Honourable Minister of Energy, Ms Dipuo Peters, MP
Honourable Chairperson of the Energy Portfolio Committee, Mr Njikelana
Honourable Members of Cabinet
Honourable Members of Parliament
Members of the Diplomatic Corps present
Invited guests and stakeholders
The Budget presented to this House by the Honorable Minister of Energy in her speech today is in tune with our ambition to be part of the larger Clean Revolution, aimed at an economy which balances our country’s developmental needs with a cleaner, smarter and more prosperous future.
It seeks to create the necessary conditions in the form of a secure and sustainable supply of energy upon which to pursue our strategic objective of universal access and which can underpin the massive infrastructure programme which our Honorable President so eloquently outlined in the State of the Nation Address.
This Budget therefore is about how best to leverage our energy resources to achieve our key strategic goal as the ANC Government of placing our economy on to a new job‐creating and more equitable growth path in line with our 52nd National Conference resolution which calls on us to on create a democratic developmental state in which our national resource endowments must be exploited to effectively maximise the growth, development and employment potential embedded in such national assets.
It presents a long term view of what we as a Ministry and Department intend to do attain the kind of society the ANC seeks to create.
Universal access to sustainable energy
As already indicated by Minister Peters, the year 2012 is the year for universal access to sustainable energy, and as the Department of Energy we will continue this year with programmes that will support the availability of sustainable and affordable energy to all citizens of our country. The Integrated National Electrification Programme (INEP) is the backbone of our electricity delivery programme for communities who were under-served in terms of grid and off-grid connection. It focuses primarily on servicing rural areas and newly established formal urban and informal settlements. Although the electrification programme has been in operation for 18 years, we continue to come across various implementation challenges. These challenges include the increasing costs of supplying new customers, network capacity, lack of skills, the poor financial status of distributors and backlogs. The biggest backlogs are in KwaZulu-Natal, Eastern Cape, and Gauteng followed closely by the islands in and around the eight (8) metropolitan municipalities.
In March this year, as part of celebrating the energy month, we held an Electricity Indaba in Durban, where we, amongst others, identified shortcomings of the current Electrification programme. The Department has commenced with the process of addressing these shortcomings with the assistance of the International Finance Corporation and consultants in order to improve the connection rate.
I would like to take this opportunity to thank the KwaZulu-Natal provincial government and other participants for their support during INEP Indaba.
This financial year the electrification programme has been allocated R 3, 119 billion, with municipalities receiving R 1,151 billion and Eskom R1, 882 billion, while R86 million has been allocated for non-grid connections. This will result in about 192 000 grid and non-grid connections planned for the year. For bulk infrastructure projects R345 million has been allocated to municipalities and R 243 million to Eskom respectively.
Electricity distribution infrastructure
The deteriorating state of the electricity distribution infrastructure is beginning to affect the pace of the rollout of the electrification programme. To address these challenges, the Approach to Distribution Asset Management (ADAM) Project is to be launched this year with pilot projects in selected municipalities. Our approach is premised on the prioritisation of regulatory matters rather than structural adjustment of distribution businesses. We recognize that there might be limitations in the current legislative and regulatory framework, and we require some commitment from municipalities where funding will be made available to rehabilitate the infrastructure, particularly where energy security is threatened.
Government and its social partners signed a Green Economy Accord on 17 November 2011 as an outcome of social dialogue on the New Growth Path. This is an agreement between organized labour, business, communities and government. Parties agreed to support government with the development, establishment and publication of a sustainable funding plan to support the installation of 1 million solar water heaters.
To date we have installed approximately 250 000 Solar Water Heaters nationwide against the 1 million target to be reached by 2014/15.As we move forward with this programme, we will be focusing on both rebate and fiscal funded programmes in the residential and commercial sectors. This programme is not only contributing to the decrease in electricity consumption, but is also ensuring access to a basic need, such as hot water.
Cushioning the poor
The implementation of the Inclining Block Tariff (IBT) of prepaid customers in municipalities is unfortunately lagging behind the Eskom roll-out programme. This is obviously of great concern to the Department and is mainly due to the following two reasons:Firstly, municipalities are struggling technically to change the meters. Secondly each municipality has to change its tariff structures to allow for changes in revenue income and these adjustments are made in more than one financial cycle.
Job creation and rural development
The Department will continue to alleviate energy poverty through the establishment of Integrated Energy Centres (IeCs) in rural areas as part of its contribution to the Department of Rural Development and Land Reform’s Comprehensive Rural Development Programme.Our Minister conducted the sod turning Ceremony of the Qwa-qwa Maluti a Phofung IeC on the 12th of January 2012. It is envisaged that 3 additional IeCs will be operationalised during the 2012/13 financial year.
The key challenge is to ensure that the IeCs which are currently operational are sustainable and continue to benefit the communities in the surrounding villages. For this to be realized, they must be operated and managed as business entities, similar to existing service stations and therefore should incorporate business management principles irrespective of the ownership model. There is no business that will succeed, unless it sticks to universal business principle. The oil companies that are partnering with the Department have the experience and expertise in operating and managing retail service stations and these skills should be shared with and transferred to the IeCs. The Department is grateful that some of the Oil Companies have embraced the Department’s call to provide access to affordable energy services and create jobs in rural areas through the IeC initiative of the Department.
