L Xingwana: Consultative Workshop in preparation for 14th session of
Commission on Sustainable Development

26 April 2006

Salutations

The upcoming 14th session of the United Nations (UN) Commission on
Sustainable Development (CSD) will place the central role that energy has in
furthering sustainable development firmly in the spotlight. This is an
opportunity for developing countries such as South Africa to identify the key
barriers to sustainable energy development and propose key policies and
measures that can redress these obstacles to sustained economic growth, social
upliftment and environmental consideration.

Allow me to provide some background with regard to where this initiative
came from.

During 2002, the World Summit on Sustainable Development (WSSD) was held in
Johannesburg at which issues of energy, environment and sustainable development
were discussed. The event was a gathering of developed and underdeveloped
countries with different agendas. The implementation mechanisms of the outcome
of the decisions flowing from there are driven as part of the CSD.

Currently there are two processes that we as Department of Minerals and
Energy (DME) are involved in. The CSD four, which involves African countries,
met in Addis Ababa, Ethiopia, last year. Issues pertinent to the African
continent and challenges that we face were discussed. Thereto, I must indicate
that it is not possible to always agree on everything because countries in
Africa are at different stages of development. To assist some of the countries
in Africa, we shared our country report with them.

CSD 14, which is an international event, will be taking place in New York
(NY) from 1 to 12 May 2006. The CSD 14 process is intended to assist in
implementing the Johannesburg plan of implementation, flowing from the
aforesaid WSSD conference that took place in Johannesburg in 2002.

At the same upcoming CSD 14 conference, South Africa would be expected to
provide a report back on the hydropower conference that was recently held in
South Africa at which over 28 African Ministers participated.

Because of the impact of energy issues on women and in keeping with the
commemoration of the 50 years of the women’s march to the Union Buildings it is
critical that women be consulted. Our approach is informed also by a desire to
rectify previous discriminatory practises where major decisions were taken
without consulting the most affected parties, you the women. For us it is
crucial that mistakes of the past are not repeated lest “we fall foul of the
same kinds of discrimination and suppression,” that we women were subjected to
in the past.

The country report and decisions taken at country level require the buy in
of the ordinary woman to succeed; otherwise the ambitious plans conceived in
Johannesburg in 2002 will remain a pipe dream.

Women are decision makers with regard to the energy choices that are used
within households. Examples of these are decision with regard to energy source
for cooking, which could be a paraffin stove or charcoal fire, or electric
stove. Choices involve whether to use candle light for lighting, electricity
for television, a gas stove for household heating, or the “basa njengo magogo”
technique for cooking with coal. All these energy decisions are taken by and
have an impact on the lives and welfare of women.

It is crucial that women are empowered to better understand and appreciate
the social and economic benefits of energy efficiency in their own environment.
If women can appreciate the financial implications of using the correct light
bulb for household lighting, correct use of basa njengo magogo, when using coal
for cooking, economic benefits of energy tips, etc, there will be major savings
for the household. Ultimately these would translate into more disposable income
for the individual and ultimately savings for the country in terms of energy
costs, including electricity.

As you are aware my Ministry has a responsibility over the entire energy
portfolio.

We want women to raise their experiences of energy in South Africa and make
concrete recommendations. You must also make proposals on what should be done
to ensure sustainable development.

Women must also give an input about what they want the international
community to know and to do to assist them.

It must be remembered that the CSD 14 process provides women with a voice to
speak about energy issues affecting South African women and those in rural and
impoverished areas to the world.

South Africa and energy poverty

While South Africa is fortunate in much of its wealth and economic
development, the government recognises that there are in fact two economies in
the country. The first is an advanced, sophisticated economy, based on skilled
labour, which is becoming more globally competitive. The second is a mainly
informal, marginalised, unskilled economy, populated by the unemployed and
those unemployable in the formal sector.

Despite the impressive gains made in the first economy the benefits of
growth have yet to reach the Second Economy and with the enormity of the
challenges arising from the social transition, the Second Economy risks falling
further behind, if there is no decisive government intervention. There is
therefore as strong a commitment to the achievement of the Millennium
Development Goals (MDG) and sustainable development in South Africa as in other
less developed countries.

