Transcript Slide 1

Emergency Response and
Business Continuity Plan
Special Task Team – Mandate & Constitution
June 2010
Supported by EON Consulting
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Agenda
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1)
Welcome and Introductions
2)
Background
3)
Begin with the End in Mind
4)
Mandate, Structure, Integration
5)
Roadmap & Deliverables
a)
Method & Approach
b)
Energy Response Wedges
c)
Fact Sheets
d)
Assign Responsibilities
6)
Flight Plan for the next 4 weeks
7)
Questions & Closure
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Background
• South Africa cannot afford economic recovery to be halted and
the country plunged back into recession due to electricity
shortages
• The Electricity Supply Industry must be able to support
economic growth
• Significant risks of energy shortfalls in the period 2011 to 2015
• Short-term demand side and supply side solutions required to
mitigate risks
• Maintain line of sight with IRP2010 and integrate seamlessly
into longer term supply plan
• Various initiatives from different stakeholder perspectives have
been launched, in a non integrated manner
Definition of Energy in context of this project to be interpreted as Electrical Energy
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Confusion & Mixed Signals
Demand
Side
Initiatives
Standard
Offer vs
Tax
Incentives
Supply
Side
Initiatives
Policy,
Regulation
&
Legislation
Crisis
Looming?
IRP 2
Crisis
Over?
Funding
One version of the “Truth”
“Mutually Exclusive Comprehensively Exhaustive”
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Begin with the End in Mind
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Begin with the End in Mind
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Begin with the End in Mind
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)
Structure & Mandate (
Key
Stakeholders
(IAP’s)
Government
Cabinet
Ministers
Inter-Ministerial Committee
(IMC)

DG/DDG’s
Inter-Departmental Task
Team (IDTT)
Government
Policy making entities
(PME’s)
Work Tracks
Ministries
Presidency
DoE
DTI

DPE
Nt
NERSA
Eskom
Specialist
Technical
WG 1
Technical
WG 2
Work
Technical
WG 3
Technical
WG 4
Technical
WG 5
Technical
WG 6
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Emergency
Response &
Business
Continuity
Team


Alignment
facts and technical
recommendations
SOE
SOE
CoM
BUSA
BLSA
SALGA
Nedlac
Cosatu
NUM

Responsible ministry
Informing policy making
Technical work (TTT)
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EIUG
AMEU
CoM
NBI

