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ANNUAL REPORT 2014/15

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2 SANEDI Annual Report 2014/15

ANNUAL REPORT 2014/15

SANEDI Annual Report 2014/15 3

7 Foreword by the Chairperson------------------------------------------------------------------------.9 Board of Directors---------------------------------------------------------------------------------------11 Chief Executive Officer’s overview------------------------------------------------------------------12 Statement of responsibility and confirmation of the accuracy of the annual report---17 Strategic overview--------------------------------------------------------------------------------------18 Vision--------------------------------------------------------------------------------------------------18 Mission------------------------------------------------------------------------------------------------18 Values--------------------------------------------------------------------------------------------------18 Legislation-------------------------------------------------------------------------------------------------18 Organisational structure-------------------------------------------------------------------------------19 Part B: Performance information-----------------------------------------------------------------------20 Auditor-general’s report: predetermined objectives-------------------------------------------20 Strategic outcome orientated goals-----------------------------------------------------------------21 Performance information by programme---------------------------------------------------------22 Applied energy research-------------------------------------------------------------------------------22 Clean energy solutions----------------------------------------------------------------------------24 Smart Grids Programme--------------------------------------------------------------------------32 Working for Energy---------------------------------------------------------------------------------44 Data and knowledge management-------------------------------------------------------------48 Energy Efficiency programme------------------------------------------------------------------------51 Energy Efficiency (12L and 12I) tax incentives-----------------------------------------------51 bigEE---------------------------------------------------------------------------------------------------52 Energy Efficiency and Demand Side Management (EEDSM) Hub-----------------------55 Report on performance against objectives--------------------------------------------------------56 Communications-----------------------------------------------------------------------------------------70 4 SANEDI Annual Report 2014/15 . Contents Part A: General information------------------------------------------------------------------------------.6 Abbreviations and acronyms-------------------------------------------------------------------------.6 General information------------------------------------------------------------------------------------.

101 Notes to the annual financial statements--------------------------------------------------.Contents Part C: Human resource management-----------------------------------------------------------------72 Personnel costs by programme----------------------------------------------------------------------73 Personnel cost by salary band------------------------------------------------------------------------73 Performance rewards----------------------------------------------------------------------------------73 Reasons for staff leaving-------------------------------------------------------------------------------74 Labour relations.100 Accounting policies------------------------------------------------------------------------------. misconduct and disciplinary action------------------------------------------74 Staff demographics-------------------------------------------------------------------------------------74 Training costs of personnel----------------------------------------------------------------------------75 Part D: Financial information-----------------------------------------------------------------------------78 Report of the auditor-general to Parliament-----------------------------------------------------79 Annual financial statements General information------------------------------------------------------------------------------------84 Accounting Authority’s responsibilities and approval-------------------------------------86 Board audit and risk committee report-------------------------------------------------------87 Accounting Authority’s report-------------------------------------------------------------------90 Materiality and significance framework-------------------------------------------------------96 Statement of financial position at 31 March 2015------------------------------------------97 Statement of financial performance-----------------------------------------------------------98 Statement of change in net assets--------------------------------------------------------------99 Cash flow statement----------------------------------------------------------------------------.119 SANEDI Annual Report 2014/15 5 .

2146 Telephone numbers: 011 0384300 Email address: exec@sanedi.za External auditors: The auditor-general of South Africa Bankers: ABSA Capital Company Secretary: CEF Secretariat 6 SANEDI Annual Report 2014/15 . 150 Linden Road. Upper Grayston Office Park. PART A: General Information General information Registered name: South African National Energy Development Institute (SANEDI) Physical address: Block E.org.org.sanedi. Sandton.za Website address: www. Strathavon. Sandton Postal address: P O Box 9935.

