The National Energy Bill

PPC presentation

25 March 2008Nhlanhla Gumede

Deputy Director General – Hydrocarbons & Energy Planning

The BillBackground

• Was first developed in 2003 to cover all EWP not covered that far

• Cabinet approved public consultation in 2004

• Widely consulted in 2004

• Withdrawn in 2006 to effect certain changes

• Focus now is largely energy security

BackgroundEnergy Security Framework

Energy security is not only about security of supply

Energy infrastructure

planning Energy security

Macro-economic

framework

Climate change (mitigation & adaptation)

Demand management

Standards & specifications

Foreign policy

Reserve margins

Diversity of supply

Import & Export

policies

Local production

Energy Research

Purpose of the Bill (1/3)Energy Security

• diverse energy resources, • in sustainable quantities, and • at affordable prices

are available to the South African economy, in support of…

• economic growth, • poverty alleviation,

taking into account environment management requirements and interactions amongst economic sectors.”

Energy security means “ensuring that…

Purpose of the Bill (2/3)Institutions

• To be responsible for the promotion of efficient generation and consumption of energy

• Energy modelling and planning• Increased generation and consumption of

renewable energies• Energy research• Contingency energy supply• Holding of strategic energy minerals stocks• Adequate investment in, appropriate upkeep and

equitable access to energy infrastructure

To establish institutions in support of the Bill …

Purpose of the Bill (3/3)Enabling provisions

• The furnishing of certain data and information regarding energy demand, supply and generation

• For all matters

To provide measures for

General guiding principlesEnergy Bill development

• The Energy Bill does not seek to replace existing institutions but to strengthen them– Energy, like water, is an economic integrator– “Energy is the lifeblood of energy economy”– Economic decisions made w/o consideration of

energy availability and price are problematic– Focuses on issues intended to strengthen

energy security– Like water & land, to operate more like the

competition law, in economic development matters (concurrency!)

– On data, the intention is to complement data collection and facilitate sharing

General Guiding Principles Establishment of Institutions

General Principles• Must act as advisory or executing agents for the Minister

on the mandate for which they were created• Avoid creating entities with conflicting mandates• Only take into account published Government principles• Not be driven by private agendas

Constitution of governance structures• May include representatives from industry as may be

prescribed by the Minister• May contain part-time members who are involved in the

overseeing and decision-making duties and full-time members who are involved in the day-to-day operations and management of the agency

The BillThe structure

• Ch 1:Definitions & Objects of the Act• Ch 2: Provision and access to Data • Ch 3: Energy Modelling and Agency• Ch 4: Integrated Energy Planning• Ch 5: Renewable Energy• Ch 6: Energy Efficiency• Ch 7: Energy Research• Ch 8: Security of supply• Ch 9: Energy Infrastructure• Ch 10: Regulations & penalties

The BillData, Safety, Health, Environment

Provision of Data• Mandatory provision of any data and information required for the

purposes of the energy modelling and planning

• Connection to any data and information management system, or any other system within (or outside) the public administration for the acquisition of energy data and information

Safety, Health & Environment• Programmes to minimise the negative safety, health and

environment impacts of energy carriers through the prescription of standards and specifications

Energy Access by Households• Programmes to provide for the universal access of appropriate

forms of energy to all South Africans at affordable prices

• Energy Related International Obligations

• Measures to give effect to the energy implications of international agreements entered into or ratified by the Republic

The BillIntegrated Energy Modelling & Planning

Drivers for change• Energy crisis show need for coordinated

planning– Liquid Fuels in 2005– Electricity in 2006, 2007 & current

• Disparate plans create potential for contradictory initiatives and activities

• No integrated or coordinated view of-– energy sector – impacts of the different plans

• The need for the ability to develop – numbers driven energy plans– a tool to evaluate proposed energy policies

The BillIntegrated Energy Modelling & Planning

• Provision of high-quality, policy-neutral energy information, in manner that promotes sound policymaking, efficient markets and public understanding, to– Cabinet– National, provincial & local governments– Markets (for efficient market operation)– Public (communication)

PlanningAn integrated planning approach to ensure that all the constituting elements are addressed in a coordinated manner

ModellingAn integrated energy modeling capability which would be instrumental in the development of energy plans and evaluation of options that are proposed by policy-makers

RequiresRequires

• Establishes an Integrated Energy Modelling Agency entity to– Collect, compile and analyse energy data, information– Publish reliable energy data, information & analyses

• daily, weekly and monthly energy reports• annual energy reviews• short and medium-term energy forecasts

– Analyse impact of proposed energy related programs, plans, policies and strategies