8
The Planning Process (Way We Work)
Debate A &
B until all
agree
A
The “uncertainties” in
getting from A to B are
sorted with a
Systematic ABCD
CURRENT REALITY
C
B
D
STRATEGY
IMPLEMENTATION
When A & B
agreed
Develop C
When ABC agreed
Develop D
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OBJECTIVES
Phase 1: Risk Assessment and Mitigation Measures
A
B
CURRENT REALITY
OBJECTIVES
Uncertainties
C
D
STRATEGY
•
IMPLEMENTATION
Identify the CURRENT Reality
–
Update post MYPD2 Supply curve
–
Update “Business as Usual” demand curve
–
Add additional contingencies to improve robustness of plan
–
Establish the Energy Shortfall Gap
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Phase 1: Risk Assessment and Mitigation Measures
A
B
CURRENT REALITY
OBJECTIVES
Uncertainties
C
D
STRATEGY
•
IMPLEMENTATION
Solutions to close the Gap
 Funded DSM
 Electricity efficiency awareness
 Eskom Internal Efficiency improvement
 Energy Efficiency Improvement
 Public buildings program
 Virtual Power Station (DMP and ULM)
 Own generation and co-generation
 Renewable generation
 Willing Buyer Willing Seller
 Municipal generation
 IPP generation
 Electricity Conservation
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Phase 2: Engagement and Development (Strategy)
A
B
CURRENT REALITY
OBJECTIVES
Uncertainties
C
D
STRATEGY
•
IMPLEMENTATION
Parameter Sheets for each solution
–
Detailed definition of each solution
–
Impact on Supply or Demand curve
–
Assumptions included in establishing the parameter values
–
Parameter Values (Each solution’s contribution to closing the gap
identified)
–
Range of parameter value
–
Preconditions for this parameter to be successful
–
Parameter Owner
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Phase 2: Engagement and Development (Strategy)
•
•
•
Identify Constraints for each solution to be successful
Possible Remedies to break the constraints
Recommended implementation plans for each remedy
1
A
B
CURRENT REALITY
OBJECTIVES
Uncertainties
C
2
Describe Current Situation
Agree the Objectives
3
D
STRATEGY
IMPLEMENTATION
Identify the
“Uncertainties”
Opportunities & Constraints
4
5
Describe each
Opportunity &
its Constraints
For each constraint
Identify its
REMEDIES
R1
R2
Rn
6
For each remedy
Identify its
IMPLEMENTATION
PLANS
IP1
IP2
IPn
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Phase 3: Track and Monitor (Implementation)
A
B
CURRENT REALITY
OBJECTIVES
Uncertainties
C
D
STRATEGY
IMPLEMENTATION
Opportunities
A
B
C
D
Constraints
A
B
C
D
Remedies
A
B
C
D
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Implementation of Remedies to
remove Constraints standing in the
way of the success of Opportunities in
order to reach objectives (Filling the
Gap)
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Programme Roadmap
Objectives:
• Prepare a 6 year Business
Continuity Plan
• Solicit participation & align
stakeholders
• A: Confirm the Current Reality
• B: Define where we want to be
• Identify & launch quick-hits
Outcome Expected:
• A: Agree the current Demand
and Supply picture or Gap
• B: Define agree opportunity
wedges to close Gap
• Gather required data from all
• Identify Constraints
• Establish & communicate big
picture perspective
• Plan & launch engagement &
develop phase
PHASE 1
“Assessment & Planning”
A&B
(Next 4 weeks)
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<Insert Date>
Outcome Expected:
• C: Define how we can get there
D: What must be done to get there
• Constraint resolution: Regulatory &
Policy Barriers removed
• Launch initiatives : Demand
Management Opportunities
• Launch initiatives : Supply
Management Opportunities
• Secure required funding
• Capacity and Skills required
to drive and manage
PHASE 2
“Engagement & Develop”
(Next 4 months)
Outcome Expected:
• Manage Implementation and create
stability.
• Track and Report on MW Savings and
additional non Eskom Generation
• Identify appropriate SOE to own
and manage Programme
PHASE 3
“Implement & Stabilise”
(Over the next 18 months)
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PHASE 4
“Track and Monitor”
(Post 18 Months)
15
Wedges & Owners
Emergency Response
Wedges
Ompi Aphane
Demand Side
Management
Tom Skinner
Funded DSM
(Eskom & Munics)
Supply Side
Management
Pieter Brand
Demand
Response
Mokgadi Matheekgana
Public Buildings
EEC
Own generation
Du Toit Grobler
/ Wolfgang Fechter
Tom Skinner
Eskom Internal
Efficiency
Nico Smith
Val Geen
/ Paul Botha
Energy Efficiency
Improvement
Electricity
Conservation
Nico Smith
Charles Mahoney
Co-generation
Managed energy
conservation
(cap & trade)
Paul Vermeulen
Renewable
generation
Municipal
generation
Doug Kuni
Ian Morison
IPP generation
Willing buyer,
willing seller
Regulatory, Legislative, Policy and Funding
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Parameter Quantification Rules
•
Parameter value quantification to consider two scenarios:
•
High probability targets under current regime (“as is” regime)
 High Probability definition = high level of confidence (can substantiate) that the
proposed project will be implemented and produce energy savings within the required
time frames
•
Stretch targets, with binding constraints resolved (“to be” regime)
•
Ramp-up period: 2011 to 2016
•
Double counting to be avoided:
•
•
•
Example 1: Co-Gen to meet Energy Efficiency Accord targets, counted only in Co-Gen wedge not Energy
Efficiency or Conservation Wedge
•
Example 2: DSM initiatives, funded from National Government or NERSA (MYPD) to be counted once in
Funded Initiative wedge
Primary departure point:
•
High probability Demand and Supply Initiatives identified
•
GAP after high probability initiatives, to be closed by Energy Conservation
Management initiatives
•
Stretch targets, if achieved, will reduce gap and increase margin for error
All constraints towards realisation of targets to be identified
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Proforma Example
Parameter Description
Impact on Supply and
Demand Gap
Assumptions included in
establishing parameter value
Parameter Value
Quantification (Bankable or
High Probability Savings)
Stretch Targets (Constraints
removed)
Constraints: (Legal, regulatory,
policy, funding, tariffs, e.g. )
Stakeholder Landscape /
Ownership
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•Define the Wedge scope, in a standard agreed
definition, to ensure category of either supply
enhancement of demand reduction
•Specific impact on either enhancing supply, or reduction
demand, through adding actual MWs or reducing the
electricity consumption, or shifting the load, outside the
peak demand period
•Document any assumptions required to affect the
demand side reduction or supply enhancements.
•Quantification of the actual parameters, through
2010 to 2016, by indicating the MW and TW/h
impact. Wedges are made up from defined
parameters (smaller building blocks). Supporting
documentation, feasibility case or detailed
calculations should be attached to this. Bankable in
this case imply high probability projects / initiatives
that will most likely yield an impact on either supply
or demand.
•Stretch targets refer to additional impact on Supply
and Demand that can be achieved, by removing
binding constraints, that can reasonably affected by
changing energy regulation, policy, legislation or
tariffs structures.
•Constraints refer to policy, legislative, regulatory or
economic and funding issues, that can be defined,
and debated through a transparent consultation
process (via normal Government procedures).
•Identify all potential stakeholders involved in this
wedge, identify potential duplication in effort, or
areas where integration or consolidation will yield a
positive outcome.
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Flight Plan (4 weeks)
Week 1: June 21
Week 2: June 28
Week 3: July 5
Week 4: July 12
• Parameter Sheets
out
• One-on-one
facilitation meeting
(EON Consulting)
• Review & confirm
data sheets
• Wedge owners
engage
stakeholders
• Continued . . .
Wedge owners
engage
stakeholders
• Gather required
data
• Mile stone checks
• DoE alignment &
feedback session
• Completed fact
sheets returned to
EON
• Consolidated
database
development
• Analysis of GAPs
• Report back to
stakeholders on
Findings
• Compile
recommendations
report to DoE, other
stakeholders & IMC
Workgroups
• Plan and launch –
programme followup phases subject
to DoE guidance
• Close-out meeting –
phase 1
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Emergency Response and
Business Continuity Plan
Appendix A
Wedge - Draft Definitions
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Demand Side
Management
Wedge