Ventilation and Cooling CSP Concentrated solar power IAS International Accounting Standards CSIR Council for Scientific and Industrial IDC Industrial Development Corporation Research IEA International Energy Agency CSIR CSP CSIR Concentrated solar power IEP Integrated energy plan CSTDI Centre for Solar Technology. Development IFPEN IFP Energies nouvelles and Innovation IIA Institute of Internal Auditors DEA Department of Environmental Affairs ipv Institute for Photovoltaics DID Gauteng Department of Infrastructure ISGAN International Smart Grid Action Network Development IT Information technology DKK Danish krone kW Kilowatt DoT Department of Transport LAN Local area network DoE Department of Energy M&V Monitoring and verification DSM Demand side management MEASA Marine Energy Association of South Africa DST Department of Science and Technology MoU Memorandum of understanding DTU Technical University of Denmark MTEC Medium-Term Expenditure Committee DBREV Douglas Banks Renewable Energy Vision MW Megawatt dti Department of Trade and Industry NAAMSA National Association of Automobile Dx Distribution grid Manufacturers of South Africa SANEDI Annual Report 2014/15 7 .Abbreviations and acronyms AAAMSA Association of Architectural Aluminium EDI Electricity Distribution Industry Manufacturers of South Africa EE Energy efficiency AFD French Development Agency EEDSM Energy efficiency and demand side AGSA auditor-general of South Africa management ASSA Academy of Science for South Africa EMWG Energy Management Working Group BEE Black economic empowerment eNaTIS Electronic National Administration Traffic CCS Carbon capture and storage Information System CCT Clean coal technologies EPD Energy Performance Database CEF CEF Group of Companies formerly known EPWP Expanded Public Works Programme as Central Energy Fund ERC Energy Research Centre CEM Clean Energy Ministerial ESI Electricity Supply Industry CES Clean Energy Solutions ETDE Energy Technology Data Exchange CEO Chief Executive Officer ETDEWEB Energy Technology Data Exchange World CER Centre of Energy Research Energy Base CESAR Centre for Energy Systems Analysis and FMPPI Framework for Managing Programme Research Performance Information CFT Carbon fuel tablet GAAP Generally Accepted Accounting Practice CNES Centre of New Energy Systems GEF Global environment facility CO2 Carbon dioxide GHG Greenhouse gas COCATE Large-scale CCS transportation GIZ German Agency for International infrastructure in Europe Cooperation CoRD Centres of Research and Development GPDRT Gauteng Province Department of Roads CPI Consumer Price Index and Transport CPUT Cape Peninsula University of Technology GRAP Generally Recognised Accounting Practice CPV Concentrator Photovoltaics GSEP Global Superior Energy Performance CSAG Climate Systems Analysis Group Partnership CSC Community steering committee HVAC Heating.

Europe Cooperation on URL Uniform Resource Locator Carbon Capture and Storage VNWA Verified Numerical Wind Atlas SAGEN South Africa – German Energy Programme WASA Wind Atlas of South Africa SANAS South African National Accreditation WAsP Wind Atlas Analysis and Application System Programme SANEDI South African National Energy WITS University of the Witwatersrand Development Institute WfE Working for Energy programme SANERI South African National Energy Research WWF World Wildlife Fund Institute WRI World Resource Institute SAPIA South African Petroleum Industry WSU Walter Sisulu University Association 8 SANEDI Annual Report 2014/15 . measurable. realistic RECORD Renewable Energy Centre for Research and and time-bound Development SOLTRAIN Southern African Solar Thermal Training REEEP Renewable Energy and Energy Efficiency and Demonstration Initiative Partnerships TAF Technical assistance facility R&D Research and development TIA Technology Innovation Agency SABS South African Bureau of Standards Tx Transmission grid SACCCS South African Centre for Carbon Capture UCT University of Cape Town and Storage UCT CSAG University of Cape Town Climate Systems SACRM South African Coal Roadmap Analysis Group SADC Southern African Development Community UNDP United Nations Development Programme SAfECCS South Africa . Abbreviations and acronyms NBI National Business Initiative SAPVIA South African Photovoltaic Industry NDA National Development Agency Association Necsa South African Nuclear Energy Corporation SARS South African Revenue Service SOC Limited SARETEC South African Renewable Energy NEEA National Energy Efficiency Agency Technology Centre NIER Newcastle Institute of Energy Research SASGI South African Smart Grids Initiative NOK Norwegian krone SASTELA Southern Africa Solar Thermal and NRF National Research Foundation Electricity Association NWA Numerical wind atlas SATTIC South African Travel and Tourism Industry OWA Observational wind atlas Conference PAA Public Audit Act SAWEA South African Wind Energy Association PCSP Pilot CO2 Storage Project SAWEP South African Wind Energy Programme PDI Previously disadvantaged individual SAWS South African Weather Service PFMA Public Finance Management Act SAYAS South African Young Academy of Science PPA Power purchase agreement SEA Strategic environmental assessment PPC Parliament portfolio committee SETRM Solar Energy Technology Road Map PSA Plataforma Solar de Almería SLA Service level agreement PV Photovoltaics SMME Small Micro Medium Enterprises RE Renewable energy SMART Specific. achievable.

