Committee's Draft Report on Department of Energy's 2011 strategic plan and budget

Energy

23 May 2011
Chairperson: Mr S Njikelana (ANC)
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Meeting Summary

The Committee met to consider and adopt its Draft Report (the Report) on the Department of Energy’s Strategic Plan, and Budget Vote 29. Members accepted that this Report was a work in progress, which would continually be referred to, evaluated and adjusted as was necessary. The Chairperson set out the crucial issues contained in sections 8 and 9 of the Report. These included differences between the strategic plan of the Department and the budget. There were concerns as to whether the Department had the capacity to roll out one million solar heaters by 2014. There were further concerns that 8% of settlements would not be connected to the national electricity grid by 2014. Electricity Distribution Industries, the filling of vacancies in the Department, nuclear safety and alignment of the strategic plan to the New Growth Path, in relation to job creation, and restructuring of the State Owned Entities. Members commented that the main issue around the 8% of settlements was not whether they would be connected to the national grid, but whether they would have access to electricity, but the Chairperson noted that this was a sensitive issue.

Members asked that the Department of Energy should release its report on the Review of the White Paper on Renewable Energy, and also to put the final version of the Integrated Resource Planning document on its website. Members also commented that although legislation was in place for an energy efficiency campaign, institutional arrangements were not sufficiently aligned to allow for its effective running. They asked for more information on Integrated Energy Planning strategies and energy mix, noting that these would be tabled in the first quarter of 2011, and would set out broad issues. Certain other suggestions were made to improve the wording in other sentences, although these did not alter the meaning. The Committee formally adopted its Report, as amended, recommending the approval of the strategic plan and budget of the Department.

Meeting report

Committee’s Draft Report on Department of Energy 2011 – 2014 strategic plan and budget
The Chairperson said that the current meeting formed part of the budget voting, which was a crucial part of the Parliamentary process, and had a strong impact upon the internal programme of the Portfolio Committee. He noted that the current meeting was the start of a process of unpacking how to address electricity distribution, together with the municipalities, South Africa Local Government Association (SALGA) and the Department of Energy (DoE or the Department). He expected this to be a massive and protracted process, on which the Committee would have to spend a considerable time, which meant that it should start as soon as possible. However, before doing so, it would have to adopt the strategic plan of the DoE. He noted that the draft Committee Report (the Report) on the strategic plan had been circulated. This report would be used as a reference tool for the Committee in its further work.

Mr J Selau (ANC) said that although the Committee would be adopting the strategic plans in this Report, it would be continually reviewed and adapted as the need arose.

The Chairperson agreed that the Report could be seen as a work in progress. He referred to Section 8 (Observations and Key Issues for the Committee) and Section 9 (Recommendations), and said that this section underscored what Mr Selau had said.

He noted that the main issues arising from Section 8 included the asymmetry between the strategic plan of the Department, as presented to the Committee, and the budget as set out by the National Treasury. There were concerns as to whether the Department had the capacity to roll out one million solar heaters by 2014. There were further concerns that 8% of settlements would not be connected to the national electricity grid by 2014. Electricity Distribution Industries (EDI) was mentioned as another issue. The pace at which funded vacancies was being filled within the DoE, nuclear safety concerns, and how the SP was aligned to the New Growth Path in regard to job creation were also mentioned, as well as the concerns around restructuring of the State Owned Entities (SOEs). (See attached document for full details).

Mr L Greyling (ID) referred to the figure of 8% of settlements that would not be connected to the national grid. He said that the main issue was not whether these settlements were connected to the national grid, but whether they had access to electricity, under the national grid or not.

Mr Greyling referred to the wording, in Section 8, of the sentence commencing: ”Regarding nuclear safety, the Committee was encouraged that the government remained committed to nuclear energy programmes…..” He felt that “encouraged” was not the correct word. He suggested that it would be more appropriate to say: “Regarding nuclear safety, the Committee noted that the government remained committed to nuclear energy programmes…”.

