Electrification Overview Electrification Indaba by DG of Department

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Electrification Overview Electrification Indaba by DG of Department of Energy Ms Nelisiwe Magubane 15

Electrification Overview Electrification Indaba by DG of Department of Energy Ms Nelisiwe Magubane 15 March 2012

Background • After 1994 and through the Government’s initiative of RDP (Reconstruction and Development

Background • After 1994 and through the Government’s initiative of RDP (Reconstruction and Development Programme) the electrification programme was endorsed. • In the period 1994 – 2001 electrification was an electricity industry funded programme. • During 2001 Government took responsibility for funding and managing the electrification programme, via funds made available from National Treasury – as a result of the White Paper on Energy Policy (1998). • This programme is managed by Integrated National Electrification Planning (INEP) unit within the Department of Energy. 2

Objectives of INEP programme • Integrate electrification with other Government Departments programmes with the

Objectives of INEP programme • Integrate electrification with other Government Departments programmes with the view of addressing Government objective of poverty alleviation and job creation. • Ensure full participation of Local Government in the planning and implementations process by using municipality’s IDPs. • To facilitate greater participation of previously disadvantaged communities in the operations and management of sector activities with a particular emphasis on women, youth and the disabled. • To ensure 92% access to electricity by 2014/15 for all formal households, instead of universal access due to limited resources and electricity industry short comings. 3

Funding process Grid Electrification Eskom - Connections - Infrastructure Municipalities - Connections - Infrastructure

Funding process Grid Electrification Eskom - Connections - Infrastructure Municipalities - Connections - Infrastructure Fiscal Non Grid Electrification Concessionaires Municipalities - Limited projects 4

Electrification progress • Over 5. 4 million households were connected to the grid between

Electrification progress • Over 5. 4 million households were connected to the grid between 1994 and 2011. • In period 2002 to 2011 close to 50 000 households were supplied with non-grid technology (Solar panels – Renewable Energy) • More than 12 000 Schools were grid connected from 1994 - 2011, and about 3 000 schools were electrified with non-grid technology in same period. • 345 Clinics in deep rural areas were supplied with non-grid electrification from 1994 to 2011. Province Electrified Houses: Municipalities & Eskom Eastern Cape 974 873 Free State 357 839 Gauteng 633 219 Kwa. Zulu Natal 878 867 Mpumalanga 535 356 Northern Cape 130 135 Limpopo 915 098 North West 628 184 Western Cape 364 172 Total 5, 417 743 5

Non grid – Solar home systems 2011/12 Financial year Total installed PV SHS -

Non grid – Solar home systems 2011/12 Financial year Total installed PV SHS - 47, 226 • Eastern Cape • Kwazulu Natal • Limpopo - 10, 284 - 28, 802 - 8, 140 § Non-grid electrification programmes will in future not only be implemented in concessionary areas, but on a limited basis in other areas in the country that qualifies for non-grid roll-out. 6

Infrastructure Projects Various Municipal and Eskom infrastructure projects were funded in 2011/12, related to

Infrastructure Projects Various Municipal and Eskom infrastructure projects were funded in 2011/12, related to the building of new substations, upgrading of existing substations and inter- connecting High Voltage (HV) lines: 1. Eskom • 43 projects under construction, mostly in KZN, EC and WC • 4 more substations than earmarked in Stratplan (6 of 10) • Different stages of completion – next 6 months 2. Municipalities • 48 projects under construction, mostly in EC, FS and WC • 11 more substations than earmarked in Stratplan (4 of 10) • Different stages of completion – next 12 months. More than 1/3 of current allocation is made for infrastructure projects – Municipalities - R 238 mil and Eskom - R 830 mil = R 1, 07 bil 7

National Progress Access - 1996 Access - 2010 8

National Progress Access - 1996 Access - 2010 8

Households without electricity Northern Cape 1. 5% North West 5. 5 % Western Cape

Households without electricity Northern Cape 1. 5% North West 5. 5 % Western Cape 5% Eastern Cape 20% Mpumalanga 6. 5% Limpopo 10. 5 % Free State 6 % Gauteng 21% Kwazulu Natal 24% Households without electricity: ~ 3. 4 million (Informal 1. 2 mil and formal 2. 2 mil) 9

INEP: MTEF Allocations MTEF 2010/11 R’ 000 MTEF 2011/12 R’ 000 MTEF 2012/13 R’

INEP: MTEF Allocations MTEF 2010/11 R’ 000 MTEF 2011/12 R’ 000 MTEF 2012/13 R’ 000 MTEF 2013/14 R’ 000 MUNICIPALITIES 1 020 105 1 096 612 1, 151, 443 1, 314, 772 ESKOM 1 719 810 1 737 842 1, 882, 087 1, 982, 596 68 200 70 861 86, 400 2 808 115 2 905 315 3, 119, 930 VOTED FUNDS NON - GRID BASELINE ALLOCATION 91, 152 3, 388, 520 10

Allocations for 2012/13 Eskom allocations (R’ 000) Munic allocation (R’ 000) Eastern Cape 488

Allocations for 2012/13 Eskom allocations (R’ 000) Munic allocation (R’ 000) Eastern Cape 488 339 279 400 Free State 39 121 79 300 Gauteng 104 882 188 000 Kwa. Zulu Natal 510 291 234 000 Limpopo 235 027 125 300 Mpumalanga 111 282 74 943 Northern Cape 36 107 59 900 North West 246 989 49 300 Western Cape 110 048 61 300 1 882 087 1 151 443 Province Total 11

Challenges • In the order of 82% of all formal households in SA have

Challenges • In the order of 82% of all formal households in SA have access to electricity – 76% of all households. • However, challenges in increasing these access figures: – – Shortcomings in the electricity distribution industry; Slow roll-out of grid and non-grid programmes; Funding shortcomings and Escalation of electrification costs • Under current conditions the real number of households to be electrified in the years to come will decrease – gap between households without access to electricity and with electricity will increase dramatically. – No dramatic increase in electrification fund within the next three financial cycles. 12

Proposed way forward White Paper on Energy Policy (1998): • Policy 7. 1. 4

Proposed way forward White Paper on Energy Policy (1998): • Policy 7. 1. 4 states: “Government will coordinate the electrification programme, including the following activities: setting of realistic electrification targets, determination of allocation criteria and priority areas for electrification, ensuring allocation and management of funds, financing and subsidization of electrification projects and determination of appropriate mix between grid and off-grid technologies. ” • Policy 7. 1. 4. 10 states: “Government will evaluate the impact of the national electrification programme and will amend the electrification policy and strategy from time to time as necessary” • Electrification policies is still valid, need to look at different strategy of implementation. 13

Proposed way forward (. . 2) • Options available are limited and if implemented

Proposed way forward (. . 2) • Options available are limited and if implemented it might not be popular. Available options need to be debated and considered, such as: – – – – Need to address EDI challenges and structure; Increase efficiency in managing and implementing electrification projects; Standardization of equipment and supply standards; Single purchasing office; National planning of electrification roll-out; Diversification of electrification technology – Energization vs Electrification Role of private service providers and financial institutions in future electrification and – Have to invest more in non-grid technologies. International grand funding available only for non-grid electrification projects • The deliberations during this Indaba and the process to be followed after this Indaba will need to address these issue. 14

Thank you 15

Thank you 15