1. The National Energy Bill PPC presentation 25 March 2008 Nhlanhla Gumede Deputy Director General – Hydrocarbons & Energy Planning

2. The Bill Background Was first developed in 2003 to cover all EWP not covered that far Cabinet approved public consultation in 2004 Widely consulted in 2004 Withdrawn in 2006 to effect certain changes Focus now is largely energy security

3. Background Energy Security Framework Energy security is not only about security of supply Energy infrastructure planning Energy security Macro- economic framework Climate change (mitigation & adaptation) Demand management Standards & specifications Foreign policy Reserve margins Diversity of supply Import & Export policies Local production Energy Research

4. Purpose of the Bill (1/3) Energy Security diverse energy resources, in sustainable quantities, and at affordable prices are available to the South African economy, in support of… economic growth, poverty alleviation, taking into account environment management requirements and interactions amongst economic sectors.” Energy security means “ensuring that…

5. Purpose of the Bill (2/3) Institutions To be responsible for the promotion of efficient generation and consumption of energy Energy modelling and planning Increased generation and consumption of renewable energies Energy research Contingency energy supply Holding of strategic energy minerals stocks Adequate investment in, appropriate upkeep and equitable access to energy infrastructure To establish institutions in support of the Bill …

6. Purpose of the Bill (3/3) Enabling provisions The furnishing of certain data and information regarding energy demand, supply and generation For all matters To provide measures for

7. General guiding principles Energy Bill development The Energy Bill does not seek to replace existing institutions but to strengthen them –Energy, like water, is an economic integrator –“Energy is the lifeblood of energy economy” –Economic decisions made w/o consideration of energy availability and price are problematic –Focuses on issues intended to strengthen energy security –Like water & land, to operate more like the competition law, in economic development matters (concurrency!) –On data, the intention is to complement data collection and facilitate sharing

8. General Guiding Principles Establishment of Institutions General Principles Must act as advisory or executing agents for the Minister on the mandate for which they were created Avoid creating entities with conflicting mandates Only take into account published Government principles Not be driven by private agendas Constitution of governance structures May include representatives from industry as may be prescribed by the Minister May contain part-time members who are involved in the overseeing and decision-making duties and full-time members who are involved in the day-to-day operations and management of the agency

9. The Bill The structure Ch 1:Definitions & Objects of the Act Ch 2: Provision and access to Data Ch 3: Energy Modelling and Agency Ch 4: Integrated Energy Planning Ch 5: Renewable Energy Ch 6: Energy Efficiency Ch 7: Energy Research Ch 8: Security of supply Ch 9: Energy Infrastructure Ch 10: Regulations & penalties

10. The Bill Data, Safety, Health, Environment Provision of Data Mandatory provision of any data and information required for the purposes of the energy modelling and planning Connection to any data and information management system, or any other system within (or outside) the public administration for the acquisition of energy data and information Safety, Health & Environment Programmes to minimise the negative safety, health and environment impacts of energy carriers through the prescription of standards and specifications Energy Access by Households Programmes to provide for the universal access of appropriate forms of energy to all South Africans at affordable prices Energy Related International Obligations Measures to give effect to the energy implications of international agreements entered into or ratified by the Republic

11. The Bill Integrated Energy Modelling & Planning Drivers for change Energy crisis show need for coordinated planning –Liquid Fuels in 2005 –Electricity in 2006, 2007 & current Disparate plans create potential for contradictory initiatives and activities No integrated or coordinated view of- –energy sector –impacts of the different plans The need for the ability to develop –numbers driven energy plans –a tool to evaluate proposed energy policies

12. The Bill Integrated Energy Modelling & Planning Provision of high-quality, policy-neutral energy information, in manner that promotes sound policymaking, efficient markets and public understanding, to –Cabinet –National, provincial & local governments –Markets (for efficient market operation) –Public (communication) Planning An integrated planning approach to ensure that all the constituting elements are addressed in a coordinated manner Modelling An integrated energy modeling capability which would be instrumental in the development of energy plans and evaluation of options that are proposed by policy- makers Requires

13. Establishes an Integrated Energy Modelling Agency entity to –Collect, compile and analyse energy data, information –Publish reliable energy data, information & analyses daily, weekly and monthly energy reports annual energy reviews short and medium-term energy forecasts –Analyse impact of proposed energy related programs, plans, policies and strategies Prepare reports on energy issues and legislation for Cabinet Prepare special analyses on energy issues and legislation for the Minister Prepare requested analysis for policy making departments The Bill Integrated Energy Modelling & Planning

14. Development of an annually reviewed and published Integrated Energy Master Plan –30-year planning horizon –produced in an integrated and coordinated manner –based on Energy Security principles –informed by the output of the Energy Modelling activities –informed by other plans from all demand, supply, production sectors whose plans impact or are impacted by the Master Plan The Bill Integrated Energy Modelling & Planning

15. Entity 1Entity 2Entity …Entity 3 Coordination Entity…Entity n Integrated Energy Planning Policy, Options, Strategies Other factors Policy - Neutral Modelling Government Departments SOEs Modelling Agency Individual Policies, Strategies, Plans, (Infrastructure)

16. The Bill Integrated Energy Modelling & Planning Example

17. The Bill Renewable Energy Creates opportunities to enable increased consumption of renewable energies –Establishment of a Tradable Renewable Certificates System –Framework for any other RE programme –Legally creating Renewable Energy Finance Office –Prescription of measures and incentives to promote the production, consumption, investment, research and development of renewable energy

18. 18 The Bill Energy Efficiency Key issue Unsustainable energy uses and limited implementation of energy efficient practices in SA economy Recommendation Creation of a National Energy Efficiency Agency Each energy carrier to fund its own efficiency program Functions of NEEA Undertake energy efficiency measures as directed by Minister Increase energy efficiency measures throughout the economy Optimise utilisation of finite energy resources Prescribe standards and technologies to promote efficient use of energy Facilitate use appropriate energy carrier for an application

19. The Bill Energy Research Key issue Continued expansion of research in energy developments and technologies Recommendation Legal creation of an Energy Research Institute (SANERI) Benchmarked on the Mintek model Functions Directs, monitors, conducts and implements energy research and technology development Promotes energy technology innovation and conducts research and develop technologies in line with the principles of the energy security framework Provides for economic growth and development through its functions

20. The Bill Security of Supply Key issue Inadequate stock held by energy industry Requirement to hold commercial and Strategic stock Recommendation Definition of measures that will ensure minimum levels of disruption in supply Minister to prescribe quantities of primary energy and “finished energy product” to be kept required nationally Definition and implementation of energy rationing & emergency measures

21. The Bill Security of Supply - Liquid fuels industry Recommendation Creation of National Petroleum Reserve Stock Agency Measures to ensure minimum levels of primary energy carriers Functions Specify quantities of primary energy and finished product required nationally Sources funding for the acquisition of stocks Manage all stocks and logistics on behalf of the state Put in place operational structures, systems and processes Implement and execute emergency reaction plan

22. The Bill Energy Infrastructure Key issue Uncoordinated infrastructure investments and developments Recommendation Measures to facilitate adequate investment in infrastructure Coordinate upkeep of infrastructure and benchmarking Ensure a holistic approach to infrastructure developments and planning

23. The Bill Project Plan

24. Thank You