M Mangena: Launch of Solar Water Heater Test Rig

5 March 2007

Programme Director
Group Chief Executive Officer of the Central Energy Fund, Mr Mputumi
Damane
Representatives of the United Nations Development Programme (UNDP)
Distinguished ladies and gentlemen of the media
Good morning

I must begin by thanking you members of the media establishment for
responding positively to our invitation to this breakfast meeting to launch our
SWH Test Rig, the first of its kind on the African continent.

I have heard it being said that if you invite the media, they don't pitch up
but they would rather much prefer the stories for which they need neither
invitation nor preparation. I am therefore pleased that you have joined us
today to launch this important programme in conjunction with the Central Energy
Fund (CEF) and the UNDP.

There is no doubt that the media occupies a central place in our endeavours,
particularly in the dissemination of (correct) information as well as in
demystifying the work that we do as scientists. I hope that your presence here
this morning will assist us in that regard.

In our quest to build a prosperous society that derives enduring and
equitable benefits from science and technology, we at the Department of Science
and Technology place innovation at the centre stage of our work, hence our
mission to develop, co-ordinate and manage a National System of Innovation
(NSI) that will bring about maximum human capital, sustainable economic growth
and improve the general quality of life of all the citizens of this
country.

Following a Cabinet decision, the Department of Science and Technology, in
conjunction with the Department of Minerals and Energy, has established the
South African National Energy Research Institute (SANERI). Through SANERI,
which is housed at CEF, we will be able to preserve the existing energy
research resources while we also strengthen our energy research capabilities in
order to attain global competitiveness. In other words, SANERI will have as a
primary objective, the advancement of public interest energy research and
development.

We have therefore seen it appropriate to partner with the CEF, a public
company that remains a market leader in the quest for alternative energy
solutions as well as with the UNDP, the paragon of development under the
auspices of the United Nations (UN).

As I have already mentioned, the SWH Test Rig is the first of its kind in
the entire continent. We therefore have reason to be elated today. But what is
of even more significance is the fact that the South African SWH market has
considerable potential to leverage electricity savings, increase employment
opportunities, improve electricity demand management and reduce greenhouse gas
emissions.

Nevertheless, despite a wide range of products being available on the
market, the SWH industry is faced with severe limitations in terms of SWH
standardisation, awareness, affordability and financing all of which ultimately
prevent any widespread technology adaptation.

It is quite clear to us then that the introduction of this project will
significantly transform the market for SWH in South Africa by tackling these
barriers and creating a positive market environment.

Studies have shown that one of the best ways to promote electricity savings
(or reduction of electricity use) in the residential sector is to target water
heating which is one of the major end uses in the sector. This saving could be
made with the introduction of SWHs. However, given the high capital costs of
SWHs, such an approach would be more suitable for middle and upper income
households primarily in the urban areas. Studies have shown that SHW could save
60% of electricity use.

For this reason, this project will amongst others, involve the installation
of about 500 SWHs and the provision of incentives for the purchase of these
geysers for middle to higher income households while in parallel standardising
the SWH quality and testing regime, consolidating a widened distribution and
maintenance infrastructure, offering attractive financing options and ensuring
continued awareness and involvement on both the supply and the demand sides.
The costs of SWHs will thus decline over time as the technology is accepted
more widely in South Africa. (As the technology is accepted more widely in
South Africa, the costs will be brought down.)

Building on the envisaged favourable conditions prevailing at the end of the
project, a second phase of the market transformation will be initiated. This
second phase will enable commercial installation of a further 9 000 SWHs over a
period of five years, with the ultimate goal of further bridging affordability
gaps and making the benefits of SWH available to low income households.

Ladies and gentlemen, none of us here can claim to be ignorant of the
projected hazards of climate change as a result the pollution of our planet.
Since South Africa is largely dependent on coal as a source of electricity and
as a result of that we produce a considerable amount of carbon dioxide. It is
thus pleasing to note that one of the primary objectives of this project, in
addition to the development objective, is to reduce carbon dioxide
emissions.

I would not like to dwell on the nitty-gritty technical side of precisely
how we are going to reach these objectives, save to say that critical measures
will include standard implementation, test rig upgrade and capacity
improvement, customer support structure, codes of practice for installation and
maintenance, training of installers and maintainers, awareness on both the
supply and demand sides, the market survey as well as financial mechanisms for
wholesale and retail financing.

While today's media briefing forms part of our public awareness campaign,
let me assure you that collaboration is the cornerstone of this project,
bringing together such partners as Eskom, Council for Science and Industrial
research (CSIR), National Research Foundation (NRF), Sustainable Energy Society
of Southern Africa (SESSA) and SABS.

The project will further continually interact and collaborate with
municipalities. Already the team has assisted the city of Johannesburg
municipality in developing a call for proposals for SWH tenders for a local
eco-development initiative.

I trust that you will therefore understand our enthusiasm and the reason to
have this launch early in the morning.

We are on the roll to address the energy challenges in our country and the
SWH test rig that we launch today puts us firmly in the right direction.

I thank you again for your attendance this morning and I am certain that the
word will be spread.

Thank you!

Issued by: Department of Science and Technology
5 March 2007