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SANEDI strategic 5-year plan

SANEDI strategic 5-year plan. 2012/13 – 2016/17 Final. A corporation established under Section 7 of the National Energy Act, 2008 (Act No. 34 of 2008). e nergy development and planning context. 1.

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SANEDI strategic 5-year plan

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  1. SANEDI strategic 5-year plan 2012/13 – 2016/17 Final A corporation established under Section 7 of the National Energy Act, 2008 (Act No. 34 of 2008)

  2. energy development and planning context 1

  3. The transition to a low-carbon economy is globally recognised as a competitive and development priority, but with the understanding that this will require far-reaching changes in technology, finance, policy and societal behaviour.

  4. South Africa also requires urgent solutions for sustainable energy supply and economic development 2024 Plateau commitment for carbon emissions. 275 Mt CO2 (50%) ‘owned’ by energy sector (IRP 2010) 2020 Planning horizon current capacity expansion programme (IRP 2010) 2020 New Growth Path target for 5 million jobs and 15% less unemployment 2035 Decline commitment for carbon emissions NGP: Job creation 275 Mt CO2 ‘owned’ by energy sector (IRP 2010) COP 17, National EE Strategy Review process, IEP (date) IRP 2020 + 34% emission reduction commitment (Copenhagen) 2025: 42 % emission reduction commitment (Copenhagen) RE White paper Target date EE Strategy Target date 2024: LTMS 550Mt CO2 ‘cap’ 275 Mt CO2 to be allocated to remainder of economic sectors IRP 2012 IRP 2014 IRP 2016 IRP 2018 2040 2030 2035 2020 2011 2015 2025 LTMS: Peak LTMS: Plateau LTMS: Decline Time (years) and prominent milestones in the energy policy and climate mitigation landscape South African Energy Development Institute

  5. SANEDI incorporates two key building blocks of sustainable energy solutions and a low carbon economy energy conservation energy innovation South African Energy Development Institute

  6. vision, mission and mandate 2

  7. To serveas a catalyst for sustainable energy innovation, transformationand technology diffusionin support of South Africa’s sustainable development that benefits our nation. vision South African Energy Development Institute

  8. Advance innovation of clean energy solutions and rational energy use that effectively supports South Africa’s national energy mandate and transitiontowards a sustainable, low carbon energy future. mission South African Energy Development Institute

  9. The National Energy Act, 2008 (Act No. 34 of 2008), Section 7 (2)provides for SANEDIto direct, monitor and conduct energy research and developmentas well as undertake measures to promote energy efficiency throughout the economy. mandate South African Energy Development Institute

  10. the south african energy development institute’s strategic contribution 3

  11. SANEDI’s role and goals have been defined in direct support of the energy policy and climate mitigation landscape 3.) Foster a culture of greater efficiency and more rational use of energy Job creation targets 2.) Accelerated transformation to a less energy and carbon intensive economy 1.) Enable well Informed and high confidence energy planning, decision-making and policy development. 275 Mt CO2 ‘owned’ by energy sector (IRP 2010) COP 17, National EE Strategy Review process, IEP 9date) IRP 2020 + 34% emission reduction commitment (Copenhagen Pledge) 2025: 42 % emission reduction commitment (Copenhagen) RE White paper Target date EE Strategy Target date 2024: LTMS 550Mt CO2 ‘cap’ 275 Mt CO2 to be allocated to remainder of economic sectors IRP 2012 IRP 2014 IRP 2016 IRP 2018 2040 2030 2035 2011 2015 2020 2025 LTMS: Peak LTMS: Plateau LTMS: Decline Time (years) and prominent milestones in the energy policy and climate mitigation landscape South African Energy Development Institute

