Public Hearings on Energy Efficiency: day 2

Energy

30 January 2013
Chairperson: Mr S Njikelana (ANC)
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Meeting Summary

The public hearings continued throughout the day. In the morning, the Department of Energy outlined its targets for energy savings. Many stakeholders had been consulted in the review of the National Energy Efficiency Strategy, and there were municipal interventions, supported by the South African Local Government Association (SALGA) Standards had been drafted for building construction and renovation. Legislation had been promulgated to implement an energy efficiency monitoring system. Energy management should be incorporated into everyday management practices. Tax concessions would be introduced to encourage energy efficiency practices. After broad consultation, the draft 2011 NEES second review was presented to the Infrastructure Development Cluster on 10 October 2012. There was still an opportunity for public comment although the period was closing that day.

The South African Local Government Association played a co-ordinating role in terms of energy efficiency projects. Some municipalities were taking the lead, and there were various domestic and international funding sources. However, many municipalities did not have the capacity to spend the grants available to them or needed assistance with making energy efficiency a core function and developing initiatives. Some of the interventions, mostly in the metros, had included urban planning and building control, solar water heating, street lighting and water services, using sludge from waste water to power plants, and transport. There was an agreement with the Swiss Agency for Development and Cooperation on energy efficiency monitoring, with targeted support to five smaller municipalities. Some municipalities were using the Eskom or National Treasury grant, others using loan or donor funds or private-public partnerships.

The Department of Public Works had embarked on a number of pilot projects in terms of energy efficiency. Considerable savings had been achieved. However, no more funding was available from National Treasury in the current and future financial years. The projects undertaken by the Independent Development Trust were outlined, with 60 building projects in Eastern Cape and 30 each in Mpumalanga and the Northern Cape. The financial value was R127 million and the total energy saving achieved was R43 million. Challenges had included a lack of professional services and monitoring and evaluation, and the need for more engagement with the Eskom Demand Side rebate programme. Buildings targeted included military bases, South African Police Service stations, correctional facilities, museums and office buildings.

Members questioned the sustainability of energy efficiency programmes should funds be curtailed. More work was needed on renewable energy sources. The strategy was described was being too vague, and a haphazard approach was being followed. They questioned the lack of reference to the White Paper. The willingness of municipalities to save electricity was questioned, as this source was an important revenue stream. They urged that procurement should be biased towards energy efficient products, to stimulate local industry, and said the Department of Energy needed to lead the process. The promulgation of regulations had been delayed on legal advice. Regulations were often not enforced. The Department was requested to provide the Committee with a formal briefing on the Energy Efficiency Demand Side Management grant so that they could advocate for further funding.

The Green Building Council of South Africa described its work and its status as part of an international body. It had introduced a grading system to certify buildings in terms of environmental considerations. The built environment was a major contributor to energy usage, greenhouse gas emissions and waste. Many successful projects were highlighted. Government was taking the lead. The Council had recommended that all new buildings be built according to green standards by 2020, but the Chairperson thought that this target was too conservative.

The National Foundries Technology Network outlined the current situation in regard to foundries, pointing out that foundries contributed to many sectors of business. However, a number had closed and many jobs had been lost since the electricity supply problems around 2007. Local industries had to compete globally. The Network was aiding foundries to become more competitive. This was an energy intensive industry, but there were no incentives to encourage foundries to shift to alternative power sources. Electricity costs had increased  by a considerably larger margin than other costs, particularly where the foundries were reliant on municipal sources, and some of the statistics for electricity price increases over the last five years were outlined.

Representatives of Eskom briefed Members on the 49M campaign intended to enhance more efficient energy use.  This had three phases. The first was creating public awareness, and it was estimated that 73% of the population was aware of the initiative. This had been achieved primarily through television advertising. The current phase was building momentum, and the final phase would be to sustain momentum.

The National Energy Efficiency Agency noted that it was now known as the South African National Energy Development Institute. It was concerned that energy efficiency (EE) was still not receiving enough prominence, and was not fully understood by funders, and that subsidies for fossil fuels continued. The Institute outlined the diplomatic EE strategy to try to coordinate foreign funding with greening in countries, and analyses on the skills gap and policy mapping. Alternative energy frameworks were needed for households as well as businesses, and there was a need to develop standards and labelling for EE-appliances. A few current projects were outlined, including benchmarking. It urged that more attention be paid to liquid fuels and private and public transport. A Cool Roofs project would be piloted in Gauteng. Mapping was being done on solar water heaters. The 12-I tax regulation, a R20 billion tax allowance for EE manufacturing, was running from July 2010 to December 2015, led by National Treasury and the Department of Trade and Industry. It was hoped these projects would create 2 000 job opportunities. SANEDI was trying to avoid a fragmented system, and urged that better co-ordination was needed to avoid duplication.

The National Business Initiative / Energy Efficiency Leadership Network described its work to help drive change in the business community on issues of sustainable development, with an emphasis, since 2006, on energy efficiency. Its members showcased best practices, with company plans and systems created to achieve energy efficiency in their buildings, recognising that energy was a huge business driver in most businesses. The kinds of tools needed were outlined, and the pledges were monitored. Some of the successes were outlined, and reduction of carbon emissions was contained in an international report that had rated South Africa second in the world, with some significant behavioural change. The challenges included the scope of projects, data, capacity building and investments, including reluctance of banks to provide financing, as well as behavioural change.

The Energy Efficiency Forum was run by City of Cape Town for commercial buildings, using the Forum as the lead partner, working closely with Eskom. The range and scope of the project and the meetings was outlined, noting growth in attendance and membership. Although there was not yet much research data on the impact, the EEF was confident that this initiative would grow and become significant for landlords, and raise more awareness.

