation Department Split –Progress to date –Impact on DOE Conclusion

4. 4 Introduction Mandate Ensure secure and sustainable provision of energy for economic development and growth Mission To regulate and transform the sector for the provision of secure, sustainable and affordable energy to all South Africans Vision Transformed and sustainable energy sector and Universal access to electricity for all households by 2014

5. 5 Introduction The 2009/10 strategic planning came in the wake of the global financial crisis, soon after the electricity challenges faced by our country in the recent past. Our plans needed to ensure that both the country and the economy come out of the current financial gloom with minimum scaring and ready to forge ahead. Our focus therefore was on ensuring energy security and energy efficiency, pursuit of renewable energy (incl nuclear), contribution to the country’s job creation and preparing our economy for the up-turn

6. 6 Introduction Energy within DME has been limited to two branches. Last year, Corporate Services was tasked with the review of the capacity for Energy (within DME) to deliver on its mandate. The split of the DME came at the beginning of this process, and a decision was taken then to combine the two processes (progress to be discussed later in the presentation)

7. 7 Programmes 1. Hydrocarbon and Energy Planning The purpose of the programme is to promote the sustainable use of energy resources through integrated energy planning and appropriate promotion including policy and regulation development of petroleum products, coal and gas.

8. 8 Programmes Cont…. 2. Electricity, Nuclear and Clean Energy To govern the electricity and nuclear sector with special emphasis on ensuring sustainable security of supply, universal access and the development of the nuclear sector

9. 9 Programmes Cont…. 3. Corporate Services To enable the Department to deliver on its mandate, by providing strategic management and administrative support to the Ministry and the Department 4. Office of the CFO Provides support with regard to Financial, Supply Chain, Facilities and Information Management 5. Audit Services Provision of independent assurance and consulting services

10. 10 SOE’s Reporting to Energy The following State Owned Enterprises report to parliament via the Energy Minister: –South African Nuclear Energy Corporation - (NECSA) –National Nuclear Regulator - (NNR) –Electricity Distribution Industry Holdings - (EDIH) –Central Energy Fund - (CEF Group) –National Energy Regulator of South Africa - (NERSA)

11. 11 Introduction Challenges facing Energy at the beginning of 2009/10 : Energy demand outstrips supply Unreliable logistics infrastructure resulting in fuel supply shortage (e.g. jet fuel at ORTIA) Shortage of storage facilities for fuel Volatility of global crude oil prices Financing of capital projects (Nuclear,Coal, Liquid Fuels etc) is limited due recession Energy efficiency Off-taker of IPPs Electricity tariff increase – cushioning the poor

12. 12 Strategic Planning 2009/10 Summary of Policy Plans Finalisation of legislation related to the restructuring of electricity distribution (RED’s); Draft Regulations on LPG’s to be promulgated before end of financial year; Fast tracking of National Energy Act enactment; Revision of National Energy Efficiency Strategy; Implementation of Nuclear Energy Policy;

13. 13 Strategic Planning 2009/10 Planned Main Priorities National campaign on power conservation in all sectors of the economy and society; Expand the use of nuclear energy electricity generation; Conduct feasibility study on nuclear fuel cycle; Roll out of the electrification programme – 150 000 household connections, all schools through grid and non-grid and construction of 10 additional bulk substation; Diversify energy sector and attract new investment through IPP’s.

14. 14 Strategic Planning 2009/10 Planned Main Priorities Cont… Lead the process of developing energy efficiency standards together with SABS and industry; Actively participate in international and multilateral forums on issues of sustainable development, desertification and climate change; Conclude a number of bilateral agreements in nuclear industry and establish strategic relationships; Develop implementation plan of biofuels licensing criteria and financing mechanism; Roll out solar water heating system; Implement programmes and project emanating from the Liquid fuel master plan.

15. 15 Strategic Planning 2009/10 Planned Main Priorities Cont… Commission the piloting of safe paraffin appliance stove in selected areas and awareness campaign on the use of appliance; Convene two summits, one for Energy in light of current shortages and the other for renewable energy. Implementation of the Integrated HR Plan – a consolidated approach to identifying, providing and retaining much needed skills for the dept to deliver on its mandate Review of the Energy Branches and Corporate Services structures (process now combined with the split process) – later, the split of DME

16. 16 Strategic Planning 2009/10 Planned Main Priorities Cont… Alignment of govt, department and SOEs strategies and plans, improvement of our planning process. Readiness for the 2010 Soccer World Cup; - Ensuring continuity of supply - Ensuring availability of resources of all type

17. 17 Department Split Progress to date – (already presented by DMR) Approval of the interim phase and the end-state of the two departments Scoping exercise has been completed – analysis of functions to be split, process mapping, HR capacity and development of a business case on the split Strategic planning for the 2010 MTEF conducted in August New independent organisational structures for the two departments finalised and submitted to the DPSA Minister for his determination Started the job profiling and job evaluation – which confirms job levels and remuneration thereof

18. 18 Department Split Progress to date (cont): Matching and placing to commence soon – employer, employees and employee representatives Vacancies – to be advertised and filled after all current staff has been placed Some of the challenges: Job hopping – Recruitment and retention of skills – financial constraints

19. 19 Split of the Department Impact on the DOE The split of Energy from Mineral Resources present an opportunity for focused mandate, vision, mission and strategy An opportunity to consolidate and grow the department. An opportunity to align strategy, structures and skills

20. 20 Key Challenges The Department of Energy is faced with serious challenges of RESOURCES and CAPACITY to provide service to South Africans. Energy is a basic necessity for humanity and the economy, therefore provision and access should be made easier, if we are to uphold constitutional requirements.

21. 21 THANK YOU