Funded DSM
Programmes
DSM interventions involve technical and behavioural
measures to influence the demand for electricity.
SWH
HVAC
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

The Eskom DSM programme is implemented under the auspices
of the DoE and NERSA. Eskom is allowed to recover the costs of
DSM through their tariff (the terms of the cost recovery are
negotiated as part of the Multi-Year Price Determination (MYPD)
process).
Policy / Regulatory / Stakeholder
Considerations
Definition
Parameters
Lighting (CFL’s)
Emergency Response Relevance
Definition
CFLs are the most commercially available, energy-efficient
(EE) alternative to the regular incandescent lamps most
commonly found in residential homes. A CFL is a compact
(coiled) version of a standard fluorescent tube. CFLs are 75
percent more efficient and last up to 7 times longer than
incandescent bulbs. Large scale promotion of CFLs to the
residential market has been used extensively worldwide as an
aggressive EE measure.

CFL programmes have been employed in South Africa to save
hundreds of Megawatts (MW) in a short space of time. A major
success has been Eskom’s ability to roll-out in excess of 100 000
CFLs per day where needed.

Eskom estimates that savings of approximately 1 500MW of
power have been made utilising this method alone for the period
March 2006 to March 2010.

SWH utilises solar thermal energy for the heating of water
rather than a more conventional energy source such as
electricity or gas.

Eskom is currently providing an incentive for the conversion of
traditional, electrically-heated geysers to SWH units. Several other
stakeholders, including some municipalities and the Central
Energy Fund, are also pursuing SWH programmes. The DoE is
currently coordinating (across all stakeholders) the development
of a National Strategy for a more aggressive SWH programme

HVAC, an acronym that stands for the closely related
functions of "Heating, Ventilating, and Air Conditioning”, and
refers to technology aimed at managing indoor environmental
comfort. HVAC systems, particularly older installations, offer
significant opportunities for efficiency improvements.

