Municipal involvement in the energy crisis

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Municipal involvement in the energy crisis
Select Committee on Labour Public Enterprises
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The current response effort is being managed at
various interfaces, these are
Treasury
DME
Other Bodies
President
DTI
DPLG
Energy Supply Committee
IMC
DPE
DEAT
SACC
ESKOM
FEE
Industry
ESKOM Recovery Team
NERT
Industry Task Team
NERSA (Regulator)
Streams
Work Groups
Work Groups
National Response to South Africas Electricity
Situation
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There is municipal representation at key forums
BUSA
DEAT
DPE
GCIS
NERSA
ESKOM
DME
NEDLAC
DPW
DoL
Indalo Yethu
National Treasury
Chamber of Mines
DPE
City of JHB
DoT
EDI Holdings
JHB City Power
Presidency
EIUG
National Treasury
COSATU
DPLG
ESKOM
Gauteng Gov.
RTMC
AMEU
Labour Unions
DME
CSIR
FEDUSA
NEEA
DTI
SALGA
Specialist Groups
NERT
Industry Task Team
Co-generation Market
Economic Impact
Strategic Steering Committee
Implementation of Power Conservation
DSM Implementation Co-ordination
Financing
Development of Communication Protocols
Regulatory Intergovernmental Support
Legal Tariffs
Comms
Power Management
Monitoring Evaluation
NERT National Energy Response Team
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The overarching role that municipalites are
playing in the enery crises is the
implementation of demand side options to reduce
energy consumption
Security of Supply
Supply-Side Options
Demand-Side Options
Security of Supply Levers
Load Shedding
Load Reduction
Municipal Gen.
Import
DSM
PCP
New-Build
Export
Pricing
Public Awareness
OCGT / CCGT
Primary Energy
Existing UCLF
Go-generation
Energy Efficiency
Economic Factors
Regulatory Framework
Availability of Skills
Extraneous Factors
Financial Constraints
Legislative Environment
Market Forces (Procurement)
The primary levers to recover security of supply
are demand and supply management. These options
are however impacted by a number of other
factors.
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Eskom/ Municipal Task team
Eskom created a national task team with the
metros and large municipalities to deal with the
energy crisis

• Members of Task Team
• Eskom
• City of Tshwane
• City of Johannesburg (City Power)
• Ekurhuleni
• City of Cape Town
• Nelson Mandela Metro
• Emfuleni Local Municipality
• Rustenburg Local Municipality
• Msunduzi Municipality
• Mangaung Municipality (Centlec)
• Buffalo city Municipality
• eThekwini Municipality

Demand-Side Options
Load Shedding
Load Reduction
DSM
PCP
Pricing
Public Awareness
Energy Efficiency
Meeting frequency is every 2 weeks
Objective To drive rapid energy reductions to
avoid load shedding
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Capital Expenditure and Funding
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Build

• Major infrastructure investments to deliver an
  additional
• 40 000MW by 2025
• Two key extensions to OCGTs at Atlantis and
  Mossel Bay will add further 1000MW by end 2009
• First unit at Medupi scheduled to come on stream
  in 2012
• Return to service stations Camden, Grootvlei and
  Komati projects proceeding to schedule.
• Last unit from Camden on line by the second
  quarter of 2008 (Total of 1600MW).
• First unit from Grootvlei commercial (31 March)
  ( 200 MW)

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Capital Expenditure 20092013
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All projects
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Funding considerations

• Credit Rating maintenance critical
• Access to funding
• Cost of funding
• Access to reputable equipment suppliers
• Maximisation of available funding options
• Long term financial market access via
  relationship management and credit rating
• Active portfolio management necessary

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Funding principles

• No one source of financing can ensure a
  sustainable balance sheet hence a balance of the
  following sources is critical
• Revenue tariff increases,
• Local and international debt markets and
• Committed equity like financial support available
  from the Shareholder
• The level of price increases awarded will impact
  directly on the quantum of shareholder support
  needed

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How Eskom will spend R60bn

• Shareholder support will be used for funding the
  capital expansion R343bn programme
• Build programme will ensure the capacity is added
  to improve the reserve margins
• Included in our funding pool of funds
• Not allocated to any specific capital project
• Utilised according to the cash inflows received
  from government over next 5 years
• Not utilised for operating costs or primary
  energy costs
• Terms and conditions of R60bn not yet finalised

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Thank You