Municipal Infrastructure Summit 2012, Birchwood Hotel, Ekurhuleni, Gauteng.

Date: 26 October 2012

NATIONAL SOLAR WATER HEATING PROGRAMME

Presented by: Mr. Khanyiso Zihlangu

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Overview of the RSA electricity industry sources of power

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OUTLINE

1. INTRODUCTION

2. PROGRAMME OBJECTIVES

3. INSTALLATIONS UPDATE

4. LESSONS LEARNED

5. PROGRAMME IMPLEMENTATION STATUS

6. SOME FREQUENTLY ASKED QUESTIONS

7. MUNICIPALITIES INVOLVEMENT

8. CLOSING REMARKS

1. INTRODUCTION

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Commitment, Funding, Expected Outputs

DoE’s SWH commitment:• The Department of Energy (DoE) remains resolute in its

commitment to ensure that 1 million SWHs are installed in SA by

the close of the 2014/15 financial year.

Available funding:• The funding allocation (R4.7bn) announced by the Finance

Minister during the 2012 Budget Speech is a clear indication of the

Government’s commitment to achieving the stated SWH target.

Some expected programme outputs:• Amount of energy saved (TWh) & demand reduced (MW); Tons of

carbon saved; Number of SWHs installed; Number & types of jobs

created; Amount of local content achieved; etc.

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2. PROGRAMME OBJECTIVES

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Both Macro-economic & Electricity Supply-Demand Balancing

Some Government’s SWH Objectives:

• Contribute towards reducing electricity usage attributed to water

heating;

• Contribute towards the reduction of unwanted greenhouse gas

emissions;

• Cushion the poor from the rising electricity prices;

• Widen residential access to hot water, through SWH, in South

Africa;

• Facilitate the creation of large scale SWH equipment

manufacturing in South Africa;

• Create jobs particularly within benefitting communities; and

• Contribute towards improving local skills.

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SWH contribution towards achieving the Government’s broader developmental objectives

3. INSTALLATIONS UPDATE

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Provincial Footprint of Installations

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LIMPOPO

MPUM

ALANGA

NORTH WEST

NORTHERN CAPE

FREE STATE

WESTERN C

APE

EASTERN CAPE

KWAZULU-N

ATAL

GAUTENG

NATIONAL A

VERAGE

TOTAL

0

50000

100000

150000

200000

250000

300000

350000

2,889 7,435 8,644 12,46528,651

42,50252,464

61,277

87,659

33,776

303,986

PAID & RECEIVED INSTALLATIONS: JAN'08 - 05 OCT'12

4. LESSONS LEARNED

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A Case of DoE-Funded Projects (Part I)

Key lessons for the DoE:• In implementing the fiscus-funded projects, invaluable lessons

have been drawn and are regarded as central to a successful

SWH programme rollout going forward.

• Planning is the key to a successful programme.

Experience that can be drawn from the previous projects:• Conducting a quick scan of a targeted area to assess the

appropriateness of installing SWHs in the area should be an

integral part of the programme rollout.

• The quick scan should be followed by a detailed feasibility study

that confirms aspects such as water reticulation status (water

connections inside the dwellings), roof integrity, security of water

supplies, drainage, orientation of houses, skills set of the area, etc.

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A DoE-Funded Projects Case (Part II)

Experience that can be drawn from the previous projects:

(cont’)• Whoever undertakes site assessment must have enough technical

strength to properly evaluate a site for application of SWH.

• Adherence to product and installation standards should be

maintained at all times.

• Measures must be put in place to monitor installations real time;

• Training of all members of the team (installers, inspectors, sales) is

vital.

• Only plumbers with relevant SWH installation skills must supervise

SWH installations and certify installed systems so as to hold the

certifying plumbers liable for any sub-standard work.

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A DoE-Funded Projects Case (Part III)

Experience that can be drawn from the previous projects:

(cont’)• The relatively small size of the South African market cannot

support a proliferation of highly varied SWH technologies.

• To create opportunities for small-scale companies whilst enabling

localisation of the SWH technology, contracts for Suppliers,

Installers, and Maintainers must be separated.

• Demand can be created by providing information and education

(grass-roots publicity) about the benefits of the technology to

homeowners particularly the high-use electric water heating

customers.

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5. PROGRAMME IMPLEMENTATION STATUS

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Key Programme Implementation Milestones (Part I)

Programme funding legislation:• SWH funds have been exclusively and specifically appropriated to

Eskom via the DoE Vote – Appropriation Act, 2012 (Act No. 12

of 2012).

Inter-Governmental coordination:• Cabinet mandated SWH Project Steering Committee was set up.

• Municipalities’ participation in the PSC is meant to be facilitated

through SALGA as one of the participants.

