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The session Chair Mr. Brian Statham
Conference organizers,
Excellencies – High Commissioners and Ambassadors
Invited speakers,
International and local delegates,
Senior Government Officials,
Distinguished guests,
Ladies and Gentlemen.
It is an honour to represent the Minister of Energy Minister Dipuo Peters, MP to deliver her keynote address to you. The Minister sends her apology and best wishes. It is Wednesday today and we all know what happens on Wednesdays.
The conference starts on a day that has generated a great amount of anticipation in the Energy sector and indeed the economy as a whole. I dreamt of being a fly on the walls of the Regulator’s offices during their deliberations but one thing I could not hear was the figure.
Mr Chairman, it was 14 Months ago that we were standing in front of a similar audience arguing for a need for South Africa to recalibrate her approaches on Energy infrastructure investments given the economic downturn. Indications are that we have passed the bottom of the cycle (the recession) and the temporary breathing space that was provided by that downturn is about to fill up. When the upturn is in full swing, energy challenges globally will re emerge and there will once again be a scramble for components, for crude oil and for petroleum products and gas. High prices may once again be back to the fore. The difference however is, economies will be starting from a low base. We will not be immune to this. We need to ask ourselves as to whether, as a collective we are prepared for this and whether that preparation can be quickly be translated into actionable programmes and projects.”
TOWARDS ACTIONABLE STEPS
Mr Chairman, Ladies and Gentlemen, it is about 9 months since the President decided to form a separate Ministry and Department whose only focus would be ensuring security of energy supply to this country and in some respects its immediate neighbours. Government recognises that proving energy security for our country remains one of its key responsibilities. Since the formation of the Department under the Ministry a considerable amount of effort has gone into creating the structures of the Department and the Minister with the concurrence of Cabinet appointed a Director General, Ms Nelisiwe Magubane to lead the Department. This year I believe that we will witness a concerted effort aimed at strengthening the regulatory framework, levelling the playing field and giving clarity in those areas that have been a source of frustration for some in the sector. As was indicated by President Zuma, this is the year of action and you will see no less in the Energy sector.
Two weeks ago the President once again indicated what he expects to be done by the Department this year working together with other Departments, key State Owned Enterprises and the social partners. Last week the Minister of Finance announced a fuel levy which would be used to augment the investment in liquid fuels pipeline infrastructure. This was the culmination of work done by the Department of Energy, the National Treasury, the Department of Public Enterprises and Transnet. On Friday last week Minister of Trade and Industry unveiled the Industrial Policy Action Plan in which again the Energy sector features prominently as one of the sectors that will enable local manufacturing in the areas of biofuels, nuclear energy, energy efficient technologies, solar water heating and liquid fuels infrastructure investments. I mention these ladies and gentlemen to indicate that this year of action has been preceded by planning and working together of government Departments. In all these energy is at the centre. On the IRP process which is underway, your valuable inputs will be required. We have a commitment to publish in June 2010. The contents of IRP2 will be published for comment in May 2010. A think tank of experts will be established to work with us on this.
One of the key requirements for a successful energy sector is regulatory certainty founded in policy and Law. South Africa has most of these in place however it is in the interpretation that a lot of contestation arises. Recent debates in the energy sector run the risk of degenerating into a blame game, which I can assure you will not take us forward. There is nothing wrong in pointing areas that need to be improved. What we begin to see are rigid positions on particular sub sectors of energy being the only ones that can solve the challenges facing the country. I am pleased that in this conference, there are a number of areas that will be explored and discussed. What I would like each and everyone to ask is what will change as a result of this deliberations, what two or three ideas will be imparted by each speaker and how will you convert that into an actionable proposal. After listening to the session on Energy Efficiency will anything change when you get home that evening.
Increasing access to improved energy services for the poor remains a global challenge. A challenge which should definitely be on the Agenda for next year’s conference. Without access to energy services the poor are deprived of the most basic economic opportunities needed to improve their standards of living. Without energy, factories and businesses cannot function efficiently; hospitals and schools cannot operate fully or safely; basic services that people in rich countries take for granted cannot be offered. This is the reality of most poor countries and the situation is most oblique here in Africa and Sub-Saharan Africa in particular. Let Energy Poverty be a pre occupation for sector specialists. We have a few years in which to achieve our Millennium Development Goals.
Mr Chairman, I have noted that issues of human capacity are on the Agenda. Energy costs have in the recent past gone up as a result of a shortage of skilled personnel. The delay in some projects is also caused by this. Solutions have got to be found to these challenges. Are we doing enough in terms of mentoring? Are institutions of higher learning aware of the needs of the sector? Are the scholarships offered targeted enough? Where are the bottlenecks? I trust that this conference will be able to offer ground breaking actionable steps.
