USAID/IFC/IDC SA Energy Efficiency Policy Overview 24 May 2012

1. USAID/IFC/IDC SA Energy Efficiency Policy Overview 24 May 2012

2. Introduction • Improved Energy efficiency (EE) is a critical response to the pressing climate change, economic development and energy security challenges facing many countries. • Energy efficiency has to deliver benefits and quickly • As government we can only hope to achieve the required scale and timing of energy efficiency improvements if robust and effective EE governance systems are put in place now. • But achieving EE improvements can be difficult since it requires establishing markets for energy efficient products and services and , and allow new production streams in the market • Influencing millions of diverse energy users from large industries to households and encouraging technological developments all at the same time. • In this kind of complex situations governments’ policies can form a key part of the solution of delivering energy efficiency solutions • Energy efficiency improvement can help avoid the cost of new energy generation (and distribution) capacity, improve industry’s competitiveness, increase access to energy and reduce greenhouse gas emissions.

3. Government policy objective in EE • Stimulate increased investment in energy efficiency through: • Adopting and publicizing a common energy efficiency M&V protocol to reduce existing uncertainties in quantifying the benefits of energy efficiency investments and stimulate increased private sector involvement • Collaborate with the private financial institutions to establish public private tools to facilitate energy efficiency financing • Putting in place institutional frameworks to ensure regular cooperation and exchanges on energy efficiency issues between the public sector and financial institutions • Encourage financial institutions to train their staff and develop evaluation criteria and financial tools for energy efficiency projects • Promoting risk mitigation instruments

4. EE Policies and Regulations Overview (1) • Energy Act establish the South African National Energy Development Institute (SANEDI), with a mandate to promote the uptake of energy efficiency across the economic sectors • The Act also give powers to Minister of Energy after consultation with other affected Ministers to make energy efficiency regulations. • Energy Efficiency Standards & Regulations: • Section 19 of the Energy Act gives the Minister an authority to make regulations, namely: • Steps and procedures necessary for the application of energy efficiency technologies. • Prohibition of the manufacture, or importation or sale of electrical appliances for reasons of poor energy efficiency. • Standards and specifications for energy equipments and processes

5. EE Policies and Regulations Overview 2 • In terms of regulations: • The Department has already promulgated the Mandatory Provision of Energy Data with effect from 1st March 2012. • Regulations aimed at ensuring security of energy data to enable policy planning • Energy Efficiency Tax Incentive Regulations under section 12L of the Income Tax are being finalised • Regulations aimed at providing incentives for Industrial energy efficiency process • Other regulations that might be considered are Mandatory Provision of Energy Management Plans and Energy Auditing • Regulations for EE compulsory specification for lighting technologies have been developed and are under consultation with industry players

6. National Energy Efficiency strategy ( NEES) 2005 Overview • The National Energy Efficiency Strategy has set up a target of final energy demand reduction of 12% by 2015 • These target is expressed as a percentage reduction against the projected national energy usage in 2015 • These are derived from the following sectors: • Commercial and Public Buildings – 15% • Industry and Mining - 15% • Residential – 10% • Power generation – 15% • Transport – 9% • The target is suppose to be monitored continuously for progress, using a monitoring system, and an annual report

7. National Energy Efficiency strategy ( NEES) 2005 Review • National Energy Efficiency Strategy and EE goals • Though the review of EE strategy, as government we are aiming to set goals and formulate action plans for improving energy efficiency in each sector of our domestic economy by: • Assessing energy consumption by end-use in all sectors • Identifying the economy’s energy saving potential and • Establish objectives and adequate methods for evaluating the success of the plan • Ensuring that energy efficiency policy agencies are adequately resourced • Ensure EE targets alignment with both IRP and IEP policies • The review process is underway and all stakeholders including business are being engaged and play an important role in finalizing this process

8. Introducing EE governance • Compliance Monitoring, Enforcement and Evaluation • As part of our responsibility we are currently putting in place a system that will ensure that both voluntary and mandatory energy efficiency policies and programmes are adequately monitored, enforced and evaluated so as to ensure maximum compliance. At a minimum this should include: • Establishing legal and institutional infrastructure for ensuring compliance with energy efficiency requirements • Ensuring transparent and fair procedures for assessing compliance • Ensure regular and public reporting of monitoring activities , including instances of non-compliances • Establish and implementing a robust system for evaluating policy and programme success during and after implementation

9. Key government initiatives underway • Review of Energy Efficiency Strategy targets to be finalized by Nov 2010 • Amendment to building regulations • Introduction of tax incentive scheme • Financing of Low cost SWH pilot projects and street, traffic and building lighting • Appliance standard and labelling programme - SABS standards for appliances ( fridges, washing machine, tumble dryers, etc) and other equipments • Unit standards for Career opportunities in Energy Efficiency • Industrial energy efficiency programme in collaboration with the dti • Intensify public building EE programme • EE Leadership network • Inter-Ministerial Committee on energy

10. Energy Efficiency Leadership Network Expectations • The EE Leadership Network (EELN) as a tool to accelerate energy efficiency improvements through support and commitments from EELN members. • The EELN will provide a platform for members to establish and implement their own energy management plans, baselines and EE targets • Although participation in the EELN is voluntary, it is also aimed at achieving the targets and goals of the National Energy Efficiency Strategy • In addition, participating EELN members will be able to track their own achievements and provide reports to the National Energy Efficiency Monitoring System • However, the NEES review process will also confirm some of the actions to achieve these targets

11. Support for the Energy Efficiency Leadership Network • EE Policy and Activity Mapping as a base for the National Energy Efficiency Action Plan (NEEAP) will be developed by SANEDI through GIZ support • However, 2012/13 annual industrial NEEAP activities will be developed through the IEE project • Support to the EELN, will be considered under IEA/DoE Energy Bilateral Agreement, German/RSA Energy Programme, Swiss/RSA EE Monitoring Programme, Britain/RSA Energy, and other bilateral agreement in place. • It is our expectation that this support will defined in this workshop and be incorporated in the EELN Programme of Action

12. Conclusion • Policy is necessary to drive behavior and technological transformation, but not sufficient on its own • Accelerate the implementation of incentive scheme • Urgent capacity building and institutional arrangement • Intensified EE awareness campaign

13. Contact details • Maphuti Legodi • Energy Efficiency & Environment • Department of Energy • Maphuti.legodi@energy.gov.za • +27 (0) 12 444 4090 • +27 (0) 82 449 1985