With the current energy challenges that the country is facing SANEDI’s role has become more critical in ensuring that South Africa has the necessary information and planning support to plan for a sustainable and secure energy future that will satisfy the country’s economic. development. while the stakeholder engagement programme continued with about 40 One of the programmes that has made strides is the engagements to date. The renewable programme also concluded is a result of collaborations and partnerships with the year with successful projects and collaborations in organisations and various government departments the renewable energy sector. One such support was by the World Bank for the Pilot CO2 Storage Project (PCSP). the National Development Agency solar resource map for South Africa. the will be expanded to other partners in other provinces launch of the state of energy research in South Africa and sectors. has successfully completed projects in KwaZulu- Natal (installing 26 biogas digesters coupled to bio- Another important milestone was the quantification fertiliser production. the recognition (NDA) and the Department of Environmental Affairs of renewable energy research excellence through the (DEA). environment and small enterprise platform. Some of these include such as the Gauteng Department of Infrastructure the launch of the first ground verified high-accuracy Development.Foreword by the Chairperson In the quest to meet the government’s mandate of facilitating the country’s transition to a low carbon society. The programme plan was approved by the Department of Energy (DoE). The shale gas investigation work Working for Energy (WfE) programme. There is no doubt that changing the energy mix and making concrete steps towards energy conservation are critical for meeting these targets. SANEDI has continued to make strides in energy innovation and energy conservation. social and environmental needs. With the recent budget cuts which may impact a great deal on delivering on this very important task. thus and the greening of schools and early childhood levelling the playing field for the independent power development centres across the country. The data has been (completing over 30 of the 55 biogas digesters). SANEDI Annual Report 2014/15 9 . The success producers. SANEDI continues to strengthen partnerships with international funders to ensure that essential financial support for SANEDI programmes is sustained. rain water harvesting and solar of South Africa’s renewable energy resources with the PV systems to demonstrate the ability of clean energy completion of the wind atlas for South Africa (WASA) interventions to provide sustainability). The benefits of these clean energy interventions RECORD RERE awards (in partnership with SANEA). such as agriculture. The pilot monitoring project Ms N Mlonzi at the Bongwana natural CO2 release was initiated Chairperson with international interest. and the launch of the RECORD waste to energy development. human resource report. placed in the public domain for access by all. in Limpopo phase 1 project in March 2014.