  12. 3 strategic orientated goals have been identified for realising SANEDI’s vision Strategic outcome orientated goal 1 Strategic outcome orientated goal 2 Strategic outcome orientated goal 3 Enable well Informed and high confidence energy planning, decision-making and policy development Accelerated transformation to a less energy and carbon intensive economy Foster a culture of greater efficiency and more rational use of energy Develop a technical knowledge base of cost effective, proven (low risk) alternative, clean energy solutions and technologies to (1) adequately inform energy planning, policy development and decision-making and (2) enable the country’s transition to a competitive, low carbon economy within the relevant planning horizon*. Actively stimulate ‘green’ energy industry development, capacity building, skills development and job creation to support the immediate concern of job scarcity and also support economic development and the critical transformation of the South African economic structure/activities to less energy and carbon intensive activities during the transition period identified by national commitments*. Actively influence consumer consciousness and behaviour to improve the energy-efficiency of existing economic activity and energy consumption by 10% during the short-term (period of supply constraints) and to contribute to achieving a energy resource efficient society (described by energy intensity levels on par with international benchmarks) in the medium to long term (2020). South African Energy Development Institute

  13. Incorporating 6 priority programmes that were defined in support of these goals Strategic outcome orientated goal 1 Strategic outcome orientated goal 2 Strategic outcome orientated goal 3 Enable well Informed and high confidence energy planning, decision-making and policy development Accelerated transformation to a less energy and carbon intensive economy Foster a culture of greater efficiency and more rational use of energy Programme 1: Applied energy research Programme3: Low energy and carbon intensity innovation cultivation Programme6: Energy efficiency programme Programme2: Data and knowledge management Programme4: Green industry capacity building and development Programme5: Working for energy programme South African Energy Development Institute

  14. The programmes also align with the 2 main focus areas identified by the SANEDI business case Energy Efficiency Focus Energy Research and Development Focus Programme 1: Applied energy research ✔ Programme2: Data and knowledge management ✔ ✔ Programme3: Low energy and carbon intensity innovation cultivation ✔ ✔ Programme4: Green industry capacity building and development ✔ ✔ Programme5: Working for energy programme ✔ ✔ Programme6: Energy efficiency programme ✔ South African Energy Development Institute

  15. …and aim to directly support the priorities of the Department of Energy Minister’s KPIs (Government Outcomes), 27 May 2011) Departmental Programmes(5-year Strategic Plan 2011/12 - 2015/16) Programme 1: Applied energy research ✔ ✔ ✔ ✔ Programme2: Data and knowledge management ✔ ✔ ✔ Programme3: Low energy and carbon intensity innovation cultivation ✔ ✔ Programme4: Green industry capacity building and development ✔ ✔ ✔ Programme5: Working for energy programme ✔ ✔ Programme6: Energy efficiency programme ✔ ✔ Programme 2 (Hydrocarbons and Energy Planning): Integrated energy planning to promote the sustainable use of energy resources by developing appropriate policies and regulations that promote the efficient use of petroleum products, coal, gas and renewable energy sources; Programme 3 (Electricity, Nuclear and Clean Energy): Monitor developments in the electricity, nuclear and clean energy sectors. Improve and implement appropriate policies governing these sectors. Promte universal access to electricity by the broader South African Population.; OUTCOME 6: An efficient, competitive and responsive economic infrastructure network; OUTCOME 10: Environmental assets and natural resources that are well protected and continually enhanced South African Energy Development Institute

  16. These specific programmes were prioritised because of their contribution to reducing the carbon intensity of the economy CO2 intensity of the economy Energy intensity CO2 intensity of energy supply = × • Improved energy efficiency • Optimal energy application / rational use of energy • Green industry growth (shift away from energy intensive activities) • Advanced metering (smart grids and infrastructure) • Increased reliance on renewable / clean energy • Mitigation of CO2 from existing sources • Transportation fuels with higher biogenic content • Optimal supply infrastructure (smart grids) The result of a combination of efforts South African Energy Development Institute

