His Excellency, Torch Christian Hildan, Ambassador of the Royal Kingdom of Norway to the Republic of South Africa
Counsellors and staff members of the Royal Norwegian Embassy
Senior officials of the Department of Energy
Chief executive officers and senior officials from Central Energy Fund (CEF), National Energy Regulator of South Africa (NERSA) and Petroleum Agency of South Africa (PASA)
Representatives of our Norwegian technical partners
Members of the media
Ladies and gentlemen
It gives me great pleasure to be part of this final presentation of the RSA3001, the energy sector collaborative programme between Norway and South Africa.
Considering that the programme was built on the work undertaken by its predecessor code-named the "RSA0027", it is my hope that the end in this case also signals "the beginning".
The minister would have liked to be part of this valedictory meeting of this important programme, however, the work of cabinet has unfortunately prevented her from being here this afternoon.
If Booker T Washington's statement that "success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome" is true, then let us celebrate our success because, as the Mighty Clouds of Joy say, "(we) don't feel no way tired; (we)'ve come too far from where (we)'ve been. Nobody told (us) that the road would be easy". These words holds true for what this event is about.
As you would have realised from the presentations that were made earlier, the focus of the RSA3001 programme was primarily the development of institutional capacity in the energy sector, covering electricity, liquid fuels, alternative energy, upstream petroleum and energy planning.
The interventions of this programme included inter alia training courses, technical workshops, development of policies and, in some cases, support during the actual implementation of these projects.
Energy planning
The programme was designed in a manner that made it flexible in order to allow for the inclusion of energy planning activities. This arrangement provided the basis for us to respond to the challenges with regard to the security of energy supply.
As a result, the process leading to the enactment of the National Energy Act in 2008 benefited from earlier interactions between the department and our Norwegian counterparts.
This initial collaborative effort was followed up by bilateral interactions that culminated in the capacity building processes that were implemented during the exercise of the modelling of the energy data (e.g. collection, processing and dissemination).
It is no coincidence, therefore, that our minister has decided that working together we will be able to usher in a new era for energy planning, modelling, forecasting and delivery. Through this appropriate choice we are wilfully building on wonderful work that has been done through this project.
Together with the promulgation in August 2009 of regulations under the Electricity Regulation Act, this has strengthened the department's position in respect of planning for our future energy requirements, as well as contributing effectively towards the rudimentary work of the National Planning Commission (NPC) on matters related to energy.
Given the constraints in fuel supply capacity, especially in the inland areas of our country, the implementation of the energy security master plan (ESMP) contributed.
With respect to electricity, the assessment by Energy Directorate's (NVE) of selected areas of the 11kV reticulation systems of host cities including Ekurhuleni was useful in highlighting the potential bottlenecks. The exercise was based on an approach similar to the one that was used before the 1994 winter Olympic Games that coincidentally took place in Lillehammer, Norway.
Electricity policy and regulation
In 2008 Cabinet approved the Electricity Pricing Policy (EPP), which sought to ensure, amongst others, that the electricity value chain contributes to economic growth and that a greater level of transparency in electricity pricing was introduced.
This policy also sought to establish an investor-friendly pricing regime as a way of promoting efficient cost recovery and reasonable returns on investment. This was the basis upon which NERSA's made its determination during the second multi-year pricing determination (MYPD2) process.
In conjunction with the establishment of the Independent System and Market Operator (ISMO), this will help government in its quest to diversify South Africa's sources of electricity supply.
More importantly, the ISMO concept emanated from an international benchmarking exercise on IPP frameworks that was undertaken within the department. Needless to say, both the EPP and the ISMO concept were outcomes of activities undertaken as part of this programme.
It is therefore quite fitting that President Zuma mentioned these themes in his annual State of the Nation Address earlier this year. We as officials are therefore going to do everything in our power to ensure that these projects see the light of the day.
The annual technical workshops between our nations' electricity policy makers including NERSA and their Norwegian counterparts contributed to capacity building and assisted in ensuring that we remained alive to the global evolution of regulatory principles and practices.
Hydrocarbons
With respect to liquid fuels, key focus areas of regulatory reform, transformation and energy security have also benefited from this programme.
The development and the implementation of a petroleum licensing system allowed for the realisation of the objectives of the Petroleum Products Amendment Act, and in the process, closed the void that had emanated from the demise of the rationalisation plan.
You will recall that the rationalisation plan was an industry self-regulation tool which was used to prevent the unsustainable proliferation of filling stations.
As the minister announced in this year's budget vote speech, we plan to finalise later this year the development and implementation of regulatory accounts for the downstream petroleum sector. This will be used for pricing purposes, and will contribute to achieving increased investments aimed at reducing constraints in the fuel supply logistical system.
The establishment of the South African Supplier Development Agency (SASDA) has also contributed to the efforts to foster the transformation of the petroleum sector, as envisaged in the Petroleum Products Amendment Act.
However, as the minister indicated again during her budget vote speech, and against the backdrop of the planned review of the Liquid Fuels Charter, we still have some way to go in opening up the procurement opportunities for emerging entrepreneurs in the petroleum sector.
With respect to energy security, this has become a major issue in the political economy of the world as it exists today. Over and above, the energy security master plan (ESMP), an assessment of strategic stocks requirements was undertaken as part of this programme. This provided critical input in the development of the draft Strategic Stocks Policy document, which we are currently using to consult internally with other economic sector departments.
The partnership between the Norwegian Petroleum Directorate (NPD) and the Petroleum Agency of South Africa (PASA) has resulted in the filing of an application with the United Nations to extend South Africa's continental shelf.
In addition, training interventions that focused on on-shore gas resource exploration have contributed to increasing PASA's capacity with respect to managing this resource. This will contribute greatly to government’s policy intention of diversifying energy sources to boost our security of supply.
Alternative energy
The Central Energy Fund's collaboration with the Norwegian Water and Energy Directorate's has resulted in skills development in the area of hydro power feasibility assessment and development. The training provided to the officials from the department and the Department of Water and Environmental Affairs will go a long way in building capacity to evaluate hydro projects.
We will, through this enhance government's efforts diversify our energy resource, while laying the foundation for developing low carbon options. We are also pleased that, through this programme, we have developed the first annual report on CDM and a database of CDM developers.
We are now armed with a better understanding of the market gaps and challenges. This will be used to inform our processes of promoting and supporting CDM projects.
Conclusion
As a department, we are mindful that the declaration of Intent that was signed by our respective governments in 2008 has laid the basis for future collaboration. In closing let us remember the words of Martin Luther King, Junior, who once said:
"Human progress is neither automatic nor inevitable. Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals".
All the officials, our local implementing partners: CEF, PASA and NERSA, our Norwegian technical support counterparts: NVE and NPD, as well as all those who have contributed to the successful implementation of this programme belong to the cluster of those individuals, men and women; Martin Luther King Junior speaks of.
On behalf of the minister, the government and the people of our country, I wish to thank you. We look forward to further and mutually beneficial engagement between our two peoples.
Thank you.
Source: Department of Energy
