National Energy Bill: Briefing; Imizamo Yethu Community Group Appeal

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Mineral Resources and Energy

29 July 2008
Chairperson: Mr O Monareng
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Meeting Summary

A brief background on the National Energy Bill was provided and the Committee was informed that the Bill was premised on the White Paper of 1998. The White Paper had however left gaps on energy security which the Bill now filled. The Energy Bill aimed to address all energy security issues and it used the Energy Masterplan as its basis. The National Energy Bill aimed to ensure the provision of energy data and information, energy modelling and integrated energy planning, energy development, security of supply and lastly state participation in key energy infrastructure planning and development. Due to time constraints the DME could not fully provide a detailed breakdown of the structure of the Bill.

Members raised concerns over Eskom’s energy plan to spend R1.3 trillion over a 25 year period. Some of the concerns related to the feasibility of the plan and from where the funding was going to come.

The Imizamo Yethu Community Group from Hout Bay supported by the Energy Research Centre from the University of Cape Town made oral presentations about their concerns over housing, energy and lack of services. Due to time constraints, further input on energy and the better utilization thereof was reserved for the public hearings process on the Bill.

Meeting report

National Energy Bill: Briefing
Mr Nhlanhla Gumede, Deputy Director General: Hydrocarbons and Energy Planning, accompanied by Mr Jeff Subramoney (Director: Energy Planning) and Ms Masego Sephoti (Director: Compliance and Monitoring) briefed the committee on the National Energy Bill.

Mr Gumede provided a brief background on the Bill and stated that the Bill was premised on the White Paper of 1998. The Bill however filled gaps that the White Paper had left on energy security. The White Paper policy had been underpinned by certain assumptions at the time which were no longer valid at present. There had been for example the assumption that government would promote investment into the energy sector rather than use energy to drive investment in other sectors of the economy. In 1998 SA had an over capacity in all areas of energy. In drafting the Bill the validity of the assumptions underpinning the White Paper policy had been a concern.

The Bill however did not seek to replace legislation; it established links with other pieces of legislation. Whilst most existing legislation dealt with the past and present, the National Energy Bill dealt with the future. The National Energy Bill aimed to address all energy security issues. Mr Gumede explained that energy security was bigger than energy supply. He also noted that some aspects of the Bill used the Energy Master Plan as its basis.

The National Energy Bill was essentially about the provision of energy data and information, energy modelling and integrated energy planning, energy development, security of supply and lastly state participation in key energy infrastructure planning and development. Mr Gumede continued by giving the committee a breakdown of the structure of the Bill as per chapter. Giving a brief synopsis of each chapter as he went along.

The Chair however interrupted the process as time or the lack thereof was becoming a concern. He said that the Committee would peruse the Bill outside the confines of the meeting and asked Mr Gumede to highlight only important and controversial aspects of the Bill in order to save time.

Mr Gumede proceeded to speak on the importance of energy data. He noted that there were three distinct points of importance, that is, collection of data, modelling and planning. He noted that even though modelling and planning were very different it was nevertheless complementary. Reference was made to various sections in the White Paper where integrated energy planning was encouraged. The DME was also in the process of developing an energy modeling system called the National Integrated Energy Modelling System (NIEMS). The NIEMS approach required a model that could forecast as well as explain energy policy impacts on the economy taking into account the concerns of inflation, unemployment, taxes etc. The approach also required detailed energy models that explained technology and energy use within each sector. Adjustment costs also had to be addressed.  

Mr J Combrinck (ANC) asked if the Bill had made provision for public participation by civil society. He asked if the Bill covered energy safety education. What was the role of provincial and local government? He queried if new energy technologies like solar and nuclear had been taken into consideration in drafting the Bill. He further asked what the future for the
South African National Energy Research Institute (SANERI) and the National Energy Efficiency Agency (NEEA) was and if they would cease to exist. Mr Combrink asked about the availability of coal in SA as an energy source. Reference was made to the 25 year energy plan that was envisaged by Eskom and why it was to be revised on an annual basis.

Mr Gumede responded that the Bill had been made available after it had been certified by the State Law Advisor’s Office. Prior to this it had been advertised and had gone through a public process. The process had taken place in Pretoria and it was unfortunate that the DME was not able to move from region to region. Mr Gumede said that he hoped the parliamentary process would allow for better public engagement with the Bill. He also said that he had interacted officially with the Committee on the need for the Bill.

Mr Gumede said that the Minister could prescribe standards and specifications as well as programmes on energy safety education. The Bill was not specific on actual programmes but the Minister would prescribe it.

He noted that it was a bit difficult to comment on the role of provincial and local government. It was covered in section 25 of the Bill relating to intergovernmental relations.

Mr Gumede said that on the energy research side there was an understanding to secure future energy. Investment was needed in future energy technology both by the private sector and government.

He said that Chapter 5 of the Bill dealt with SANERI and section 23(1) spoke about NEA. Both institutions were created as a Pty (Ltd) by directives of the Minister. The idea was for both to be self sustaining and not to receive funding from government. Funds could not be transferred to either because they were not listed under the Public Finance Management Act (PFMA). The Bill aimed to consolidate the two entities. They would henceforth be properly and legally constituted. Transitional arrangements were in place until consolidation actually took place. He affirmed that eventually both would cease to exist.