Foreword by the Chairperson SANEDI was instrumental in working together with to provide a green credit facility to finance small. Africa’s commitments to the cool surfaces component without whose support we would not have managed of the clean energy ministerial (CEM).to the South African National Treasury. with assistance from the United States of America’s Department of Energy. the technical assistance facility hosted by SANEDI and Ms N Mlonzi funded by the French Development Agency (AFD) Chairperson 10 SANEDI Annual Report 2014/15 . will yield more successful results in the search for clean and sustainable energy solutions. the Department medium-size energy efficiency and renewable energy of Energy and all interested and affected parties in projects through three commercial banks in South the country to ensure that the energy efficiency tax Africa has exceeded all expectations. online benchmarking tool (bigEE). Lastly. Furthermore. I would like to take Traction has also been gained in meeting South this opportunity to thank all our partners and funders. establishment of the South African Cool Surfaces Association (SACSA). the South period. were substantially fund having been exhausted within the contract amended and improved. through the what we have achieved. went live and is proving to be a useful tool for local and international In closing. with the entire incentives (referred to as 12L). This may lead to a second phase of this facility African component of the internationally-funded for South Africa. there is no doubt that the new financial year stakeholders.

PhD ◊ Mr J Marriott (Deputy Chairperson). Diploma Mech Eng. PhD (Applied Mathematics) Ms N Mlonzi Mr J Marriott Ms M Modise Dr D Hildebrandt Ms D Ramalope Mr C Manyungwana Dr V Munsami Mr G Fourie Ms P Motsielwa Dr C Sita Mr M Gordon Dr R Maserumule SANEDI Annual Report 2014/15 11 . MBA ◊ Dr D Hildebrandt. ◊ Ms P Motsielwa. BSc. BSc Chem Eng ◊ Mr G Fourie. ◊ Ms M Modise. Dip Management. BProc LLB ◊ Dr V Munsami. Post Grad ◊ Dr R Maserumule (alternate director). MSc (Eng) BCom Economics. MSc Chem Eng. MSc. BSc (Hon). Higher Dip ◊ Mr M Gordon (alternate director). BSc (Applied Dip Transport Management Mathematics). BSc Chem Eng. BSc (Hon). MSc. MBA Public Managmenet and Administration.Board of Directors ◊ Ms N Mlonzi (Chairperson). MSc Chem Eng (Polymer Engineering) ◊ Ms D Ramalope. B Acc (CA)(SA) PhD Chem Eng ◊ Dr C Sita. HED. BSc (Hon). MBL PhD Chem Eng (Polymer Engineering) ◊ Mr C Manyungwana.

it must National Treasury has announced plans to introduce be commercially viable and in turn. should initially be a carbon tax as of 2016/17. the two new Eskom large coal-fired power plants. With the first unit of Medupi only expected to be commissioned in December 2015. The electricity constraints are largely as a result of delays in the construction of Medupi and Kusile. Suffice to say. placing further stress on an already strained electricity supply industry. contribute at least 14% to the measures designed to reduce greenhouse gases by 2050 to under 450 ppm Carbon Capture and Storage – panacea or not? and to limit the increase in mean global temperature to 2 degrees Celsius. due mainly to electricity supply constraints that have plagued the country of late. in an attempt constraints have seriously limited the utility’s ability to to limit their tax liability in South Africa. The present electricity shortfall is in the region of 3 000 MW and is exacerbated by the number of Eskom’s power plants that are out of service for planned and unplanned maintenance. at least half itself as a key role player in identifying additional supply of the emissions that need to be reduced must come options as well as initiating energy efficient measures from the energy sector. Estimated at R120/ton of supported by a carbon tax or other fiscal instrument. Compounding the problem is that even when the two new coal-fired plants are brought on- line. that are assisting the country deal with the challenge of spurring on economic growth in an electricity. the programme will target the grid since 2013/14. the expectation is that industrial and commercial activities will gain momentum. CCS is expected to constrained market. as it doesn’t have sufficient funding at of load-shedding. it is likely that load-shedding will continue for the next two years or so. it is likely that government will review the scope and extent of This dilemma has paved the way for SANEDI to assert its tax policy in this area. 12 SANEDI Annual Report 2014/15 . Eskom has some degree the current shortfall in electricity supply already indicated that it will pass on such a tax to but is not yet sufficient to mitigate against the impact the consumer. For CCS to have this impact. This for SANEDI to fast-track its Carbon Capture and Storage report highlights the various programmes of SANEDI programme. Under the 2DS scenario of the IEA. When one shift or reduce demand for electricity at peak periods. but budget some of their operations offshore. This development has offset to large emitters such as Eskom and Sasol. considers these implications of a carbon tax. Eskom could well have benefited present to cover the expected tax. Energy intensive from an upscaling and acceleration in its Integrated industries such as Sasol may well consider moving Demand Management Programme. has been responsible for just over 4.000 MW of new renewable energy being added to CO2-equivalent emissions. Chief Executive Officer’s overview Adding Value in an Uncertain Market The 2014/15 year has been characterised by lower than expected economic growth. which creates an opportunity to assist in reducing the demand for electricity. Mr K Nassiep The Renewable Energy Independent Power Producer Chief Executive Officer Programme. REIPPP.

