Central Energy Fund (CEF) on its key operations & annual plans: briefing; Électricité de France (EDF) on stakeholder engagement and experiences on nuclear power and public acceptance thereof: briefing

Energy

27 June 2011
Chairperson: Mr S Njikelana (ANC)
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Meeting Summary

The Committee met with the Central Energy Fund and Électricité de France to discuss partnerships and ventures into renewable energy and nuclear waste management. The Central Energy Fund was a State-Owned Enterprise mandated by the Department of Energy to provide the country with renewable energy options. The presentation focused on the corporate structure of the Central Energy Fund which included subsidiaries and associates such as PetroSA, iGas, Central Energy Fund Carbon, Darling Wind Power, Philips Lighting and Johanna Solar. The objective for 2011 to 2012 was to reposition the Central Energy Fund in terms of a new mandate and to build and maintain an appropriate human capital base. Activities for 2011 to 2012 were to clarify the role of the Central Energy Fund and its subsidiaries to explore new opportunities by proactively engaging with the Department of Energy. Some projects and developmental projects included landfill gas projects which would be placed across the country, as well as wood waste, biofuels and solar projects. 

Members asked about the progress on the iGas compressor and the Darling Wind Power project. Members wanted to know why a German company was commissioned for the Johanna Solar project. Members also questioned the role of the Central Energy Fund and felt that the company was standing still. They suggested that intervention could have been given earlier had they been aware of looming financial issues.

Électricité de France was a French nuclear power utility. Its presentation focused on nuclear energy waste management and stakeholder engagements. The presentation emphasised the importance of a participatory democracy by means of the empowerment of individuals so that communities could play an active role in their own governance. Based on a study conducted by the European Commission on nuclear safety, people trusted scientists more than their government on issues of safety. The legislative framework around the access to information was discussed and France had gone one step further by developing a law in 2006, which was the law on nuclear transparency and safety  aimed at creating an independent nuclear regulatory agency.  The economic impact in France was that 125 000 direct and 410 000 indirect jobs would be created. This came to approximately 17 to 30% of the country’s total industrial employment. Examples of other countries such as Sweden, Belgium and Slovenia were also discussed in the presentation.

Members said that the information presented was very useful and complimented Électricité de France for its good efforts in educating its public. Nuclear safety in France was of a high standard as Members had observed in a visit to the country. The link between the Japan Fukushima nuclear disaster and current nuclear situations was also explored.


Meeting report

Central Energy Fund: presentation
Mr Mputumi Damane, Chief Executive Officer, Central Energy Fund (CEF), gave an overview to the presentation which included the corporate structure of CEF, objectives and activities for 2011-12 and projects they were involved in. Some CEF subsidiaries were PetroSA, iGas, Africa Exploration, Environmental Technology Advancement (ETA) Energy, CEF Carbon, and the South African National Energy Research Institute (SANERI). The associates and the percentage of shareholding of CEF included:
Darling Wind Power (49%)
Johanna Solar (3%)
Biotherm (19%)
Cradock Sugar Beet (48%)
Philips Lighting Maseru (33%)
Energ G Systems Joburg (29%)
Baniettor Mining (49%)
Thin Film Solar Technology (TFST) (45%)

Mr Damane explained that the objectives for 2011 to 2012 were to reposition CEF in terms of a redefined mandate and to identify new opportunities for CEF. CEF wanted to maintain proactive engagement with the Department of Energy (DOE), to build and maintain an appropriate human capital base and to manage the business efficiently and effectively. The refined mandate included looking at the current situation which was that CEF’s activities were defined by the High Level Business Strategy of 2003. The new regulatory environment had impacted on many of the projects. The 2011 to 2012 activities were to develop a revised mandate for CEF and clarify the role for CEF and subsidiaries.

Mr Damane said that CEF was investigating new opportunities for the manufacture of energy equipment and to initiate an energy poverty alleviation project. In order to achieve this, CEF had to engage with the DOE at all levels to address issues pertinent to both parties and collaborate with the DOE on the feasibility study for the Solar Park. In order to help redefine the position of CEF, effective management was needed. The company needed more returns on financial investments and needed to manage these investments in associated companies and subsidiaries. Service delivery to subsidiaries had to improve greatly and this could be done by means of a sustainability drive. The progress of existing projects needed to be evaluated to determine the long-term feasibility of these projects. CEF also had to ensure that an appropriate human capital base was developed and maintained.

Mr Damane said that CEF Landfill gas projects were established in Buffalo City, City of Cape Town, Tshwane, Johannesburg, and Emfuleni. Lesedi Biogas was a CEF project whereby cow manure was used to create energy, as the manure contained high levels of methane gases which could then be converted into energy. The George Wood waste project had hit some problems and the Cradock Biofuels project was established in conjunction with the Industrial Development Corporation (IDC) but needed approval from the Minister. Johanna Solar was an initiative by the University of Johannesburg to use thin film technology instead of silicone for electricity conduction. Phillips in Lesotho was producing energy efficient light bulbs and the project was aimed at reducing the number of imports from the East. Darling Wind was problematic as the previous Minister did not approve this initiative, and as a result CEF had run into some problems with it.

