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PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS Public Hearing on

PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS Public Hearing on Division of Revenue Bill 2010 5 March 2010. 2. PRESENTATION OUTLINE. Part 1 INTEGRATED NATIONAL ELECTRIFICATION PROGRAMME Schedule 6 Schedule 7 Part 2 EEDSM Schedule 6 Schedule 7. Part 1.

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PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS Public Hearing on

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  1. PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS • Public Hearing on • Division of Revenue Bill 2010 • 5 March 2010 2

  2. PRESENTATION OUTLINE Part 1 INTEGRATED NATIONAL ELECTRIFICATION PROGRAMME • Schedule 6 • Schedule 7 Part 2 EEDSM • Schedule 6 • Schedule 7

  3. Part 1 Integrated National Electrification Programme

  4. BACKGROUND • The electrification programme was started by Eskom during the late 1980’s • It was further refined by the National Electrification Forum (NELF) during the early 1990’s. • Access to electricity for households in RSA was approximately 30%. • During this period the electrification programme was funded through the National Electricity Regulator (NER)

  5. BACKGROUND • After 1994 and through the government’s initiative of RDP (Reconstruction and Development Programme), electrification programme was endorsed. • During 2001 the government took responsibility for funding electrification programme. • The funds are made available through fiscal allocation, Schedule 6 and 7 grant allocation • President’s State of Nation Address (universal access in South Africa

  6. MANDATE OF INEP • To manage the electrification planning, funding and implementation process,with the aim of addressing electrification backlog so as to reach universal access.

  7. FOCUS AREAS • Managing the electrification planning process • Managing the implementation of the electrification programmes • Monitor both INEP programmes in line with the Energy white paper, the Division ofRevenue Act (DoRA, Public Finance Management Act (PFMA),ER Act, OHS Act etc. • Conducting the technical audit on DOE funded project.

  8. Allocation Criteria for INEP • Backlog. • Rural biasness. • Nodel Zone • Availability of formalized areas. • Bulk funding availability. • Past performance. • Integration with other programmes eg. BNG

  9. Backlog

  10. % Backlog

  11. MTEF ALLOCATION INEP Allocation split 62 % Eskom / 38% Municipalities Details of allocation per municipality are available in the DoRB 2010

  12. ALLOCATION PER PROVINCE

  13. COMPLIANCE WITH DoRA 2010 Sec 10 – Duties of transferring national officer • Sec 10 (1)(c) transfer funds in accordance with payment schedule determined in accordance with section 21; • The Department does have a challenge of complying due to municipalities not requesting funds according to payment schedule

  14. COMPLIANCE WITH DoRA 2010 Sec 12 – Duties of receiving officer iro schedule 5,6 or 8 allocation • The receiving officer of a schedule 5,6 or 8 allocation must ensure compliance with the requirements of the relevant framework. • Municipalities do not comply with the requirements of the framework and sec12(2) and 12(7) as they don’t submit monthly, quarterly and annual evaluation reports. This makes it difficult for the Department to comply with the Act

  15. CHALLENGES • Municipalities do not report on regular basis –monthly reports, quarterly and annual evaluation reports. • Municipalities not requesting funds according to payment schedules • Municipalities not implementing projects as agreed in the contracts • Municipalities signs contract with the Department for connections and change projects without notification or reduce connections due to cost.

  16. Mitigating Strategies • Allow Eskom to assist where necessary • Revise the cost per connection subsidy annually for municipalities • Support to municipalities in relation to planning, capacity building development and monthly reporting • Regional energy Officers and electrification managers to assist municipalities with planning and monitoring of projects • Sec. 19 Conversion of schedule 6 and schedule 7 allocations to prevent under-spending

  17. Part 2 • EEDSM

  18. BACKGROUND • Over the past two years our country has experienced electricity supply constraints. • the impact was so severe to both social and economic sector • Production levels lowered while job security was threatened • Coordinated efforts between government and all stakeholders made a huge difference in reducing the impact of the crises • In 2008/9 financial year government provided fiscal allocations (schedule 6 and 7 ) to assist in reducing the impact of the situation by addressing energy efficiency and demand side management opportunities • Bigger load centres benefitted from the allocations to

  19. MANDATE OF EEDSM • To promote energy efficiency behaviour changes • To contribute towards reducing the demand for electricity to 12 per cent by 2015 as per the National Energy Efficiency Strategy 2005. • To manage funding for the implementation of Energy Efficiency and Demand Side Management (EEDSM) programme in residential dwellings, and communities by providing capital subsidies to Eskom, Metros and secondary municipalities in order to mitigate the risk of load shedding and supply interruptions

  20. FOCUS AREAS • Facilitate and manage the process of allocating EEDSM funding • Manage and monitor the implementation of EEDSM and programmes in line with the National Energy Efficiency Strategy, the Division ofRevenue Act (DoRA, Public Finance Management Act (PFMA), • Conduct technical audit to EEDSM projects

  21. Allocation criteria for EEDSM • National priorities in ensuring security of supply • Areas targeted with high electricity usage and 2010 FIFA World Cup host cities getting preference • Technical and resource capabilities to implement EEDSM projects • Support to already existing EEDSM programmes in municipal and Eskom areas • EEDSM programme being implemented in line with municipalities’ Integrated Development Plans (IDP)

  22. Objective of the programme • Reduction of Megawatts from the network through the implementation of energy efficiency Projects i.e. Street lighting, traffic lighting, building energy efficiency lighting and the rollout of domestic lighting(CFL). • These projects have a potential savings of 70MW • The roll out of Solar Water Heating Programme in Tshwane, Naledi and Sol Plaatjie Municipalities.

  23. MTEF ALLOCATION EEDSM

  24. ALLOCATION PER PROVINCE

  25. CHALLENGES • Municipalities do not report on regular basis –monthly reports, quarterly and annual evaluation reports. • Municipalities not requesting funds according to payment schedules • Delay in the signing of contracts • Municipal managers not signing monthly progress reports as required • Lack of capacity and competence to administer the programme.

  26. Mitigating Strategies • Allow Eskom to assist municipalities where necessary to implement EEDSM Programme • Support to municipalities in relation to planning, capacity building development and monthly reporting • Regional energy officers and electrification managers to assist municipalities with planning and monitoring of projects • Sec. 19 Conversion of schedule 6 and schedule 7 allocations to prevent under-spending

  27. THANK YOU (TIME FOR QUESTIONS)

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