Energy Strategic Plan - Promoting Sustainable Use of Energy Resources

1. ENERGY STRATEGIC PLAN – 2006/7 MTEF AND DME SKILLS DEVELOPMENT PROGRAMME

2. TEAM Adv S Nogxina – Director General Mr H Gumede – Chief Director: Hydrocarbons Mr T Maqubela – Chief Director: Nuclear Mr G Mnguni – Chief Director: Management Services Mr T Nell – Director: Office of the Director General Ms N Maphokga- Moripe – Director: Gender Empowerment Ms S Makhoba – Chairperson of DME Gender Desk Mr A Otto – Director: Renewable Energy Mr J Raphela – Chief Director: Office of the Director General Ms T Zungu – Chief Compliance Officer

3. THE ENERGY BRANCH HYDROCARBONS AND ENERGY PLANNING Purpose: Promotion of sustainable use of energy resources through IEP Key focus areas: IEP Introduction of other forms of energy – phasing out of paraffin Implementation of policies – security of supply of liquid fuels Strategic stock policy Increase in renewable energy

4. THE ENERGY BRANCH ELECTRICITY AND NUCLEAR Purpose: Development, monitoring and implementation of policies and legislation governing the electricity and nuclear sectors. Key focus areas: Security and diversity of supply Effective electricity distribution Universal access to electricity Implementation of radioactive waste management Development of nuclear energy policy

5. Hydrocarbons 5 Year Plan Hydrocarbons 5 Year Programmes Operational Energy Information and Petroleum Licensing Systems To govern the energy sector to be cleaner, safer and healthier Redressing Past Imbalances To contribute to sustainable development through energy interventions Implementation of Energy economic policies and legislation • Petroleum Licensing Business System • Low Smoke Domestic Fuels • Vehicle Fuels • LPG • TRANSFORMATION • Licensing framework • Procurement • INTERNATIONALLY COMPETITIVE ENERGY PRICES REGULATION • Petroleum Prod Act • Gas Act • Petroleum Pipelines Act • Energy Bill • National Energy Regulator Act Regulation and Enforcement of Certain Elements of Security of Supply Alignment of SOEs to Government Policy • Coal Reserves and Resources • Security of energy supply • Strategic Oil stocks • Energy White Paper review • Gas infrastructure • Gas Trade Agreements

6. WHITE PAPER ON RENEWABLE ENERGY White Paper on Renewable Energy (approved by Cabinet in Nov 2003) spells out Government’s commitment to: Creating an enabling environment for a renewable energy industry in SA (both on and off-grid) Develop a biofuels industry in SA Supporting the implementation of specific technologies Ensuring uptake through the adoption of a target for renewable energy.

7. RENEWABLE ENERGY TARGET 10 000 GWh (0.8 Mtoe) renewable energy contribution to final energy consumption by 2013, to be produced mainly from biomass, wind, solar and small-scale hydro. The renewable energy is to be utilised for power generation and non-electric technologies such as solar water heating and bio-fuels. This is equivalent to replacing two (2x 660 MW) units of Eskom’s combined coal fired power stations. OR 1100 million litres of diesel (14%) replaced with biodiesel. This is in addition to the estimated existing 8-9% renewable energy contribution mainly from feulwood and waste. More efficient and sustainable use of fuelwood and conversion of waste for power generation will add to the target.

8. RENEWABLE ENERGY STRATEGY MANDATE White Paper on Renewable Energy (Nov 2003) Way forward: “ A strategy on Renewable Energy will be developed, which will translate the goals, objectives and deliverables set out herein into a practical implementation plan”

9. ANTICIPATED BENEFITS OF MEETING THE RE STRATEGY A Macro-economic analysis of the RE target concluded that: The target is economically viable with government financial support and “green” funding (e.g CDM, “green premium) Achieving the target could add about 1667 MW new renewable energy capacity with, in comparison with coal-fired power stations,: a net impact of GDP as high as R1 071m per year, additional government revenue of R299m, additional income that would flow to low-income households as much as R128m, just over 20 000 new jobs would be created and water savings of 16.5m kilolitres which translates into R26.6m saving.