such as the of the pilot project and it is estimated that in excess Zululand basin.Chief Executive Officer’s overview SANEDI. understanding the movement of carbon dioxide South Africa has demonstrated its commitment to through a natural reservoir. the announcement this year that the World Bank has pledged $27 million to this programme. The work that is being done in SANEDI has been recognised in a number of ways over the past few years. In the past year. companies in industry and the commercial sector that wish to implement energy saving measures in In the coming year. engaging with traditional this programme with a grant of over R200 million leaders and their communities and assisting over the current MTEF period. through its centre SACCCS (South African Centre for Carbon Capture and Storage) has made significant strides in the year towards identifying the key steps required to take a decision on whether CCS is a viable option for South Africa. including Cabinet endorsement of the programme as well as its inclusion in the National Climate Change Response Strategy of South Africa. the team will focus on of R500 million will be required for this project. SANEDI has successfully initiated its Pilot CO2 Carbon Storage Project or PCSP. It is testament to South Africa’s commitment and the National Treasury has promulgated regulations in confidence in the SACCCS team in SANEDI that this November 2013 that introduce a tax incentive for grant has been secured. particularly securing the permits to conduct Income Tax Act and follows on the implementation of SANEDI Annual Report 2014/15 13 . both from a technical as well as a commercial perspective. In addition. This is Section 12L of the aspects. Funding remains a major consideration in the design exploration activities in specified areas. which will allow the member organisations and institutions that comprise the SACCCS Board of Governors to determine the impact the transportation and injection of carbon dioxide will have on the environment. given the nascent nature of the Commercial Sectors industry and the technical barriers still to be overcome. Critical to this pilot project’s success will be buy-in from the communities affected by such activity and SANEDI has therefore established a comprehensive stakeholder engagement plan to deal with civil society’s concerns in this area. CCS features as a flagship priority programme of government and therefore it is vital that accurate and detailed information is presented to government to enable effective policy-making and regulation setting. Using this as leverage. government in developing an appropriate regulatory the team in SACCCS has secured a major coup with framework. This is Incentivising Energy Efficiency in Industrial and a remarkable feat. SANEDI will focus on geotechnical their plants or buildings.

