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									NERT PCP Workgroup

Kick-off Workshop

            10 March 2009
            Discussion Document
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 2
Welcome & Introductions

i.     Apologies

ii.    Declaration of interest – Members introduction

iii.   Safety

iv.    Adoption of Agenda




                                Confidential            Slide 3
Purpose of Meeting

Reconfirm mandate and objectives of the PCP Work Stream,
review progress to date and establish the baseline for 2009.




                 Confidential                           Slide 4
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 5
NERT Background
•   A National Electricity Response Team (NERT), under the leadership of the Department
    of Minerals and Energy (DME) has been set up to coordinate and facilitate all the
    implementation activities that is taking place as part of the response to the shortage of
    electricity supply

•   With the aim to prevent load shedding and to put South Africa on a more sustainable
    path in the future by ensuring permanent behaviour changes of all citizens of the
    country with respect to a more efficient use of energy




                                       Confidential                                  Slide 6
NERT Mandate
• The NERT PMU is brought to life through a resolution at Cabinet level, to
  establish an inter-ministerial committee, tasked with resolution of the energy
  crisis.
• DME is the sponsor for this engagement.
• The NERT Committee reports to an Inter-Ministerial Committee, combined with
  Labour and Business – chaired by the deputy President.
• Inter Ministerial Committee (IMC): DME, DPE, Treasury, Presidency, DPLG.
• NERT Plenary Committee (Quarterly) has more than 140 participants, one
  committee for approval, reporting, recommendations to IMC
• NERT Steering Committee (Monthly).




                                   Confidential                               Slide 7
Mandate and representation: Drivers for NERT
Short and medium term
•   Readiness within emergency
•   Improving reserve margin
•   Optimal value for allocated funding
•   Consumer awareness and ownership
•   Optimal alignment between stakeholder efforts


Long term
•   Optimal energy consumption culture
•   Establishing sufficient supply capacity to support economic growth




                                          Confidential                   Slide 8
Roles & Responsibilities




                       Confidential   Slide 9
NERT Governance Model
                                                                                    1   Set Clear Targets
        ESKOM


                                     3             Develop Innovative Ideas
        BUSA
                                                                                                            2   Set Policy, Regulation


         NBI

                                                     Primary Workgroups
        NEEA

                                         4       Develop Initiatives to implement
                                                                                                                        National Gov
        SALGA
                                                                                                                          •Treasury
                                                                                                      DME
                                                                                                                         •NERWSA
                                                     Support Workgroups
        AMEU
                        Recommended: Budget,
                          Regulation, Policy
                                                5 Quantified Plans & Recos
       Others…



                                                  NERT Steering Committee

                     Measurement &
                 7     Reporting                    6       Approval



                 NERT
                 PMU                                    Implementation

                                               Confidential                                                            Slide 10
 Strategic Objectives
Level 1: Overall Objective
                                                                       Energy Crisis in SA
                                                                                                               What we want
                                                                       Obtain 15% reserve
                                                                             Margin


Level 2: Strategic Objectives




                                             Increase                                                      Manage
                                              Supply                                                       Demand



 Level 3: Key Objectives
                                                        Reliability
                                New Build
                                                            of
                                  & RTS                                                        Load
                                                        Generation
                                 (SPA10,                                                     Shedding
                                                          (SPA1,
                                  SPA11,                                                      (SPA5)
                                                         SPA12 &
                                 SPA12)
                                                         SPA10)

                                                                                              Demand
                                CoGen/IPP/               Reliability
                                                                                                Side
                                   MTPP                      of
                                                                                             Manageme                    Power
                                  (SPA9,                Transmissi
                                                                                             nt (SPA5,                Conservation
                                 SPA10,                  on(SPA2,
                                                                                              SPA10,                      Plan
                                 SPA12,                   SPA10,
                                                                                              SPA12,
                                 SPA13)                   SPA12)
                                                                                              SPA13)

                                                        Reliability
                                 Primary
                                                             of
                                 Energy                                                                                                    Demand
                                                        Distributio                                                            Energy
                                 (SPA4,                                                                    Energy                           Market
                                                         n (SPA3,                                                              Growth
                                 SPA12,                                                                  Conservati                       Participatio
                                                          SPA10,                                                              Manageme
                                 SPA10)                                                                  on Scheme                         n (SPA5,
                                                          SPA12)                                                              nt (SPA7,
                                                                                                           (SPA5,                           SPA10,
                                                                                                                                SPA8,       SPA12,
                                                                            Confidential                   SPA13)
                                                                                                                               SPA13)       SPA13) Slide   11
 Roles and Standards: Programme roles
                       Accountable Executive (AE):
        Accountable     Select accountable and mandated Work Stream Leaders (WSL) to manage the successful delivery of designated projects within their
         Executive       Workgroups in alignment with approved NERT objectives, targets and delivery plans.
Programme               Chair the NERT Executive Committee
  Director             Programme Director:
                        Appointed by the AE with the mandate to performance track all major NERT projects