Mr Damane continued by explaining the developmental projects which included safer paraffin stoves and the Robben Island renewable energy projects. Robben Island was still using diesel for energy production and this was very expensive.

Discussion
Ms N Mathibela (ANC) asked for the progress regarding the R1.1 billion iGas compressor station.

Mr Damane replied that the compressor was commissioned and had been delivered and was pumping gas successfully.

Mr E Lucas (IFP) asked why Germany was commissioned to develop the Johanna Solar project where it could have been done locally.

Mr Damane replied that CEF would have been able to commission the project but the university decided to give the project license to a German company instead. He did not know the real reason for this.

Mr Lucas asked what the failure was with the Darling Wind project.

Mr Damane replied that there was nothing wrong with the project itself but it had no perfect fit within the area and the concept was perhaps still too unknown locally for successful establishment.

Mr S Motau (DA) said that he was worried about the presentation. CEF was one of the basic components of the Department of Energy and CEF was needed to develop renewable energy strategies. However, it seemed that the DOE did not have a role for CEF.

Mr Damane replied that it was disappointing that CEF did not have a bigger mandate within the Department. The role of CEF had been questioned before but ultimately what happened to the company remained with the owners of the company. At present, the owners’ intentions were not clear enough. CEF played a major role in the start of renewable energy initiatives but now it seemed there was no need for CEF any longer.

Mr J Selau (ANC) said that if the presentation was the true reflection of the situation then engagements were needed in the future. A new mandate was needed but currently CEF was in a lull.

Mr Damane agreed that more engagement with the relevant stakeholders was needed to try and strengthen the role of CEF in the development of renewable energy initiatives.

Mr S Radebe (ANC) said that it was disappointing to not have the hard copy of the presentation.

Mr Damane apologised for the communication breakdown which led to the presentation not being available.

Mr Lucas asked whether there was any in-house fighting with the DOE and CEF.

Mr Damane replied that this was not a row between DOE and CEF. Rather, one of the big reasons why CEF was not doing well was because of a lack of private sector interest and investment. CEF had to be self-funded and this posed a major challenge.

Mr Selau said that he was disappointed that the Committee did not receive any information in the past that CEF might be in so much trouble.

Mr Damane replied that CEF did not want to openly come to the Committee with their problems as this might have offended the Minister, but he was grateful that a channel of communication had been opened as this could help.

Mr Selau asked what the link was between CEF and new ideas in the DOE.

Mr Damane replied that subsidiaries were used by the Department as result of directives that were taken. Therefore, each subsidiary of CEF had a specific mandate to follow and complete according to new projects undertaken.

Mr Radebe said that if there were any challenges in CEF then it needed to come to the Committee for assistance. The Committee was here to assist and to try and resolve issues.

The Chairperson said that the relationship between CEF and the Committee needed to be strengthened so that procedures could be reviewed. The management structures of all subsidiaries and associates had to be explained in more detail as a lot of exciting projects could come from renewable energy initiatives. The Committee would interact with DOE and CEF as well as all subsidiaries and associates in the future.

Électricité de France: presentation
Ms Karen Daifuku, Senior Nuclear Project Manager, Électricité de France (EDF), gave a presentation on nuclear energy and stakeholder engagement. The strategic drivers were the consultation process, trust, respect and empowerment, the legislative framework, knowledge, communication and transparency and the economic impact. Ms Daifuku explained that the principles of a participative democracy included different levels of involvement. The empowerment of individuals and groups was a precondition of effective participation. Communities could take an active part in their own governance if they had the skills, knowledge and organisational capacity to do so. The new nuclear communication strategy was to consult, assess, suggest, consult again, amend, decide and enact.

Ms Daifuku said that according to a nuclear information study carried out by the European Commission, people found the highest level of trust in scientists and national nuclear safety authorities. The results showed that providing information was crucial and making people part of the decision process by creating partnerships was found to be effective. Environmental questions were best handled with the participation of all the citizens concerned, at the appropriate level. At the national level, each individual should have access to information relative to the environment held by public authorities and the ability to participate in the decision process. States should facilitate and encourage public awareness and participation by making information widely available.