The Department of Minerals and Energy (DME) is committed to contributing
towards the eradication of energy poverty in South Africa and has also rallied
behind national government strategies aimed at alleviating urban and rural
poverty. Several programmes and initiatives have been developed over the
years.

Integrated National electrification Programme (INEP)

In 1994, the South African government developed an integrated national
electrification programme focused on both grid and non-grid connections aimed
at ensuring access for all. The programme was designed such that it covers
different sectors of the social ladder namely households, schools and clinics.
With schools and clinics it placed more emphasise on rural areas that had been
isolated for a long time. Targets are set on annual basis and in 2005/06 an
amount of R1.39 billion was spent on electrification with R84 million allocated
to non-grid electrification.

Free Basic Services

In line with the Integrated National Electrification Programme (INEP), we
have established a Free Basic Electricity (FBE) programme where people earning
below a certain income bracket receive a free monthly allocation of 50 kWh.
This is to ensure that INEP is coupled with affordability and meeting basic
energy needs.

We are forced to concede, however, that some areas are indeed too far from
the main grid to be electrified at present. A free basic alternative energy
policy is being developed by my Department to provide support to communities
with access to alternative fuels such as LPG, ethanol gel, paraffin and others
that contribute to providing energy for household energy needs.

Fossil fuels are finite but their use continues, seemingly unabated When
combusted, fossil fuels release greenhouse gases into the atmosphere.
Multi-lateral arrangements such as the United Nations Framework Convention on
Climate Change (UNFCCC) and the Kyoto Protocol have been established to address
the control of greenhouse gas emissions. South Africa acceded to the UNFCCC in
1997 and to its Kyoto Protocol in 2002. Although South Africa is not required
to reduce its greenhouse gas emissions, it is in a favourable position to
develop Clean Development Mechanism Projects (CDMP). You will hear more about
this instrument of the Kyoto Protocol later.

Notwithstanding climate change concerns and the increasing emphasis being
placed on alternative energies the use of fossil fuels is expected to increase,
albeit at a reducing rate, over the next few decades. The international energy
agency contends that the world will remain reliant on fossil fuels for at least
the next 20 to 30 years. Technologies supporting carbon capture and storage
will gain prominence as environmental pressure builds on countries that
continue to use coal as feedstock for energy production.

I would like to share with you some of the initiatives in the Department
that support the protection of our environment and contribute to sustainable
growth in our economy.

Energy efficiency

Energy efficiency measures remain the cleanest form of energy that can be
introduced. Implementing energy efficiency measures that result in a decrease
in energy consumption directly equates to a reduction in environmental impacts
and a bottom line monetary saving. The DME has a target for the first year of
achieving a saving due to energy efficiency practices of 29 Peta Joules by
implementing the following:

* Energy efficiency in the building sector

Although this sector contributes a relatively minor percentage to national
energy usage, savings through low cost and medium cost technical interventions
have been calculated to be as high as 15 percent of energy demand. Government
is leading by example and has instituted a programme where government buildings
are retrofitted to become more energy efficient. I have myself agreed to be one
of the test cases for energy efficient interventions in the home together with
other Ministers and Deputy Ministers we are ensuring our official residences
are fitted with energy efficient lamps, geyser blankets and even solar water
heaters.

* Increased energy efficiency in industry and large business

The industrial and mining sectors combined are the largest users of energy
in South Africa and are highly energy intensive, a legacy of the past where
excess electricity generation capacity necessitated investment in energy
intensive industries. A target final energy demand reduction of 15 percent by
2015 has been set for this sector. In order to achieve this, the Minister of
Minerals and Energy has signed an Energy Efficiency Accord (EEA) with large
business and industry during May 2005.

* Awareness Raising and Interchange of Information on energy efficiency

A national campaign to promote energy efficiency will run for most of the
year. It will be spearheaded by the newly established National Energy
Efficiency Agency (NEEA). This agency takes responsibility for the
implementation of energy efficiency nationally and is housed in Central Energy
Fund (CEF) (Pty) Ltd, the state energy company.