Working for energy
Minister Peters has also indicated that later this evening we will officially launch SANEDI. Among the projects to be implemented by SANEDI this year, will be the hosting of the Working for Energy project, which puts clean energy solutions and sustainable development into practice, demonstrating replicable applications and improve the quality of lives in poor and rural communities. An amount of R25m has been transferred to SANEDI for the current financial year, for the implementation of this project.
Socio-economic issues, women, youth and children
Last year, I committed to intensifying our efforts to appropriately engage with women, youth, children and people with disabilities and implement responsive programmes and projects in partnership with our stakeholders.
Through our partnership with PetroSA, R13 million has been committed for the construction of a Multi-Purpose Centre in Nkungumathe as a joint initiative with the Nkungumathe Youth Development Forum in Nkandla. The Centre would serve as a “one stop shop” through which various basic essential services such as applying for identity documents, child welfare grants, computer services and other youth development programmes, basically most social development issues, would be accessed.
In August last year, we launched the South African Chapter of the Clean Energy Education and Empowerment Initiative for Women (C3E) with our sector partners in the private sector, institutions of learning and research, business and NGOs.This is one of the international Clean Energy Ministerial (CEM) Initiatives, of which our Honourable Minister of Energy, Minister Peters has been designated the Clean Energy Ambassador for Africa. Through this initiative, we seek to empower women of all ages to participate in the clean energy space through business and professional networking, mentorships, coaching, training and clean energy ambassadorships.
To date through the C3E initiative, bursaries have been committed for girls to pursue studies in Science, Technology, Engineering and Mathematics (STEM) focusing on clean energy. A steering committee and working groups in education, women empowerment, research and innovation, communication marketing and branding have developed a plan to implement integrated clean energy empowerment and education initiatives targeting and led by women.
In our attempt to address the challenge of scarce skills in Science, Technology, Engineering and Mathematics with our partners, we will continue hosting the annual Learners Focus Week which is a career guidance and information session for Grade 9 and 10 learners from all provinces focusing specifically on the energy sector. The Department hosted its first annual Learners Focus Week workshop for the Coastal region in July 2011 KZN and it was attended by 220 learners from Grades 9-11 and these included learners with disabilities. The programme will continue from 18-22 July 2012 where the inland provinces will be part of this programme that will be held at the University of the Free State.
The department is working hard to enhance, streamline and coordinate all women empowerment initiatives within the energy sector. Last year we hosted workshops for Women in Energy and Oil in KwaZulu -Natal, Northern Cape, Limpopo and Gauteng provinces. The objectives of these workshops were to inform women on available business ventures and opportunities within the energy sector and financial support and capacity building available. It is envisaged moving forward that this venture will reach out to women in the most rural areas and other provinces. We will continue to strengthen our partnerships and collaboration with progressive women empowerment entities like WINSA and WOESA amongst others.
In our quest to ensure universal access to affordable, safe and cleaner energy, the Department has also undertaken a study on the India Women Solar Panel Engineering Model (the so-called Bare foot programme) with the aim of tailor-making a South African Model. Once completed, the training programme will be rolled out to rural areas to provide the much needed jobs.
This year, in partnership with State Owned Entities and the energy parliamentary committees, we will continue with the public participation programmes through which, we will educate, engage and debate energy related issues to enhance the Department’s service delivery.
Finally, in relation to empowerment of women and persons with disability, the Employment Equity Plan of the Department was also implemented and I need to highlight that the target of 50% representation of women on the overall establishment was exceeded. There is still a need to intensify our recruitment drive for people with disabilities. A strategy has been put in place, but the implementation thereof requires dedicated funding for both their recruitment process and their needs.
The energy sector is a catalyst to job creation for other sectors, however; we have managed to achieve modest job creation in the energy sector through the implementation of some of our projects.In this regard we have facilitated about 5 000 direct jobs during the construction of service stations and a further 1, 260 permanent jobs. I would like to remind members that service stations employ about 60,000 workers and that this number is expected to increase.Also within the INEP programme approximately 5000 jobs were created last year. Over and above this, we anticipate a significant increase in jobs in the sector as we implement the renewable energy programme.
Since the establishment of the department two years ago, we have experienced challenges in relation to our office accommodation needs. I’m pleased to announce that, with the assistance of the Department of Public Works our department has procured alternative office accommodation and will be relocating to its new home (corner Visagie and Paul Kruger streets in Pretoria) during June/July this year.
We will also continue with our internal training programme with a view of enhancing the skills base of the department.
In conclusion I would like to thank Minister Peters and colleagues in Parliament for their leadership and support; Team Energy under the guidance of the Director General, Ms Nelisiwe Magubane, State Owned Entities and energy sector partners for their unwavering support.
Ngithanda ukubonga nomndeni wami ngokungeseka nokungibekezela kulomsebenzi obalulekile kaHulumeni, wokuletha intuthuko kubantu bakith
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