Members noted that one overriding theme was the need for a move to total resource efficiency, through an integrated strategy, and agreed that the Department must take the lead in ensuring that there was not duplication, and in harnessing discussions on financing, investment, and monitoring. They asked for more detail on the battery-operated car project in South Africa, comments from Eskom on capacity and up-front funding, and more detail on energy efficiency in households. The Chairperson asked if reporting practices were complementing each other to present a composite picture, and urged the Department to consider mandatory or voluntary reporting, labelling and setting of standards and survey results. SANEDI was asked to clarity its exact role, and it was hoped that this would be refined to counteract the current fragmentation of the sector.  

 

Meeting report

 Public hearings on Energy Efficiency (continued)

Department of Energy submission
Ms Mokgadi Modise, Chief Director: Clean Energy, Department of Energy, outlined the goals of the National Energy Efficiency Strategy (NEES). The overall target was a 12% saving in energy consumption. The industry and mining sub-sector was set a target of 15%, commercial and public buildings also 15%, residential 10% and transport 9%. Implementation plans were drawn up for a ten year period. The objectives of the NEES included enhancing energy security, improving the country's global competitiveness, decoupling growth in energy consumption from growth in the gross domestic product (GDP), and contributing to job creation.

Ms Modise said that a review had taken place in 2011. Public opinion indicated the need for more radical alterations. A Monitoring Methodology Handbook was developed by the Department of Energy (DoE or the Department). Current developments were considered. There was a need to reflect on international practice. Inputs were needed from all stakeholders.

Ms Modise said that the DoE had looked into policies, initiatives and programmes in order to determine the contribution being made to energy efficiency. Funding sources had also been considered. A proposal had been tabled for a national energy efficiency structure. Wide-ranging consultation had been held.

Ms Modise listed a number of interventions that had already been set in place. Campaigns had been launched to increase public awareness of the need to save energy. New technology lighting could produce significant savings, both for municipalities and private consumers. Solar water heating was another targeted area.

Ms Modise said that legislation had been promulgated to implement an Energy Efficiency Monitoring System (EEMS). The EEMS would track the achievement of targets as published, but the data would only become available when the third NEES review was conducted in 2015. The project was being implemented with the cooperation of the South African Local Government Association (SALGA) and South African National Energy Development Institute (SANEDI).

Ms Modise said that there would be a focus on planning, reporting and implementation of the municipal Energy Efficiency Demand Side Management (EEDSM) policy. Indicators would include the number of jobs created, energy savings, reduction in carbon dioxide emissions and the total energy cost savings. Much of this would happen at a municipal level.

Ms Modise said that standards for energy use in new buildings, energy management and measurement and verification of standards had been developed with the assistance of the South African Bureau of Standards (SABS) and Department of Trade and Industry (dti). Energy management should be incorporated into everyday management practices. Tax concessions would be introduced to encourage energy efficiency practices.

Ms Modise said that after broad consultation, the draft 2011 NEES second review was presented to the Infrastructure Development Cluster on 10 October 2012. There was still an opportunity for public comment although the period was closing that day.

South African Local Government Association (SALGA) submission
Ms Linda Manyuchi, Technical Specialist: Energy Efficiency, SALGA, said that SALGA played a coordinating role. Progress had been made on climate change and energy efficiency activities by Sustainable Energy Africa. Funding had been received from Danida and the British High Commission, amongst others. Many metros, particularly the City of Cape Town, had initiated energy efficiency programmes. Some of these had been incorporated into the Integrated Development Plans (IDPs).

Ms Manyuchi mentioned some of the interventions that had been conducted. These included urban planning and building control, solar water heating, street lighting and water services. In Johannesburg, sludge from the waste water treatment process was used to power the plant. Transport was another focus area, including more efficient and popular public transport and the encouragement of non-motorised transport.

Ms Manyuchi said that some municipalities had incorporated energy efficiency into the normal institutional arrangements. She singled out the Sol Plaatje, Ethekwini, Ekhuruleni and Cape Town municipalities. Some of the others did not have the capacity to implement the grants that government put on offer.

Ms Manyuchi said that the Swiss Agency for Development and Cooperation had signed an agreement with SALGA on energy efficiency monitoring. Targeted support was being provided to five smaller municipalities. Energy efficiency strategies and implementation plans had been developed in these five pilot municipalities. Resources were shared and there was regular interaction with SALGA.

Ms Manyuchi said that some municipalities did budget funds towards energy efficiency. There was an EEDSM grant from National Treasury. Some used the Eskom grant, other made use of loan or donor funds, and there were some private-public partnerships. She listed the most prominent donors. SALGA was also part of the former International Council for Local Environmental Initiatives (ICLEI) Urban Low Emission Development Strategy.

Ms Manyuchi said that some municipalities did not see energy efficiency as a core service delivery area. There was uncertainty over the EEDSM grant. Another challenge was the impact on municipal revenue, as electricity tariffs were used to cross-subsidise other services. She suggested that National Treasury (NT) should looking into funding incentives to municipalities.

Ms Manyuchi recommended that long term programmes be developed to support municipalities. Clarity was needed from national government. A benchmarking programme should be put in place regarding energy efficiency. The Blue Drop programme used for ensuring good water supplies could be used as a model.

Department of Public Works submission
Ms Sassa Subban, Deputy Director General, Department of Public Works said that her Department (DPW) was incorporating energy efficient techniques into all new and renovated buildings.

Mr Anselm Umoetok, Director, DPW, said that the mandate of the DPW was to provide a service to all national departments. It was mandated to implement a shared savings model, to conduct retrofitting projects and to influence behavioural changes. Design considerations had been introduced to keep buildings cool during summer by construction techniques. Shading devices would reduce the use of electricity. Energy would be harvested to reduce energy consumption.

Mr Umoetok official listed progress made in terms of shared energy contracts. There had been contracts in four regional offices. Between 2003 and 2010, savings due to retrofits in Pretoria amounted to R36 million, Johannesburg R46 million, Bloemfontein R26 million and Cape Town R7 million.