34 of 2008). particularly among the large SANEDI has approached the large power users as well power users in South Africa. This is pleasing as the body responsible for verification of the savings indeed. as cogeneration offers shorter-term option made and for administering the entire application to providing capacity under the current electricity- process for Section 12L. as the banks to institute a programme aimed at making essential energy efficient products available to either In the absence of an Eskom-led IDM programme. SANEDI is mandated through its establishing consumers with state of the art solutions Act. While Eskom credit facility. Plans allowance. addition. Feedback to date commence in the middle of the next financial year suggests positive support for the scheme. home loan clients or employees of large power users. encourage energy saving. the large power users that to consumers and will allow for appropriate longer. subject to funds being made available. 2008 (Act No. and are already underfoot to initiate manufacturing of the the exclusion of renewable energy and cogeneration product in SA. where significant saving potential exists. Section 12I focused on awarding a from the scheme. Section 12L will form the basis for an incentive for SANEDI has undertaken to provide for a revolving energy efficiency in the coming years. cogeneration has now been included in the list of applicable technologies and will be eligible for SANEDI has been appointed in terms of the regulation inclusion as of the 2015/16 tax year. expressed their full support for the initiative as has one of the major banks in South Africa. The tax benefit is therefore with pleasure that we received news from the Minister based on the associated capital expenditure. In the course of assisting applicants in getting their projects registered the year. may well receive additional funding for EEDSM in the as well as to source the energy efficient products on a future. In savings and the allowance is based on the kWh saved. SANEDI has put in place an of loans on behalf of SANEDI. SANEDI has also developed plans to introduce and reviewed. In the of Finance that he was increasing the tariff applicable case of Section 12L. the National Energy Act. the current regulations. The project is set to raise awareness of the initiative. which reduces the online application and administrative tool that is resource requirements dramatically. 14 SANEDI Annual Report 2014/15 . comprise the Electricity Intensive Users Group have term planning and investment in energy efficiency. to undertake measures to implement energy The only drawback to the current Sections 12I and 12L efficiency in the country. the focus is on the actual energy from 45 c/kWh to 95 c/kWh in the 2015/16 tax year. To date. This follows on the success of constrained conditions. Several roadshows around in an effort to provide for more sustainable lighting the country have been held thus far. in order to help solutions in these communities. Chief Executive Officer’s overview Section 12I earlier. SANEDI has incorporated these tax allowance for companies that invested capital in concerns into a report to National Treasury and it was energy saving measures. It is therefore appropriate schemes are that they don’t cater for the residential that SANEDI direct efforts designed to stimulate and sector. on behalf Energy Efficiency in the Household – reaching of the dti. which is currently 45 c/kWh before tax. although and will see 840 high mast lights converted to higher there are concerns regarding the quantum of the efficiency using an e-box solution from Europe. the efforts on SANEDI’s part to administer the energy component of the Section 12I tax allowance. as per the mandate of SANEDI under efficient high mast lights in Soshanguve. near Pretoria. a tax incentive will provide a clear market signal bulk discount basis. With the assistance of the Deutche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the The banks will administer the funds and the repayment University of Pretoria.

the South African Smart Grid Initiative (SASGI). The initial phase of this demonstration projects in the Melani Village and the project has now commenced and nine municipalities College and has been able to successfully commence are on board already. to create a single platform to deliberate on and chart a After a somewhat lengthy delay mainly due to way forward for the sector. such as AMEU.Chief Executive Officer’s overview Closer to a Smart Grid solution in South Africa the integration of electricity. through its affiliation to the International Smart needs-driven solution. area soon. SANEDI has completed in several municipalities. has been instrumental in establishing a programme of action that will bring We expect to announce more exciting results in this us closer to upgrading our existing electricity network. office integration. tariffing and data management Similar projects are underway in KwaZulu-Natal. as plans are underway to launch the second particularly the low voltage network under municipal phase of this project. SANEDI has been successful in notable projects are already nearing completion. it is now well underway and several Through SASGI. several of these Limpopo and the North West Provinces. This initiative brings together the key stakeholders in Exciting developments in the Working for Energy the electricity sector. Grid Action Network (ISGAN). Eskom and the Programme electricity distribution entities in local government. associated with the meters. SANEDI has assisted in the establishment of the EU. again with possible support from control. revenue management though. Demonstration municipalities have recorded an increase in revenue as of cool surfaces technologies is also top of the agenda a result of the identification of previously unmetered since many of the facilities in low income communities large consumers. the back Nkonkobe District Municipality in the Eastern Cape. administrative issues in the Working for Energy Programme. leveraging approximately R180 million from the EU Partnering with the Fort Cox Agricultural College and for the purposes of introducing smart grid technology the University of Fort Hare. The project is not only about are without HVAC. Already. communication and ICT technology to provide a more robust and customer SANEDI. The initial focus has been on construction of well over 100 biogas digesters in the smart meter technology and aligned to that. A smart grid involves SANEDI Annual Report 2014/15 15 .