Mr Greyling referred to bullet point 4 in Section 9, especially the phrase “ there is a need to revive the White Paper on Renewable Energy…”. He pointed out that although the White Paper had been reviewed, no report on this had ever been released. He asked the DoE to urgently release that report.

Mr Greyling noted, in regard to the Energy Efficiency Campaign, that the legislation was in place, but the institutional arrangements were not sufficiently aligned to achieve energy efficiency, and the legislation thus had to be reconsidered. The Energy Efficiency Agency was staffed by only two people, which was insufficient.

Mr D Ross (DA) referred to point 6.2. He asked whether the Integrated Energy Planning (IEP) strategy that would be tabled included the different energy technologies that were going to be used to ensure energy security. He wanted more information in this regard.

The Chairperson said that the first sentence of point 6.2 should have read: ”The Department should have tabled the Integrated Energy Planning strategy during the first quarter of 2011.”

Mr Greyling said that this plan came out of the 2008 Energy Act, which said that Government needed to develop a comprehensive energy plan, which went beyond electricity and included liquid fuels, as well as all other energy sources. This plan was meant to provide a blueprint for guiding all decisions concerning the IEPs over the next twenty years.

The Chairperson asked Mr Ross to be patient. The document would be tabled before Cabinet in the first instance, and then the Portfolio Committee would have access to it. As Mr Greyling pointed out, the IEP was a broad document dealing with sustainable energy generation and supply, while the Integrated Resource Plan (IRP) formed a component of it.

Mr Greyling said that this document would contain a broad overview, and would address issues including job creation, industrial policy, and environmental issues.

The Chairperson asked whether IRP 2010 had been circulated to the Committee, noting that the Committee had been dealing with the second plan before it had apparently been finalised by the Cabinet. He asked the DoE to provide the final document.

Mr Greyling stated that he had searched the website of the DoE, but could only find draft versions of the IRP document. He could not find the final version, and pointed out that if it was indeed available on the website, it was not easy to find.

The Chairperson said that the DoE should make the document available on the site.

Mr Ross said that it was necessary for the Committee, before going into the debate, to know which technologies were going to be used, and said that it needed to know the energy mixes contemplated as well as the percentages.

The Chairperson said the energy mix had been changed from what it was previously. The percentages of solar, wind, nuclear, coal, oil and bio-fuels had changed and the Committee needed to know the current figures.

The Chairperson said, in regard to points raised by Mr Greyling, that grid-connected as opposed to non-grid-connected electricity supply was a sensitive issue. It was said that 8% of settlements would not be connected to the grid.

The Chairperson then commented on the remarks around nuclear safety, and agreed that the Committee’s Report should state that the Committee had noted that Government planned to continue to pursue the nuclear power option.

The Chairperson agreed that Mr Greyling’s suggestion that the institutional arrangements for the Energy Efficiency Campaign had to be reconsidered should be added to the list of recommendations in the Report. He further agreed with the emphasis on the need for the DoE to release the report on the Review of the White Paper.

Mr K Moloto (ANC) commented that he found the ninth bullet point under Section 9 to be too general. It said merely that “Parliament had to put more emphasis on sourcing information from constituencies through its Members”.

The Chairperson suggested that the phrase “regarding energy issues” should be added to the sentence, after “its Members”.

Mr Selau said that point 6.10 dealt with more than just infrastructure rehabilitation.

The Chairperson suggested that the current second paragraph under 6.10, which dealt with legislation, should rather be separately numbered as 6.11. The last two paragraphs should then be reflected as point 6.12, under the heading “Build Programme”.

Mr Greyling suggested that bullet point 14 of Section 9 should rather read “Parliament needs to ensure that adequate funds for INEP are secured and made available to achieve universal access.”

The Members formally voted to adopt their Report and the Strategic Plan and budget vote of the Department.

The meeting was adjourned.



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