Mr Umoetok outlined progress made with several projects funded by NT.

Mr Umoetok then outlined the challenges. The first was the lack of technical capacity within DPW, and the Department had proposed the creation of a Chief Directorate to provide this function. There was no NT allowance for DPW's Energy Efficiency Programme for the 2012/13 financial year (FY) and beyond. Frequent staff changes impacted on the capacity of the Department. There was a lack of local manufacturers. The programmes only covered a small number of the properties in the charge of DPW.

Mr Umoetok briefed Members on a number of projects undertaken by the Independent Development Trust (IDT). Some 120 buildings had been targeted as pilot projects, of which 60 were in the Eastern Cape and 30 each in Mpumalanga and the Northern Cape. These had happened during the 2010/11 and 2011/12 FYs. Of the 120 projects, 103 had been completed and the financial value was R127 million. The total energy saving achieved was R43 million. Challenges had included a lack of professional services and monitoring and evaluation. More engagement was needed with the Eskom Demand Side rebate programme. There had been remarkable commitment from those involved. However, no funds had been budgeted by NT after the 2011/12 FY. Buildings targeted included military bases, South African Police Service stations, correctional facilities, museums and office buildings.

Discussion
Mr K Moloto (ANC) asked if the DPW initiatives were targeted toward their own buildings or to those it managed on behalf of other departments.

Mr Moloto asked for clarity from SALGA on the EEDMS grant. He asked if SALGA felt that the sustainability of the projects funded by the grant would be threatened if the grant were to stop. He also asked if the allocation for the free basic electricity grant was going where it was intended.

Mr J Selau (ANC) was confident that much progress was being made. The DoE had made mention of tools to monitor implementation of programmes, but this had been dealt with at a high level and he would appreciate more detail. He noted that since Parliament represented the public, presentations should be made in plain and straightforward language. He asked about the current status of energy efficiency. He would like to see comparison of South Africa to major emitters of greenhouse gases, like China and the United States of America (USA). Another issue was that of renewable energy. There was no real push in this regard. He asked what was meant by energy efficiency and electricity saving. Nothing had been said about efficient use of petroleum-derived energy.

Mr Selau had not heard any discussion on regulations. Even if these fell under the Minister, the Committee should have sight of these in order to give answers to the public. Renewable energy had to be considered.

Mr L Greyling (ID) said that, having read the draft strategy published by the DoE, he believed that this was still too vague and more specifics were needed. The Department was doing its best to deal with energy efficiency, but he felt that the numbers in the Integrated Resource Plan (IRP) were an underestimate. There was no proper baseline study. A “shotgun approach” was being followed, and there was no understanding of where the biggest savings could be made. The Council for Scientific and Industrial Research (CSIR) had said that a study was needed on the types of building in the country in order to set targets. He further commented that there had been little mention of the White Paper on Climate Change.

Mr Greyling asked if municipalities could apply for both EEDSM funds and the low pressure solar water heater funding. This should not be a choice of one or the other.

Mr Greyling said that it was not in the interest of municipalities to reduce electricity sales due to the cross-subsidy systems. He saw the biggest challenge as reducing peak time demands, and he advocated the use of time-of-use meters. He asked who should be enforcing regulations on local and renewable content.

Mr Greyling noted that DPW had introduced energy saving measures in 123 buildings, and yet it had 100 000 public buildings under its control. The procurement of goods should include a ban on anything that was not energy efficient. By committing to such a policy, a significant signal would go out to the public. If there was intent to introduce energy efficient goods and products, industry would react by increasing its manufacturing capacity. He emphasised the need for behavioural change programmes.

The Chairperson noted the need for Parliament to make progress on its greening and energy efficiency campaigns. He agreed that the focus of the hearings was on energy and not just electricity efficiency. He asked if the approach to energy efficiency was too fragmented. The DoE should be the lead department in this regard. The Energy Intensive User Group (EIUG) had pointed out the need for leadership. Energy efficiency should be the result of individual behaviour. He had been very disappointed that the need for energy efficiency had only been brought to the fore during the load-shedding episodes of 2008. He commended the DoE on establishing a directorate, but cautioned that there might be a danger of fragmentation.

The Chairperson asked how provincial DPW offices were monitored, and asked what DPW did not cover. He noted that there was no mention of any schools in the list of targeted buildings. He asked how the IDT had been appointed as a service provider. A creative approach was needed to get SALGA to explain its position in more detail. Department of Public Works focused on buildings, but he pointed out that government had a huge fleet of motor vehicles, and energy efficiency should apply to this as well.

The Chairperson asked if there was any regulatory framework. He was concerned about the reported lack of financial capacity to utilise grants. He noted the comments on municipal electricity tariffs and said that in regard to free basic electricity, municipalities were able to divert funds to other areas. He asked what role the Department of Transport (DoT) played in the cluster.

Ms Modise said that it was difficult to administer and allocate the grant for energy efficiency, given the number of municipalities. All citizens should benefit. The EEDMS allocation was a recurring one. It was being implemented in stages. The EEDMS would be updated every three years. There was engagement with NT on the implementation of the programme. There was also continuous engagement with SALGA, who had recently requested clarity on the allocation of the grant. DoE had received complaints in the previous two FYs. The Department was trying to issue clear guidelines. She agreed that draft business plans were needed. Demand needed to be reduced across the board. The social component had to be considered. Most demand was in the metros.

Ms Modise apologised for the use of acronyms, which Members might not understand. This point would be taken into consideration in preparing future presentations. The invitation to the DoE to make this presentation indicated the need for a high level overview, and that was why there was no focus on specifics. However, these could be provided if the Committee so requested. There was a lack of a monitoring system, in the past, to determine if challenges were being met. One of the key areas in the presentation was the current focus on best practices.

