Energy Summit: Defining the Energy Future of Local Government

7thto9thMarch2018

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Background

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Background of Energy Summit

•  SALGAishostingasummitthewillbetakingplaceattheSandtonConventionCentreonthe7thto9thMarch2018

•  Thesummitwillbefocusingtheproblemsassociatedwiththecurrentbusinessmodelasaresultofthefollowingchanges:–  Stagnantorevendecliningelectricityconsumption–  Energysecuritythreatsandincreasingelectricityprices,associatedwith

decreasingtechnologycostsandincreasingproductquality–  Increasedinterestinenergyefficiencyandrenewableenergytechnologies,–  Growinginterestinself-generationofelectricitythroughrenewable

technologiessuchassolarphotovoltaicsystems–  LackofAffordabilityasaresultofincreasingelectricitycosts–  TheftandNon-Payment–  RenewableResourcesandEnergyEfficiency–  BusinessOpportunities

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Background of Energy Summit

•  Theelectricityindustrycouldsoonbefacingitsmostdisruptiveperiodofchangesincethecommercializationofelectricityinthe19thcentury.

•  Thetimeisripeforsignificanttransformationbecausethepotentialfordramaticdisruptiontotheexistingelectricityoperatingmodeliscomingnotfromonedirection,

•  It’scomingfromarangeoffactorssuchasdemand,technology,regulation,newproducts,andnewcompetitors,

•  InfrastructureMaintenanceBacklog(BothEskomandMunicipalities)•  Thefinancialsustainabilityofmunicipalitiesisthreatenedwhichresultsinto:

–  anincreaseintheEskomdebt,whichinturnnegativelyaffecttheenergysystemand

–  alsonegativelyaffectingservicedelivery

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HowtheSystemischanging

Decentralisation

• Trendofselfgenerationbycustomers• Trendofdecentralisinggenerationintosmallscalegeneration

Democratisation

• Democratisationoftheenergysystem• Co-owningenergyassetsscalingupcommunityinvolvementingeneration

Digitisation

• Emergenceoftechnology• Emergenceofdigitalenergyconsumption

Decarbonisation

• Consumerbehaviourshiftsincleanenergy• Increasingclimaterisk

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Purpose

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Toexamine the current energy landscape and todefine theenergyfutureroleforLocalGovernment

PurposeoftheEnergySummit

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Objectives

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Specific Objectives of the Energy Summit

•  Tounderstandhowthetransitionmanifestseconomically,legally,financiallyandinstitutionallyforLocalGovernment

•  Topursueconsensusofthepoliticalleadershipintheenergysectortoagreethatchangeisnecessary

•  ToexaminethepossiblescenariosforSouthAfricanEnergysectorandtodefineanidealFutureLocalGovernmentUtility

•  Todevelopanddefineaframeworkonthecountrycompactfortheenergysector

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ProgrammeOverview

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Overview of Programme

Day1 OfficialOpening

WelcomingfromaddressfromthePresidentandMinisters

CeremonialSpeeches

Day2 Session1:FivePresentations

Session2:PanelDiscussion

Session3:FiveFacilitatedBreakawaySessions

Day3 Session4:ReviewofBreakawaySessions

SummitDeclaration

ClosingofSummit

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Themes

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OverallEnergySummitThemes

Energy Summit Themes

Megatrends in the Energy

Sector

Future models and Policy

Implications Energy

Economics

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Theme1:MegatrendsintheEnergySpace

AreasofDiscussion

§  Majortrendsorlikelydiscontinuitiesaffectingtheenergysectoroverthenextfivetotenyears?