We are living in the edge of climate change and we need to take advantage of the knowledge that we have and invest in energy carries that are cleaner, safer and environmentally friendly. We have vast agricultural lands and can indeed take advantage of the introduction of bio-fuels to both provide fuel but also act as an employment creation investment that in the long run alleviates poverty. We have in Africa sunlight in abundance and can take advantage of the Solarwater heaters to provide warm water and at the same time reduce the carbon footprint of the continent. On the issue of the solarwater heaters its not enough for Africa to be a recipient of technology but to ensure that companies set up manufacturing companies on the continent and produce locally components locally.
Ladies and Gentlemen, there are currently a number of very critical infrastructure projects underway and others at the planning stage. For instance in the New Multi Product Pipeline for petroleum products, which will vastly improve the security of liquid fuels supply in the inland region, power stations are in various stages of construction by Eskom, a coal to liquid project facility is being planned by Sasol, and a Greenfields refinery being investigated by PetroSA. The gas Pipeline from Mozambique continues to bring much needed methane rich gas for the country. It is important that private sector takes initiative in investing in other energy projects such as refineries, renewable energy projects and mainly coming as independent power producers in the electricity sector. We have a nascent gas sector with huge potential not only in South Africa, but in the whole of SADC. The demand for electricity is now increasing and there will be a need to move to LPGas at some point. All these are opportunities in the energy sector which investors can take advantage of in this country.
Mr. Chairman, Ladies and gentlemen, Africa is rich in oil and gas. The continent has become an important source of Oil and Gas. Africa exports significant quantities of oil and gas but Africa imports huge quantities of refined petroleum products (Petrol and Diesel). This is an anomaly, which should not be allowed to prevail for long. In the whole of sub-Saharan Africa, most of the refineries are aged, inefficient, unreliable and unable to produce fuel of better quality. Once again African raw material is beneficiated elsewhere and sold to Africa at a higher price. This cannot be sustained for long and the region needs to establish a refinery hub of its own which allows for beneficiation, saving of much needed foreign currency required to re-import refined products and eliminate the distortion of balance of payments generated by huge imports of refined petroleum products. Much more important is the fact that an African refinery hub will provide security of supply to the continent especially sub-Saharan Africa which is far from major international refinery hubs and has old unreliable and inefficient refineries. Refineries in the region will also create much needed jobs and will not sustain jobs in other economies.
Besides Oil, Africa has vast uranium resources however Africa has yet to establish a nuclear energy sector that can power the continent in a cleaner and smarter way. In line with the South African Energy Policy, various strategic initiatives have commenced to prepare South Africa for nuclear energy expansion. A range of feasibility studies covering all important components of the nuclear fuel cycle are being undertaken by Necsa. The emphasis remains on the attainment of security of fuel supply for future national energy needs, while being economically viable and competitive in the global market. Relationships have also been developed with all main international players in fuel cycle services in this regard to ensure the latter perspective in these studies. At the same time preparations are progressing for the establishment of laboratories and facilities in order to establish a local skills and technology base to facilitate re-establishment of fuel cycle operations in South Africa.
This is a demonstartion of South Africas’ commitment to nuclear energy. The important step is to ensure that we have developed competency not only to operate nuclear power station but to be able to build our own innovate on the current technology and grow our own skilled manpower to execute projects of such magnitudes. This is what countries like South Korea have done. From operating a turnkey project, they are now in a position to export their own nuclear reactors. This took careful planning, bold desicions, resources commitments and finally results. This can be done in South Africa and Africa, a continent rich in uranum the critical input in the nuclear energy.
A number of players have always been asking for a coherent plan. Although a number of separate plans had been produced, a coherent and comprehensive Intergrated Energy Plan will be developed.
In conclusion, let me assure you that we will be continuously building a more responsive and nimble capacity in order to tackle these issues head on. We do admit that there are areas of improvement in the manner and the pace at which we bring certainty to some of you.
We have heard your calls for decisiveness. We just trust that you will be able to keep pace with the hive of activity that you will see.
The management of the energy sector especially electricity need to be reviewed. It is important to promote interregional connectivity to optimize resources in the region and enhance efficiencies in both investments in the sector and use of available resources. Strategies to enhance interregional connectivity will be useful.
Ladies and gentlemen, I want to take this opportunity to thank you for inviting the Minister to be part of these deliberations. The time for action is now. We have taken to heart the call by the President that “Working together, we can do more”. Yes together we can tackle the energy challenges in this country and on the Continent to provide a better live for all. Together we can work better, faster and smarter to develop the sector which is the cornerstone for the industrialization of the continent.
I wish you all the delegates a fruitful engagement. Government takes initiatives such as this one seriously and we expect tangible action oriented plans that can be used to deal with the challenges we face. We also hope that our development partners will participate in this debate and review their strategies inline with the deliberations from this conference.
I thank you. |
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