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PRESENTATION LAYOUT

Presentation to the Select Committee on Economic Development Department of Energy’s 2012/13 Annual Report Ms. N. Magubane – Director General 13 November 2013. Introduction Department’s organisational health and its capacity to deliver on government policy objectives

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PRESENTATION LAYOUT

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  1. Presentation to the Select Committee on Economic DevelopmentDepartment of Energy’s 2012/13 Annual ReportMs. N. Magubane – Director General13 November 2013

  2. Introduction • Department’s organisational health and its capacity to deliver on government policy objectives • Link the non financial performance with the financial results • High level performance of the department • Issues raised by the Auditor General – 2012/13 Audit Report • Conclusion PRESENTATION LAYOUT

  3. For the past few years, the global energy agenda has been dominated by: energy security, energy access, and the deployment of sustainable (renewable) energy. • The Department’s focus within this global energy agenda has continued to be on energy security through: • diversification of the energy mix – continued implementation of the IRP2010; • access to diversified energy markets; • deployment of sustainable energy – through the renewable energy program; and • engagements in local (continent) and international platforms – areas of capacity, skills development and funding. INTRODUCTION

  4. We have kept the lights on, the factory machines operating, cars, busses and trains running, over the past financial year. • Our partnerships with all relevant stakeholders have continued to bare fruit as we ensured that energy supply is secured. • Major investments in the REIPP programme INTRODUCTION (cont)

  5. There was a slight improvement in the financial resources this year: • The 2012/13 budget allocation increased by 8.6% to R6.73 billion. • 93.6% (R6.3 billion) was allocated to transfers and subsidies and 6.4% (R 429.7 million) went to the operational budget. • The department spent 98.9% of its allocated budget; • Staff compliment was – 818 total approved, 556 funded and filled, with 56 interns; • The vacancy rate was kept at below 15%. Department’s organisational health and its capacity to deliver on government policy objectives

  6. Through our planning process, we identified the Strategic Outcome oriented goals (SOOGs) that speak to the NDP and government outcomes (2, 4, 6, 7, 8, 9 and 10) as indicated on page 41 of the Annual Report. • We have also participated in the following Strategic Integrated Projects (SIPs) programme – SIP 6 and 8 (Lead Ministry), SIP 10 (Co-chaired) and participated in SIP 2-5, 7, 9, 14, 17 and 18 • Other programmes that the department engaged in include: • INEP • Renewable Energy IPP Programme • Solar Water Heater Programme • Nuclear Review Programme Department’s organisational health and its capacity to deliver on government policy objectives (cont)

  7. From the 2012/13 total budget allocation of R6.73 billion, 93.6% was allocated to transfers as follows: • Integrated National Electrification Programme – R3.1 billion; • Transnet’s New Multi-Product Pipeline final instalment – R1.5 billion; • NECSA – R568 million; • Energy Efficiency Demand Side Management – R1,02 billion for the Solar Water Heaters programme • The balance of transfers went to State Owned Entities and other smaller programmes. • R429 million (6.4%) of the total budget was allocated for the Department’s operational needs. Financial Performance

  8. 2012/13 BUDGET OVERVIEW

  9. Link of Financial and Non-financial performance

  10. Link of Financial and non-financial performance

  11. Electricity • The deteriorating state of the electricity distribution infrastructure continues to be of great concern to the Department as it affects the pace of INEP • During the year R320m was allocated for the 2013/14 financial year to address the distribution infrastructure • Two metros and seven municipalities have been identified as part of the first pilot • The process of closing down EDIH was completed, pending the receipt of the deregistration certification High level performance information

  12. Electrification – INEP • We exceeded the 180 000 annual target for electricity connections this year and achieved 202 835 ; • Of the 202 835, non-grid connections totalled 9 343; • 4 new substations were completed and 5 upgraded • A total of 275 km of new electrical lines were installed and another 85 km upgraded • Of the total allocation of R 3.1 bn for INEP all but R 36.4 million were transferred to the implementing agencies (Eskom and Municipalities) High level performance information (cont)

  13. Energy Policy and Planning • Continued with the implementation of the IRP • Draft IEP Report was completed. • Recommendation on the final ISMO Bill submitted to National Assembly. • NEDLAC consultation process for ERA and NERA completed. • Development of models to inform the 20 Year Liquid Fuels Infrastructure Plan initiated • A policy discussion document outlining coal supply constraints and possible interventions was drafted • The Carbon Capture and Storage Road Map was endorsed by Cabinet • The Draft Gas Amendment Bill was pre-certified, submitted for Cabinet approval and released for public comments High level performance information (cont)

  14. Clean Energy • In August 2012, we reached financial close in respect of 28 bidders contracted to supply 1415MW under the REIPPP, and construction has commenced • The Standard Offer policy for Solar Water Heaters in place and 353 188 SWH units had been installed by year end • The Solar Park feasibility study is back on track following the initial teething problems • Working for Energy MoU executed with SANEDI and annual workplan developed and funding allocation transferred • 68 CDM project proposals received (64 PDD’s and 4 PINs) • Participated in COP 18 UNFCCC negotiations. COP 18 outcome report completed and approved High level performance information (cont)

  15. Energy Efficiency and Demand Side Management • EEDSM monitoring tool was developed and implemented • Real time field update testing was demonstrated • Municipal EEDSM savings of just over 39 MW were confirmed • 2,251 TWh annual savings confirmed by Eskom • Regulations for introducing EE Incentives Scheme High level performance information (cont)

  16. Petroleum • With the discontinuation of the supply of crude oil from Iran, it meant that South African oil companies had to find alternative sources of supply • As a result, South Africa’s imports of crude oil from the African continent reached 41%, which signified the continent’s growing role in the supply of crude oil to our country • No fuel supply shortages were experienced; corrective actions were implemented where necessary • Improved the process of ensuring all applications are processed within 90 days • 1717 compliance inspections conducted • Biofuels Mandatory Blending Regulations were promulgated and draft Biofuels pricing framework developed High level performance information (cont)

  17. Nuclear • The growing interest in nuclear created the need for the department to intensify public awareness initiatives to present a balanced view in order to demystify nuclear energy and ensure public acceptance • During the year a number of public engagements were hosted by the department to address nuclear issues • The work of the NNEECC together with the Department continued in preparation for the nuclear built program • Draft IAEA external review of nuclear infrastructure report completed • The Africa Nuclear Conference took place on 18 March 2013 High level performance information (cont)

  18. Energy Projects and Programmes • 2 IEC's were successfully established namely, Mbizana in the Eastern Cape and Ulundi in KwaZulu-Natal • Energy Awareness campaigns held: • Mangaung Learners Focus Week informed 250 learners on career opportunities in energy • Eastern Cape Road-show informed 100 women on business opportunities in energy • Mangaung Youth Career Expo informed young people on the DoE, and career/ business opportunities in energy • Side Event at the CSW in New York informed women and youth on career/ business opportunities in energy\ • Take-a-girl-child-to-work initiative informed young girls on the DoE an the importance of taking “STEM” subjects. High level performance information (cont)

  19. Audit opinion: • For the third year running, the department received an unqualified audit • The AG raised concerns on the performance information and plans to improve are underway • The department has completed an action plan to address AGSA findings • Most of the audit findings were addressed by 31 July 2013 REPORT OF THE AUDITOR GENERAL

  20. THANK YOU CONCLUSION

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