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DEPARTMENT OF ENERGY PRESENTATION ON THE INTEGRATED NATIONAL ELECTRFICATION PROGRAM (INEP)

DEPARTMENT OF ENERGY PRESENTATION ON THE INTEGRATED NATIONAL ELECTRFICATION PROGRAM (INEP) 18 JUNE 2013. Annual Report Presentation. Introduction Key focus areas Allocation 13/14 financial year Universal access challenges Additional progress Way forward. Introduction.

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DEPARTMENT OF ENERGY PRESENTATION ON THE INTEGRATED NATIONAL ELECTRFICATION PROGRAM (INEP)

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  1. DEPARTMENT OF ENERGY PRESENTATION ON THE INTEGRATED NATIONAL ELECTRFICATION PROGRAM (INEP) 18 JUNE 2013

  2. Annual Report Presentation • Introduction • Key focus areas • Allocation 13/14 financial year • Universal access challenges • Additional progress • Way forward

  3. Introduction

  4. INEP’s response to the 12 Government Outcomes and PICC INEP contributes to the following DoE and Government’s Outcomes Based Planning Approach: Outcome 4 – Decent employment through inclusive economic growth; Outcome 6 – An efficient, competitive and responsive economic infrastructure network Outcome 7 –Vibrant, equitable and sustainable rural communities with food security for all Outcome 8 – Sustainable human settlement and improved quality of household life and Outcome 9– A responsive, accountable, effective and efficient local government system. INEP is also reporting into SIP 6 of the PICC process.

  5. Key Focus Areas for 2012/13

  6. Electrification progress • Over 5.6 million households were connected to the grid between 1994 and 2012/13. • In period 2002 to 2012/13 - 65 174 households were supplied with non-grid technology (Solar panels – Renewable Energy) • Eastern Cape - 12,282 • Kwazulu Natal - 43,511 • Limpopo - 9,381 • Non-grid electrification programmes will in future not only be implemented in concessionary areas, but in a limited basis in other areas in country.

  7. MUNIC PROGRAMME 2012/13 – PERFORMANCE APRIL 2013

  8. ESKOM PROGRAMME 2012/13– PERFORMANCE APRIL 2013

  9. Non grid – Solar home systems 2012/13 Financial year

  10. INEP PERFORMANCE (12/13) Electrification data of 12/13 still to be added – more connections will be added, need to verify some connections. Target of 180 000 was exceeded Improved efficiencies as a result of be more involved in the operational activities of implementers. Good co-operation from Eskom and Municipalities

  11. Allocations 13/14 Financial year

  12. Allocations 2013/14 • Connections might change as projects are moving from design into • implementation phase.

  13. Connection and Bulk Allocations for 2013/14

  14. Bulk allocation 2013/14

  15. Adam allocation 2013/14

  16. Universal access challenge

  17. Universal access challenge • Households without electricity: ~3.3 million (Informal 1.2 mil and • formal 2.1 mil) • 75 % in Eskom supply area and 25% in municipalities supply • area.

  18. INEP established in 2001/02 - address backlogs of households in line with Energy White Paper (1998) recommendations. • Newly built households to be electrified by the restructured Electricity Distribution Industry (EDI) - due to serious inefficiencies in the EDI over the last 10 years, INEP had to address not only backlogs, but also newly built houses and informal households. • Not only connections had to be funded, but also ‘back bone’ network infrastructure. • In addition to the above challenges, escalating electrification costs and limited funding, as well as the high growth rate of houses (formal and informal), resulted in a serious thread to reach universal access in the country. • Despite its successes to date, the electrification programme will fall short in meeting its target of electrifying 92% of formal households by 2014, as defined as backlogs in 2001/02. It is expected that 84% of all formal households and 78% of all households in the country will be electrified by 2014. Universal access challenge (cont.)