Transitional arrangements in place:• Currently rolling out the remnants of the DoE-funded projects

(under the previous MTEF allocation).

• Rebate programme is set to continue until end Dec’12.

• To introduce a differentiated rebate until the new approach gains

momentum.

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Key Programme Implementation Milestones (Part II)

Contractual arrangements:• Signing of the DoE-Eskom funding contract is imminent.

SWH Request for Information:• The DoE urges municipalities to promptly respond to an RFI

issued & placed on the departmental website on 22 October 2012.

• RFI objectives: Assess households’ SWH readiness to participate

in the programme, and to guide tentative allocations of SWH units

to municipalities which will later be confirmed after conducting

detailed feasibility studies.

Facilitating localisation of the SWH technology:• the dti has completed in investigation into the feasibility of SWH

Industry Designation – a legal instrument for setting minimum local

content thresholds.

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Key Programme Implementation Milestones (Part III)

Education, awareness & information dissemination:• To be led by the DoE in collaboration with its Partners (beneficiary

municipalities, Eskom, SANEDI, GIZ, participating supply &

installation companies, communities, et al.).

SWH monitoring system:• Developing a web-based (real-time) SWH installations and

performance monitoring system through the German Agency for

Technical Cooperation (GIZ) support.

Conclusion of programme implementation planning:• The Department is at the terminal stages of fully executing the

programme and is determined to only allow bulk procurement (for

economies of scale benefit ) of systems that have been approved

by the South African Bureau of Standards.

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6. SOME FREQUENTLY ASKED QUESTIONS

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Persistent Questions (Part I)

How can municipalities access the DoE funds?• Municipalities need to submit the data requested through the RFI;

• This FY, the DoE will make allocations on the basis of the received

household data as well as the need to redress the imbalanced

provincial & municipal spread of current installations.

• As the municipalities’ capacity to deal with SWH develops, a

process of applying for funds will be clearly communicated.

What criteria are likely to be used for municipal

allocations?• Over and above the socio-economic status of a municipality, other

considerations could be those issues that indicate, at face value,

the applicability of the SWH technology in an area selected by the

municipality – refer to the RFI Questionnaire.

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Persistent Questions (Part II)

• Funds permitting, the 1st prize for the DoE is to switch every

household to SWH in a selected area. If not, indigents will be

prioritised.

Who will be responsible for the procurement of SWHs?• As mandated by the 2012 Appropriation Act, Eskom will be the

programme Procurer up until such time the funding legislation

proposes otherwise or the entire EEDSM Institutional

Arrangements, once finalised, change the participants’ roles.

• Eskom will implement the programme under supervision of the

DoE and the PSC.

Who receives and addresses SWH enquiries at the DoE?• Departmental officials listed on the SWH RFI document are Mr.

Xolile Mabusela, Mr. Khanyiso Zihlangu, & Mr. Maphuti Legodi.

• Further, emails can be sent to swhprogramme@energy.gov.za.

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7. MUNICIPALITIES INVOLVEMENT

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What can Municipalities do?

What can Municipalities do to aid the national SWH rollout?• Select SWH ready areas in line with their priorities;

• Select targeted beneficiaries if not every household can be

connected to SWH;

• Provide inputs into the feasibility study;

• Ensure that all SWH components used by suppliers are indeed on

the municipalities’ list of permitted plumbing components;

• Assist with selecting local labour through community structures;

• Mobilise & support local SMMEs & Cooperatives to be able to

actively participate in the programme;

• Build their internal capacities such that they become equal

participants in the country's EEDSM drive; and

• Review and support the marketing and communication activities

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8. CLOSING REMARKS

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Brighter Future ahead for the South African SWH Sector

• South African SWH landscape is changing and this presents a

significant opportunity for municipalities to play a key role which will be

firmed up together with municipalities.

• Within a short period of time, municipalities will need to build internal

capacity to be able to seize the anticipated SWH opportunities.

• So long, the DoE humbly urges municipalities not to appoint or

mandate service providers (conclude MoUs) to implement SWH in their

areas particularly if this is done only with the hope of later requesting

funds from the DoE or of accessing the rebate funds.

• Participation of locals in the programme ought to be maximised as far

as reasonably possible.

• The DoE remains unwavering on ensuring that SA does not only rely

on imports to meet its SWH targets but manufactures most of the

components domestically – a pre-condition for supplier participation in

the programme.

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THANK YOU

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CONTACT DETAILS

Mr. Khanyiso Zihlangu

South African Department of Energy

Email: Khanyiso.zihlangu@energy.gov.za

Tel: +27 12 406 7651

Fax: +27 12 323 5819

Mob: +27 76 411 1219

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