The Department of Energy (DoE) is mandated to ensure the secure and sustainable provision of energy for socio- economic development. This is achieved by developing an Integrated Energy Plan (IEP), regulating the energy industries, and promoting investment in accordance with the integrated resource plan. The department’s strategic goals are to: • ensure that energy supply is secure and demand is well managed • facilitate an efficient, competitive and responsive energy infrastructure network • ensure that there is improved energy regulation and competition • ensure that there is an efficient and diverse energy mix for universal access within a transformed energy sector • ensure that environmental assets and natural resources are protected and continually enhanced by cleaner energy technologies • implement policies that adapt to and mitigate the effects of climate change • implement good corporate governance for effective and efficient service delivery. The DoE places emphasis on broadening electricity supply technologies to include gas and imports, as well as nuclear, biomass and renewable energy resources (wind, solar and hydro), to meet the country’s future electricity needs and reduce its carbon-dioxide emissions. Goals beyond 2020 include contracting more than 20 000 megawatts (MW) of renewable energy, including an increasing share from regional hydro-electricity. South Africa has committed to attain substantial reductions in carbion dioxide emissions by 2025. The country supports research, technology development and special measures aimed at environmentally sustainable economic growth. Legislation and policies The DoE derives its mandate from the White Paper on Energy Policy, 1998, the White Paper on Renewable Energy, 2003, and the National Energy Efficiency Strategy. The following legislation regulates the energy sector: • The National Energy Act, 2008 (Act 34 of 2008) ensures that diverse energy resources are available in sustainable quantities and at affordable prices in South Africa. In addition, the Act provides for the increased use of renewable energies, contingency energy supplies, the holding of strategic energy feedstock and carriers, and adequate investment in energy infrastructure. • The Electricity Regulation Act, 2006 (Act 4 of 2006) establishes a national regulatory framework for the electricity supply industry to be enforced by the National Energy Regulator of South Africa (NERSA). The Minister of Energy is empowered to make determinations for the establishment of independent power producers (IPPs) to increase the supply of electricity. • The Petroleum Products Act, 1977 (Act 120 of 1977), as amended, provides for measures to save petroleum products and the economy in distribution costs, the maintenance 1 and control of price, the furnishing of certain information • Petroleum Agency of South Africa (PASA) Establishment Bill: R599,34 million in 2016/17, while the NNR and Sanedi received regarding petroleum products and the rendering of service. Seeks to establish the upstream gas regulator separately R16,64 million and R20,63 million, respectively. It further provides for the licensing of people involved in from its incumbent CEF state-owned company location. This The New Nuclear Build Programme is part of the security the manufacturing, wholesale and retailing of prescribed will conclude the regulatory and institutional arrangements of electricity supply. Additional funding of R200 million in the petroleum products. that are necessary to facilitate the concessioning, licensing Nuclear Energy programme was made available in 2016/17 for • The Central Energy Fund (CEF) Act, 1977 (Act 38 of 1977), and exploitation of the shale gas resource that offers so much a transactional advisors and consulting services for the New as amended, provides for the determination of State levies. potential for South Africa. Nuclear Build Programme. • The Nuclear Energy Act, 1999 (Act 46 of 1999) provides for • The Petroleum Products Amendment Bill seeks to improve the establishment of the National Energy Corporation of South the enforcement elements in the licensing framework for Role players Africa (Necsa) and defines its functions, powers, financial and wholesalers and retailers in the liquid fuels sector. National Energy Regulator of South Africa operational accountability, governance and management. It • IPP Office Establishment Bill: The IPP Office Establishment NERSA was established in terms of Section 3 of the National also regulates the acquisition and possession of nuclear fuel, Bill will formally create the IPP Office and define its role and Energy Regulator Act of 2004. NERSA’s mandate is to regulate nuclear and related material and equipment, and the import mandate in regard to private-public sector