Tag Archive | Sisi Njikelana

Nuclear and gas workshop meeting

Gas emerges as winner……

nuclear logoIn what appeared to be a listening platform for anti-nuclear lobbyists, an energy stakeholders meeting, organised by the portfolio committee on energy on nuclear energy with the subject of nuclear energy as a component of South Africa’s future energy mix, was billed as a debate as such.  However it turned out to be a platform for speakers and not a debate at all.

This was primarily because there were so many submissions and questions had to be cut down to one minute, most of the earlier time having been taken by the department of energy, NECSA and proponents of the nuclear build programme using the day for presentations, already seen in Parliament and by parliamentarians.

Nuclear platform not provided

Opposition members expressed their anger at their inability to listen to any serious opposition to the use or deployment of nuclear facilities but a number of interesting points did emerge that may give value to whether or not it was worth having had a meeting at all.

Much of what emerged was the seriousness of the costs of any nuclear programme; safety matters and job creation ability, particularly in the relationship between nuclear versus solar and wind and other clean energy projects.

Govt. seems fixed on nuclear

Whilst the chair, Sisa Njikelana, said the meeting was not about trying to change government plans on its nuclear ambitions which clearly included nuclear energy in its planning, or debate the extent to which whether or not nuclear will or will not be part of the energy mix, he nullified arguments put forward by stating that a revised integrated resources plan was to be available in the coming weeks.

Most presenters expressed surprise that government policy was so fixed on the matter.

What did emerge that detractors were quoting the high costs of Finnish nuclear re-actors but the subject of low-cost Chinese or Korean re-actors did not emerge, as stated by one commentator.

Plans for waste in hand

Furthermore, DEO negated all complainants on the issue of nuclear waste by saying that plans were in process to handle long term nuclear waste with a scientific solution by government and the main problem was a misinformed public at this stage.

DEO also responded that hydro power could be a lot more dangerous and threatening to a massive number of communities downstream than any nuclear re-actor and that nobody had died in the Fukushima accident, which was the result of an earthquake not nuclear mishandling.

From results tabled it appeared that wind power was more expensive on a consumer cost basis.

Shell says gas cost effective

A major input came from Shell SA who pointed out that whilst they were not against building nuclear plants but for cost of building one nuclear plant, three national gas pipelines could be built, enough to handle all South Africa’s gas field requirements and include also the cost of gas to fuel technology.

The result of the stakeholders meeting in fact resulted in a determination of parliamentarians to insist upon DEO that gas should be focussed upon to a far greater extent when determining South Africa’s future energy mix and needs.

Refer to articles in this category

http://parlyreportsa.co.za//energy/integrated-energy-plan-iep-around-corner/ http://parlyreportsa.co.za//cabinetpresidential/nuclear-goes-ahead-maybe-strategic-partner/ http://parlyreportsa.co.za//energy/national-nuclear-control-centre-now-in-place/

Posted in Energy, Facebook and Twitter, Finance, economic, LinkedIn, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Electricity connections not making targets

No hope of meeting Zuma’s promises…

elec poleThe inability of municipalities and local government to bring electricity to the poor and for the department of energy (DOE) to meet its promised target of electricity to all households by 2015 was a subject which dominated the DOE’s annual report to Parliament recently. New Minister of governance and traditional affairs, Pravin Gordhan, will have this issue before him as he tackles local government problems as will new minister of public enterprises, Lynne Brown.

Ms Nelisiwe Magubane, DG of DOE was reporting on the activities of her department for the 2o12/13 period and neither the minister of energy, Ben Martins, or his deputy, was present, much to the chagrin of portfolio  committee energy committee chairperson, Sisi Njikelena, who reported angrily on the subject.      DOE was reporting on its annual report and second quarter achievements.

Success with avoiding Middle East for oil

In noting that the year had been dominated by fluctuating oil prices, Ms Magubane noted that South Africa had succeeded in switching 41% of its oil imports to the African continent.

DG Magubane also reported that the electricity supply situation had improved in the country and the department’s own household electricity connection programme had also improved, mainly thanks to Eskom, but there was a large backlog that still existed due to lack of accountability by municipalities. This was a worrying factor for the country, she said. On this subject, further reports followed.

