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BUDGET REVIEW AND RECOMMENDATIONS REPORT Presented by : Ms N Magubane Director General

BUDGET REVIEW AND RECOMMENDATIONS REPORT Presented by : Ms N Magubane Director General 20 October 2010. DoE Management Team. Mrs. Thandeka Zungu: COO Mr. Dakalo Netshivhazwaulu: Acting CFO Mr. Ompi Aphane: Acting DDG of Electricity, Nuclear & Clean Energy

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BUDGET REVIEW AND RECOMMENDATIONS REPORT Presented by : Ms N Magubane Director General

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  1. BUDGET REVIEW AND RECOMMENDATIONS REPORT Presented by : Ms N Magubane Director General 20 October 2010 -Confidential-

  2. DoE Management Team • Mrs. Thandeka Zungu: COO • Mr. Dakalo Netshivhazwaulu: Acting CFO • Mr. Ompi Aphane: Acting DDG of Electricity, Nuclear & Clean Energy • Ms Tshilidzi Ramuedzisi: Chief Director Energy Planning • Mr Muzi Mkhize: Chief Director Hydro Carbons • Ms Yolisa Mapekula: Office of the Director General -Confidential-

  3. Presentation outline • Overall Departmental budget review • Personnel budget outlook. • Austerity measures adopted to contain expenditures. • Unfunded key activities. • Overview of Programme(s) performance. • Conclusion. -Confidential-

  4. Introduction • Last week we presented and certain issues were raised by the Committee. • The presentation has taken into account these issues: • Further breakdown of expenditure per Programme • Consolidated and detailed Programme Performance • More details on previous slides 11-17: • INEP • SWH • Liquid Fuels Masterplan • Integrated Energy Plan • Etc. -Confidential-

  5. Departmental budget per Programme -Confidential-

  6. Budget per Economic Classification -Confidential-

  7. Departmental ENE Allocations -Confidential-

  8. Adopted Austerity Measures Restriction on international travelling Restriction of internal catering Review of international commitments for affiliations Stringent measures for control of tele- communication costs Review of internship programme Restriction of advertisement on commercial media Review of process for appointment of consultants -Confidential- 8

  9. Key unfunded activities -Confidential- 9

  10. Programme 1 (Admin): Budget per Economic Classification -Confidential-

  11. Programme 1: Key Projects • Filing of vacancies • Payment turn around time • Procurement spent on HDSA • Internship programme • Bursaries • Training • Presidential Hotline • Employment Equity -Confidential-

  12. Programme 1: Key Activities – Filling of Vacancies -Confidential- 12

  13. Programme 1: Key Activities Cont… -Confidential- 13

  14. Programme 2 (HEP): Budget per Economic Classification -Confidential-

  15. Programme 2 (HEP): Key Projects • Fuel strategic stock policy • LPG price regulations • Fuel specifications and standards • 25 year Fuel Liquid Infrastructure Plan • Petroleum pricing framework • Transnet Multi Product Pipeline • 20 Year Integrated Energy Plan • National Integrated Energy Modelling System • SANERI/SANEDI -Confidential-

  16. Electricity Chief Directorate: Progress Reporting. -Confidential-

  17. Electricity Chief Directorate: Progress Reporting. -Confidential-

  18. Electricity Chief Directorate: Progress Reporting. -Confidential-

  19. Electricity Chief Directorate: Progress Reporting. -Confidential-

  20. Electricity Chief Directorate: Progress Reporting. -Confidential-

  21. Programme 3 (ENCE): Budget per Economic Classification -Confidential-

  22. Programme 3 (ENCE): Key Projects • IRP 2010 • ISMO • Electricity Regulation Act, 2nd amendment bill • Independent Power Producers • REDs • Standard offer policy • INEP • Solar Water Heaters • Nuclear -Confidential-

  23. Electricity Chief Directorate: Progress Reporting. -Confidential-

  24. Electricity Chief Directorate: Progress Reporting. -Confidential-

  25. Programme 3 (ENCE): Key Projects Contin… -Confidential- 25

  26. Project report: Non Grid Electrification ProgrammeStart: 01 April 2010 Finish: 31 March 2011 -Confidential-

  27. SWH Roll-Out : tariff funded programme -Confidential-

  28. SWH Roll-Out : tariff funded programme -Confidential-

  29. SWH Roll-Out : fiscal funded programme -Confidential-

  30. Number of Units settled through Eskom rebate programme to date • A total number of 10 600 claims has been received as of end of August 2010 • Eskom confirmed that they have settled 8700 units through the rebate programme. • The reason for the variance (1900 units) between the two figures is because of the delays in the Measurement and Verification process. • Target of total 6500 units for October in Bloemfontein, Kroonstad, Mossel Bay, Potchefstroom and Saldanha -Confidential-

  31. Roll out of High Pressure Systems • DoE exploring programme with CEF to make funding available to cover the gap between the consumer willingness-to-pay and the installation cost. • Modelling exercise to be completed end-October 2010 -Confidential-

  32. Spending patterns- INEP (‘000) 2009-2010; 2% 2008-2009; 1% -Confidential-

  33. SWH Program Objective Presentation outline -Confidential-

  34. SWH Program Targets Presentation outline -Confidential-

  35. Presentation outline Experience with Tariff Based Rebate Program - Eskom -Confidential-

  36. Comments from market on rebate programme “We are currently averaging 100 – 200 per month (reflected in Eskom stats)” - One big national player “Burst geyser is not good time to sell SWH” “Rebate programme just isn’t doing it for market” “Market needs a serious shake-up” “It would be embarrassing to give you our sales numbers” 3126 installed on Eskom rebate from Jan 2009 – Apr 2010 Average for 3 months of new rebate level = 443 units per month -Confidential-

  37. Experience with new diversified approach Presentation outline -Confidential-

  38. What is in the pipeline? Presentation outline • Program funded from fiscus to install 40 000 systems – Eskom managed and due to start in November 2010 • Program involving local banks and insurance industry to install residential systems without any rebates • Voluntary program by industry in lieu of their contribution to energy efficiency -Confidential-

  39. What are the key challenges that will increase rate of rollout if addressed? Presentation outline • Capital cost of imported components and systems is too high (R18 000 for 150 liter) • Funding • Skills shortages – necessary for safe scaled up installations -Confidential-

  40. Presentation outline Addressing the challenges • Skills program initiated with CETA, eSETA, donors – unit standards developed and accredited training available • Various initiatives to manufacture locally – preference will be applied for local systems when rebates are applied for • Additional fiscal allocations applied for, plus tariff-based rebate cemented in Integrated Resource Plan (Nersa will be compelled to make adequate rebates available in the future) -Confidential-

  41. Programme 4: Associated Services -Confidential-

  42. END….. -Confidential- 42

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