programmes in the the electricity, piped-gas and petroleum pipelines industries in and export thereof. power sector. terms of the Electricity Regulation Act of 2006, the Gas Act of Other relevant legislation: 2001 and the Petroleum Pipelines Act of 2003. • The National Nuclear Regulator (NNR) Act, 1999 Budget and funding Revenue is generated from levies paid by the regulated (Act 47 of 1999). The total appropriation to the DoE for 2016/17 was R7,5 billion. industries. All costs of NERSA are shared between the • The National Radioactive Waste Disposal Institute (NRWDI) Some 90,2% of the budget was earmarked for transfer to electricity, piped-gas and petroleum pipelines industries using Act, 2008 (Act 53 of 2008). municipalities and state-owned entities (SOEs), while the a ringfencing methodology. NERSA’s total budget for 2016/17 • The Petroleum Pipelines Act, 2003 (Act 60 of 2003. remaining 9,8% was to be used for the department’s operational was R295,4 million. • The Petroleum Pipelines Levies Act, 2004 (Act 28 of 2004). and capital expenditure. NERSA has formulated the following five strategic outcome- • The Gas Act, 2001 (Act 48 of 2001). The spending focus over the medium term remained on oriented goals to support sustainable socio-economic • The Gas Regulator Levies Act, 2002 (Act 75 of 2002). transfer payments to Eskom and municipalities for expanding development in South Africa: • The National Energy Regulator Act, 2004 (Act 40 of 2004). the electrification programme to increase the number of • facilitate investment in infrastructure in the energy industry • The Electricity Act, 1987 (Act 41 of 1987), as amended. households with connections to the grid and providing substation • promote competitive and efficient functioning of the energy • The National Environmental Management Act, 1999 infrastructure. industry (Act 107 of 1999). By the end of March 2017, the Integrated National • facilitate affordability and accessibility in the energy industry • The Mineral and Petroleum Resources Development Act Electrification Programme (INEP) had achieved 301 976 (grid) to balance the socio-economic interests of all stakeholders (MPRDA), 2002 (Act 28 of 2002). and 16 922 (non-grid) connections, amounting to a total of 318 • facilitate security of supply of energy resources • The Electricity Regulation Amendment Act, 2007 (Act 28 of 898 new connections. • position and establish NERSA as a credible and reliable 2007). The programme electrifies households through grid and non- regulator to create regulatory certainty. In 2016, the DoE submitted the following legislation and grid connections, and builds and upgrades substations and amendmends to existing legislation for consideration by electricity networks. National Nuclear Regulator Parliament. It was either to be introduced or concluded in the Transfers to municipalities for 2016/17 were R1,9 billion, and The NNR is responsible for safety standards and regulatory upcoming financial year. transfers to Eskom were R3,5 billion. practices for the protection of people, property and the • Amendment of the National Energy Regulator Act of 2004: A The DoE also focused on the implementation of the National environment against nuclear damage. The entity’s total budget new proposed structure will create a two-tier energy regulatory Solar Water Heater programme, with the objective of promoting for 2016/17 was R177,7 million. structure, to enable the appeal of regulatory decisions energy efficiency. through a body that is not conflicted by having participated Spending of R1,2 billion over the medium term on more than Nuclear Energy Corporation of South Africa in making the regulatory decision in the first instance. The 130 000 solar water heaters was projected. Since its inception, Necsa is a wholly SOE with the mandate to: Review Board will create such a body. the INEP has completed more than 50 000 installations of Solar • undertake and promote research into nuclear energy and • Gas Amendment Bill: The Bill will largely introduce a Home Systems (SHSs), mainly in the Eastern Cape, KwaZulu- radiation sciences and technology mechanism that allows the Minister of Energy to direct the Natal, the Northern Cape and Limpopo. This has improved • process source, special nuclear and restricted material development of new gas infrastructure including pipelines, people’s standard of living. including uranium enrichment storage and regasification technology for imported liquefied Non-grid electrification projects, mainly solar energy, were to • collaborate with other entities. natural gas. The Bill will encompass the midstream elements be extended countrywide. The projects would be implemented in The Nuclear Energy Act of 1999 provides for the of the gas value chain, whereas the upstream will be