Other DOE targets met

Dr Barnard

Dr Barnard

On clean energy as far as the year was concerned, she reported that in August financial close had been received from twenty eight of the independent power producer (IPP) bids: the biofuels blending regulations had been drafted; the draft pricing arrangements started; and a nuclear safety report compiled and submitted as a result of lessons learnt from the Fukushima disaster.
 Dr Wolsey Barnard took up the issue of DOE’s poor record on electricity connections and said that bearing in mind the lack of skills and training at local government, it “was a miracle that South Africa had achieved so much”.

Aside from the fact, he said, that the government financial year was different to the municipal year, which made a mockery of funding programmes and targets, he said dealing with municipalities was “extremely difficult”  but nevertheless “for each seventy seconds of each day there was a connection some here in South Africa”.

Treasury must ring fence local funding

On the problematic relationships with local government, Dr Barnard said DOE was doing as much as it could “but you can pull a rope but you can’t push it and that was the trouble in dealing with local government officials”.   He said he looked forward to the day when National Treasury’s promised Bill “ring fencing” funds was promulgated “and then we might get somewhere”, he said.

He noted that each municipality had to sign a contract to get funding in the first place, providing business plan, “but sometimes we get to a place to install for a lot of homes built and there is no sub-station or any hope of connecting to the national grid”.

Cabora Bassa dam debt at R1

nelisiwe magubaneMs Magubane confirmed that in the annual reports a loan to Mozambique for the Cabora Bassa dam had been written down to R1 with the permission of Treasury. This loan was in respect of money loaned in the ‘sixties and it was clear that the Mozambique government could not pay. However, the question of re-payment of this loan would be re-raised, she said.

On queries why there seemed so little interest in gas exploration by government in Mozambique, whereas other countries seemed to have “got their foot in first”, Muzi Mkhize, chief director of hydrocarbons, said that “unlike other countries, we do not subsidize our national oil exploration effort and, in any case, the quest of dealing with countries was a foreign affairs matter and country to country relationships had to come first.”

SA to meet Mozambique on gas exploration

Sisi Njikelana said that this was a totally unsatisfactory answer and called on Mkhize for a better explanation to his committee.  Mkhize admitted that South Africa was “meeting Mozambique on a government to government basis on gas exploration matters in mid-October”.

When asked what had happened to the nuclear safety report, deputy director general of nuclear, DOE, Zizamele Mbambo, said that this was a security document but it had been acted upon.

The Eskom representative was asked to speak on the subject when a question was raised about the Koeberg Nuclear plant by a Cape Town MP, and the Eskom official reported that a “fortnightly nuclear safety committee met in the area with all representatives present” and that the meeting was chaired by a person drawn from the local community.

Refer to articles in this category
http://parlyreportsa.co.za//public-utilities/municipal-free-basic-services-slow-build/
http://parlyreportsa.co.za//energy/dpe-

Posted in BEE, Electricity, Energy, Enviro,Water, Facebook and Twitter, Finance, economic, LinkedIn, Public utilities, Trade & Industry0 Comments

Biofuels development stays in limbo

Nobody building

sorghumIn a major presentation by the department  of energy (DOE) it became quite evident that governments biofuels strategy was still only a theory and whilst eight biofuels projects had licences either granted in principle or issued in practice, not one plant has yet gone into the building phase to meet government’s target of creating an estimated 25,000 jobs.

Ms Mokgadi Modise, chief director of clean energy at DOE, told the portfolio committee on energy up front that it was acknowledged by DOE that South Africa’s biofuels strategy could not get off the ground unless the state came up first with clear policy regulations and incentives to industry.

Big plans for 2013

Nevertheless, entrants to the industry that had indicated a firm commitment to the biofuels production had provided a cumulative figure to DOE that would exceed the 2013 target they had originally envisaged of some 400m litres, about 2% of the national fuels pool.

She said that whilst this was an encouraging start, there was little hope of any target date being met primarily because no support mechanisms from Treasury were yet put out; no regulations or pricing mechanisms had been established but only talked about and government was still undecided on blending options – the most suitable crops being mainly sorghum, soya, sugar and canola.

Blending issues

The minimum blending level of 5% biofuels into conventional diesel and petrol were set last year, in a gazette published accordingly, she said.

Currently, Modise said, DOE acknowledged that bio-ethanol falls outside the fuel tax net but bio-diesel, if supplied, would not, although manufacturers, would receive their 50% from the fuel levy in this case. Blending options were the six refineries in South Africa and at all the fuel depots, which amounted to 2 large depots for each of the seven oil companies.

Having heard their options, it was assumed by DOE that two of the companies would blend at their refineries and the balance of oil companies would blend at their depots. She gave no names.