• Prepare reports on energy issues and legislation for Cabinet

• Prepare special analyses on energy issues and legislation for the Minister

• Prepare requested analysis for policy making departments

The BillIntegrated Energy Modelling & Planning

• Development of an annually reviewed and published Integrated Energy Master Plan– 30-year planning horizon– produced in an integrated and coordinated manner– based on Energy Security principles– informed by the output of the Energy Modelling

activities– informed by other plans from all demand, supply,

production sectors whose plans impact or are impacted by the Master Plan

The BillIntegrated Energy Modelling & Planning

The BillIntegrated Energy Modelling & Planning

Entity 1 Entity 2 Entity …Entity 3

Coordination

Entity… Entity n

Integrated Energy Planning

Policy,Options,Strategies

Otherfactors

Policy- Neutral Modelling

Government Departments

SOEs

ModellingAgency

Individual Policies, Strategies, Plans, (Infrastructure)

The BillIntegrated Energy Modelling & Planning

Example

The BillRenewable Energy

• Creates opportunities to enable increased consumption of renewable energies– Establishment of a Tradable Renewable

Certificates System– Framework for any other RE programme– Legally creating Renewable Energy Finance

Office– Prescription of measures and incentives to

promote the production, consumption, investment, research and development of renewable energy

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The Bill Energy Efficiency

Key issue

• Unsustainable energy uses and limited implementation of energy efficient

practices in SA economy

Recommendation

• Creation of a National Energy Efficiency Agency

• Each energy carrier to fund its own efficiency program

Functions of NEEA

• Undertake energy efficiency measures as directed by Minister

• Increase energy efficiency measures throughout the economy

• Optimise utilisation of finite energy resources

• Prescribe standards and technologies to promote efficient use of energy

• Facilitate use appropriate energy carrier for an application

The Bill Energy Research

Key issue

• Continued expansion of research in energy developments and

technologies

Recommendation

• Legal creation of an Energy Research Institute (SANERI)

• Benchmarked on the Mintek model

Functions

• Directs, monitors, conducts and implements energy research and

technology development

• Promotes energy technology innovation and conducts research and

develop technologies in line with the principles of the energy security

framework

• Provides for economic growth and development through its functions

The Bill Security of Supply

Key issue

• Inadequate stock held by energy industry

• Requirement to hold commercial and Strategic stock

Recommendation

• Definition of measures that will ensure minimum levels of

disruption in supply

• Minister to prescribe quantities of primary energy and

“finished energy product” to be kept required nationally

• Definition and implementation of energy rationing &

emergency measures

The Bill Security of Supply - Liquid fuels industry

Recommendation

• Creation of National Petroleum Reserve Stock Agency

• Measures to ensure minimum levels of primary energy carriers

Functions

• Specify quantities of primary energy and finished product required

nationally

• Sources funding for the acquisition of stocks

• Manage all stocks and logistics on behalf of the state

• Put in place operational structures, systems and processes

• Implement and execute emergency reaction plan

The Bill Energy Infrastructure

Key issue

• Uncoordinated infrastructure investments and developments

Recommendation

• Measures to facilitate adequate investment in infrastructure

• Coordinate upkeep of infrastructure and benchmarking

• Ensure a holistic approach to infrastructure developments

and planning

The Bill Project Plan

ID Item Duration Start Finish Status

1 Pre Parliament 32.d 25 February 2008 08 April 2008

1 Final draft with internal comments 5.d 25 February 2008 29 February 2008 Done

1 Send to government departments for review and feedback 10.d 03 March 2008 14 March 2008 Done

1 Cluster Presentation 1.d 17 March 2008 17 March 2008 Pending

1 Stakeholder workshops 5.d 17 March 2008 21 March 2008 Done

2 Final revision of bill 5.d 24 March 2008 28 March 2008 In progress

2 Director General's approval 2.d 28 March 2008 31 March 2008

2 Ministerial approval 5.d 01 April 2008 07 April 2008

2 Cabinet approval for the Bill to be introduced to Parliament 16.d 08 April 2008 29 April 2008

2 Bill Certification by State Law Advisor 15.d 30 April 2008 20 May 2008

2 Parliament 61.d 28 May 2008 10 July 2008

2 Minister introduces Bill to Parliament (as a Section 75 Bill) 21.d 21 May 2008 10 June 2008

2 Public Hearing by the Parliamentary Portfolio Committee (PPC) 14.d 21 May 2008 03 June 2008

2 Translation of Bill 30.d 11 June 2008 10 July 2008

2 Approval of Bill by the National Council of Provinces 10.d 20 June 2008 30 June 2008

3 Bill ready for the President to assent 30.d 11 July 2008 10 August 2008

Thank You