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Draft Energy Bill Comments

Draft Energy Bill Comments. Energy Research Centre. Energy Research Centre (ERC). Multi-disciplinary research group in the Faculty of Engineering & Built Environment at the University of Cape Town with the following targeted research activities:

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Draft Energy Bill Comments

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  1. Draft Energy Bill Comments Energy Research Centre

  2. Energy Research Centre (ERC) Multi-disciplinary research group in the Faculty of Engineering & Built Environment at the University of Cape Town with the following targeted research activities: • Energy, poverty and development: concerned with energy issues that affect sustainable development and improved livelihoods for poorer communities. • Energy efficiency : dealing at the energy demand level, looking at the effects on single businesses and the national picture. • Energy systems analysis and planning: dedicated to energy modelling with the aim of assisting local industry and government identify and assess technology and policy options. • Energy, environment and climate change: researching the intersection between energy, local environment and global climate change. Postgraduate opportunities at the Masters and PhD levels and conducts targeted and relevant research in the following areas:

  3. ERC involvement in Energy Analysis • Dates back to the 1970s with research in energy consumption across all sectors • More recently involved in key energy efficiency, climate change and integrated energy planning initiatives: • Energy Efficiency Strategy (CABEERE/DME) • Integrated Energy Planning (IEP/DME) • Long Term Mitigation Scenarios (LTMS/DEAT) • Training and Capacity building in Energy Modelling and Analysis in South Africa and elsewhere.

  4. Overall comments on Bill (1) • The Bill aims to establish a "National Energy Modelling and Information Agency" which is clearly needed and should be welcomed. • Another positive development is the commitment to publish energy data, assumptions, and modelling results. If well framed, this will establish an important resource for South Africa. • The scope of energy issues has widened considerably, and it is important that the institutions contemplated in the Bill meet not only the DME’s requirements, but also those of other government departments, as well as different levels of government.

  5. Overall concerns on Bill (2) • Bill focuses on supply and underplays the importance of demand side considerations. • Demand side solutions will continue to play an important role in energy efficiency, South Africa’s climate response, the competitiveness of the economy, response to energy supply shortages etc and should receive greater attention in the bill. •  There appears to be some risk of fragmenting responsibility for mitigation to climate change both at international and national level, unless more carefully defined. It is not clear how the DME mitigation plans would relate to those developed by DEAT. The Bill seems to suggest that the DME Minister only needs to consult colleagues on implementing "energy-related international obligations"

  6. Overall concerns on Bill (3)  The Bill aims to establish SANEDI which replaces SANERI. SANERI has a clear research focus, SANEDI does not. In SANEDI, research is a small subsidiary component in a division and it is very unclear in SANEDI what funds or portion of funds would be available for research. It is not clear what the merits of moving SANERI into a new institution are.

  7. Specific CommentsIntroductory paragraph • suggest the term “generation” be replaced with “transformation”, as generation is usually only used in relation to electricity. • The phrase “holding of strategic energy minerals” should be replaced with “holding of strategic stocks of energy carriers where applicable”. • “strategic stocks” is a more widely-used phrase, and broader in its application (for instance, it would be applicable to refined liquid fuels and to nuclear fuel as well, which fit uneasily under the phrase “energy minerals”)

  8. Specific CommentsChapter 1: Definitions: • Integrated Energy Masterplan: a clear definition is not given here or in Section 16. We would propose that the more widely-used and internationally-recognised phrase “Integrated Energy Plan” (IEP) be used throughout instead.

  9. Specific CommentsChapter 2 Clause 3 the aims of this clause are laudable, and will promote better energy policy formulation. However, we can see no reason for clause 3 (3) and would suggest that unless the information can be shown to be harmful to commercial interests, all information collected under this act should be placed in the public domain. This will ensure that the information is available for research and benchmarking purposes thus ensuring that maximum benefit comes from the collection of the information. Thus, we would propose that clause 3 (3) be rephrased as follows: 3 (3) The information provided under this Act must be placed in the public domain. If the information provider can demonstrate that publicizing the information will significantly harm the provider’s commercial interests by conveying commercially-sensitive information to competitors, or such provision will conflict with the terms of other legislation, the provider may make representations to the Minister for the information not to be released. The Minister may then order that the information not be placed in the public domain.

  10. Specific CommentsChapter 2 Clause 5. 2 • This section is focused on supply and makes little mention of demand technologies. We would propose that the title of the section be amended to “Access to affordable and safe energy services by households”, and that the section be expanded to include a range of demand-side strategies, which include energy efficiency for households, and also include interaction with other government departments such as housing whose work is closely related to energy provision for households, as well as with local authorities. • We would also propose that the Minister be obliged (maybe an extension of section 3) to establish a function in government which collects data on households relevant to this end, i.e. on service provision / delivery of energy services to households. This would include data on what households do and do not have access to appropriate energy services, what the impacts of energy use in households are, and how successful programmes have been to date,. This data should be published annually.