Clean coal technologies

As South Africa’s main energy reserve, coal forms 75 percent of the primary
energy supply. It is vital that we consider technology that allows us to
continue to use coal where there are no viable alternatives, albeit in a manner
that reduces the impact on the environment. Priority is being given in the DME
to the roll out of the “Basa njengo Magogo” programme, the top down ignition of
a coal fire. This methodology has been shown to result in a smoke reduction of
80 to 90 percent under laboratory test conditions and also results in less coal
being burnt (and hence less carbon dioxide being emitted).

Designated National Authority/Clean Development Mechanism

The Designated National Authority (DNA), a requirement under the Clean
Development Mechanism (CDM), has been established in the Department of Minerals
and Energy. The role of the DNA is to approve CDM projects submitted to it in
line with sustainable development criteria. This project review is done in
consultation with the 10 relevant national government departments.

Project proposals are now streaming in and the outlook for CDM projects in
South Africa is indeed promising. I am also pleased to inform you that the
Kuyasa project in Cape Town, an energy efficient project targeting low income
housing in Khayaletsha, was approved by the CDM executive board last year
making it the first CDM project in Africa to be approved. It also received the
gold standard award for the high quality of the proposal.

Renewable energy

The South African government recognises the benefits that renewable energy
offer from an economic, environmental and social perspective. Government has
committed itself to the uptake of renewable energy in the approval of the White
Paper on Renewable Energy in 2003.

Government’s long term goal is the establishment of a renewable energy
industry producing modern energy carriers that will offer in future years a
sustainable, fully non-subsidised alternative to fossil fuels. To get started
on a deliberate path towards this goal, the government’s medium term (10 year)
target is:

* 10 000 GWh (0.8 Mtoe) renewable energy contribution to final energy
consumption by 2013, to be produced mainly from biomass, wind, solar and small
scale hydro. The renewable energy is to be utilised for power generation and
non-electric technologies such as solar water heating and bio-fuels.

This is in addition to the estimated existing (in 2000) renewable energy
contribution of 115 278 GWh/annum (mainly from fuelwood and waste).” The
following initiatives are underway:

* AsgiSA

The Accelerated and Shared Growth Initiative for South Africa (AsgiSA), as
adopted by Cabinet early this year, will focus on specific projects, which will
work towards poverty alleviation and job creation. Those relevant to the DME
are Bio fuels; which is a priority project for AsgiSA as well as
beneficiation.

* Bio fuels

Bio fuels can be produced from various energy plants, maize, sugar cane,
sugar beet for ethanol, and soya beans jatropha and other plants for bio
diesel. Ethanol get, which can replace paraffin and can be used for cooking and
heating, can also be produced from maize and sugar cane. Bio fuels are cleaner
and more affordable than fossil fuels and various derivatives of crude oil.
This programme can create thousands of jobs particularly for our rural
communities and rural women thus contributing greatly to rural development and
economic growth. Bio fuels will also contribute a great deal towards the
achievement of our targets for renewables by 2013.

* Passive solar and grid-connected renewable energy

Our macro economic study indicates that landfill gas, sugarcane bagasse
co-generation and solar water heating are the least cost options. A study has
been done on the availability of biomass resources for co-generation. The
darling wind demonstration project (5.2MW) is expected to be operational by
next year.

There is much potential for much bigger contributions but these initiatives
are being frustrated and prevented by the relative costs of renewable energy
sources as compared to traditional sources based on fossil fuels which are
cheaper per unit of energy.

I am pleased to announce that a subsidy and finance office for renewable
energies has been established in the Department of Minerals and Energy. A call
for proposals for subsidies has been advertised in the media in October last
year.

Natural gas

When combusted natural gas emits less carbon dioxide per unit of energy
released that coal. Coal provides approximately 75 percent of South Africa’s
primary energy supply. It is government policy to diversify energy supply and
one of the areas in which that diversification is taking place is into natural
gas.

The contribution of natural gas to the primary energy supply has risen from
a previous 1.5 percent to 3.3 percent (2005) since the arrival of natural gas
from Mozambique. That contribution is expected to rise to 4.3 percent when the
Mozambique/South Africa gas transmission pipeline has reached its maximum
capacity.

Nuclear energy

South Africa is investigating the development of the Pebble Bed Nuclear
Reactor, which emits less greenhouse gases than a coal fired electricity
generation station.

