SANERI Comments on

National Energy Bill (B52 of 2008)

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Contents

SANERI

OriginKey DriversObjectivesPriority activities

Formation of SANEDI

Formation of NEMIA

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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

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CEF Group Structure

Minister of Minerals & Energy

CEF Board of Directors

Chairman

CEF (Pty) LtdCEO

Wholly incorporated divisionse.g. NEEA, EDC

Part Shareholding

Funds

Wholly owned Subsidiaries, includingSANERI (Pty) Ltd

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SANERI Role in Context

IMPLEMENTATIONSTRATEGIES /LEGISLATION

STATEOWNED

ENTITIES

PRIVATESECTOR

Tertiary EducationalInstitutes

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CIA

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&D

HUMAN CAPITAL DEVELOPMENT

R &

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NERSA

ALLSPHERES OF

GOVERNMENT

CONTRACT R&D

R&D ACTIVITIESPOLICY PLAN

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ObjectivesAffect 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

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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

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Key Deliverables 2008/09

Clean Energy Systems

Development of revised wind atlas for SAScoping of possible wave energy test facility in SATesting 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 systemDevelopment of carbon storage atlas for SA & Centre for Carbon Capture & StorageEvaluation 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 useDevelopment of CESAR centre at UCT to support energy systems analysis and data collection/interrogation

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Key Deliverables 2008/09

End Use and Infrastructure Management

Development of EE integrated mass transit scheme for SA citiesDevelopment 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

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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

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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.

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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 HDIDifficult to retain skills in a local and international market short of people with requisite qualifications and experienceGrowing 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

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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

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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

Thank You

First solar traffic light intersection installed by SANERI / NEEA in 2007 in Cape Town