Ms Daifuku said that France had gone further by adopting in 2006 the law on nuclear transparency and safety, which aimed at improving transparency by the creation of the “Haut comité pour la transparence et l’information sur la sécurité nucléaire” (High committee for transparency and information on nuclear safety”). This was the official implementation of Local Information Committees that already existed without legal status, by creating an independent nuclear regulatory agency. This was done to improve the legal status of nuclear plants. Transparency law implied large rights to access to nuclear information for the public and the guarantee of an independent control on nuclear safety. Communication tools used included pamphlets, ad campaigns, sponsorship, web sites, and a participative web. Education and the familiarisation of societal issues such as the security of supply, climate change and waste management were also used to educate communities. The objective was to form opinions and help the community make informed decisions. The Local Information Committees (LICs) were a structure for the dialogue with the stakeholders. These were permanent structures which had a mission to supply clear, precise and understandable information for the population. They were an indispensable place of dialogue between the nuclear operators and the various local stakeholders (in particular elected representatives, associations, employees' labour unions and qualified persons). The law on transparency on nuclear safety (2006) made the creation of a LIC near each nuclear power plant (NPP) compulsory and gave the LIC a legal status.

The public debate (France) was a consultation on significant industrial projects. EDF’s engagements after Flamanville-3 public debate (2005-2006) proposed economic energetic solutions with low greenhouse gas (CO2) emissions, reinforcing the energy economy policy for the industrials and the communities and developing information actions on an economic way in using electricity. With regards to renewable energies, €3 billion was invested through 2010 in wind energy in Europe, on developing research on new technology and renewable energy sources. A consultation of the public organized by the law on proximity democracy under the control of an independent commission resulted in meetings in the region and the country with the utility for the possibility to express one’s own opinion and the final report was public. 

Ms Daifuku explained that the two main objectives were to inform the public as completely as possible and to allow everybody to give his opinion on the project as well as to give the possibility to the owner to adjust the project to take into account main concerns or wishes of stakeholders and the public. “Grand chantier” was a procedure developed in France. It was a socio-economic plan to accompany the project. The procedure, asked by the operator, but decided by the authorities, enabled EDF to promote the local economy by education and training for employment concerning the project. Infrastructure financing for road and transportation, buildings and areas for business created a long term plan for employment. The economic impact was that 125 000 direct and 410 000 indirect jobs would be created. This came to approximately 17 to 30% of the country’s total industrial employment.

Ms Daifuku gave some examples of the support the nuclear repository had in European countries. In the regions of Osthammar and Oskarshamm in Sweden, more than three out of four inhabitants in the towns supported having a repository in their own municipality. A participative democracy was necessary for finding a site for spent fuels. The process was voluntary based on principles of openness, knowledge sharing and transparency. The conditions that had to be followed were that there had to be a legal framework, role clarity, financing and enough time to decide and finalise the project. Examples of community benefits requested in the Belgian partnership were ongoing local participation and communication and social benefits such as a contact and support centre and an ombudsman. A measure of monitoring safety and the environment was also installed.

Ms Daifuku continued by explaining the Slovenian local partnership. This partnership had many positive as well as negative features. Some positive features were:
Information availability and opportunity for discussion, additional independent studies
Opportunity to participate in decision making
Trust building
Model for managing other environmental problems
Development of dialogue between the municipality, government and local community
Involvement of ombudsman
However, key negative aspects that lead to low empowerment came through the changes in legislation and low trust in municipality leadership and politicians in general. There was a lack of clear framework and representativeness was questioned due to voluntarism. There were also difficulties in distinguishing between public interest, environmental interest, organisation interest or personal interest. The public did not take the responsibility for its influence in decision making and the process became time and money consuming without the expected positive results.

Ms Daifuku concluded by highlighting that partnership was an innovative approach to public involvement. The key feature to success was to find different ways of organising work and to ensure that local, regional and national authorities were involved. The local authority should always be clear about the scope and limits of a participatory process such as which decisions or budgets were open for discussion or could be managed by residents and which could not. Partnerships required adequate support measures which involved choosing experts and providing recommendations to authorities. Each country had to develop their own formula based on best practices and taking into account the culture and society of the country.

Discussion
Ms B Tinto (ANC) commented that the information from the EDF was useful for informative purposes as many people had a fear of nuclear energy. This was partly due to the fact that people did not know where nuclear energy came from.

Mr Lucas complimented the EDF for its good presentation. It was a good thing to educate people. Members should not confuse the Japan situation with South Africa because the Japan situation was as a result of the tsunami. Waste recycling was a good thing.

Ms Mathibela said that on an oversight visit to France members had the opportunity to see that things at the nuclear plant were safe. People did need education because fear mostly came from the unknown.

Ms Daifuku said that the Fukushima nuclear disaster in Japan did have an impact on the way nuclear energy was thought of internationally, and it gave the EDF a chance to educate people even more about aspects of safety. It gave the EDF and other power utilities a chance to look at increased and more improved safety. Radioactive waste was a huge health issue and nuclear waste management had to be addressed.

The meeting was adjourned.

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