Ms Lethabo performance management system. as feedstock for does not have to compromise the quality of its electricity production. There of action that seeks to ensure employment equity is is always room for improvement and in the coming realised in the workplace. SANEDI is committed to a programme pleasing results in terms of our external audit. Our long-standing relationship with Working for Water has now culminated in the efforts to remove invasive Towards better corporate governance and sound vegetation from farmlands in the Eastern Cape area administration of Uitenhage. this is due to the hard work of the entire Currently within SANEDI there are 52 employees. This vegetation. brings with her a key performance indicatives are SMART (Strategic. wealth of experience from the auditor-general. ensuring that our Manamela. mainly in the form of black wattle trees. service through adherence to an employment equity programme. SANEDI Measurable. It is testament to their hard work and the support from the As a responsible corporate citizen and a member of the technical staff that we are able to continue producing public sector. year. will be used as feedstock for power SANEDI once again has produced an unqualified audit generation using South African-developed gasifier report in terms of its financial management. has been a noticeable improvement in the quality of service provided by the finance team as well as the Transformation and Empowerment in the workplace procurement and administrative support staff. The team at SANEDI and I would like to personally thank breakdown by race and gender is as follows: and congratulate them on another sterling effort this year. will continue to identify and recruit people with the Overall though. Once again. Chief Executive Officer’s overview Aside from biogas digesters. Realistic and Time-bound). the focus will be on improving the quality of our our Chief Financial Officer was appointed. together with biomass. with over 72% of country and support employment and gender equity its objectives met or exceeded. There technology. SANEDI is also focused SANEDI prides itself on employing individuals of a high on partnering with municipalities such as eThekwini calibre in terms of their qualifications and experience Metro to construct power plants that utilise sludge and it is testament to the fact that an organisation from sewage. Achievable. the company has put in a strong requisite skills that represent the demographics of the showing in terms of its performance. During the course of the year. targets. BLACKS COLOURED WHITE INDIANS Females Females Females Females Males Males Males Males Kadri Nassiep 21 12 2 2 3 6 2 4 Chief Executive Officer 16 SANEDI Annual Report 2014/15 . a Chartered Accountant.

National Treasury. operations. accurate and is free In our opinion. the annual report fairly reflects the from any omissions.Statement of responsibility and confirmation of the accuracy of the annual report To the best of my knowledge and belief. Kadri Nassiep The Accounting Authority is responsible for the Chief Executive Officer preparation of the annual financial statements and for 21 August 2015 the judgements made in this information. Yours faithfully The Annual Financial Statements (Part D) have been prepared in accordance with the standards applicable to the public entity. the human resources information and the following: annual financial statements. the human resources information and the financial affairs of the The annual report has been prepared in accordance public entity for the financial year ended 31 March with the guidelines on the annual report as issued by 2015. I confirm the information. The Accounting Authority is responsible for establishing and implementing a system of internal control that Ms N Mlonzi has been designed to provide reasonable assurance Chairperson of the Board as to the integrity and reliability of the performance 21 August 2015 SANEDI Annual Report 2014/15 17 . The annual report is complete. the performance information. statements. All information and amounts disclosed in the The external auditors are engaged to express annual report is consistent with the annual financial an independent opinion on the annual financial statements audited by the auditor-general.