10. CURRENT STATUS OF FISCAL SUPPORT OF RE Once off capital grants to commercial projects (all renewable energy, including biofuels) R14.2 m over financial years 2005/6 to 2007/8 Tax incentive for biodiesel Currently 40% concession on general fuel levy Accelerated depreciation on assets from 4 to 3 years Environmental fiscal reform policy Under review by National Treasury but does not yet contain direct support for renewable energies (lost opportunity?)

11. RENEWABLE ENERGY STRATEGY DEVELOPMENT Two distinct strategies have been identified as key to the implementation of renewable energy - Large Grid-connected Renewable Energy Strategy - Biofuels Strategy Development.

12. LARGE GRID-CONNECTED RE TECHNOLOGY UPTAKE Strategy to support uptake of key grid-connected technologies such as: - sugarcane bagasse cogeneration - Small-scale hydro - Landfill gas power production - Solar water heating (energy efficiency) Strategy proposes introduction of top-up feed-in tariff to bridge cost gap: - Involves levy on electricity consumption (0.2 – 0.3 c/kWh) - Phased out scheme that supports critical mass development of technology and skills

13. LARGE GRID-CONNECTED RE TECHNOLOGY UPTAKE (cont) Strategy addresses market rules required to ensure free and equitable access to the national grid - pilot project underway to study potential of voluntary market for renewable energy.

14. BIOFUELS STRATEGY DEVELOPMENT Cabinet approved in December 2005 the establishment of a task team to develop biofuels strategy - Task team convened by the Minister of Minerals and Energy - Representation from key departments involved in biofuels - Working Groups established to provide key input to strategy development – led by relevant department - CEF (PTY) Ltd and IDC tasked to investigate investment in commercial projects that support strategy development Strategy focuses on two major aspects - Job creation in the second economy - Development of an immediate market for biofuels in the formal economy

15. BIOFUELS STRATEGY DEVELOPMENT (cont) Timelines: - Compilation of relevant literature and pricing model development – June 2006 - Presentation to Cabinet Lekgotla in July 2006 - Submission to Cabinet in October 2006.

16. OBJECTS OF THE NATIONAL ENERGY BILL Draft Energy Bill (2006) makes provision for: - establishment of the National Energy Advisory Committee - establishment of the National Energy Data Base and Information System - integrated energy planning function - renewable energy and energy efficiency matters - energy safety, health and environmental matters - energy access by households - international energy obligations - energy research

17. ENERGY BILL STATUS Draft Bill was circulated as per Cabinet request to key stakeholders for comment in 2004 - substantive comments received - Bill Revised accordingly Resubmit Bill to Cabinet in June/July 2006 - request approval to go out for public comment

18. NUCLEAR FRAMEWORK ISSUES Continue training of personnel - Internship Programme at DME and Associated Institutions - Monitor enrolment in universities - Host training programmes by the IAEA including WITS RP course for the African region.

19. NUCLEAR POLICY ISSUES Development of a Nuclear Energy Policy - Address position on Nuclear Fuel Cycle - Conduct feasibility studies on potential uranium beneficiation projects Address issues on future Nuclear Build Review the Governance Framework

20. INTERNATIONAL CO-OPERATION Key for any Development of Nuclear Infrastructure and Security of Nuclear Supply. Agreements under negotiation: - Argentina - Turkey - United States - South Korea - People’s Republic of China

21. PBMR Governance of the PBMR is through the Department of Public Enterprises Success of the PBMR is key to ensuring security of Nuclear Energy Supply The NNR is awaiting the Safety Analysis Report due January 2007 The PBMR Company still confident of Construction in 2007.

22. NUCLEAR NON-PROLIFERATION Strengthening of the Nuclear Non Proliferation Regime. - Regulatory Framework is adequate - Improve enforcement - Enhance coordination with other stakeholders – Law enforcement agencies and the Customs and Border Control – Commodity identification training to be provided - Acquire new analytical tools.

23. SKILLS DEVELOPMENT A number of initiatives are underway: - WITS-International Atomic Energy Agency (IAEA) Radiation Protection Course currently running Feb to July - MSc Programmes in Nuclear Engineering and Nuclear Technology at North West University - Around 60 students enrolled for Nuclear Sector pipeline in universities.