                       Workgroup (WG):
                        Appointed by the AE with the mandate to performance manage the Work Stream designated NERT projects in alignment with approved NERT
                         objectives, targets and delivery plans
                        The WG has the accountability for all aspects of the project delivery within agreed time, cost and quality constraints and the realisation of
                         benefits, whilst adhering to governance standards
                        The WG has to ensure that the projects give value for money, ensuring a cost-conscious approach to the project, balancing the demands of the
                         industry, users and suppliers. Ensure that a quality solution is delivered with an optimum fit to the industry and with maximum contribution to
                         address the issues at hand
         Workgroup      The WG is also responsible for regularly reviewing the Business Case, Risks, Issues, Scope change requests, Stakeholder and Communication
                         Log (minimum every 3 months)
                        If the WG members changes during the life of the project there must be a documented handover of responsibilities, in which the incoming
                         member signs up to the Plans, Business Case, Benefits Realisation Plan and Risk Management Strategy he/she is inheriting. If necessary, the
                         Business Case may need to be updated to ensure the incoming member is satisfied to sign-up and any changes to the Business Case must be
                         confirmed by the NERT Executive Committee in line with the NERT governance
                        Any new or changed business concepts and business cases must be presented to the NERT Executive Committee for approval
                        Remove organisational and industry obstacles for the PMU programme/project managers and review the projects with other WG’s as part of the
                         normal integration and alignment processes
                        Defend/justify the existence/need of the programme in the industry and ensure the implementation approach is beneficial to the industry
                        Commit all required and approved resources needed by the programme/project or guarantee the commitment of these resources


                       Programme Manager:
Programme               The Programme Manager is responsible for delivering as per the mandated projects within his/her portfolio or strategic project scope aligned
 Manager                 with project principles and NERT governance and project processes.
                        Facilitate all Programme Workgroup forums

                       Project Manager:
             Project    The Project Manager is responsible for delivering as per the designated mandated project scope aligned with project principles and NERT
             Manager     governance and project processes.
                                                                      Confidential                                                                        Slide quality
                        The Project Manager's prime responsibility is to ensure that the project produces the required deliverables, to the required standard of12
                         and within the specified constraints of time and cost.
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 13
  Overall Status of NERT Work Groups
                     Primary Work Groups

                  DSM                   Cogeneration          Power             Distribution        Innovation &
                  Implementation        & Market              Conservation                          New
                  Coordination                                Programme                             Technologies
                                                              (PCP)




                         INITIATIVES




                                                INITIATIVES




                                                                  INITIATIVES




                                                                                      INITIATIVES




                                                                                                          INITIATIVES
 Support Work
   Groups
Economic Impact

Financing

Legal & Tariffs

Communications




                                       Confidential                                                     Slide 14
     Overall Status of NERT Work Streams
                                          Workgroup Lead
       #                Work Stream                                    Progress to date 27/2/09                                   Next Focus Areas
                                              (WGL)

                      DSM                                                                                     • Baseline to be finalized 6/3/09
                                                             Kick-off session held 17/2/09 and Workgroup
                      Implementation      Elsa du Toit                                                        • SANEDI & DME & PMU alignment for optimal EE
                                                             baseline developed
Primary Work Groups




                      Coordination                                                                            financing deployment
                                                                                                              • Baseline to be finalized 6/3/09
                      Cogeneration &                         Kick-off session held 17/2/09 and Workgroup
                                          Willie de Beer                                                      • Expression of interest on Cogeneration potential on
                      Market                                 baseline developed
                                                                                                              existing plants (second week of March 2009)
                      Power                                                                                   • Kick off meeting taking place 10 March 2009
                                                             Workgroup has been approved to be
                      Conservation        Mike Rossouw                                                        • ECS scheme is currently with NERSA and potentially
                                                             established
                      Programme (PCP)                                                                         needs support on alignment

                      Distribution        To be Identified   Identified as a new Work Stream                  • Establish a Workgroup

                      Innovation and
                                          To be Identified   Identified as a new Work Stream                  • Establish a Workgroup
                      New Technologies

                                                             National Energy Efficiency Campaign              Busy revisiting the proposed SABC partnership as well as
Support Work Groups




                      Communications      Tasneem Carrim     development completed and roll-out to start in   reviewing the communication requirements from the
                                                             March 2009.                                      various main Workgroups
                                                                                                              • Workgroup session scheduled for 5/3/09
                                                             Identified new Workgroup Leader and planning
                      Economic Impact     Roger Baxter                                                        • Preliminary discussions with Industry Experts
                                                             of mobilization for 2009 in progress
                                                                                                              • Fast track PCP modeling as blue-print for other initiatives

