SANERI Comments on

1. SANERI Comments on National Energy Bill (B52 of 2008)

2. Contents • SANERI Origin Key Drivers Objectives Priority activities • Formation of SANEDI • Formation of NEMIA

3. SANERI Origin • Cabinet decision to establish national energy research institute – 9Jun04 • State-funded Research Institute focusing on Public Interest Energy R&D • Established by Ministerial Directive in 2005 as subsidiary of state energy company, CEF (Pty) Ltd. For the benefit of members, the reason is as follows: • ● CEF Act (1977) makes provision for energy R&D to be undertaken by the company on behalf of the state • ● CEF has proud history of research and development, culminating in commercial company development, e.g. Sasol, MossGas, Soekor, PetroSA, Enerkom • ● CEF (Pty) Ltd has access to finance and equity to help commercialise products • Supports Human Capital Development at tertiary institutions and research projects that assist in meeting national goals / objectives • Supports the membership of SA to various bodies such as • ● IEA Implementing Agreements • ● Carbon Sequestration Leadership Forum (CSLF) • ● Renewable Energy and Energy Efficiency Partnership (REEEP) • ● European Commission Framework Programme

4. CEF Group Structure

5. CONTRACT R&D SANERI Role in Context Tertiary Educational Institutes NERSA Contract R&D R & D Chairs Regulatory Bursaries ALL SPHERES OF GOVERNMENT IMPLEMENTATION STRATEGIES / LEGISLATION POLICY PLAN R&D ACTIVITIES COMMERCIAL STATE OWNED ENTITIES PRIVATE SECTOR HUMAN CAPITAL DEVELOPMENT

6. Objectives • Affect a transformation in the demographic profile of researchers active in the country through the establishment and maintenance of a human capital development programme • Stimulate innovation in the energy R&D sector through creation of funding opportunities and identification of early frontrunners in possible IP generation • Development of specific high profile, high value flagship projects that talk to national objectives w.r.t. energy security of supply, poverty eradication, etc • Development of an integrated information and knowledge management system that lends itself to nurturing in-house and national institutional memory • Assist in the coordination of SA participation in, and membership of, various international bodies involved in energy R&D

7. SANERI is concerned with.. • Infrastructure Optimisation (electricity networks, liquid fuel transportation, road/rail infrastructure) • Energy Efficiency and DSM • Renewable Energy and Alternative Energy • Cleaner fossil fuels (including CCT, CCS, NG) • Impact of energy use on the environment • Stimulating socio-economic upliftment through productive use of energy • Human capital development across all sectors addressed by SANERI • Support to Departments on data collection, systems analysis and planning tool development

8. Key Deliverables 2008/09 • Clean Energy Systems • Development of revised wind atlas for SA • Scoping of possible wave energy test facility in SA • Testing and development of 2nd Generation Biofuel crops • Advanced Fossil Fuel Use • Continued testing and development of optimised liquid fuels through use of high • pressure fuel injection system • Development of carbon storage atlas for SA & Centre for Carbon Capture & Storage • Evaluation of clean coal technologies that would be relevant for SA coals • Energy Policy and Planning • Development of knowledge Management System for SANERI and for national use • Development of CESAR centre at UCT to support energy systems analysis and • data collection/interrogation

9. Key Deliverables 2008/09 • End Use and Infrastructure Management • Development of EE integrated mass transit scheme for SA cities • Development of low cost and efficient electric motors for mobile and stationary applications • 2010 Green Transportation Project • Establishment of 2 Gas refueling stations (run vehicles on LPG / petrol) • 10 Cars converted to alternative fuel use

10. Formation of SANEDI • Positive elements of Bill • ● It ringfences major clean energy and efficiency measures under single entity (with secure funding stream) • ● It assists in development of coordinated strategy in support of long term climate change mitigation (as per LTMS) • ● It protects research capacity in the country and supports long term funding of research activity • ● The Bill promotes long term security of supply through firstly identification of cleaner, safer and more affordable alternatives and then developing a framework for commercial deployment

11. Formation of SANEDI • Aspects worth considering • ● Funding for institute during transitional period – long term funding will be secured through Monies Bill but this may take years to promulgate • ● Responsibilities of various divisions are too prescriptive – need flexibiity in changing political, environmental and economic climate • ● Location of entity under CEF (Pty) Ltd has resulted in minimisation of overheads and facilitation of implementation – moving entity from CEF (Pty) Ltd will result in greater overheads for the entity and hamper commercialisation • ● Should consider including provision in the Bill that SANEDI will only be operationalised once Monies Bill is promulgated.

12. Formation of SANEDI • Aspects worth considering • ● Parity in remuneration with similar institutions required to protect scarce indigenous skills (cf. CSIR, Mintek, ARC, MRC, etc) • In SANERI, 5 PhD Senior Managers of which 4 are HDI • Difficult to retain skills in a local and international market short of people with requisite qualifications and experience • Growing problem of migration of civil servants and academics to SOEs and private sector (recycling skills not good enough) • ● Grant funding and Commercial exploitation of IPR should be encouraged • ● Dependence on state funding alone could burden the state in future years (e.g. NECSA, PBMR) • ● Some institutions have only survived because of income from intellectual property that has been exploited • ● Income from external sources could well augment state funding to remunerate staff at comparable levels to other state-owned research entities

13. Formation of NEMIA • Positive Elements • ● Provides for enhanced indigenous modelling and planning capacity in the country • ● Provides for more rigorous data collection methodologies to be put in place • ● Allows for coordination of other planning initiatives in the country, e.g. NERSA and DME (NIRP), Eskom (ISEP) and DME (IEP) • ● Government support will ensure long term confidence in the energy market in SA, buoyed by clear planning framework and signals to investors • ● Can provide government with robust and detailed analysis of likely impact of proposed policies and measures

14. Formation of NEMIA • Aspects to consider • ● Requires peer review of methodology used in planning framework – this can be done by other entities active in this area • ● Will require extensive time to put in place the requisite data sets and human capital to make the agency effective – will delay further IEP activity • ● Should not be inflexible in terms of choice of planning tools – more about horses for courses rather than 1 size fits all • ● Needs close working relationship with DEAT on long term climate change position of SA – will affect scenario development and technology choices in supply side mix

15. Thank You First solar traffic light intersection installed by SANERI / NEEA in 2007 in Cape Town