  17. SMART strategic objectives describe the outputs expected from the programmes (…1) Programme 1: Applied energy research Strategic Objective 1.1: Knowledge creation in the energy sector in support of policy directionDevelop a portfolio of demonstrable, cost-effective, sustainable energy options with an emissions intensity of less than 40 gCO2/MJ that have the potential to increase the low carbon content of the South African energy mix by 5% (225 million GJ/a) by 2020) . Strategic Objective 1.2: Intelligent energy systems infrastructure Finalise an accepted, comprehensive National Smart Grid 2030 vision with tangible system benefits, and define SANEDI’s role and mandate towards realising this vision by 2012. Suggested contributions may be structured as: a 20% reduction in South Africa’s electricity peak demand, 100% system availability for critical loads, 40% improvement in system efficiency and asset utilization (to achieve a load factor of 70%) and incorporate 9% electricity capacity from distributed and renewable energy sources. Strategic Objective 1.3: Optimised energy research investments Consolidate energy related public spend for research and innovation and pursue increased overall energy research investments (nationally and internationally) to correspond with the goal of 1,5% of GDP (R5.6bn/annum for the energy sector) by 2014 of which 30% (R1 864 800 000/annum) (i.e. 0.5% of GDP for the energy sector) to be invested from public funds. Programme2: Data and knowledge management Programme3: Low energy and carbon intensity innovation cultivation Programme4: Green industry capacity building and development Programme5: Working for energy programme Programme6: Energy efficiency programme South African Energy Development Institute

  18. SMART strategic objectives describe the outputs expected from the programmes (…2) Programme 1: Applied energy research Strategic Objective 2.1: Establishment of a Technology Management CentreEstablish a highly competent, independent technology management centre by 2017 that can adequately support energy related analysis and decision-making and tracking of progress indicators towards a low carbon economy (refer equation A, Section 8 of this plan) Strategic Objective 2.2: Develop and maintain a comprehensive, central data repository with high quality data relating to the areas of SANEDIs focus Compilation and maintenance of a credible and current energy dataset to the adopted IEA standard at an adequate level of disaggregation for the areas and indicators directly under SANEDIs influence (Energy Efficiency, Renewable Energy, Clean Carbon Technology and Clean Oil and Gas, Carbon Capture and Storage, Smart grids, Working for Energy, Tax incentives) by 2013 and thereafter maintain as current and continue to develop in response to national requirements. Strategic Objective 2.3: Enhanced access to energy information and knowledge Provide appropriate (in a suitably controlled manner to protect confidentiality commitments) access and disseminate available energy data to a broad range of users as soon as possible and sustained over the planning horizon. Programme2: Data and knowledge management Programme3: Low energy and carbon intensity innovation cultivation Programme4: Green industry capacity building and development Programme5: Working for energy programme Programme6: Energy efficiency programme South African Energy Development Institute

  19. SMART strategic objectives describe the outputs expected from the programmes (…3) Programme 1: Applied energy research Strategic Objective 3.1: Increase the share of demonstration and commercialisation phase projects in SANEDI’s portfolio Increase the focus on innovation and demonstration by increasing the share of projects in the portfolio that are in the Demonstration and Commercialisation phase to 40% (currently 32% of the portfolio by number of projects and spend) by 2017. Strategic Objective 3.2: Facilitate technology innovation progress to commercialisation Transfer one fully-fledged, commercially viable concept for every R500 million spent on Research and Development to TIA or EDC or similar for active business incubation and deployment. Programme2: Data and knowledge management Programme3: Low energy and carbon intensity innovation cultivation Programme4: Green industry capacity building and development Programme5: Working for energy programme Programme6: Energy efficiency programme South African Energy Development Institute

