1

2

Background

•The electrification programme was started by Eskom during the late 1980’s

•It was further refined by the National Electrification Forum (NELF) during the early 1990’s.•Access to electricity for households in RSA was approximately 30%.

•During this period the electrification programme was funded through the National Electricity Regulator (NER)

3

•After 1994 and through the government’s initiative of RDP (Reconstruction and Development Programme), electrification programme was endorsed.

•During 2001 the government took responsibility for funding electrification programme.

•The funds are made available from the fiscas

•President’s State of Nation Address (universal access in RSA by 2012)

Background Cont.

4

To manage the electrification planning, funding and implementation process, with the aim of addressing electrification backlog so as to reach universal access by 2012.

Our Focus areas

• Managing the electrification planning process• Managing the electrification funding allocation process• Managing the electrification implementation process• Monitor the INEP in line with the Energy white paper, the Division of Revenue Act (DoRA, Public Finance Management Act (PFMA),ER Act, OHS Act etc.

MANDATE OF INEP

5

SITUATIONAL ANALYSIS

6

National backlog (Households)

Province Eskom Area Municipal Area Total Backlog

Eastern Cape 625,760 103,721 729,481

Free State 156,805 44,507 201,312

Gauteng 256,750 415,969 672,719

Kwazulu-Natal 657,642 156,890 814,532

Limpopo 345,725 36,460 382,185

Mpumalanga 155,137 60,343 215,480

North West 150,142 27,859 178,001

Northern Cape 45,302 11,326 56,628

Western Cape 75,759 90,436 166,195

Total 2,469,022 947,511 3,416,533

7

National Backlog11%

6%

19%

5%24%

6%

22%

2% 5%Limpopo

Mpumalanga

Gauteng

North West

Kwa-Zulu Natal

Free State

Eastern Cape

Northern Cape

Western Cape

National backlog cont.(H/H)

8

Province Schools Clinics

Eastern Cape 1924 0

Free State 157 0

Gauteng 0 0

Kwa Zulu-Natal 2230 0

Limpopo 263 0

Mpumalanga 400 0

North West 151 0

Northern Cape 6 0

Western Cape 0 0

Total 5131 0

National backlog (Schools and Clinics)

9

Electricity value chain

POWER STATIONSPOWER STATIONS

GENERATIONGENERATION

TRANSMISSION LINESTRANSMISSION LINES

TRANSMISSION TRANSMISSION SUBSTATIONSSUBSTATIONS

DISTRIBUTION DISTRIBUTION LINESLINES

SERVICE CONNECTIONSERVICE CONNECTIONRETICULATION HV LINERETICULATION HV LINE

(11 & 22kV)(11 & 22kV)

TRANSMISSION (400/275 kV)TRANSMISSION (400/275 kV)

RETICULATION LV LINERETICULATION LV LINE(380/220V)(380/220V)

DISTRIBUTION SUBSTATIONSDISTRIBUTION SUBSTATIONS

Electricity is Generated by burning of fossil fuels (coal, oil, or natural gas), use of nuclear technology and hydro capability

High Voltage electricity is carried between Generation and required Distribution through Transmission networks (or Transmission grids)

The distribution networks collect ‘stepped down’ electricity from the transmission networks and deliver it to Redistributors /End Users

DISTRIBUTION DISTRIBUTION (132/33 kV)(132/33 kV)

Customer consumption is measured at the point of supply in KWh. This information is used to measure and bill consumption levels utilised/sold

The voltage levels of electricity are further transformed to meet Distribution requirements

1

2

3

MUNICIPALITIESMUNICIPALITIES

10

Electrification Plan (Actual data)