Ms Modise wanted clarity on the comment that the presentation focused solely on electricity efficiency. She did not agree that this was the case. The DoE would present on the regulations if so requested by the Committee. The State Law Adviser had instructed that the introduction of the regulations be delayed.

The Chairperson said that if an Act was introduced, the regulations acted as secondary legislation. Members wished to participate in the drafting of the regulations as a matter of course.

Ms Modise said that there had been a delay in the review of the IRP. There was an overall programme delay. The DoE wanted to take a step back on Phase 1 and Phase 2 in order to address shortfalls that had come to light. There was no value in reviewing a document that had not yet been implemented. There would be a link between the documents. She agreed that there was a need for a baseline study. There was engagement with the Department of Environmental Affairs on the climate change issue, and a response would be provided.

Ms Modise repeated that the money reserved for energy efficiency was woefully inadequate. The solar water heating programme contributed to the EEDMS. In the 2009/10, 2010/11 and 2011/12 FYs, only three municipalities had been dealt with. The allocation should be increased and she asked for the Committee's assistance. As resources were spread, so the impact would be felt over a wider area.

Ms Modise noted that the DoE had taken legal opinion as to what extent building standards could be enforced. While the municipality had the authority, it was not always possible to enforce these regulations. She acknowledged that the approach to energy efficiency was fragmented. There had been a mandate to run the campaign for three years, but it had been coupled to a recommendation to implement the programme nationally. The strategy had been approved in December 2011. There had been a lack of resources. There was a programme for road-shows to foster awareness. In relation to the issue raised by the EIUG, the DoE was addressing the matter of the baseline. The target monitoring system would inform the baseline process. Sufficient resources were needed to inform the task. All the provinces had been considered in the planning. The current list was not exhaustive. The DoT was indeed part of the cluster. She could not confirm if there had been any feedback from the DoT.

The Chairperson requested that further answers be provided in writing in the interests of time.

Ms Manyuchi said that Treasury had made it clear that the grant was for projects and not for employing staff. Strict conditions were applicable, and the grant to some municipalities had been stopped due to incorrect usage. Some of the municipalities had started implementing time-of-use meters. This was a desirable technology, but was expensive. Building control was a municipal function. Developers and architects were often not compliant themselves. SALGA fully supported knowledge sharing.

Ms Subban said that the standards for energy efficient buildings only currently applied to state buildings. Negotiations were at an early stage. More feedback would be provided at a later stage. DPW was responsible for more than 75 000 buildings, and would report to the new Director General on the requirements. The procurement of furniture and vehicles fell under Treasury policies, and they should give the guidelines. Job creation must be incorporated into the green building framework. Baseline audits had started in 1997. There was a lack of a monitoring and evaluation unit, and there was engagement with Treasury to enable this to happen. Schools fell under the respective provincial governments, but DPW did play an oversight role. Discussions were being taken forward by the Minister. The IDT had been re-established as a public authority to support all spheres of government.

Mr Greyling suggested that a document be provided on the progress with the EEDMS. This could strengthen the Committee's efforts to advocate more funding.

The Chairperson asked that the DoE take this suggestion as a formal request.

Green Building Council (GBC) submission
Mr Brian Wilkinson, Representative, Green Building Council of South Africa introduced the delegation and noted that the Green Building Council (GBCSA) was part of the international body. Its vision was to ensure that all buildings were constructed in an environmentally-friendly way. The built environment generated a third of green house gases and significant amounts of waste. This was an area that afforded an excellent opportunity to do something significant regarding climate change.

Mr Wilkinson said that key focus areas were the creation of awareness, educating members of the industry and recognising excellence. GBCSA had introduced a star rating system for both new and renovated buildings. A socio-economic category had been introduced to the evaluation criteria, a world first. There were ten environmental categories. These covered management, indoor environmental quality, energy, transport, innovation, water, materials, land use, emissions and the socio-economic aspect.

Mr Wilkinson said that lighting was a major concern, and the ratings focused on lighting power density and zoning. A tool was available, freely, to building owners that would allow owners to rate the performance of any building was against a national benchmark.

Mr Wilkinson said that in the five year history of GBCSA, it had given 29 certifications. The number was doubling every year. Another 31 buildings were currently being evaluated, of which 20% were in the public sector.

Mr Wilkinson listed some of the certified buildings. The NDPW Agrivaal Office in Pretoria was using 35% less energy than the national standard. The Manenberg Contact Centre in Cape Town had received a four star rating, and had achieved an 80% energy saving. ABSA Towers West in Johannesburg had achieved a five star rating. The Vodafone Site Solution Innovation Centre in Midrand had a six star rating. The entire roof was a photovoltaic surface, and produced twice the energy requirement. This was shared with an adjoining building. A project in Cato Manor had resulted in the country's first “green street” and had attracted international attention.

Mr Wilkinson said that government was taking a lead. Certifications were required for buildings at all levels of government as well as the parastatals. A four star rating was set as the best practice for offices. He made a recommendation was that all new government buildings should be “built green” by 2020. Half of existing government buildings should have water, energy and waste measurement and improvement systems by 2020.

The Chairperson felt that these targets were too conservative.

National Foundries Technology Network (NFTN) submission
Ms Adrie El Mohamadi, Programme Manager, National Foundries Technology Network presented a background of the Network (NFTN). Between 2007 and 2011, the number of foundries had decreased by 13%, as a result of both mergers and closures. It was estimated that up to 20 000 people were employed at foundries, but this number had been reduced by up to 15% since 2008. The majority of customers were in the mining and automotive sectors. The main customers were global companies, and local foundries had to realise that they were facing global competition.

Ms El Mohamadi presented some examples of the everyday products manufactured in foundries. Foundries were crucial to the manufacturing industry. The NFTN had produced a handbook for foundries to gauge their situation. A competitive improvement programme had been launched. The baseline assessment compared the foundry, using various factors, to the local and international market. A cost analysis would be done to show companies where they could make savings.