On capital investment by the oil companies, she noted that R278m would have to be spent on refinery blending for this to be possible and a minimum of R460m on depot blending.

Looking outside SA

Parliamentarians noted that satisfactory diversification processes seemed to be going on in the liquid fuels industry and there were obviously attempts to create sustainable jobs but they asked what export markets were being created and how was the product going to be transported.

Modise said these issues had not yet been explored by DOE but she needed a joint meeting with the departments of science and technology, the department of agriculture including water department and treasury officials present before any such questions could be answered.

She said feasibility studies were being conducted with the refinery companies in order to establish whether or not they would “buy in” and that the department of science and technology were to supply their research findings by 31 March. A decision had to be taken by the same date on whether or not to exclude maize as a permitted feedstock.

Treasury answers needed

In answer to questions on financing, Modise said that IDC had put R1.5m aside for support but treasury needed play out its support programme on incentives and might make a statement before the national budget took place.

Parliamentarians said that if jobs were to be created in the right areas then Modise and DOE had to ensure that any such incentives must speak to the issue of distance from the market place if growth of agriculture in the “homelands” areas was to be encouraged. Modise said that was the kind of question that DAFF and treasury had to get together on.

On the one major biofuels plant that had been in the newspapers, namely the Craddock facility which had IDC backing, Modise said it still only had a conditional “granted” licence as not all requirements, mainly financial, had been met in order to issue a licence – only a temporary “granting” being considered. There was also a well-developed plan in Port Elizabeth but this was still on hold. A “granted” licence was a strong indication but an “issued” licence gave the right to operate.

Things too vague, says chair

In conclusion, chair Sisi Njikelana said there must be immediate follow up by Parliament on the whole issue of biofuels since DOE had to get beyond just local strategy and move towards the creation of an enabling environment. He had no sense, he said, on finality on manufacturing possibilities or issues, or even a road map on what was happening generally.

Modise responded by saying that DOE needed certain  “triggers” at the stage to happen; for example for the government needed to start talking to SADC for a start to see if the country really should be really working to just a 2% figure of the local market alone; treasury and particularly  agriculture had to provide clarity on policy; and technical issues under debate had to be finalised.

Feedstock,incentives,transport et al

Lance Greyling of the ID said the possibility of creating thousands of jobs in the biofuels industry had started in 2007 and there was still an air of frustration and expectation.   He told DOE that whilst it may seem possible to exceed the originally set target of 400m litres a year, the security of supply of feedstock was still a worrying issue, as was transport to manufacturing points and a proper tax incentives plan, including recovery cost factors to the liquid fuel companies.

Much more work had to be also with the department of rural development and land reform as well, he said, on the issue of getting small holders being able to get crops as well to their market in order to assist in rural development.  The implementation of the whole biofuels strategic plan was far too slow, he said.

Posted in Cabinet,Presidential, Energy, Enviro,Water, Finance, economic, Fuel,oil,renewables, Land,Agriculture, Public utilities, Trade & Industry, Transport0 Comments

Oil industry stakeholders to meet on B-BBEE audit

Chairperson Sisi Njikelana told parliamentarians and those who attended the portfolio committee of energy meeting on the audit findings of the Liquid Fuels Charter (LFC), that all stakeholders in the industry will  meet to discuss the way forward  to improve the black empowerment stake in the oil industry.

His comments followed a presentation of the audit by Moloto Solutions by Tseliso Maqubela, deputy director general hydrocarbons for department of energy (DoE) together with Ms Gosetseone Leketi, the DoE liaison officer who had worked on the audit. It is understood that that such a meeting has taken place and that procurement by the oil industry was a major discussion point.

Maqubela told parliamentarians that DoE could now proceed on the subject of black empowerment within the oil industry without just anecdotal information but with extra basic facts and home truths garnered in an exercise, which, with the exception of a few companies, was marked by good co-operation amongst the industry.

DoE had placed the audit findings on its website a week earlier, the original survey of the LFC being commissioned in 2010 and its findings being only up to that date. The document was placed before cabinet in April this year, the audit having been completed by Moloto Solutions as late as April 2011.

In the light of the fact that the LFC had an expiry date of 2010, the purpose of the audit, as explained by the minister of energy at the time, was to establish the level of compliance with the BEE factors laid out in the charter before renewal was negotiated if it was to be, the industry not having its own B-BBEE sectoral agreement through the department of trade and industry.