Mr Gumede said that coal was regarded as a fossil fuel. SA had good supplies of coal, the problem was that much water was needed for coal to be used as an energy source. Water, oil and gas were not in abundance in SA. SA had coal and uranium. A coal supply model was in place. He noted that he could not envisage energy plans that would exclude coal. Coal had to play a role.  

Mr Gumede said that in the sector there was always a look out for new opportunities. Hence if one was in the private or public sector, you begin to plan your capacity. Planning had to be done with a long term view. It did not make sense to plan in the short term. Capacity planning especially had to be done in the long term. The 25 year energy plan had to be reviewed on an annual basis as things often change. He emphasized that the plan could not be static as changes often took place in the environment.
Mr L Greyling (DA) said that it was unclear how the Bill linked up with energy processes of other departments. He noted that Eskom had put plans and figures forward and asked how they were going to be affected by the Bill and the institute to be created by DME. Mr Greyling referred to the planned expenditure of R1.3 trillion on energy generation over the next 25 years by Eskom and said that it was important that it created local jobs and that much of the money should be kept within SA.

Mr Gumede responded that in reality private entities needed to consult with their board of directors before making a decision. Therefore one had to take cognizance of other people’s plans. One had to consider what happened in the general economy as well.

Mr Gumede pointed out that section 11(3)(e) of the Bill spoke to an integrated energy plan. He noted that at some point there needed to be an integration of plans. The Energy Master Plan did not have the intention of telling Eskom that it could not spend R1.3 trillion over 25 years. The Master Plan had to take into account all such plans.

Mr C Kekana (ANC) referred to the perceived expenditure of R340 million on electricity over five years and said that the figure was well beyond SA’s annual budget. He asked from where the funds were going to come.

Mr Gumede said that if funds were to come from the state there had to be an understanding of the impact. Macro-economic policy, fiscal policy and monetary policy etc had to be considered. The economy was a system with many parts.

The Chair stated that the R1.3 trillion expenditure was part of Eskom’s projections. He noted that if the DME was able respond to the questions on this, they should do so.

Mr E Lucas (IFP) said that it was the First World countries that had done most of the damage to the environment causing climate change. As a result SA had to bear the cost of environmentally friendly processes in generating energy. The poor man on the street had to foot the bill as a result.

Mr Gumede said that SA could not compare itself to the First World. He noted that economies with no energy could not grow. The issue was about what resources were available.

The Chair referred to the objects of the Bill and asked how realistic it was to state in clause 2 “ensure uninterrupted supply of energy to the Republic”. He made mention of the recent load shedding that had taken place in the past and asked if it was an ideal that was being strived for.

Mr Gumede was not too sure about the correctness of the wording chosen. It could possibly have read “promote” instead of “ensure”. He agreed to engage his colleagues on the matter. If the Minister was not accountable for energy supply for the economy, then who was? It was about accountability and the identification of risks with a view of coming up with risk mitigation strategies. The object might not be too realistic but it was an end state that was wished for. Strategies and policies were needed to reach it.

Imizamo Yethu Community Group Appeal
The Imizamo Yethu Community from Hout Bay supported by the Energy Research Centre from the University of Cape Town made oral presentations. The group comprised of a formidable delegation of women from the Imizamo Yethu Community as well as Ms Jocelyn Muller and Mr Bill Cowan from the Energy Research Centre. Each of the women spoke on different aspects of their appeal which was about the lack of basic services such as electricity, water and sanitation as well as housing in the Imizamo Yethu informal settlement. There was a plea that the Committee should assist in any way possible.

The Chair stated that the Committee sympathised with the plight of the community but nevertheless felt that the issues highlighted fell within the domain of the municipality. The Committee would however try to assist in any manner that it could by referring the matter to the parliamentary committees on housing and local government.  

Mr Kekana agreed that it was a matter that needed to be handled by local government.
Mr Mathlala (ANC) suggested a way forward given his past experience as a mayor in local government. He asked if the community had spoken to its ward councillor and if he had informed them about their integrated Development Plan. Had the Mayor or the Department of Housing made a visit to the informal settlement? He stated that if the matter was to be referred to the relevant persons, a detailed report was required.

The Chair alerted all present that time was becoming an issue and that the Committee would have to adjourn shortly.

Ms Muller appealed to members to listen to the inputs by the community group. Inputs on the better utilization of electricity in the community were yet to be done.

The Chair said that people could have their say as there was a process in place, that is, the public hearings on the Bill. He noted that if he had known the subject matter of the presentation he would have suggested the presentation be made during the public hearings.

The Chair said that Parliament would always be willing to listen to people from grassroots level. However Parliament also had processes and systems in place to contend with. He suggested that the community make a submission on the Bill during the public hearings process.

Further inputs were briefly heard on how expensive cooking fuel and daily necessities were.

The Chair agreed that food prices had become expensive and referred to the recent marches by trade unions in protest against these. He said that the Committee could not entertain further inputs as members had other commitments. He said that the Committee heeded the pleas of the community and would engage further on the issue.

The meeting was adjourned.


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