24. THE ELECTRICITY SCENE “Blackouts” and “brownouts” - Used to be mainly with municipalities - Now also Eskom transmission (Western Cape) Recovery plan in place for Western Cape winter of 2006 - Koeberg contingency plan in place - Rotor installed and loaded (Eskom) - Other Eskom initiatives involve LP Gas distribution to shift load Improve regulatory environment - Electricity Regulation Act operational from July 2006 - New licensing framework - Quality of supply norms and standards - Penalty provisions in the event of breach of licence conditions

25. THE ELECTRICITY SCENE (cont) Legislation still outstanding: - EDI Restructuring Bill still has to go to Cabinet for approval will provide a framework for RED formation still a voluntary process: Constitution - Dual regulation in terms of the Electricity Regulation Second Amendment Bill, dealing with Sec 75 issues - Completes the regulatory and structural form of the distribution industry.

26. REDS FORMATION PROCESS Considers two options relating to formation of National RED as per Cabinet decision of September 2006 Option 1: anchor using Eskom Distribution in 3 phased approach Option 2: new entity which is then populated by business transfers . - Factors in comments from stakeholders - Keeps restructuring objectives in check - Provides for Cabinet Memo with recommendations Resolution of policy/parking lot issue Mandate for implementation

27. REDS FORMATION PROCESS (cont) Information dissemination After Cabinet decision is finalised. - Provincial energy forums - NEDLAC - Directly with municipalities as requested - Communication strategy

28. ELECTRIFICATION Challenges - Universal access - Funding: need extra R1 billion per annum - Skills capacity related to accelerated program for 2012 - Also opportunity for job creation: Expanded Public Works

29. NEW GENERATION CAPACITY Recall that Cabinet decision requires: - Eskom to do 70% of new generation - Independent Power Producers (IPP) will do 30% Progress regarding IPP project - Five companies pre-qualified to bid - Tender issued in March 2006 - Tender closes September 2006 - Commissioning expected before winter 2009. New generation will be rolled out on basis of investment plan below between Eskom and IPPs.

30. Installed Capacity Plan 4

31. NEW GENERATION CAPACITY

32. DME SKILLS DEVELOPMENT PLAN SKILLS DEVELOPMENT INTERVENTIONS

33. SKILLS DEVELOPMENT INTERVENTIONS • HRDMaster Plan for the Minerals and Human Energy Sectors; • Malaysian Scholarship • Internship Programme • The Presidential Strategic Leadership and Development Programme • Bursaries, Mentorship and Coaching Programmes • Petrad (Norway)Liquid Fuels Training Programme • Electricity Regulatory Initiative • Masters in International Technologyand Innovation; • DaVINCI Project Management Development Programme 2004; • Women in Nuclear Training; • Learnership Development Programme (Inspectors &Project Management for other Staff Members) ; • Various Training Programmes in Line with the Workplace Skills Plan; • Sasol Sponsorship Programme; • Anglo Gold Ashanti MDP

34. HRD MASTER PLAN FOR THE MINERALS AND ENERGY SECTORS • HRD MASTER PLAN DEVELOPED AND FINALISED DURING 2005. • THIS IS A DEPARTMENTAL STRATEGY THAT AIMS AT ADDRESSING THE SHORTAGE OF THE MUCH NEEDED SKILLS WITHIN THE MINERALS AND ENERGY SECTORS. • THE PLAN WAS DEVELOPED BY A TEAM OF PARTICIPANTS FROM THE DME,SETAS AND ASSOCIATED INSTITUTIONS. • THIS A LEAVING DOCUMENT THAT WILL CONTINUOUSLY BE SUBJECTED TO CHANGES AS DETERMINED BY OUR NEEDS • THE PLAN WILL BE LAUNCHED IN JULY 2006.

35. MALAYSIAN SCHORLASHIP PROGRAMME • THE PROGRAMME COMMENCED IN 1999 AS A JOINT VENTURE BETWEEN DME AND THE MALAYSIAN GOVERNMENT. • THE TARGET GROUP IS MATRICULANTS WHO INTEND TO STUDY ENGINEERING AND IT/IS FIELDS. • THERE ARE TEN STUDENTS PER INTAKE EVERY YEAR . • THESE STUDENTS ARE REGISTERED WITH UNIVERSITY TEKNOLOGY PETRONAS IN MALAYSIA.