  20. SMART strategic objectives describe the outputs expected from the programmes (…4) Programme 1: Applied energy research Strategic Objective 4.1: Growing the pool of active and productive researchers, technicians and support staffActively contribute to strengthening research leadership and capacity and contribute to job creation and skills development by creating 100 additional research positions (i.e. ~25% increase for the sector) (including research chairs, assistant research chairs, fellowships as well as internal research positions) by 2017. Strategic Objective 4.2: Facilitate the development of a skilled workforce that meets the needs of the changing economy Mobilise and coordinate an industry-wide skills development initiative (which should include, amongst others, establishment of a reference and support group for green jobs and skills and a key occupations review process) for energy efficiency and renewable energies that leverages and complements existing frameworks and structures and resolve identified gaps. Strategic Objective 4.3: Promote job creation through innovation Deliver at least 1 permanent employment position for every R1,5 million spent on technology innovation (demonstration and commercialisation innovation stages) until 2017. Programme2: Data and knowledge management Programme3: Low energy and carbon intensity innovation cultivation Programme4: Green industry capacity building and development Programme5: Working for energy programme Programme6: Energy efficiency programme South African Energy Development Institute

  21. SMART strategic objectives describe the outputs expected from the programmes (…5) Programme 1: Applied energy research Strategic Objective 5.1: Demonstrated increase in employment levels within participating communities.Create 400 new full time employment opportunities and 120 000 person days of temporary employment during the five years until 2017 and hence contribute 0.01% (equivalent to 500 new jobs) towards the 5 million new jobs by 2020 targeted by the new growth path. Strategic Objective 5.2: Rural clean energy production and provision Establish clean energy and electricity production/generation and supply facilities equivalent to 5MWp and 25 GWh/a within (rural) communities by 2017 with all associated economic, social and sustainability benefits. Strategic Objective 5.3: Demonstrated Energy Management opportunities Develop and demonstrate the rural application of energy efficiency technologies to deliver energy savings of 0.5 MW and 1.5 GWh/a by 2017 with all associated economic and environmental benefits. Programme2: Data and knowledge management Programme3: Low energy and carbon intensity innovation cultivation Programme4: Green industry capacity building and development Programme5: Working for energy programme Programme6: Energy efficiency programme South African Energy Development Institute

  22. SMART strategic objectives describe the outputs expected from the programmes (…6) Programme 1: Applied energy research Strategic Objective 6.1: Establish NEEA as National Champion for Energy Efficiency Define NEEA’s role to play a central role and for an optimal impact on South Africa’s energy culture; develop and implement a plan for NEEA to transition into fulfilling this role comprehensively by 2017. Strategic Objective 6.2: Energy Efficiency improvements in Public Facilities Target an annual reduction in energy consumption by 250 GWh and GHG emissions by 250 tCO2e in public facilities by 2017. Strategic Objective 6.3: Create large-scale awareness of energy efficiency and market demand for energy efficient and green technologies Improve general awareness levels** across all sectors by 5% by 2015 relative to 2012 (in support of equation A, term 1, Section 8 of this plan). **define awareness scope i.e. recognition of the need to save energy, how to save energy, etc. Strategic Objective 6.4: Create market demand for energy efficient and green technologies Achieve a 10% real increase (over and above existing trends) in sales of energy efficient and green technologies by 2017. Strategic Objective 6.5: Support the Income Tax Amendment Act section 12i and 12 l relating to the tax rebate for energy efficiency improvements Establish the capacity to support the certification of energy savings for tax reduction claims . Strategic objective 6.6: Management of the EEDSM hub and oversight of transition of Hub to CORD Continue the Energy Efficiency Hub initiative to strengthen energy related researches, human capacity development, and market transformation and enterprise development initiatives Programme2: Data and knowledge management Programme3: Low energy and carbon intensity innovation cultivation Programme4: Green industry capacity building and development Programme5: Working for energy programme Programme6: Energy efficiency programme South African Energy Development Institute