DoE in its recommendations following its own summation of the audit suggested that a sectoral B-BBEE code be developed through DTI after agreement at the recommended stakeholder’s meeting and that the issue of penalties for non-compliance should be debated.

However, Sisi Njikelana said that his approach to penalties was that they were not going to be “important” if all co-operated and that DoE would not necessarily have to legislate for this necessarily. But he reminded all present that “we do not have another ten years like before.” There had to be some very urgent improvements, he said.

“We need a systematic way to track demographics but in order to get meaningful change” all involved have to apply their minds”, he said. An official ongoing monitoring body that was more effective and constantly updated progress amongst oil companies was suggested by Njikelana.

In presenting their views on the report, Gosetseone Leketi of DoE said that oil industry participants had agreed to the application of the LFC in its industry ten years before BEE legislation was applied in South Africa generally.

Presumably now DoE would have to consider how to amend the LFC after negotiation with oil industry participants or alternatively consider a separate document along the lines of other sector industry BEE charters, studying the success and failure of the separate oil industry scorecard factors in South Africa and its verification system to date.

Concern was expressed by Moloto Solutions in the audit that the department of trade and industry, with its current work load, could take on another sector industry BEE draft.

In very broad principle, Moloto’s audit findings indicated overall compliance with the charter at 48% with black shareholding averaging at 18.91%, albeit narrow-based, with a very low participation by black women as shareholders. Only one company has met the LFC target for shareholding control which participants at the meeting assumed to be Total whose French shareholders had made a major sale to black owners upon exiting.

As far as the audit was concerned generally, Leketi said skills development areas stood out with a poor record, as did employment equity and also preferential procurement in certain aspects. On the issue of procurement, the audit findings indicated considerable effort by Moloto to establish the background and factors behind the procurement of crude oil and the mechanisms involved, which they had clearly found difficult to establish in some cases due to competitive factors.

Leketi noted that this was an area where black employees had to gain more control and experience, according to Moloto Solutions. Leketi said that this was a DoE view.

The report separates, as a distinct entity, employees who are “foreign nationals” and Leketi pointed to the difficulty some companies had in reporting structures on product issues where responsibility and organogram management structures were constantly changing without any reference to the particular trading conditions in any country.

For example, Maquebela subsequently said on this issue in discussions later, “Suddenly an international company with its head office in Hong Kong could decide that Africa would report through Egypt for, say, LPG, he said, and the management in that area would have no understanding of (B-BBEE) conditions applying in this country”.

Leketi, in presenting the report, said the audit stated up front that that punitive measures should be designed against companies that do not make “the 25% cut” and that “some way” has to be found the develop supportive cultures for BEE within company behavioural patterns, especially in line management.

Companies, the report said, should place on notice boards employment equity achievements and targets and companies should urgently upgrade their black recruitment programmes, especially amongst black women  and improve the overall knowledge base of the their own staff at all levels regarding BEE employer requirements and targets if achieved or not achieved.

The findings were specific, Leketi said, on the need for “employee capacity building” at all levels with reward and achievement acknowledge programmes to accompany skills acquisition, especially in “scarce skills” areas.

Maquebela stressed in his comments that in his view, on the aspects of skills training which was so absent in most companies (particularly scarce skills needed in cleaner fuel development, he said) that the principle of “learning by doing” should be emphasised and that “internationals” should take a lot more advantage of their ability to send employees overseas on training courses.

The meeting concluded by chairperson Sisi Njikelana saying that bearing in mind the date of the findings, “the industry must have another platform to express itself”.

Tseliso Maquebela agreed with this route but warned that he rejected those findings where oil companies had said during the audit that they were not aware of the conditions that they or their employers had to meet with regard to black empowerment.

“Nobody could be in this industry and not be aware of exactly where they stood in regards to targets, timings and the details of LFC requirements in addition to BEE regulatory aspects.”    He rejected any idea that employees interviewed should have been ignorant of why the audit was being conducted and what the onuses were upon on their employers.

He stated however that he agreed with the findings of the report that there was great ignorance generally amongst employees of the urgency behind the need for industry to re-organise along BEE lines and noted the comments in the audit that much appeared to be done in an atmosphere of haste after initial interviews had been conducted.

 

Posted in BEE, Cabinet,Presidential, Energy, Finance, economic, Fuel,oil,renewables, Justice, constitutional, Public utilities, Trade & Industry0 Comments


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