Efficiency upgrades to HVAC systems have traditionally been one
of the key focus areas of the Eskom funded DSM programme,
particularly in the industrial and mining sector. Efficiency
improvements to HVAC systems would qualify for funding under
the traditional ESCO or Standard Offer programmes.

Policies should be put in place for providing minimum
performance criteria for heating, ventilation and air conditioning
(HVAC) systems, including specific requirements for furnaces,
heat pumps or air conditioning units.
<Insert Date>
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Demand Side
Management
continued…

Compressed air (air kept at pressures higher than
atmospheric) has an extensive range of applications in
industry (e.g. power sources for tools and equipment used for
pressurizing, atomizing, agitating, and mixing applications). It
is believed that optimization of compressed air systems can
improve energy consumption of 20 to 50 percent.

Eskom has recently identified Compressed Air as a focus area for
efficiency interventions and a newly structured programme
targeting compressed air applications is expected.

A heat pump is a device which moves heat energy from one
place to another and from a lower to a higher temperature. A
domestic refrigerator is an example of a heat pump. Heat is
removed from the contents of the refrigerator (the source) and
discharged elsewhere (the sink). In heating applications, heat
is removed from ambient air and delivered to where it is
needed. Heat pumps provide a good alternative efficient
water heating particularly where solar water heating
technology is not suitable.

Heat Pumps are included in the Eskom’s DSM Water Heating
Programme that is currently being refined and restructured. Other
suitable applications for heat pumps should also qualify under the
traditional Eskom ESCo and new Standard Offer programmes.

There remain opportunities for policy to guide the appropriate use
and set performance standards for heating and cooling equipment
including heat pumps.
Efficient showerheads and regulators combine a ratio of
water and air, thus aerating the water flow. The ratio of the
air/water mixture is dependent on the rating of the
showerhead or regulator as well as the water system
pressure. The use of a shower regulator instead of a
complete showerhead provides more flexibility to the end
user, as it can be installed in the current showerhead fixture
and therefore still provides the aesthetic look the owner
prefers.

Given the water efficiency and electricity benefits, showerheads
have been incorporated into Eskom’s DSM water heating
Programme.

A long-term objective should be to put in place national regulation
to mandate the installation of water and energy efficient
showerheads. Consideration should be given by Government
Agencies and the South African Building Codes Board as to
whether this can be accomplished through perhaps a National
Plumbing Code and SA Standards. In the short term other nonregulatory options should be explored
Compressed Air
Heat Pumps

Shower Heads

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Policy / Regulatory / Stakeholder
Considerations
Definition
Parameters
Efficient shower heads improve water usage and electricity
used to warm water.
<Insert Date>
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Demand Side
Management
Wedge
Energy Efficiency
Improvement
Supply Side
Management

EE includes those actions that reduce the overall consumption
of electricity over all hours of the day, effectively shifting the
load duration curve down without impacting service levels.
These actions may include the installation of more efficient
appliances and lighting as well as employing new processes
that use less energy.
Parameters
Industrial Process
Improvement
Water losses
management
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Emergency Response Relevance
Definition

The Eskom DSM programme incorporates EE initiatives covering
an extensive range of interventions and technologies for
residential, commercial and industrial applications.

EE is, however, not limited to that funded by Eskom and is also
driven by municipalities and leading businesses amongst many
others.
Policy / Regulatory / Stakeholder
Considerations
Definition

These are comprehensive tailored solutions to improve the
energy use of industrial processes. These include process
optimisation and efficiency upgrades to lighting systems,
electric motors, pumps, compressed air and Heat, Ventilation
and Air Conditioning systems, amongst many other solutions.

Process improvements also incorporates
principles/philosophies such as lean production, aimed at
optimising processes for value add, minimising any activities
not aligned with this purpose.

Water loss management deals with the water not accounted
for such as unmetered and illegal connections and leakage.
Consists of a review of a utility’s distribution system and
development of numerous control zones with a single source
of water (if possible). These zones are referred to as DMA s
or District Metered Areas. Each DMA requires a meter as well
as a pilot-operated control valve.
<Insert Date>

Industrial process improvements are funded as part of the Eskom
DSM programme. Many businesses are, however, pursuing
efficiency improvements on their own initiative.

