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2012 Budget Vote Speech by Ms Dipuo Peters, MP, Minister of Energy: South Africa

17 May 2012: Click here to view the 2012 budget vote speech by South Africa’s Minister of Energy, Ms Dipou Peters. Herewith an extract from the Minister’s speech:

“Honourable members,

We are making steady progress with the development of the Integrated Energy Plan; and by the end of the financial year will table the draft for Cabinet approval before embarking on further broader public and stakeholder consultations.

The Energy Planning Colloquium was held at the end of March this year, and attended by subject matter experts in the academic field, industry and various organisations and interest groups.

While we obtained a wealth of constructive viewpoints and comments on our processes and approach, there was a call for more stakeholder consultations to provide input into the plan.

In developing this plan, we are taking a holistic approach to the problem of planning for future energy needs and we seek to ensure that environmental and climate change issues, together with social development and economic growth issues are all considered in a balanced manner.

We will therefore continue to engage with various experts and stakeholders during the IEP development process, and we urge maximum participation from all interested parties.”

“Ladies and Gentlemen, the implementation of the Integrated Resource Plan has commenced and a number of policies and strategies that address the mandate of energy provision and the need to reduce our dependence on coal have been initiated. The IRP proposes the development of new generation capacity in a way that optimizes costs, promotes job creation and mitigates adverse climate change.

The flagship programme under IRP is the Renewable Energy IPP Bidding Programme for the provision of 3625MW of capacity from Independent Power Producers. The process has lived up to expectations by attracting foreign direct investment into South Africa worth about R100 billion over a period of 12 months.

The successful bidders are expected to enter into a contractual agreement with the Department, referred to as the Implementation Agreement. This agreement is designed to govern the commitments made by the bidders in relation to the minimum number of jobs that they will create during the construction period, the local content procurement of some power plant’s components and the change in control and BEE equity. The procurement process is designed such that the bidders will not be able to finalize their deals without signing this critical component of the project agreements.

We are confident that this will boost the energy sector employment growth potential.

We are now set to initiate a fresh bidding round for the other technologies such as cogeneration from Biomass, including sugar and paper, Biogas, Landfill Gas, and Small Hydro.The selected preferred bidders for the REIPP under window two will be announced on Monday, 21 May 2012.

During the course of this year, we will introduce the small power or less than 5MW capacity bidding round, whilst continuing with the renewable energy programme as a rolling programme, where subsequent windows are initiated subject to availability of MW left from the previous windows.

In response to the injunctions of the Green Economy and Localization Accords, the target for local content has progressively been increased for window 2 to a target of 60% in respect of certain technologies, whilst the minimum 40% South African equity participation remains the same. I would like to challenge project developers to take advantage of this certainty in the project pipeline to bring their factories to South Africa, to locally manufacture the components that constitute the various systems and to develop local skills. More details on this process will be dealt with by Minister Davies.

Over and above the Renewable Energy IPP Programme, we have also issued a Request for Information for projects that are available from other technologies such as gas, imported hydro, cogeneration and coal.

Once we have received the information about prospective projects, we will initiate a procurement process to meet the IRP requirements based on these projects.”

www.gov.za

 

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