Ms El Mohamadi said that the industry made use of incentives offered by Eskom to control demand side management. There was not enough local expertise to advise on issues regarding metal smelting techniques. The were no incentives for switching to alternative energy sources. Many foundries had applied for incentives, but were unable to qualify. The industry was confused by the number of government agencies involved in the process.

Mr David Mertens, Representative, NFTN, noted that foundry operations were energy intensive. Up to 18% of an average foundry's costs were for energy. Two conditions were needed for growth. Foundries must have access to competitive tariffs, but must also be energy efficient.

Mr Mertens said that almost all foundries bought their electricity from municipalities, which charged up to 50% more than Eskom. This made energy more expensive than in many countries. Tariff increases had come thick and fast in recent years. Increases had also come in the midst of a recession. The tariffs were not cost reflective. The foundry industry paid more for energy than other users. There was a lot of uncertainty, and thus a need for a national strategy around tariffs. Electricity tariffs in the Nelson Mandela Bay Municipality, for instance, would have increased sevenfold from 2001 up to 2015, as opposed to a 265% increase in the producer price index in the same period.

Mr Mertens quoted the example of an Eastern Cape cast iron foundry which had reduced its energy consumption by 30%.

Mr Mertens identified a number of challenges. These included the cost of electricity, which made investment unattractive, and the investment incentives were also difficult to access, or unattractive. There were no specific credits for switching to alternative sources. The involvement of municipalities in Eskom's IDM was non-existent.

Mr Mertens recommended again that a national strategy for energy tariffs for the industry be implemented. IDM investment should be intensified.

Eskom submission
Ms Erica Johnson, Group Executive: Enterprise Development, Eskom, introduced herself and the delegation.

Mr G Choeu, Divisional Executive, Eskom, briefed Members on the background to the 49M campaign. He noted that even small changes by individuals could lead to huge benefits. The first phase was to raise awareness. The second phase, ending in March 2013, was to build momentum, and the third phase would be to sustain that momentum.

Mr Choeu said that the first phase of raising awareness had been launched with a powerful delegation from Cabinet, led by the Deputy President. Various business leaders had also been included. There had been free media coverage to the extent of R1.6 million. Television, print, radio, cinema and open air media had been used.

Mr Choeu said that the momentum would be built through various channels. The pillars of the campaign were to try to reach all South Africans through the media and by staying in the public eye in shopping malls. A number of articles had been broadcast. Eskom worked through the Minister of Public Enterprises. All Cabinet Ministers had subscribed to the campaign, as had 74 partner companies. The glass house models erected in a number of malls were a demonstration to the public of how to embrace energy saving techniques.

Mr Choeu said one of the challenges was a lack of public awareness. Partners had been slow to take up the campaign. Research had been done on the public's knowledge and understanding of the campaign. The research had been conducted in October 2012. Key outcomes were that 73% were aware of the campaign. The majority of those aware had learned of the campaign through television.

Mr Choeu said that that 68% thought that it was a good campaign. There was a general perception on the need to save electricity.

South African National Energy Development Institute submission
Mr Kadri Nassiep, Chief Executive Officer, South African National Energy Development Institute (SANEDI) noted, in his introduction, that problems with energy efficiency (EE) were found internationally, with an actual rise in the use of coal. China, for example, was responsible for almost half of the world’s coal consumption and was responsible for 87% growth in the coal market. He said comprehensive subsidies were still handed out for fossil fuels, in South Africa and throughout the world, while there was not enough emphasis on EE, and there was the problem of financiers not understanding EE.

He noted that the term “National Energy Efficiency Agency (NEEA)” no longer existed; instead the body was referred to as the South African National Energy Development Institute –Energy Efficiency (SANEDI-EE).This was in-line with the National Energy Act, the DoE’s recommendation and SANEDI’s decision to adopt a monolithic brand position. It also aimed at avoiding further confusion in the market.

Mr Nassiep turned to the key strategies developed. He noted the diplomatic EE Strategy to co-ordinate and align international funding of foreign governments with embassies in SA, as well as embassies in less-developed countries, and the emphasis on greening of embassies. Key strategies included an analysis of the skills gap for energy management, and the policy mapping exercise, together with the Department of Energy (DoE or the Department), which was just awaiting the signature of the Minister as the study had been completed. There was also the need for an Alternate Energy Framework for households in SA to deal with household fuels. He found it shocking that the Paraffin Safety Association of South Africa (PSASSA) had closed its doors. SANEDI was also assisting the DoE with NEES and National Energy Efficiency Action Plan (NEEAP) development and the development of standards and labelling for EE-appliances.

Mr Nassiep outlined some current projects, noting that the development of solar-powered traffic signals was initiated and piloted by SANEDI and was now being implemented by various local authorities. A draft green IT strategy was developed for SA, but the project had not attained momentum. The pumping energy efficiency initiative in municipalities was still being pursued and would hopefully be included in the next round of the Division of Revenue Act (DORA) funding applications. He noted the implementation of a big EE project, funded by the Wupperthal Institute in Germany, which involved the benchmarking of EE-policies, processes and technologies in, predominantly, the BRICS countries of Brazil, Russia, India, China and South Africa. There was also the hosting of a French Development Agency (AFD)-funded Technical Assistance Facility (TAF), for an EE-and- Renewable Energy (RE) green credit line to three commercial banks in SA.

He spoke about liquid fuels/transport, saying that it was a key area that had to date been neglected, being restricted primarily to the conversion of vehicles to Liquid Petroleum Gas (LPG). He also outlined the SANEDI research work into bio fuels and transport modelling. South Africa unfortunately did not yet have a reliable system of public transport, but there were alternatives to conventional petrol-driven transportation. SANEDI was working with other role-players to break through the limitations, particularly through a fee-bait system to encourage people to purchase EE and electronic vehicles. He urged that many similar measures needed to be introduced.
 