Process optimisation is typically internally implemented and
funded by industries/businesses.

?
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Demand Side
Management
Wedge

Eskom Internal
Efficiency

EE includes those actions that reduce the overall consumption
of electricity over all hours of the day, effectively shifting the
load duration curve down without impacting service levels.
These actions may include the installation of more efficient
appliances and lighting as well as employing new processes
that use less energy.
Eskom has launch various internal processes to reduce
electricity consumption and improve overall energy efficiency.
Internal awareness
campaign
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
The Eskom DSM programme incorporates EE initiatives covering
an extensive range of interventions and technologies for
residential, commercial and industrial applications.

EE is, however, not limited to that funded by Eskom and is also
driven by municipalities and leading businesses amongst many
others.

Internal targets as derived and being reported on.
Policy / Regulatory / Stakeholder
Considerations
Definition
Parameters
Generation input
Energy Efficiency
Emergency Response Relevance
Definition

As much as 30% of global energy use is consumed by Power
Generation (assumed to include transmission losses).
Efficiency improvements at Generation facilities will make
more energy available for supply to end users.

The current EEDSM Policy excludes the Power Generation Sector
undertaking to give it further consideration at a later stage. As a
result of policy exclusion one of the largest consumers of electrical
energy in South Africa has remained largely unaffected by the
energy efficiency drive. This has been partly addressed more
recently by Eskom’s internal efficiency drive (billion kilowatt hour
project)

Refers to programs that are aimed at reducing the energy
used by specific end-use devices and systems, typically
without affecting the services provided. These programs
reduce overall electricity consumption (reported in MW-hours),
often without explicit consideration for the timing of programinduced savings. Such savings are generally achieved by
substituting technologically more advanced equipment to
produce the same level of end-use services (e.g. lighting,
heating, motor drive) with less electricity. Examples include
high-efficiency appliances, efficient lighting programs, highefficiency heating, ventilating and air conditioning (HVAC)
systems or control modifications, efficient building design,
advanced electric motor drives, and heat recovery systems.

?
<Insert Date>
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Supply Side
Management
Wedges

Renewable
generation
RE harnesses naturally occurring non-depletable sources of
energy, such as solar, wind, biomass, hydro, tidal, wave,
ocean current and geothermal, to produce electricity, gaseous
and liquid fuels, heat or a combination of these energy types
(this definition is as per the DoE).
Concentrated Solar


Bio Mass

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
NERSA have published the REFIT as well as the Power Purchase
Agreements and Guidelines for wind, small hydro, landfill gas
methane, concentrated solar power, PV units, biomass and
biogas technologies. The tariffs are set to top up the earnings of
the IPPs. This establishes building blocks for the development
and purchasing of RE with the hope of promoting a market for the
development of RE to meet the government target of 10 000
Gigawatt hours of power produced from renewable sources by
2013.
Policy / Regulatory / Stakeholder
Considerations
Definition
Parameters
Wind Energy
Emergency Response Relevance
Definition
Kinetic energy present in wind motion that can be converted
to mechanical energy for driving pumps, mills, and electric
power generators.
A solar energy conversion system characterized by the optical
concentration of solar rays through an arrangement of mirrors
to generate a high temperature working fluid. Also see Solar
rough, Solar power tower, or Solar dish. Concentrating solar
power (but not Solar thermal power) may also refer to a
system that focuses solar rays on a photovoltaic cell to
increase conversion efficiency.

?

?

?
Organic non-fossil material of biological origin constituting a
renewable energy source.
<Insert Date>
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Supply Side
Management
Wedges

IPP generation
Emergency Response Relevance
Definition
(Also referred to as Non-Utility Generator (NUG)) An IPP is an
entity, which is not a public utility, but which owns facilities to
generate electric power for sale to utilities and end users.
Definition
Parameters

The South African Government (DoE) has stated their intent to
fast-track the development of capacity by IPPs. The DoE
procurement of Open Cycle Gas Turbines at Coega was,
however, not concluded successfully. The DoE have published
new generation procurement regulations (August 2009) under the
Electricity Regulation Act, 2006 (Act No. 4 of 2006), that are
expected to clarify market entry for IPPs.
Policy / Regulatory / Stakeholder
Considerations
???
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<Insert Date>
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Supply Side
Management
Wedges