Chairman, I have outlined a few of the activities being undertaken to
address the sustainability of energy all of which are contributing to
overcoming the hurdles that stand in the way of achieving the millennium
targets.

Africa can benefit from the experiences of the developed countries
particularly in preserving air and water quality. Progressive and contentious
legislation will help spearhead the drive to sustainability and energy will be
the catalyst to sustain and job creating growth on our continent.

Integrated energy centres

In December 2005, I launched an integrated energy centre (IeC) in Matatiele
in KwaZulu-Natal. We plan to launch an IeC in the following local
municipalities between now and March 2006: Kuruman, Moshaweng (Northern Cape),
Ratlou (North West), Mutale (Limpopo), Greater Tubatse (Limpopo), Newcastle
(KwaZulu-Natal) and King Sabata Dalidyebo (Qunu, Eastern Cape). I wish to
commend Sasol and Total for their continued commitment to the rollout of IeCs.
The IeCs are a beacon of hope to communities that government is beginning to
deliver on its promise of giving them a wider variety of energy choices.

Women in oil and energy in South Africa (Woesa)

My Department together with its associated institution and industry continue
to support the women organisations in energy. CEF’s energy development
corporation has taken a 49 percent stake in a R72 million hydroelectric plant
near Bethlehem in the Free State. A shareholders agreement was signed with
Hydro-SA, an affiliate of Woesa.

Women in nuclear South Africa

The DME hosted the annual general meeting of Women in Nuclear South Africa
(WINSA), which continues to enjoy increased membership and support. An outreach
programme to institutions of higher learning is planned.

Paraffin safety

Madam Speaker, the hazards associated with paraffin is a concern to the
Department. The consequences of the accidents can be devastating on individual
consumers and their families. To address this we have completed the new
national standard for non-pressure paraffin stoves and heaters and are
currently awaiting final approval from the standards approval committee at the
South African national standards. This is anticipated to be ready sometime next
month. Phansi nge Primus Stove Phansi.

* SA Supplier Development Agency (SASDA)

The charter has resulted in the transfer of over 18 percent equity to black
hands. All oil companies have complied with the exception of Sasol. We urge
them to expedite all aspects of transformation. The industry has now shown
further leadership by not only opening up their procurement but by also
developing the suppliers. The oil industry has come together and contributed to
the creation of the Supplier Development Agency (SASDA). I am proud to report
that I launched the SASDA in Port Elizabeth (PE) in December 2004. Now only
four months later SASDA is up and running and potential suppliers can now log
into the database and view the opportunities for the supply of goods and
services by simply logging onto their website.

Mining rehabilitation

Approximately R120 million has been allocated over the 2005/06 to 2007/08
financial-year, towards the rehabilitation of ownerless and derelict mines. The
cleaning up of abandoned and ownerless asbestos dump sites was the department’s
first rehabilitation priority.

R18 million has been allocated towards the rehabilitation of abandoned
uranium mines in the Karoo and Free State.

In total, tenders to the amount of R104 million will be put out as part of
the rehabilitation programme in 2005/06. It should be mentioned that each of
the rehabilitation projects would incorporate dedicated enterprise development
and intensive job creation.

Beneficiation is also a priority project for AsgiSA

This programme ensures value addition to our minerals and other raw
materials. This will result in skills transfer, job creation and economic
growth for our country. The Department of Minerals and Energy has set up the
Kgabane project under MINTEK, which has to date trained 14 rural groups in
jewellery making. In February 2006, we have sent 15 young girls to Beijing,
China where they are being trained in jewellery manufacturing, working with
gold, platinum and diamonds.

For us as a Department, your contribution at this workshop would go a long
way in assisting to modernise the energy policies that we are seized with, on a
daily basis, so that relevant policy interventions can be made.

I have outlined a few of the activities being undertaken to address the
sustainability of energy all of which are contributing to overcoming the
hurdles that stand in the way of achieving the millennium development goals.
Africa can benefit from the experiences of the developed countries,
particularly in preserving air and water quality. Progressive and contentious
legislation will help spearhead the drive to sustainability and energy will be
the catalyst to sustain job creating growth on our continent.

I thank you!

Issued by: Department of Minerals and Energy
28 April 2006