Mr Nassiep talked about envisaged future projects and noted SA had joined the “Clean Energy Ministerial–Working Group (CEM-WG) on Cool Roofs” and had formally appointed SANEDI as the local representative on this working group. He said cool surfaces were a high-impact, low-cost, short-payback investment that
improved buildings by cutting net energy use, helped roofs and the equipment on them t last longer, and improved the comfort of non air-conditioned buildings, while the opposite applied to galvanised roofs. He said a pilot project would be introduced shortly in Gauteng to demonstrate the improved effects associated with cool roofing.

Mr Nassiep looked at target monitoring and noted the hosting of the SDC-funded EE monitoring system contract. SANEDI was also hosting the GIZ-funded GIS specialist and system, mapping every Solar Water Heater (SWH) installed in the country, which was an exciting and helpful tool for data to keep track of the further roll out the project, together with the cool roofs initiative. He noted the development of a secure, web-based Monitoring and Verification (M&V) system for the 12-I and the proposed12-L EE-tax incentives to
confirm, verify and certify the benefits of the projects and incentives in accordance with national standard SANS 50010.

Mr Nassiep explained that the 12-l tax regulation was a R20 billion tax allowance for EE manufacturing, which had been in effect since July 2010 and would run until 31 December 2015 or until the R20 billion available was utilised. The lead authorities were National Treasury and the Department of Trade and Industry (dti) and they were supported by SANEDI and others, like DoE. A minimum efficiency improvement requirement of 10% saving was set as a benchmark. He said that fourteen new projects were taken through this system, with quite a few more pending. There had been a total investment of about R22.4 billion, and it was conservatively projected that these projects would produce just under 2 000 sustainable job opportunities. Seven out of nine provinces were involved and projects were taking shape throughout the country. Five projects were housed in Gauteng as the economic hub.

Mr Nassiep turned to stakeholder engagement, stating that SANEDI contained to play a crucial role in engaging all stakeholders to avoid a fragmented system and to advance the need for a more-focussed EE-delivery solution for the country. It was an active member of all EE-related technical committees, an active member of the National Business Initiative (NBI) led Energy Efficiency Leadership Network (EELN) and various other working groups (WGs) related to EE.

General comments were that SANEDI co-hosted the South African German Energy (SAGEN) programme, with support from GIZ, to address EE-activities. SANEDI-EE continued to provide an advisory and advocacy role in addressing numerous areas as well as bringing in international technical capacity, which was available to SA in general, in about the next three years. He noted the research produced through SANEDI’s EE hub based at the University of Pretoria. 90 students had already been put through the system, with a high percentage being previously disadvantaged individuals (PDIs), although the proportion of female students needed to be improved.

He concluded that although it appeared that the need and awareness for EE in SA was escalating, the activities were becoming more fragmented and the nature of the industry was leading to duplication and wastage, as seen in proposed directorates that would duplicate efforts in different departments. Proper co-ordination was needed, using DoE as the lead department, focussing on policy-development whilst SANEDI should focus on the co-ordination of implementation activities, performance tracking and consolidated national reporting.

Finally, in the South African context, Mr Nassiep mentioned the good work done by Renewable Energy-Energy Efficiency Partnership (REEEP) in bringing in neighbouring countries into the EE space.

NBI / Energy Efficiency Leadership Network submission
Ms Valerie Geen, Director, National Business Initiative, noted that the Initiative (NBI) had been in existence since 1995 and was a non-profit, catalytic organisation to help drive change in the business community on issues of sustainable development. Some of these issues were in education, schooling support and skills development, EE, water and climate change. NBI’s work in EE began in 2006 as a direct response to the promulgation of the 2005 Energy Efficiency Strategy and government’s call for business to support the drive for EE through the EE Accord, which had now been reintroduced. It consisted presently of 58 member organisations, including some government departments, although others should be on board.

Ms Geen said the Energy Efficiency Leadership Network (EELN) was a leading network in driving continuous improvement in energy efficiency, with members taking the lead by showing best practice. The energy efficiency pledge of the members was to create a company plan for energy efficiency improvement, supported by an energy management system, with company level targets aligned to help deliver an agreed government strategy. They would report on progress and skills development and capacity building would take place through money and time invested by companies within their value-chain. Implementation of the pledge would occur through integrated planning, metering and monitoring of energy usage and the fact that energy was to be seen as a value driver. She pointed out that in many companies, EE was imperative, as electricity costs alone accounted for up to 40% of a company’s budget and governance.

Ms Geen looked at capacity building, involving the development of proper auditing and baseline setting, EE opportunity identification, to make business cases to managers, monitoring reporting and verification of information and the accessing of funding/financing.

Members of the EELN would be required, during their engagement, to nominate energy champions and representatives to lead or co-ordinate energy management in the company, and interface with the EELN. They would drive the key commitments under the EELN Pledge, support performance reporting and knowledge sharing, facilitated through quarterly EELN meetings, so that others could learn from this, and exploit all opportunities for continuous improvement in Energy Efficiency.

Ms Geen said stakeholders could expect facilitation from the NBI for good and best practice sharing, which was of high value, as well as training and capacity building, collaboration to alignment, and reporting on collective performance. Some successes included the implementation of quick wins as seen in buildings – including initiatives for lighting, air conditioning, off grid solutions such as photo-voltaics, and target setting in relation to projects and facilities, which was difficult especially in large, diverse companies. Other successes were apparent in metering, monitoring, and improving fuel efficiency and these issues needed to be addressed collectively. Examples could be found in the 2011 Energy Efficiency case studies, or the Carbon Disclosure Report.