36. MALAYSIAN SCHORLASHIP PROGRAMME Cont… • IN TOTAL SEVEN-TEEN HAVE GRADUATED FORM THE PROGRAMME AND ARE ALL EMPLOYED • PETROSA HAS EMPLOYED TEN ;DME ONE,ESKOM ONE;PUBLIC WORKS ONE;MURRAY AND ROBERTS ONE AND THREE ARE SELF EMPLOYED • CURRENTLY THERE ARE THIRTY-SEVEN STUDENTS REGISTERED AT THE UNIVERSITY AND TEN OF THEM ARE FEMALES

37. PROVINCIAL STUDENT DISTRIBUTTION ON THE PROGRAMME

38. INTERNSHIP PROGRAMME StatusNumber • Total Interns 222 (Since inception ) • Interns absorbed permanently by DME 34 • Interns absorbed on contract at DME 23 • Interns offered employment elsewhere 36 • Interns in the system as at 30 March 2005 158

39. BURSARY SCHEME; MENTORSHIP AND COACHING PROGRAMME • THE DEPARTMENT HAS ALSO DEVELOPED A BURSARY POLICY WITHIN THE FRAMEWORK OF THE PUBLIC SERVICE BURSARY SCHEME; • THERE ARE CURRENTLY 228 BURSARY HOLDERS WHO ARE REGISTERED WITH VARIOUS UNIVERSITIES FOR CAREERS THAT ARE RELEVANT TO THEIR AREAS OF WORK; • SIXTY-FOUR EMPLOYEES ARE CURRENTLY PARTICIPATING ON THE MENTORSHIP AND COACHING PROGRAMME

40. PRESIDENTIAL STRATEGIC LEADERSHIP AND DEVELOPMENT PROGRAMME • THIS IS A HIGH LEVEL AND ACCREDITED PROGRAMME THAT WAS INITALLY DEVELOPED FOR DIRECTORS-GENERAL; • DUE TO TIME CONSTRAINTS ON THE PART OF DGs FOR THE ATTENDANCE OF THE PROGRAMME A DECISION WAS TAKEN TO ALLOW OTHER SENIOR MANGERS TO ATTEND; • THE PROGRAMME IS MODULAR-BASED AND IN LINE WITH THE KEY MANEGERIAL COMPETENCIES WITIN THE PUBLIC SERVICE; AND • SEVENTEEN SENIOR MANAGERS AT CHIEF DIRECTOR AND DIRECTOR LEVELS HAVE ALREADY GRADUATED AT THE UNIVERSITY OF POTCHEFSTROOM.

41. LIQUID FUELS TRAINING PROGRAMME AND THE ELECTRICITY REGULATORY INITIATIVE • THE LIQUID FUELS TRAINING PROGRAMME IS OFFERED AT PETRAD UNIVERSITY IN NORWAY • TWO OF DME EMPLOYEES HAVE ALREADY COMPLETED THE PROGRAMME; • AN INVITATION FOR FURTHER NOMINATIONS FOR THE PROGRAMME IS STILL AWAITED . • THE ELECTRICITY REGULATORY PROGRAMME IS OFFERED IN OSLO WITH AN INTAKE OF THREE PARTICIPANTS PER ANNUM • THE PROGAMME IS AIMED AT BUILDING CAPACITY WITHIN THE ELECTRICITY SECTOR.

42. MASTERS DEGREE IN INTERNATIONAL TECHNOLOGY AND INNOVATION • THE DEGREE IS PROJECT MANAGEMENT ORIENTED WITHIN THE PRACTICAL WORK ENVIRONMENT • IT IS OFFERED THROUGH DaVINCI SCHOOL OF MANAGEMENT • TWO DME EMPLOYEES HAVE REGISTERD FOR THE PROGRAMME AND ONLY ONE HAS COMPLETED

43. NUCLEAR TRAINING PROGRAMME • THERE ARE SIXTY STUDENTS AT VARIOUS TERTIARY INSTITUTIONS, IN SOUTH AFRICA AND ABROAD • STUDIES FOCUSING ON PHYSICS, CHEMISTRY AND VARIOUS ENGINEEING FIELDS INCLUDING NUCLEAR ENGINEERING. • WE HAVE 9 MSc GRAUDATES AS INTERNS • 5 ARE PLACED WITHIN THE DME, AND 4 AT NNR