  19. 2011 Census: ±12,24 mil households out of ± 14,45 mil households are utilizing electricity as a lighting source; ± 85% of households have access to electricity for lighting purposes. • Different types of households included into the total household figure (built on the same stand as the formal household): • Houses/flats/rooms in backyard 423 000 • Informal dwellings in backyards (shacks in backyard) 713 000 • Room/flatlet on a property or larger • dwelling/servants quarters/granny flat 120 000 • Total 1,256 000 • Majority of these households (about 90% plus) are not metered, estimated to be ± 1.1 mil . • Network designs were not done to accommodate these additional households, hence will have to be upgraded. • These household does also not qualify for inclining bock tariff and FBE. • About 2.2 mil households according to Census 2011 stats are without electricity, if the 1,1 mil households that are not metered (have not received electricity formally) been added, total figure of about 3,3 mil. • In line with the INEP stats for households that are not formally electrify (metered), hence ±77% households have a metered supply. Households electrified in South Africa

  20. If universal access to electricity by 2014 is not practical, what is the most effective and realistic timeframe to reach universal access, given the various challenges in the electricity industry, raising cost of electrification, etc.? • Hence a new approach to electrification is required - New Electrification Roadmap (Implementation plan) for South Africa was developed. • In March 2012, DoE held an Electrification Indaba where all the relevant sector departments and stakeholders were invited to participate and agreed on the need for a new Electrification Roadmap. • The Indaba resulted in a consultative working group process which the following relevent stakeholders were involved in defining the new Roadmap: • Eskom, DHS, DRDLR, DPE, SALGA, AMEU, CoGTA, MISA, NERSA, SANEDI, DBSA, National Planning Commision, National Treasury, MinMEC, NPC, PICC Secretariat, Commercial financial institutions and current non-grid concessionnaires. Universal access challenge (cont.)

  21. 2027 2017 2018 2017 2019 +R2 billion Universal Access is function of Electrification Technology options and funding 2022 2031 2020 2023 2021 +R1 billion Additional funding per year 2037 2023 2026 Base case 2028 2030 (base case) Option 2 Most cost efficient technology Option Option 3(base case) Option 2, but non-grid within 3km Option 5 Option 3, grid connection for informal households Option 1 All grid Option 4 Option 3, but grid replaces mini-grids 100 70 90 87 78 Technology mix % of current un-electrified formal households to be connected to the grid

  22. At least 99% grid access by 2028 Universal access by 2025 Universal access vs Connection rate Number of connections outstanding Connection rates required2 to meet… Million connections • Current ~220,000 grid connections per year3 3.4 Informal households1 1.2 • ~380,000 connections per year3 Formal households 2.2 2012 1 Informal settlements are defined as residential areas that do not comply with local authority requirements for conventional/formal townships 2 Beginning in the middle of 2013; includes informal settlements 3 Ignores growth of new un-electrified households .

  23. Using these rules, it is expected to deploy around 300,000 solar home systems and reach universal access for formal households in 2025 South Africa Provincial non-grid potential Thousand households Total connections 2013 – 2025 Million households 37 26 10% 16 0.3 Non-grid 84 11 28 3.1 90% Grid 73 19 The highest potential for Non-grid is in KZN and Eastern Cape Time to electrify formal households 20251 1 Assumes existing INEP annual funding and DoHS contribution of R2,000 per household for new RDP houses (40,000 houses per annum); assumes total of 50,000 new formal households per year from DoHS formalization process

  24. The key aspects of the new Household Electrification Strategy : Re-setting universalaccess date to 2025 and defininguniversalaccess as 97% - full electrificationis not possible due to growth and delays in the process of formalizing informalsettlements. Electrify about 3 million formal households via grid (90% of backlogs) and about 300,000 households with high-quality non-grid solar home systems to address current backlogs. Increasedefficiency in planning and the deliveryprocesswillrequire Master Plan to ensure more connections and to be in line with PICC SIP progrmames. Currentfinancialyearwillimproveefficiency, especiallywrtmunicipality’sdelivery (last yearincreased connections by about 20 000), as well as to prepare the electricityindustry for the increasedconnection rate. Additionalfundingwillberequired if universalaccessis to bereached by 2025. An additional R0.5 billion annually (nominal 2012 figure) top-up of existing allocations willberequiredfrom 2014/15 onwards. Eskom’s to lead the development of the Master Plan. Municipalities to improvedelivery and management of projects. New Household Electrification Strategy

  25. Additional progress

  26. Additional progress Eskom has progressed very well with addressing the so-called “island electrification” in KZN. 14 959 households identified falling into this category in 2011/12 – 10 186 been electrified (4773 outstanding) Master plan development – DoE in collaboration with Eskom. DBSA “front loading” process to fast tracked certain high backlog Municipalities as part of INEP long term planning.

  27. Project Report DBSA Front Loading

  28. Project Report DBSA Front Loading

  29. Project Report DBSA Front Loading

  30. Thank you

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