Reducing carbon emissions through EE was contained in an international report of the top 100 Johannesburg Stock Exchange (JSE) listed companies, who disclosed their carbon emissions, and showed progress in improvement. These companies (together with Eskom) made up over 60% of SA carbon emitters. They were changing mainly in their building usage, along with behavioural change for EE solutions. This report ranked SA second in performance, globally, just behind the UK 300, and showed SA’s willingness to disclose. However, work was still needed in target setting.
 
Challenges were seen in the baseline setting, where companies struggled with scope and with determining how many buildings to measure, whilst there were also problems with data, capacity building and bankable projects. The recommendations were the nomination of champions and the training of artisans. Other challenges were seen with the investment of large scale projects or operations (which, in some instances, were not viable) especially retro-fitting. As a result, banks did not buy-in to provide funding. Behavioural change was another challenge, but recommendations were now being made and campaigns run on how to make the initiatives work, with attention to policies, how regulations were policed, incentives, giving recognition to those doing well and municipal billing to reward company savings.

The Chairperson noted that he had tried to link up with an international organisation based in Paris to join the discussion, through video, to allow for international benchmarking, but it had failed. He said he would persist, because it was good to be part of the global village.

Energy Efficiency Forum (EEF) submission
Ms Sarah Ward, Head: Energy and Climate Change, City of Cape Town, said the Energy Efficiency Forum (EEF) was run in Cape Town as part of its EE programme, specifically for commercial buildings. It was a Public Private Partnership (PPP) where the EEF was the lead partner and worked very closely with Eskom. There were a number of supporting partners to this PPP who helped to make the EEF successful, such as the University of Cape Town. Membership was based on a partnership network focused on Cape Town. Three meetings were held per year, at Old Mutual (Pinelands) who was a great supporter of the EEF. There were two information meetings for building owners and managers, and one market place at which suppliers could showcase their wares and market their goods. EE Forum Awards were held once per year and this had been newly introduced as a system of reward, with strict criteria with professional evaluation.

Ms Ward looked at an overview of previous events, noting that attendance was between 160 and 220 participants at each event. Outreach was based on networking system through a partner’s database of 800 of all the partners and supporters, who had provided their databases as contacts, and sent out invitations. Registration was automatic on the website, as well as notice of attendance, with about 40% new attendees each time. A survey showed that 95% felt that they were provided with valuable/useful information and 92% were motivated to make improvements in their building/s or company through what they had learned at the Forum.

Ms Ward said the although there was little specific research data on impact to date, Eskom and South African Property Owners Association (SAPOA) were of the opinion that Cape Town’s commercial property sector was very driven, and this was directly a result of the EE Forum. She noted the EEF provided assistance to companies in accessing Eskom funding, which was very successful.

Ms Ward tabled a number of graphs, and noted the clear disengagement between economic growth and energy consumption, which was a good indicator.

Ms Ward then turned to themes and topics, and noted that the case studies presented by companies always created a lot of interest and presented an opportunity for them to showcase what they were doing. Useful information was provided on tariffs, national building regulations, Green Building Council of SA star tools and Eskom EE financial offerings. Awareness was raised through green leasing, insurance in a changing climate, and benchmarking. Other themes and topics were new technology inputs and the EE Forum Awards. Case study examples of winners of the EE Forum Awards were the V&A Waterfront and Vuyani Properties, 14 Loop Street, Cape Town.

Ms Ward turned to the challenges and queries which included the implementation of Part XA of National Building Regulations monitoring and assessing, the linking of all resource efficiency together with energy, water and waste. There was a need for clarity with regard to supply, and the low pressure solar water heater programme, appliance labelling and net-metering. She said behaviour change was critical but sometimes there was an overemphasis on technology changes.
 
Discussion
The Chairperson said that notable in the presentations was the point that there was a need to move from EE, to total resource efficiency, which was the overall end goal for an integrated national programme. He wanted the Department of Energy to comment on some issues that had been raised.

Mr K Moloto (ANC) made a general comment on possible future focus areas for the future. One might be the JSE companies, and sharing of information on issues of environment and resource conservation. He noted that at times, the work should be narrowed down to look specifically at EE. He highlighted the need for responsible investment and suggested communication with the JSE on this matter.

The Chairperson said the Department and SANEDI should take the Committee through this issue as investment was a significant area.

Mr J Selau (ANC) stated that most of the concepts discussed were still in their initial phase and there was a need to continue assessing how far the work had gone. He referred to a recent television programme showing a wealthy businessman in Beijing canning and selling “clean, unpolluted air”, which was a worrying indication of how far pollution had gone.

Mr Selau asked for more details on the initiative for South Africa to introduce a battery-operated “green car”, saying that according to the initial projections, this should be on the market already.

Mr L Greyling (ID) thought the most depressing presentation had been given by the Foundries, and indicated the country’s dire situation around energy costs. He wanted comments by Eskom on capacity and up-front funding.

The Chairperson agreed with comment on the depressing presentation by the Foundries Association and said it was a pity they had left and could not answer questions but said Members could send their questions through the Committee Secretary.

Mr Greyling asked the EEF about problems with landlords and tenants and how this problem could be overcome when looking at EE.

The Chairperson added that it would have been helpful if the EEF had spoken about households.

The Chairperson questioned if the reporting practices were complementing each other, so they were able to present an overall picture of consumption and efficiency. He felt the Department should also be looking into the concepts of mandatory or voluntary reporting. He said the labelling and setting of standards for appliances was important and the institutions responsible for this should be robustly supported.

The Chairperson asked for more clarity on the advocacy role and exact mandate of SANEDI. He wanted to know who the coordinator was of the R20 billion incentive programme. He felt Members should be alerted to this, even if it meant asking the Department for follow up. He felt the 49M presentation was very interesting but questioned the survey. He understood that this answer could only be provided at a later stage, after engaging with those conducting the study.