44. LEARNERSHIP DEVELOPMENT PROGRAMMES • TWO LEARNERSHIP PROGRAMMES HAVE BEEN DEVELOPED WITH A FOCUS ON : (a) Inspectors of Mines Mine Equipment = 9 participants Mining Engineering =6prticipants Occupational Hygiene = 4 participants Mine Survey =6 participants (b) Project Management. • ONE HUNDRED AND TEN TRAINEES ARE IN THE GRATUATE DEVELOPMENT PROGRAMME THAT IS BEING RUN IN PARTNERSHIP WITH MQA; • THIRTEEN PARTICIPANTS ARE CURRENTLY ON THE PROJECT MANAGEMENT LEARNERSHIP

45. SASOL SPONSORSHIP PROGRAMME • THE PROGRAMME CAME ABOUT AS A CONTRIBUTION BY SASOL TO THE DEPARTMENTAL SKILLS DEVELOPMENT INITIATIVE WITHIN THE LIQUID FUELS SECTOR; • THE SPONSORSHIP PROGRAMME ALLOWS FOR FIVE PARTICIPANTS AT DIFERRENT LEVELS OF STUDIES • TWO PARTICIPANTS WILL BE FROM WITHIN THE DEPARTMENT WHO WILL BE REGISTERED FOR SENIOR DEGREES • THREE WILL BE SELECTED FROM DESERVING MATRICULANTS WHO INTEND REGISTERING FOR JUNIOR DEGREES IN THE LIQUID FUELS SECTOR • THE SPONSORSHIP WILL COMMENCE DURING 2006

46. SASOL SPONSORSHIP AND THE ANGLO ASHANTI DEVELOPMENT PROGAMMES • THE PROGRAMME CAME ABOUT AS A CONTRIBUTION BY SASOL TO THE DEPARTMENTAL SKILLS DEVELOPMENT INITIATIVE WITHIN THE LIQUID FUELS SECTOR; • THE SPONSORSHIP PROGRAMME ALLOWS FOR FIVE PARTICIPANTS AT DIFERRENT LEVELS OF STUDIES • TWO PARTICIPANTS WILL BE FROM WITHIN THE DEPARTMENT WHO WILL BE REGISTERED FOR SENIOR DEGREES • THREE WILL BE SELECTED FROM DESERVING MATRICULANTS WHO INTEND REGISTERING FOR JUNIOR DEGREES IN THE LIQUID FUELS SECTOR • THE SPONSORSHIP WILL COMMENCE DURING 2006 • FOUR DME EMPLOYEES ARE PARTICIPATING IN A MANAGEMENT DEVELOPMENT PROGAMME SPONSORED BY ANGLO ASHANTI • THEY ARE ALL REGISTERED AT THE UNIVERSITY OF WESTERN CAPE

47. PROGRAMMES IN LINE WITH THE WORKPLACE SKILLS PLAN(ONLY FOR INFORMATION) Generic Training Courses • Computer Courses (Ms Word, Ms Excel, Ms Powerpoint, Ms Outlook, Ms Project and Ms Access) • Project Management • Financial Management • PFMA and Budgeting • Service Delivery • Change Management • Office Administration • Effective Writing • Time Management • Management and Leadership • Mentorship and Coaching • Information and Record Management • HIV and AIDS Programme • Records Management

48. PROGRAMMES IN LINE WITH THE WORKPLACE SKILLS PLAN(ONLY FOR INFORMATION) Line Function Training • Electrical Engineering Mine Seismology • Economic Analysis Supply Chain Management • Mechanical Engineering Asset Management • Environmental management Skills Development Facilitation • Mining and Energy Legislation PERSAL courses • Energy Economics Contract Law • Simulation Safe Surface Mines • Rough Diamond Grading Hygienist Course • Accident Investigation Ecology Course • Basic Electricity Database Design • Land/Quantity Surveyor Environment Finance • Gas Testing Internal Auditing • Petroleum Management Risk Management • Mine Managers Certificate Mine Oversee Course • Policy Development Evaluation of Mine Pillars

49. THANK YOU