  23. Linking SANEDI strategy to climate change response strategy 4

  24. Further Urgency: Climate Change Response Strategy requires detailed plans completed within 2 years of Strategy publication The strategy quantifies energy generation alone to produce around 40% of GHG emissions in South Africa (vs 50% for which the IRP 2010 took responsibility) 2024 Plateau commitment for carbon emissions. 275 Mt CO2 (50%) ‘owned’ by energy sector (IRP 2010) Climate Change Response Strategy detail plans ready Within 2 years of publication of Strategy 2020 Planning horizon current capacity expansion programme (IRP 2010) 2020 New Growth Path target for 5 million jobs and 15% less unemployment 2035 Decline commitment for carbon emissions NGP: Job creation • Plans to be completed within 2 years after the publication on the Climate Change Response Strategy includes: • 10 year Global Change Research Plan for South Africa. • Strategy to continuously update and maintain the South African Risk and Vulnerability Atlas (SARVA). • A methodology to downscale climate information and comprehensive impact assessments to provinces and municipalities. • Roll-out of downscaling methodology with appropriate M&V safeguards. • Ensure all National Communications submitted as part of UNFCCC commitments contain the most up to date modeling results and risk and impact assessments. 275 Mt CO2‘owned’ by energy sector (IRP 2010) COP 17, National EE Strategy Review process, IEP (date) IRP 2020 + 34% emission reduction commitment (Copenhagen) 2025: 42 % emission reduction commitment (Copenhagen) RE White paper Target date EE Strategy Target date 2024: LTMS 550Mt CO2‘cap’ 275 Mt CO2 to be allocated to remainder of economic sectors IRP 2012 IRP 2014 IRP 2016 IRP 2018 2040 2030 2035 2020 2011 2015 2025 LTMS: Peak LTMS: Plateau LTMS: Decline Time (years) and prominent milestones in the energy policy and climate mitigation landscape 1/4/2020 South African Energy Development Institute South African Energy Development Institute 25

  25. Climate Change Response Strategy Objectives and Key Elements Objective 1: Make a fair contribution to the global effort to stabilise GHG concentrations in the atmosphere at a level that avoids dangerous anthropogenic interference with the climate system within a timeframe that enables economic social and environmental development to proceed in a sustainable manner. Key Element 1 - Setting the Performance Benchmark: Using a National GHG Emissions Trajectory Range to measure the collective outcome of all mitigation actions will be measured. Key Element 2 - Identifying desired sectoral mitigation contributions: Defining desired emission reduction outcomes for each significant sector and sub-sector of the economy based on mitigation potential and options, science, evidence and cost and benefits assessment. Key Element 3 - Defining Carbon Budgets for significant GHG emitting sectors and/or sub-sectors: Adopting a carbon budget approach to provide flexibility and least-cost mechanisms for companies at company level desired emission reduction outcomes. Key Element 4 - Mitigation Plans: Requiring companies and economic sectors or sub-sectors to prepare and submit mitigation plans to achieve the desired emission reduction outcomes. Objective 2: Effectively manage inevitable climate change impacts through interventions that build and sustain South Africa’s social, economic and environmental resilience and emergency response capacity. Key Element 5 - The use of different types of mitigation approaches, policies, measures and actions: Developing and implementing a wide range and mix of approaches, policies, measures and actions that optimise outcomes, job creation and other sustainable developmental benefits. Key Element 6 - Using the Market: The deployment of a range of economic instruments to support the system of desired emissions reduction outcomes, including pricing of carbon and economic incentives, use of emissions offset or emission reduction trading mechanisms. 1/4/2020 Key Element 7 - Monitoring and Evaluation: A national system of data collection to provide detailed, complete, accurate and up-to-date emissions data in the form of a GHG Inventory and a Monitoring and Evaluation System. 26 South African Energy Development Institute South African Energy Development Institute

  26. Linking Climate Change Response Strategy Key Elements with SANEDI Strategic 5-year plan priority programmes Climate Change Response Strategy SANEDI Strategic 5-year plan Goal 1: Enable well Informed and high confidence energy planning, decision-making and policy development Key Element 1: Setting the Performance Benchmark Programme 1: Applied energy research Key Element 2: Identifying desired sectoral mitigation contributions Programme 2: Data and knowledge management Key Element 3: Defining Carbon Budgets for significant GHG emitting sectors and/or sub-sectors Goal 2: Accelerated transformation to a less energy and carbon intensive economy Key Element 4: Mitigation Plans Programme 3: Low energy and carbon intensity innovation cultivation Programme 4: Green industry capacity building and development Key Element 5: The use of different types of mitigation approaches, policies, measures and actions Programme 5: Working for energy programme Key Element 6: Using the Market Goal 3: Foster a culture of greater efficiency and more rational use of energy Key Element 7: Monitoring and Evaluation Programme 6: Energy efficiency programme 27 South African Energy Development Institute South African Energy Development Institute 1/4/2020