The Chairperson noted that the membership of the GBCSA was not as high as they had wished it to be but felt their influence was growing in the built environment. He found it pleasing that people working in green buildings would be able to carry EE behaviour and awareness in their households. He thought it was worth noting that their work was not confined to the commercial built environment.

Mr Brian Wilkinson, Representative, Green Building Council of SA, thanked the Chairperson for his kind comments. He noted that SAPOA was part of the GBCSA’s Board and he would engage with SAPOA to find out how they would like to be represented. He added that the GBCSA had over 1 000 corporate members and considered itself to be not such a small organisation.

The Chairperson noted this point but felt there should be agreement on the need to still grow.

Mr G Choeu, Executive, Eskom, said the budget speeches of the DoE and the Department of Public Enterprises was used as opportunities to promote 49M. Looking at the research, he noted most of the questions were direct to 49M, but added there must have been benefit from other campaigns.

Mr Pieter Pretorius, Senior Manager, Eskom, said there were great challenges in refurbishing big pieces of equipment, and it was a very expensive process. He thought investment was needed in basic capability in the engineering facilities of tertiary institutions, such as metal making and metrology as an advanced science. Looking at upfront funding, he explained that Eskom required funding for projects upfront. He said the Industrial Development Council (IDC) was looking into bridging this gap.

The Chairperson asked if this was linked to the concerns of SANEDI.

Ms Mokgadi Modise, Chief Director: Clean Energy, Department of Energy, said that the solar water heating programme had also included a programme that was trying to encourage the Sector Education and Training Authorities (SETAs) to provide the necessary expertise.
 
Ms Geen (NBI) said the report she had mentioned in her presentation could be made available to all, through a link, but the EELN were actually the custodians of the report. There were plans, over the next couple of months, to pull out the data in the report related to EE specifically; the report was actually based on carbon emissions. It was possible to isolate what the companies were doing to save energy.

Mr Nassiep (SANEDI) referred to Mr Selau’s question on the electric car and agreed that the initiative was pioneered by Optimum Energy. Although the car was developed, it was not viable, because hundreds of millions of rands were needed to develop prototypes and produce enough for a viable market. He thought that SA was not ready for this type of vehicle, especially given the number of EE international brand cars that were already available in SA. He said there was a gap, in SA, for the retro-fit of electric vehicles. In India, vehicles were tested every six months for levels of carbon emitted, and not only did this process help the environment, but was also a means of job-creation. In SA, a premium was placed on new cars in relation to carbon emissions but there was no consideration of the carbon emissions and degradation of cars already on the road. He questioned the value in taxing new vehicles only, while not dealing with the problem of existing vehicles. South Africa also did not prescribe a scrapping age for vehicles.  A programme for mandatory testing of the carbon emissions of existing vehicles would be relatively easy to manage; it could be done at service stations and would help to create jobs. SA also needed to decide on an average scrapping age, and from there, decide whether to scrap a vehicle or convert it to a hybrid. A vehicle could easily be converted to half-LPG, half-petrol for R20 000, or converted to electric, which would cost much more. Valuable lessons would be learnt through the SA electric car initiative, and the vehicles had now been transported to Nelson Mandela University to be used as part of research.

Mr Nassiep fully supported the notion that there should be integrated reporting, specifically through a shared database. He outlined the mandate of SANEDI but said it was not easily implemented, owing to its fragmented nature. SANEDI was primarily intended to support the stakeholders, especially on the tax incentive side, and in determining which projects would be most successful in growing the sector. Its advocacy role focused on access funding and finances, and more discussion was needed on these points.  In relation to comments about banks, he noted the important role of the Clean Technology Initiative (CIT) in nurturing new projects, through providing finance and setting up project developers, and encouraging bankers to secure more funding.

Ms Ward (EEF) spoke about the landlord tenant divide noting that there were great benefits for landlords in having EE buildings, and this would attract tenants although the idea of green leasing was yet to grip SA and would be part of behavioural change. She said that in Queensland, Australia, with the sale of every house, the seller had to complete an obligatory resource-efficient form answering questions, for example, around solar water heaters, LED instead of CFL lights, water consumption and so on. This concept was worth exploring in South Africa, although it would have to be conducted on a national level, so that potential buyers would be made aware of the operational costs of houses. She also felt that national government needed to look into time-of-use tariffs and smart metering. Although national government had put out an edict that all municipalities had to install smart meters by the end of last year, she did not think that this had yet been done by any of them. Cape Town had become a bit smarter in this area, and was on the verge of rolling out a programme to begin on the retro-fitting of all meters, but much greater support was needed nationally, particularly in the metros.

The Chairperson agreed with the concept of smart mechanisms but thought it was not helpful to get information piecemeal.

Ms Modise discussed the solar water heater programme and indicated the Department had received a number of queries on this. However, she noted problems with the small budget received from Treasury, and mentioned that the Department would be trying to access more funding. In relation to the appliance labelling and standards, she said there were delays in the roll out of the process, but it would be promoted in a more robust way once the programme manager had been appointed. Further expertise, additional skills and capacity were provided through the US Department of Energy for this programme. She said the clarity around the role of SANEDI would be elevated, both in her capacity as a board member of SANEDI, as well as her official role in the DoE.

The Chairperson said that many of these questions around the role of SANEDI came from the Committee, and would hopefully result in a more refined mandate for SANEDI. It was most important that the fragmented nature of EE be counteracted and that an epicentre be developed.

Ms Ward requested that the DoE send a formal letter to the Mayor.

The Chairperson interjected and said this could be handled after the meeting.

The Chairperson said the EE of solar water heaters had been questioned at an earlier stage of hearings.

The Chairperson, in his closing remarks, questioned whether EE was rated highly enough in the country. He said a number of new issues had been raised. The Committee wanted some guidance from the Department whether further public hearings were necessary.

Finally, the Committee and the Chairperson wished Mr Selau a happy birthday.

The meeting was adjourned.

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