§  Willchangebedrivenbythemarket,orbypolicy?OrConsumers

§  KeyInternationalEnergyTrends§  TrendsintheSouthAfricanEnergysector§  ChangesinthesystemsuchasDecentralisation,Democratisation,

DigitisationandDecarbonisation

§  ImplicationsofEmbracingorResistingChange

§  OpportunitiesforradicalnewbusinessmodelsforallPlayers

Outcomes

§  AsharedunderstandingofthenatureandextentofMegatrendsintheSouthAfricanEnergysector

§  Reflectionontrendsinpowergeneration,theriseofdecentralisedpower,theblurringlinebetweentheenergyproducerandenergyconsumer

§  PossibleScenarios

Speakers

§  LocalEnergyExperts§  InternationalEnergyExpert

Objective:ReflectonthekeymegatrendsoccurringintheEnergyspacebothNationallyandInternationally

ProblemStatement

§  NumeroustrendsarechallengingtheSouthAfricanEnergylandscape,threateningthesustainabilitytheElectricitySupplyEnergy

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Theme2:EnergyEconomics

AreasofDiscussion

§  ThefuturerealitiesandinnovationstostrengthenMunicipalRevenue“exploreothersourcesofincomeandensurerevenuesustainability”

§  AssetManagement“Howtosweattheassetsandprocuremaintenanceresources”

§  FinancingInstrumentsandMechanisms(EnergyInfrastructure)

§  EnergyTechnology,SystemsandRevenuemodelling

§  ElasticityofSupplyandDemandinEnergyMarket

§  EnergyForecasting§  ElectricityAffordability§  OpportunitiesforradicalnewbusinessmodelsforallPlayers

§  ConsiderationsoftheDeathSpiral§  InputCostsandWheelingCosts

§  Costofenergyandmacro-economicbenefitsofdifferentenergyfuturescenarios

Outcomes

§  Optionsonmunicipalrevenuestreams

§  ProposedFinancinginstrumentsandMechanisms

§  ProposedInnovationsonAssetManagement

Speakers

§  LocalEnergyExperts§  InternationalEnergyExpert

Objective:ToexploreopportunitiesshapingEnergyEconomics

ProblemStatement

§  Municipalrevenuesaredecliningduetounaffordability,technologyandsloweconomicgrowthwhichinturnnegativelyimpactingservice

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Theme3:FutureModelsandPolicyImplications

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AreasofDiscussion

§  Examinethecurrentlegislativeandpolicycontextshapingtheenergysystem

§  Currentconstraintsandweaknessesofthelegislativeframeworkintheenergyspace

§  Opportunitiesforenhancementsinthelegalframeworktocreateanenablingenvironmentforenergytransitions

§  InternationalBestPracticeintheenhancementsofthelegislativeframework

§  EnergyPlanningPolicy:nationalenergyplanningandlocalgovernmentenergyplanning

Outcomes

§  Identifiedconstraintsandopportunitiesofthelegalframework

§  RecommendationsonLegalFrameworkenhancements

Speakers

§  LocalEnergyExperts§  InternationalEnergyExpert

ProblemStatement

§  Thecurrentlegislativepoliciesareconstrainingmunicipalitiesfrompursuinginnovativeanddevelopmentsolutionsintheenergyspace

Objective:ExaminekeyopportunitiesandconstraintsintheLegislativeFrameworkoftheEnergySpace

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PostEnergySummit:PolicyShift

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EnergySummitApproach

PolicyShift

EnergySummit

EnergyReferenceGroup

DoEEngagements

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EnergyReferenceGroup

•  Themain objectives of the ReferenceGroup is to strategize on thecontentoftheEnergySummit

•  It will involve energy experts, private sectors, relevant nationalgovernmentandEskomandothersthatwillengageonthefollowing:o  FinalisationoftheEnergySummitAgendao  FinalisationofKeySpeakerso  FinalisationoftheEnergySummitProgrammeo  FinalisationoftheContentandstepstobetakenposttheEnergy

Summit

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PostEnergySummitActivities

•  PostEnergySummitReportwithanActionPlanforlobbying(IRPandothers)andengageonWork-streamorRoundtable.

•  PosttheenergysummitworkwillbedonewiththeDoEandotherkeystakeholders topropose innovative frameworksof policy, legislativeandinstitutionalchangesthatwillenableSouthAfricatoadapttothedisruptionsintheenergyspace.

•  ThepropositionswillpresenttheproposalsnecessaryforPolicyShiftsthat will be aligned to the changing environment in the energysector.

•  The propositions will also examine possible short term LGopportunities

•  Other:AnnualEnergySummitSALGA/DoEMoU

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Thank You