Asset Management, Smart Metering, Water and renewable Energy
Industrial Hub
Presented by Jerry Mafereka and Lindelani Errol Sibisi
16 August 2012ICUE Conference 2012
Sources of energy are becoming scarce and COP17 Targets for mitigating against negative Climate Change are massive.
Thus ESKOM as a major supplier of energy is embarking on a drive to boost supply of energy from alternative sources while simultaneously reducing demand for electricity.
The Energy Industry in South Africa is not as developed as in most countries thus ESKOM needs more capacity to meet growing demand.
However, there are very few local and well equipped suppliers hence the on-going importation for both the New Build Programme of Power Stations and Integrated Demand Management (IDM) Technologies.
Eskom seeks to build an industry by building a group of home-grown companies that can assist ESKOM (and later other clients) and compete globally especially in Africa.
The reality is that energy problems of South Africa are too complex and profound that no one company can solve them.
This process will create thousands of jobs and empower hundreds of companies to help solve South Africa’s energy problems.
Industry background
Eskom Transformation Imperatives
Create a society which allows all of its participants to generate economic growth within a framework that provides
consistency and stability
This is an investment in the future of South Africa
Correcting the inequalities of the Apartheid era
80% of population receiving 25% of total remuneration
90% owning less than 5% percent of the JSE
40% black South Africans unemployed compared to 10% of white South Africans (Skills-based problem)Demographics Ownership of JSE
All data at November 2005 Source for all charts: DTI
• Increase the level of participation by black owned businesses mainstream economy (ESKOM AND OTHERS)
• Increase income through resultant economic growth
• Increase the real market in the SA economy Second Economy
BE
EU
pliftm
ent
Second Economy
Mainstream EconomyMainstream Economy
More economic participants
Higher Economic Growth
A Bigger Market for All
What Eskom Supplier Development & Localization Strategy wants to Achieve
ESKOM will spend over R1trillon over the next 20 - 30 years on New Build and IDM Programmes because the current fleet of power stations will be due for decommissioning during this period.
About 40% of this amount is to be spend on developing the local energy industry focusing on small black owned companies
This will be done through: Skills development Localisation Industrialisation Job creation for decent work Enterprise development
Eskom’s Capital Investment Plans
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DefinitionKey performance area
• Increasing the skill base (number and skill level) of South African workers in areas relevant to the energy sector and where there is a national scarcity of skills
Skills development
• Utilisation of Eskom and suppliers’ spend to develop South African based suppliers relevant to the energy sector (focusing primarily on B-BBEE and Black Owned suppliers)
Localisation- Country- Province/Region- Site/Operation
• Utilisation of Eskom and suppliers’ spend to foster the establishment of new competitive industries in the energy sector
Industrialisation
• Creation of new jobs by suppliers as a direct result of Eskom business
Employment and job creation
• Providing a platform for SA-based suppliers to develop into national and international suppliers, through Capability & Capacity & Competitiveness development
Supplier development (SD)
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Industrial HubAsset Management, Smart Metering, Water and
renewable Energy Industrial Hub
“Utilisation of Eskom and suppliers’ spend to foster the establishment of new competitive industries in the energy sector” Create new black owned companies in the energy
sector Boost small black owned companies in the energy
sector to be competitive globally Create jobs Increase the skill base in the energy sector Boost the reliability of suppliers in the local industry
through fostering best practice
Strategic Objectives & Modus Operandi
Hub Management Office Consist:
ESKOM SD&L and Foundation, SABEF, ZIMELE and a Consortium of SMME’s
Duties: manage the running of the industrial hub and stakeholder relationships
Scope of Work to cover: Asset management
Large Scale Manufacturing of Capital Goods Construction and renovation of building Provision of related services
Smart Metering ESCOs Smart ICT Grids Local Water and Renewable
Energy Water and Renewable Energy
Generation of water from water Renewable energy
The Key Pillars of Industrial Hubs
Drivers of the programme will provide assistance such as: Business opportunities Funding Training Incubation
Drivers are to be identified by ESKOM and financed by its Global ICT Suppliers, National & Provincial DFIs.
Local Beneficiary Companies / Enterprises / Co-Ops / NGOs / CBOs be vetted by accredited empowerment verification agencies for eligibility.
The Drivers of Industrialization & Localization Framework and Programme
Management Office
Products & Services for Eskom Business
Asset Management
Manufacturing Retail Support Services
Cables and ConductorsMotorsGeneral ConductorsAir Heaters & FansProperties (Facilities) Vehicles
ClampsVoltage Regulators Capacitive Voltage TransformersCoupling CapacitorsGrinding Elements
Coal supply Buying and Hiring services for:•Fleet •Cranes•Aerial Platforms•Drill Equipment•Lubricants •Chemicals
Maintenance Services HR Specialist Recruitment Professional Services Print MaterialMetering strategyMonitoring systems CateringSmart Meter Systems Courier ServicesExternal AuditorsTravel Management
• Companies are to be grouped according to areas of specialisation • Each areas will have a champion who is part of the management
team
Asset Management
Smart Metering Water and Renewable
Energy
• IBM• T-Systems
• SEDA TTP• IDC• ESKOM
Construction Manufacturing Retail
Support Services
Khayelitsha Saldana AtlantisSir Lowry’s
Pass
Management Office (Consortium , Drivers,
SABEF and ESKOM)
B BBEE SMME’s
Industrial Hub Framework
Induction of companies Identify existing ESKOM suppliers who would be registered under the hub Use SABEF to induct new companies into the hub Identify other structure to induct new companies
Qualify companies to be added to the hub database Companies must meet set criteria Add to a database that will be available to the market
Train and educate new companies on energy related aspects and leadership FET’s, Technical Universities and Academic Universities will provide training Training programmes will also be put in place for ad hoc training programmes
Identify opportunities within and outside of ESKOM for companies in the industrial hub A competitive process according ESKOM requirements will be followed
Sell companies in the hub to other energy suppliers Use a portal to advertise opportunities to members of the hub Sell members to funders
Manage hub activity Report on statics
Number of companies added Success rate of the hub
Perform above mentioned activities
Typical Activities of the hub
Eskom Supplier Evaluation Process
Continuous Improvement cycle
Buyers
Identify focus areas
Capture buyer requirements
Contracting
Comply with buyer
contract requirements
Invite Suppliers to participate
Verification of evaluation data
Assisted self assessments
Develop improvement
plan
Implement improvement
plan
Suppliers
Facilitate access to supplier development resources
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Example of Targets & Outputs from the Smart Metering Pilot Study
• Through the Smart Energy School train over 15000 individuals within and out of ESKOM
Skills development
• Build and empower 300 new local companies
• Focus on Youth owned – 50%; and Women owned – 25%
• Empower 200 existing local companies
Localisation
• Boost the Smart Metering companies
• Build a Smart Metering School
Industrialisation
• Create over 15 000 jobs
• Focus on black, young, women and disabled individuals
Employment and job creation
• The 500 companies will be able to offer services to other clients such as local municipalities and across Africa
• Zimele will be able to grow to compete internationally
Supplier development
Why do we think we will Succeed?
We are ready to partner with ESKOM in SMME
Development…
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