                                                                                                              • Proposed name change to Financing WG
                      Financing           David Mahuma       1st Workgroup session held 26/2/09
                                                                                                              • Baseline to be finalized 6/3/09

                                                                                                              • Baseline to be finalized 6/3/09
                                                             Kick-off session held 11/2/09 and Workgroup
                      Legal and Tariffs   Maduna Ngobeni                                                      • Regulation discussions and Sector Target discussions
                                                             baseline developed
                                                                                                              with Workgroup and Dr. Elsa du Toit (4/3/09)
                                                                             Confidential                                                                  Slide 15
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 16
Confirm mandate and representation: Proposed PCP Mandate
•   To coordinate and facilitate all the PCP related activities that are taking place as part of
    the response to the shortage of electricity supply, through:
     – Identification of issues
     – Problem analysis
     – Solution formulation and recommendations
•   with the aim of preventing load shedding and to putting South Africa on a more
    sustainable path in the future by ensuring permanent behaviour changes of all citizens of
    the country.


•   Identify and invite those role players that can make a direct contribution to the objectives
    set by the Workgroup


•   Develop and recommend context-sensitive solutions



                                          Confidential                                    Slide 17
Confirm mandate and representation: Member Responsibility
Representation
•   Members are practising recognised subject matter experts in the industry
•   Representatives will not be responsible for binding their organisations in the decision
    making process, but will be accountable to channel the required action to the correct
    resource and ensure completion of the action by agreed target dates


Member Contributions
•   Members are required to commit the time and effort required to successfully participate
    fully and consistently in the workgroup by attending meetings, being responsive to and
    maintaining sufficient communication with the WGL and PMU, and staying current with
    information provided to the group and decisions of the group
•   Members are also required to provide specified reports, inputs and deliverables agreed to
    in light of the workgroup mandate and objectives



                                         Confidential                                   Slide 18
Mandate and representation: Current Workgroup Composition
                                 Multi-stakeholder group:
  •AMEU – onboard
  •EIUG - onboard
  •CEF / SANEDI - onboard
  •Metros and Muni’s affected by Phase 1
     –(City Power, eThekwini, Ekurhuleni, CoCT, NMBM, Tshwane, Centlec, uMhlathuze, Msunduzi)
  •ESKOM - onboard
  •DME - onboard
  •BUSA - invited, awaiting confirmations
  •DPLG - invited, awaiting confirmations
  •SALGA - onboard
  •NBI - onboard
  •NERSA *
  * Not a member

                                      Confidential                                   Slide 19
Mandate and representation: Workgroup Definition for PCP

  A structured power conservation program that encompasses:


  •Energy Conservation Scheme
  •Energy Growth Management
  •Right to Consume Trading
  •Demand Market Participation




                           Confidential                       Slide 20
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 21
Mandate and representation: Objectives
• Halt to align all current “PCP processes”
• Redefine the context for PCP
• Agree the purpose and objectives for PCP
• Agree the critical performance areas, objectives and inter-
  relationships for PCP
• Develop strategies for each CPA & co-dependencies with other
  CPAs
• Develop a workplan to realise the strategy for PCP




                             Confidential                       Slide 22
TEA / COFFEE BREAK




                     Confidential   Slide 23
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 24
PCP in Context
                                            Condition                                        State of Readiness
                                             Operational                                     Ready &Working

                                             Under Pressure                                  Being Implemented
     Route                  Vehicle                            Lever
                                                                                              Being Debated
                          Gx Reliability  Stressed

                          Tx Reliability
   Increase               Dx Reliability
   supply
                          New build & RTS

                          Cogen/IPP/MTPPP

                          Primary energy                       Quotas
       The Strategy




                                                                                 INTENSITY
   Increase this Margin
                                                                Pricing
                            Emergency Load Shedding

                                                                DMP
   Manage
                            DSM                 ECS           Trading
   Demand
                                                                Demerits/Merits
                            PCP
                                                                Regulatory

                                              EGM              Market Driven
                                    Confidential                                                           Slide 25
A Mind map on PCP
                               Fixed by                                                                                                             Slope
                                Sector                                                                                                         >1 for Penalties
                                                            Ministers
                                                           Discretion!!!
                                                                                                                         Sliding Scale
                                                                                                                            Rebates


                                                                                                                                                    Slope
                                                                                                                                               <1 for Rewards

                                 Obligation of
                               New Connections?
                                                                      Saving
  When                                                                Targets                                     Penalty Tariff
   How                                                                                                              System
How Much                                                                                                                                             Penalty
With Whom                                                                                                                                          Block Tariffs
                          Trading
                           RTC’s