  11. Specific CommentsChapter 2 Clause 6. (1) The Minister may, in consultation with the Ministers of Foreign Affairs, of Environment Affairs and Tourism and of Trade and Industry— (a) institute programmes, including authorising officials in the Department; (b) establish agencies or entities; and (c) take any other reasonable steps, to give effect to the energy implications of international agreements entered into or ratified by the Government of the Republic" Some questions which arise from clause 6 above are: • If South Africa signed up to an agreement in Copenhagen at COP-15 in 2009, would the energy component be decided by DME? • Does this change the role of DEAT as focal point on climate change internationally, or is the intention only to implement agreements in the energy sector? • If the latter, it should be made clearer that DME would implement the agreements SA signs up to internationally.

  12. Specific CommentsChapter 3: National climate change mitigation plans Clauses 8 (1) d. vi and 8 (2) a.v: • In terms of national mitigation plans, how would the plans be developed nationally, in particular the Long-term mitigation scenarios (LTMS)? Several new institutions which are envisaged by the Bill would have responsibility for energy-related mitigation plans. This would be helpful if framed as part of implementation of an agreed and integrated national plan. But it does raise the question: • What are the provisions for alignment with other components of such a plan?

  13. Specific CommentsChapter 3 Clause 11: This section is too restrictive and contains many clauses which are probably inappropriate for legislation. 11 (1) a is far too restrictive and should be removed, as it will prevent the agency from fulfilling functions contemplated in Clause 8; since the function of modelling is to explore alternative policies and measures, mostly before these have become official government policy. If the agency is restricted to “published policies”, it will not be able to do its job, which is to compare the outcomes of different policy options. There may well, for example, be policies which are highly successful in other countries, and government agencies might well want to know what impact these would have in South Africa.

  14. Specific CommentsChapter 3 Subclause 11 (1)b: while laudable, is meaningless without a legal definition of “private agendas”. This is not legal language. The aim of excluding obvious influence from parties which might have interests in specific outcomes could probably better be accommodated in some other way. Subclause 11 (1)c: this should be up to the discretion of modellers, and depend on their technical competence, since “near-proven” is a meaningless term (something is either “proven” or “unproven”). Whether a technology is “proven” is a matter of judgement. There may be instances where it is desirable to model “unproven” technologies (for instance, the PBMR). Subclause 11(1)d: this seems redundant, since no technically competent energy modeller would model scenarios which were not bound in this way. Clause 11 (3): It is unclear what the intention or meaning of this point is. Surely what NEMIA publishes should consist of its analysis and not express views of other bodies?

  15. Specific CommentsChapter 4 Clause 16 (1): This is a very good principle, but it should have a start date attached to it: we would propose adding “..commencing within six months of the passing into law of this legislation” Clause 16 (2): The term “energy” should be replaced with the term “energy and demand for energy services”, since the plan should consider non-energy ways of providing energy services; for instance, household insulation.

  16. Specific CommentsChapter 4 Clause 16 (3)d: the phrase “correct technology” is technically incorrect – this could be replaced with something like “optimal technology, given existing policy objectives of government for the energy system” or “ technology with the most appropriate characteristics”.

  17. Specific CommentsChapter 4 Clause 16 (5): The Integrated Energy Masterplan “must have a planning horizon of 25 years”. This also seems unduly restrictive – why not 20, why not 30 or 50? What might help would be clarification that the modelling can have different time horizons, even if this particular plan is 25 years. Even then, a single duration seems to box in future decisions. Different time periods are appropriate for different requirements.

  18. Specific CommentsChapter 5: Energy research and SANEDI Clause 18 (2): Composition of the Board – this is too narrow: • There should be broader representation from national government (for instance DPE, DPLG, Housing), as well as some representation from provincial and local government • There should be broader representation from the energy sector (not only supply industries) • There should be civil society representation

  19. Specific CommentsChapter 5 Clause 27 • Does the REFSO replace the one that exists within DME?. • It is not clear that the Tradeable Renewable Certificates System (TRECs) will be the preferred policy instrument to promote renewable energy; currently NERSA seems to be favouring a feed-in tariff. Thus, it seems inappropriate to mention this in legislation.

  20. Specific CommentsChapter 5: SANEDI Research? • What relationship is envisaged between NEMIA and the R&D division of the new SANEDI with regard to energy modelling? • What is the rationale for establishing two new institutions ? • How would areas of overlap between them be managed? SANEDI as it is proposed has very little R&D focus. The EE and RE sections (26,27,28 and 29) make no mention of research and this does not seem to be consistent with what DST intended when SANERI was established. • Is there a justifiable reason to incorporate SANERI into SANEDI?

  21. Specific CommentsChapter 8: Clause 36.1.a A 5 million Rand fine does not seem an adequate penalty for non-compliance and is also very harsh for smaller companies and almost negligible for larger companies. Our concern is that the energy sector in South Africa is dominated by large companies which may choose to ignore requests for data from the Minister at a cost of only R5 million per year. We suggest that this clause be replaced by a maximum fine defined in terms of a predefined fraction of annual turnover. There is a precendent for this in government: Competition Tribunal fines are levied on the same basis. For instance, a maximum of 10% of a company’s annual turnover.

  22. Thank You Energy Research Centre University of Cape Town Private Bag Rondebosch 7701 Cape Town 021 650 3230

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