Presentation to International Workshop on Energy Statistics Energy Accounts Ester Koch

1. Presentation to International Workshop on Energy Statistics Energy Accounts Ester Koch National Accounts 2─5 December 2008, Aguascalientes, Mexico The Environmental Economic Accounts unit is part of National Accounts. Four people do water, minerals, energy, fisheries and land accounts.

2. Energy Accounts Supply and Use Tables The physical flows are captured in the flow accounts structure, and the supply and use tables format is used. SEEA 2003 and SEEA-E The international methodology as set out in the system of Integrated Environmental and Economic Accounting 2003 is followed with regard to the definition of natural resource accounting. Recently Statistics South Africa are using the SEEA for Energy as guideline as well. SIC The energy accounts uses the Standard Industrial Classification of all Economic Activities (SIC) for economic activities as per the System of National Accounts (SNA).

3. Energy Accounts Physical flow accounts In the development of the physical flow accounts, in the format of the 1993 System of National Accounts, the Department of Minerals and Energy’s Energy Balance is used. The physical units are converted to Terajoules to give total energy use and total energy supply. Four types of physical flows are captured: Natural resource extraction Coal, crude oil, and gas. Ecosystem inputs i.e. oxygen combustion. Products Energy fuels such as petrol and diesel. Residuals Generated by the use of fossil fuels.

4. Supply Table Eight columns: Changes were made to the SEEA framework. Excluded: Natural gas, steam and hot water, wood, and straw and waste Included: Nuclear power, hydropower, and renewables and waste.

5. Use Table • Intermediate consumption by industries includes: • Agriculture and fishing • Mining and quarrying • Manufacturing • Electricity, gas and steam production • Construction • Transport, storage and communication • Commercial sector (wholesale and retail traders, financial intermediates and public services). • No further breakdown is done in these categories.

6. Energy resources Energy resources: Coal = main energy supply source and provides 75% of primary energy needs (South Africa 6th largest holder of coal reserves) The remaining sources of supply are: • Oil • Gas • Nuclear power • Hydropower • Renewable resources (wind, solar, biomass and wave power)

7. Classifications Classification of energy sectors: Industrial – uses largest amount of energy and is divided in eight sub sectors: • Chemicals and petrochemicals • Food and tobacco • Iron and steel • Mining • Non-ferrous metals • Non-metallic minerals • Pulp and paper • Other Residential – are classified into urban and rural: • Urban – use modern fuels, i.e. electricity for cooking, water heating, space heating, and lighting. • Rural – mainly traditional fuels, i.e. wood, dung, and bagasse. Transitional fuels include coal, paraffin and liquid petroleum gas (LPG). Transport – together with residential 2nd and 3rd largest users of energy: Agriculture Commercial

8. Sectoral energy consumption Final sectoral consumption of energy in Terajoules (TJ)

9. Classifications Standard Industrial Classification of all Economic Activities

10. Data collection In order to compile the accounts, data is obtained from Statistics South Africa in the form of a survey, with 22 power stations complying monthly. Questions: 1. Electricity generated in kilowatt-hours (kWh). 2. Electricity consumed in power station(s) and energy storage systems in kWh. 3. Net quantity of electricity generated and sent out from power station(s). 4. Purchases outside the Republic of South Africa, e.g. Mozambique (specifying supplier). 5. Consumed in synchronous condenser (CSO), Department of Water Affairs and Forestry (DWAF) and Assets” (Applicable to the Electricity Supply Commission [Eskom]).

11. Data sources The Department of Minerals and Energy uses the following sources of data to compile the Energy Balances:

12. Data quality assurance & dissemination In order for the Energy Balance and Energy Account to be useful as a reliable information source, quality checks need to be done and the integrity of data need to be verified. This is currently done manually. The Energy Account is currently only published as a discussion document, pending the formalizing of the institutional arrangements between the Department of Minerals and Energy and Statistics South Africa. Statistics South Africa is also entering into a legal framework with Department of Environmental Affairs and Tourism for future work on environmental statistics, including the development of the Emissions Account.

13. Uses of energy accounts / statistics The main energy resources in the South African economy are coal, oil, gas, nuclear power, hydropower and renewable sources such as wind, solar energy, bio-mass and wave power. The significance of the energy accounts are that they are of considerable interest in their own right, especially for countries heavily involved in oil mining and processing. Also, every economy in the world depends on the availability of oil and other energy sources. The use of energy is critical to the economy, because almost all economic activities are connected either directly or indirectly to the consumption of energy. The environmental accounts, specifically in the case of energy accounts, are crucial in a sense that they reflect how significant our environment is in the economy. In South Africa, energy is sourced mainly from coal. The supply and use (in physical units) of energy should be reflected in a way that is understandable from its raw production to the residuals. Energy accounts provide information about the levels of direct energy consumption of industries regarding their production processes and private households. These accounts can also provide information on changes in the energy requirements of particular industries in relation to their output. This shows the macro level impacts of new technologies, and eco-efficiency measures and behavioural changes. They are also an indispensable prerequisite for reliable estimates of air emissions related to energy consumption. The accounts are currently not official, there are some institutional arrangements that need to be formalised with partners in the energy sector to achieve this.

14. Uses of energy accounts / statistics Energy statistics and Energy Accounts could provide useful information in planning and scenario planning. Questions such as these could be answered: • What are the levels of energy consumption in South Africa? • What are the levels of energy input (both direct and indirect) into the various categories of final demand (private household consumption, exports, etc.)? • What is the energy intensity of particular industries taking into account both direct and indirect energy inputs? • For future predictions and scenarios, what are the changes expected in the energy requirements of particular industries in relation to their output?

15. Uses of energy accounts / statistics In mid-January 2008, nationwide power outages occurred and lasted approximately four weeks. The economic costs of the outages are estimated to range in the hundreds of millions with approximately half representing mining losses. Although the cost of electricity in South Africa is among the worlds lowest, the country's strong economic growth, rapid industrialization and a mass electrification program has led to demand for power outstripping supply . In January 2008, the DME and Eskom released a new policy document: National response to South Africa's electricity shortage. The plan includes work on the country's electricity distribution structure and the fast-tracking of electricity projects by independent power producers. It also involves electricity co-generation projects between Eskom and private industry. There are significant projects and initiatives ongoing to expand South Africa’s electricity infrastructure, reducing demand by pricing electricity correctly, as well as promoting energy efficiency and deterring energy inefficiency.

16. Uses of energy accounts / statistics Thank you for the opportunity to present!