                                                                                       Enforcing                                    DSM
   Exchange                                                                                                                                                Increase DSM
  Penalties for
   More DMP
                                                                                       PCP with                                                              Spending
                                          Application of the
                                            PCP Rules
                                                                                        Tariffs
                                                                                                                                    DMP
                                                                                                                                                             Interdependence
                                                                                                                                                               On PCP????
   Permitting
                                                                   Penalty “Stayed”
    Group
                                                                       For set
  Aggregation                                                                                                                      Load Shedding
                                                                   Payback Period
                                                                                                                                                                   Interdependence
                                                  Trigger of                                                                                                         On PCP????
           Capping                                PCP Rules                                                 Baseline
       Savings/Catch-up                                                                                   Determination
           Capacity                                                                                          System                          When
                                                                             Customised                                                   Normalised?
                                                                            By Real Time
                                                                           Negotiation with
                                    Always On
                                                                               Client
                                                                                                                                            Past Savings
Extra-Group
                                                                                                                                             Restricted
                                                     Only When                                  Aggregate
                  Inta-Group                          Required                                Group Savings?

                                                                                                                                          Past Savings
                                                                           Confidential                        Disclosure of               Restricted              Slide 27
                                                                                                               Baselines??
Our Collective Goal


               Recover from the current Electricity Crisis

     Put our economic growth plans back on track, within the

           Approved & allowable Time, Budget & Impacts

                         Government to Confirm




                               Confidential                   Slide 28
Creating a Balance


Its all Stuffed                                       No Problems



 Disengaged or
                                                        Naïve or living in
  Jump Ship                                                  Denial


              Threats &                     Opportunities &
                          Risk Management
                             Balance &
           Weaknesses        Accuracy
                                               Strengths




                          Confidential                         Slide 29
A risk based approach
     “ A Risk” – ISO/IEC 73 Definition
 “Something that may occur and affect the achievement of objectives”

                                                            1
             2
           Risk Assessment                                 Risk Identification



       3
   Control Identification & Implementation                      6
                                                                Communicate

                                    4                                 5
                                  Control Assessment                  Monitor            Gap Analysis
                                                                             oz




                                                                    Actual   Direction




                                            Confidential                                            Slide 30
Savings can and must be made, but we must;


   Case by Case Baseline

   Have Realistic Time Lines

   Have Realistic Targets

   Communicate Consistently

   Clarify Role Responsibilities

   Be Systematic




                          Confidential       Slide 31
High Level Workplan
• To be finalised in March 09




                            Confidential   Slide 32
Task Teams
• Determined at workshop
                Allocations                      Merits / Demerits                        Pricing

 Jaco Hugo                        Jurg Zaaiman                       Dave Long

 Paul Curnow                      Pieter C. Robinson                 Leslie Rencorte

 Paul Botha                       Pieter Brand                       Pieter Brand

 Tony Cole                        Ohna Smit                          Ohna Smit

 Jurg Zaaiman

 Charles Mahony



    Demand Market Participation                      Trading                Energy Growth Management



 Talu Tshivhase                   Dave Long                          Jaco Hugo

 Paul Vermuelen                   Paul Vermuelen                     Paul Botha

 Pieter Brand                     Leslie Rencorte                    Pieter C. Robinson

                                  Pieter Brand                       Johan Crous




                                                     Confidential                                      Slide 33
Presentation Outline
•   Welcome & Introductions

•   Background on NERT

•   Overall NERT Status Update

•   PCP Work Group Mandate & Composition

•   PCP WG Scope & Objectives

•   Coffee / Tea Break

•   Way Forward

•   Closing




                                 Confidential   Slide 34
 Next Sessions : PCP WG Meetings 2009
   Month       Meeting Type           Date          Time              Venue

March       WG Forum          Tuesday , 10th   09h00 – 12h00   Umkhanyo Boardroom
                                                               6th Floor, Presidia
                                                               Building, 255 Paul
                                                               Kruger Street, Pretoria

April       Task Teams        Thursday, 9th    09h00 – 11h30   EDI / Alternative

May         WG Forum          Thursday, 7th    09h00 – 11h30   EDI / Alternative

June        Task Teams        Thursday, 4th    09h00 – 11h30   EDI / Alternative

July        WG Forum          Tuesday, 14th    09h00 – 11h30   EDI / Alternative

August      Task Teams        Thursday, 13th   09h00 – 11h30   EDI / Alternative

September   WG Forum          Tuesday, 8th     09h00 – 11h30   EDI / Alternative

October     Task Teams        Tuesday, 13th    09h00 – 11h30   EDI / Alternative

November    WG Forum          Thursday, 5th    09h00 – 11h30   EDI / Alternative

December    WG Forum          Thursday, 3rd    09h00 – 11h30   EDI / Alternative


                               Confidential                                Slide 35
THANK YOU

								
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