Own generation
DER are parallel and stand-alone electric generation units
located within the electric distribution system at or near the
end user. DG or DER can be beneficial to both electricity
consumers and, if the integration is properly engineered, the
energy utility. There are several applications and technologies
that can be utilized including co-generation and renewable
energy sources, as described below.
Parameters
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

For the consumer the potential for lower cost, higher service
reliability, high power quality, increased EE and energy
independence are all reasons for interest in DER. The use of
renewable distributed energy generation involving ‘green
power’, such as wind, photovoltaic (PV), geothermal or
hydroelectric power, can also provide a significant
environmental benefit.
Incentives in the form of public or private subsidies are offered
to lower capital costs and accelerate the payback period.
Rebates on installations of renewable energy electric
generating systems are offered with eligible technologies
including PV tubes, small wind turbines, fuel cells that use
renewable fuels, and solar thermal electricity systems.
Incentives for renewable fuels or energy sources are generally
higher than those for non-renewable sources.
<Insert Date>
During 2008 Eskom initiated a Pilot National Co-generation
Programme (PNCP) inviting expressions of interest from industry
to develop Co-generation capacity. Several responses were
received from industry from which a short list of qualifying parties
was identified. The programme was however suspended in
September 2009.
Policy / Regulatory / Stakeholder
Considerations
Definition

Distributed
Generation (DG) /
Distributed Energy
Resources (DER) /
Embedded
Generation (EG)
Emergency Response Relevance
Definition

The National Energy Regulator of South Africa (NERSA) has
published a guideline for the regulation of Co-generation and the
Department of Energy (DoE) has indicated their intent to develop
a Co-generation Feed In Tariff (COFIT) similar to the recently
published Renewable Energy Feed In Tariff (REFIT).

Eskom initiated a Medium-Term Power Purchase Programme
(MTPPP) during 2008 so that they would be able to purchase
energy from qualifying industry sources. From numerous industry
responses a shortlist of possible participants had been identified
before the programme was suspended in 2009.
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Supply Side
Management
Wedges

Co Generation
Co-generation is the simultaneous production of electric
power and another form of useful energy (such as heat or
steam) from the same fuel source. The energy (electrical and
other) can be produced from a power generator directly (i.e.,
manufacturing processes, space heating, water heating, etc.)
or by a thermally-activated device (chillers, dehumidifiers,
bottoming cycles, etc.).
Parameters
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
Co-generation typically entails permitting customers to
generate power while serving their thermal and/or cooling
loads and thus reducing overall electricity consumption by
using highly efficient power generators in lieu of gridpurchased power. Co-generation may also be used to supply
energy into the grid (refer also to Distributed Generation).
<Insert Date>
During 2008 Eskom initiated a Pilot National Co-generation
Programme (PNCP) inviting expressions of interest from industry
to develop Co-generation capacity. Several responses were
received from industry from which a short list of qualifying parties
was identified. The programme was however suspended in
September 2009.
Policy / Regulatory / Stakeholder
Considerations
Definition

??
Emergency Response Relevance
Definition

The National Energy Regulator of South Africa (NERSA) has
published a guideline for the regulation of Co-generation and the
Department of Energy (DoE) has indicated their intent to develop
a Co-generation Feed In Tariff (COFIT) similar to the recently
published Renewable Energy Feed In Tariff (REFIT).
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Supply Side
Management
Wedges

Municipal
Generation
This term covers all the existing generation capacity not
belonging to the national power utility. This includes a few
municipal power plants. The process by which a municipal
entity assumes responsibility for supplying utility service to its
constituents. In supplying electricity, the municipality may
generate and distribute the power or purchase wholesale
power from other generators and distribute it.
Parameters
??
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Emergency Response Relevance
Definition

Policy / Regulatory / Stakeholder
Considerations
Definition

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
The National Energy Regulator of South Africa (NERSA) has
published a guideline for the regulation of Co-generation and the
Department of Energy (DoE) has indicated their intent to develop
a Co-generation Feed In Tariff (COFIT) similar to the recently
published Renewable Energy Feed In Tariff (REFIT).
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Supply Side
Management
Wedges
Emergency Response Relevance
Definition