1999 JAN-JUNE 2002

2003 2004 2005-2006

No. of connections - 293,006

98412 173,094

168,205

101,621

Cost per Connection (Retic only) -

R 4,256 R 2,859 R 3,234 R 4,081 R 4,021

Cost per Connection (Sub Trans & Retic) - DME

R 4,387 R 2,943 R 3,573 R 4,368 R 4,713

Cost per km (Supply R’000) 148 120 69 117 183 Connections per Transformer 35 112 56 54 19

kVA per Connection 26.92 0.39 0.76 1.60 0.92 MVA per Transformer 0.05 0.04 0.04 0.09 0.02 MVA per km 0.02 0.02 0.02 0.05 0.04 Transformers per km 0.31 0.38 0.39 0.56 2.46 Connections per km 26.92 42.47 21.71 30.16 46.26 Reticulation Transf Quantity 3411 878 3099 3131 5412 Sub TX Strength Infrastructure as % of Total

2% 3% 10% 7% 15%

11

Electrification Projected Trend

2004 2005 2006 2007 2008 2009 No. of connections - 164,810 158976 164,235 153,250 148,620 148200 Cost per Connection (Retic only) -

R4,266 R4,497 R4,397 R4,636 R4,850 R4,948

Cost per Connection (Sub Trans & Reticulation)

R4,521 R5,046 R6,078 R5,475 R5,751 R5,903

Cost per km (Supply ) 102 138 139 145 153 159 Connections per Transformer 69 58 61 58 56 56

kVA per Connection 0.65 0.82 0.70 0.74 0.76 0.76 MVA per Transformer 0.05 0.05 0.04 0.04 0.04 0.04 MVA per km 0.02 0.03 0.02 0.02 0.02 0.02 Transformers per km 0.37 0.53 0.52 0.55 0.57 0.58 Connections per km 25.47 30.86 31.82 31.54 31.88 32.48 Reticulation Transf Quantity 2378 2751 2673 2651 2641 2631 Sub Tx strengthening as % of Total

6% 11% 28% 15% 16% 16%

12

CHALLENGES

Challenges in the Electricity industry in South Africa

• Ageing electricity infrastructure

• Minimum or no investment by respective distributors

(municipalities) in the operation and maintenance of the

electricity infrastructure to date, hence lack of maintenance.

• Increased blackouts and brownouts in the country, concern

for quality and security of supply for the 2010 FIFA World cup

• Limited or lack of adequate skills at local government level for

operation and maintenance electricity infrastructure.

13

Electrification outputs

Project life cycle

Construction for backbone infrastructure

•Poles

•Cables MV and LV

Hou

seho

ld c

onne

ctio

n

Pre

-Eng

ine

erin

g an

d D

etai

led

desi

gn

15%

80 %

5%

Start Finish

14

Electrification outputs

Project life cycle

Hou

seho

ld c

onne

ctio

n

Pre

-Eng

ine

erin

g an

d D

etai

led

desi

gn

15%

80 %

5%

Start Finish

Construction for backbone infrastructure

•Poles

•Cables MV and LV

15

Projected outputs for MTEF

2007/08 2008/09 2009/10Households R 1,440,910,000 R 1,746,395,000 R 2,317,778,000Schools and Clinics R 45,000,000 R 90,000,000 R 150,000,000Total R 1,485,910,000 R 1,836,395,000 R 2,467,778,000

Outputs per annum2007/08 2008/09 2009/10

Households 150,000 150,000 150,000Substations 10 10 10Schools and Clinics 700 2,500 3,000

16

DoRA FRAMEWORK

17

Comments (current)

• Current framework support the projected outputs– Connections for households, schools and clinics– Building of bulk infrastructure

• Assist in monitoring performance– Reallocate funding were is required (if

necessary)

18

Comments (future)

• Have a schedule that allows funding of DSM and Energy Efficiency initiatives for municipalities

• Framework outputs

• MW shifted through the programme

• Assist in monitoring performance

• Process to be initiated with National Treasury

19

INSTITUTIONAL AND LEGISLATIVE FRAMEWORK

• Electricity Regulation Act (Act. No 4 of 2006) completed, will

be used to:

• Monitor compliance to the quality of supply regulations (to

be completed by the end of October 2006.

• Enforce penalties to distributors for non-compliance

• Improve integration during planning process with municipal

IDP.

• Eskom progress report to municipalities as per DoRa

requirement

20

THANK YOU

Questions….?