  27. SANEDI’s programmes directly support the mitigation plans and approaches identified in the Climate Change Response Plan SANEDI PROGRAMMES Programme 1: Applied energy research Programme 3: Low energy and carbon intensity innovation cultivation Programme 5: Working for energy programme Programme 2: Data and knowledge management Programme 4: Green industry capacity building and development Programme 6: Energy efficiency programme PRIORITY MITIGATION OPTIONS (identified and listed in Section 6.3 of Climate Change Response Plan) Option 1: Shifting to lower-carbon electricity generation options RE part of Programme Clean energy solutions + carbon capture and storage +smart grids Clean energy pilots and demonstration projects Small-scale RE solutions Option 2: Significant upscaling of energy efficiency applications EE part of Programme NEEA EE Hub + smart Grids Option 3: Promoting transport-related interventions Green transport +smart grids Green transport Option 4: Carbon capture and storage in the synthetic fuels industry Carbon Capture & Storage research Carbon Capture & Storage demonstration Option 5: mitigating non-energy emissions in agriculture and land-use Option 6: Transitioning society and economy to more sustainable consumption and production patterns. Smart grids Directly supported in SANEDI plan South African Energy Development Institute Directly supported in SANEDI plan

  28. SANEDI furthermore plays a leading role in three of the identified near-term priority flagship programmes 8.1 The Climate Change Response Public Works Flagship Programme Working for Energy 8.4 The Energy Efficiency and Energy Demand Side Management Flagship Programme NEEA and specifically the Public Buildings Energy Efficiency Programme 8.7 The Carbon Capture and Sequestration Flagship Programme SANERI’s Carbon Capture and Storage South African Energy Development Institute

  29. financing the strategic plan 5

  30. 3 operation scenarios where considered for SANEDI, each with specific investment requirements, however scenario 4 is what has emerged by default and not by design Scenario 3: Scenario 4 Scenario 1 Scenario 2 Rapid transition and full operationalisation as independent entity with programme implementation in parallel Rapid transition and full operationalisation as independent entity with skeleton programme only Focussedprogramme implementation with gradual transition to independence SANEDI in survival mode Year 1 2012/13 R 255 192 831 R 154 712 387 R 136 579 179 R 50 110 000 Total 5 year budget 2012/13 – 2016/17 R 2 794 851 532 R1 578 334 991 R 2 768 474 563 R 264 193 372 South African Energy Development Institute

  31. In addition to cost considerations, each scenario also has associated delivery implications Scenario 4: Scenario 3: Scenario 1: Scenario 2 Rapid transition and full operationalisation as independent entity with programme implementation in parallel Focussedprogramme implementation with gradual transition to independence Rapid transition and full operationalisation as independent entity with skeleton programme only SANEDI in survival mode Benefits • Full programme benefits and contribution achieved (as per this plan) • Rapid establishment of SANEDI as independent entity • The budget requirement for year 1 is less onerous than scenario 1 • Full programme benefits and contribution can be achieved • Financial commitment for year 1 is reduced • SANEDI sustained until funding is made available Considerations • Programme benefits as presented in this plan moves out with one year • Opportunities may be lost • Synchronisation with IRP and other planning processes impeded • Existing and planned partnerships and initiatives may be at risk • Slow transition to independence • Significant financial commitment required. • Continuity of operation to receive priority attention • SANEDI is operating in survival mode • Keeping the lights burning South African Energy Development Institute

  32. thank you 6

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