Willing Buyer &
Willing Seller
The concept of willing buyer-willing seller means a completely
voluntary transaction between a buyer and a seller. The
underlying assumption is that there are willing buyers and
willing sellers who are involved in transaction processes in the
market place on an equal basis. The concept of willing seller
willing buyer fully protects the interests of existing energy
owners, as neither compels to sell against their will nor at a
price with which they are not fully satisfied.
Parameters

Policy / Regulatory / Stakeholder
Considerations
Definition


??
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Eskom has a policy of “willing buyer, willing seller”, and therefore
endeavours to purchase land where ever possible or necessary.
However, the State and State-owned-enterprises can acquire the
rights to use or possess the requisite land through the
Expropriation Act (No 63 of 1975). The Expropriation Act requires
the determination of compensation based on the principle of
market value (i.e. what would the value be in the event of both a
willing buyer and a willing seller trading the land). There is a suite
of additional legislation, which, in conjunction with the
Expropriation Act, would be used to determine the compensation
value.
The National Energy Regulator of South Africa (NERSA) has
published a guideline for the regulation of Co-generation and the
Department of Energy (DoE) has indicated their intent to develop
a Co-generation Feed In Tariff (COFIT) similar to the recently
published Renewable Energy Feed In Tariff (REFIT).
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Energy
Conservation
Wedge
Energy
Conservation
Management

ECM is a broad term used to describe the mechanisms to achieve
and equitably manage energy conservation in South Africa. The
conservation scheme consists of a number of different components
including Self Managed Conservation (a cap and trading
mechanism that allows buying and selling available energy quotas),
Rationing (energy reduction targets set against established
baselines) and a Virtual Power Station (refer to the definition given
herein).
Parameters
Self Managed
Conservation Cap
and Trade System

This term covers the establishment of a trading mechanism that
allows the buying and selling of available energy quotas.

(Also referred to as Demand Response) DMP is an initiative whereby
a utility compensates electricity consumers for reducing their load on
notification (dispatchable).

Consumers will receive an energy allocation based on their
consumption over a baseline period, adjusted with a savings target.
Should consumers exceed their monthly energy allocations, excess
energy tariffs will be charged to discourage excessive use.

The ULM is an intelligent load limiting system aimed at the residential
market. It incorporates advanced / smart metering and load limiting
capabilities. The ULM empowers consumers to manage their own
consumption through improved understanding of use patterns and
allows prioritisation of loads during periods of supply constraints. It
also enables load curtailment by the utility during emergencies.
Intelligent algorithms furthermore accommodate the selective
exclusion from load limiting of priority services and consumers, e.g.,
life support systems, etc.
Rationing / Penalty
System
Utility Load
Management
(ULM)

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
A VPS is a System Operator-managed program that integrates and
optimises all dispatchable demand reduction. It allows the operator to
schedule and dispatch load as needed
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Energy efficiency offers a no regrets solution; it is the
fastest, cheapest, and cleanest way to stretch energy
supplies. A kilowatt saved always cheaper than a kilowatt
generated. There is also a growing interest in renewable
energy and energy efficiency from the international
community.
Policy / Regulatory / Stakeholder
Considerations
Definition
Demand Market
Participation
Virtual Power Station
Emergency Response Relevance
Definition

Policy should be long term in nature, with proper pricing
signals for investors, should be accompanied by legal and
institutional frameworks that remove market distortions, as
well as consider demand and supply aspects.

The Eskom DMP programme contracts and dispatches
customers with flexible load, to reduce the customer’s
energy consumption levels in order to lower the impact on
the grid. This occurs on Eskom’s instruction during periods
of system constraints.

Political will and commitment will be important to
successfully implement such a system, with the
participation and commitment of provincial and local
governments being as important as that of national
government.

LM programmes involve reducing loads on a utility system
during periods of peak power consumption by deliberately
moving electricity utilisation to off peak periods. These
projects therefore exhibit energy neutrality, but have
potential to influence consumer behaviour by providing
real time consumption information.

Such an initiative is likely to incorporate DMP, Advanced
Metering Infrastructure and ULM, amongst others.
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