South Africa

Activities and Outputs 2010:
The Programme’s Final Report was presented in May 2010 and included a review of the “RSA3001” Programme since inception in 2006. Based on NORAD’s reporting require­ments, the review focused on the following aspects of each sub-programme:

• Effectiveness, - assessing the extent to which objectives had been achieved.
• Efficiency, - comparing the value of outputs to the costs thereof.
• Impact, - assessing both positive and nega­tive effects on target groupsand/or stakeholders.
• Sustainability, - assessing the extent to which positive effects will continue beyond Programme expiry.

The Final Programme Report built on the work undertaken by consulting company Econ Pöyry AS for the Mid-term Review of the Programme in May - June 2009. Where appli­cable, the review was presented in terms of the three themes that were approved at the 2007 Annual Meeting (AM), namely: Regula­tion; Climate Change; Energy Planning.

It should be noted however that the implementation had taken place on the basis of individual business plans for five different sub-programmes, namely:

i) Electricity; with The Department of En­ergy (DoE), Chief Directorate Electricity and Chief Directorate Energy

ii) Hydrocarbons, with The Department of Energy (DoE), Chief Directorate of Hydro­carbons as the RSA partners.

iii) Energy Regulation; with The De­partment of Energy (DoE), Chief Directorate Electricity and the National Energy Regulator (NERSA) as the RSA partners.

iv) Upstream Petroleum, with Petrole­um Agency SA (PASA) as the RSA partner, and

v) Alternative Energy, with Central Energy Fund (DEF) / Energy Development Corporation (EDC) as the RSA partners.

These business plans included technical sup­port agreements between South African and Norwegian counterpart institutions. In terms of these agreements, NVE supported the Electricity, Energy Regulation, and Alternative Energy sub-programmes, and to a smaller ex­tent, the Hydrocarbons sub-programme. NPD primarily provided support to the Upstream Petroleum sub-programme under Hydrocarbon.

For internal administration purposes, the Energy Planning activities, involving NVE and the Energy Planning Chief Directorate, were conducted on the basis of the Electricity Sub-Programme agreement. This agreement was also used to facilitate NVE’s modelling of the electricity reticulation networks of the cities that had been selected to host matches of the FIFA 2010 World Cup in South Africa.

• Regulation Theme: Activities addressing this theme were the ones most delayed; - those under Electricity (Independent Power Producer (IPP) Framework Development), Hydrocarbons (Petroleum Pricing Review) and the entire sub-programme under National Energy Regulator of South Africa (NERSA). They commenced only during financial year 2009/10. This was despite work-plan approv­als that were granted in January 2008 (Pe­troleum Pricing Framework and NERSA) and October 2008 (IPP Framework Development).

• Climate Change Theme: The Energy Development Corporation (EDC) completed a number of approved activities focused on the roll-out of bio fuels assessment, pre-feasibility studies for small scale hydropower projects, and development of a framework for the productive use of renewable energy. However, following a review of the plans and budgets during the 2009 Annual Meeting, funding for a number of activities was withdrawn due to the risks of exceeding Programme timelines. Despite a belated introduction to the Programme, the Designated National Authority (DNA) completed its approved activity - the 1st Annual Clean Development Mechanism (CDM) Tracking Report – by September 2009.

• Energy Planning Theme: The Pro­gramme was instrumental in the develop­ment and early implementation of the Cabinet-approved Energy Security Master Plan – Liquid Fuels; - some of its outputs were used to strengthen energy modelling capabilities, as well as for preparing plans to ensure adequate liquid fuel supplies during the FIFA 2010 World Cup in South Africa. The National Treasury supported the National Multi-Products Pipeline, targeted to elimi­nate transport capacity constraints between Durban and the inland liquid fuels market. This bore testimony to the importance of this pipeline, which was one of the listed ESMP projects. The funding was raised in the form of a ZAR 0.075 /litre levy, recovered from the sales of national road transportation fuels, from 1 April 2010 onwards.

Key results:

i) Electricity: Eskom’s use of the Electric­ity Pricing Policy (EPP) resulted in a substan­tial increase in the proposed regulatory asset-based and the associated depreciated charges.

ii) Electricity: The reticulation of WC 2010 modelling exercise, highlighted potential areas of failure that could negatively impact electricity supplies to key facilities.

iii) Hydrocarbons: The computerised Petroleum Licensing System has made it possible for the DoE to give effect to the key requirements of the Petroleum Product Act.

iv) Regulation: The Licensing Informa­tion System will contribute to closing the information asymmetry that makes it dif­ficult for a regulator to effectively exercise its mandate.

v) PASA: The capacity-building interven­tions have improved PASA’s ability to regulate the upstream sector.

vi) EDC: Regulatory certainty will be real­ised now that the policy guidelines for the implementation of hydro are being operation­alised.

vii) DNA: The capacity built through the database provides a central repository for the DoE to monitor CDM development using internal human resources.

viii) Energy Planning: Effect of Energy Security Master Plan process was to highlight bottlenecks in the supply of liquid fuels and especially during periods of peak demand such as the 2010 World Cup.

Results/Outcome:
The Programme was completed in 2010. A final report was delivered by the Programme Manager and the final An­nual Meeting took place in June 2010 in Pretoria.