Section 7 (2) gave effect to SANEDI’s existence To serve as a catalyst for sustainable energy innovation. monitor and conduct energy research and our nation. Mission The business case that established SANEDI outlines the purpose of the entity and incorporates a set of Advance innovation of clean energy solutions and key activities that SANEDI undertakes on behalf of rational energy use that effectively supports South the state. 34 of 2008). Values without becoming a player and referee in a particular sector. Integrity Professionalism National interest Batho Pele 18 SANEDI Annual Report 2014/15 . development as well as undertake measures to promote energy efficiency throughout the economy. The underlying principle remains the same. however. SANEDI is mindful of the various role players Innovation that are active in the energy efficiency sector and Accountability endeavours to create value in the area in which it Transparency operates. As the energy landscape is a continually Africa’s national energy objectives and the transition evolving space. The Act provides for SANEDI to South Africa’s sustainable development that benefits direct. Strategic overview Legislation Vision The National Energy Act. 2008 (Act No. responsibilities will be undertaken by SANEDI in line with its legislative mandate. and provides for its primary mandate and specific transformation and technology diffusion in support of responsibilities. low carbon energy future. in that SANEDI plays a catalytic role in the development of the energy sector. it is clear that additional activities and towards a sustainable.

Organisational structure CHIEF EXECUTIVE OFFICER Applied Energy Energy Administration Research Efficiency Clean Energy Finance Solutions Green Communications Transport Cleaner Fossil Human Fuels Resources Working for Secretariat Energy Corporate Smart Grids Services Knowledge Information Management Technology SANEDI Annual Report 2014/15 19 .

PART B: Performance Information Auditor-general’s report: predetermined objectives The report of the auditor-general on predetermined objectives is on page 79 to 83 of the annual report. 20 SANEDI Annual Report 2014/15 .

information. which are based on government’s Medium- Term Strategic Framework (MTSF) that clearly articulates the agenda of the government. governance and compliance support to the Institute • Strong collaborative approach and strategic international collaboration Enable well informed 2. Applied energy research • Knowledge creation in support of policy and high confidence and development direction i. executive. Corporate governance • Corporate. Energy Efficiency • Support the Income Tax Amendment Act energy efficiency and programme section 12I and 12L relating to the tax more rational energy rebate for energy efficiency improvements use • Management of the EEDSM Hub and oversight of the Hub to a CORD • Provide industry support and capacity- building • Provide a national champion coordinating service for all energy efficiency awareness and promotion initiatives • Establish a national measurement and verification centre SANEDI Annual Report 2014/15 21 .e. viable cleaner energy options energy planning. financial.Strategic outcome orientated goals SANEDI is expected to contribute to government’s twelve outcomes. including subprogrammes • Knowledge creation in the energy mobility decision-making for: and green transport sector in support of and support policy policy direction development • Cleaner Fossil Fuels • Intelligent energy systems infrastructure including Carbon Capture • Demonstrate cleaner energy technology and Storage opportunities and solutions • Clean Energy Solutions Support accelerated • Smart Grids • Due custodianship of knowledge and data transformation to a • Working for Energy developed within SANEDI less energy and carbon • Data and Knowledge intensive economy Management • Green Transport Programme Foster a culture of 3. SANEDI contributes to the following three outcomes that the Minister of Energy has committed to: STRATEGIC OUTCOMES PROGRAMMES STRATEGIC OBJECTIVES All/Crosscutting 1. and administration supply chain management.

• Increase human and technical capacity and raise the awareness of CCS. monitoring. the Bongwana natural CO2 release near Harding in KwaZulu-Natal (KZN). The funding work Cleaner Fossil Fuel inputs theme saw World Bank approval of the first of two project concept notes (PCNs) for the PCSP and the Notwithstanding the progress in the application endorsement of the second. two major projects are being finalisation of analysis of existing data. Carbon Capture and Storage. Performance information by programme Applied energy research 2014/15 saw critical progress in the PCSP. such as fossil fuel power generation. it is imperative that cleaner use of fossil fuels is the development of foundation documentation. and the planning undertaken. matters pertaining to the production and use of shale The endorsement of the second PCN means that the gas. The objective of the South Africa site characterisation programme to determine an CCS programme is to ascertain whether or not such appropriate site for the PCSP has been made to the technology can be safely applied in the country. To this end. The stakeholder engagement activities programme at the Bongwana natural CO2 release to moved from a national level to the point where the build capacity in the area of CO2 monitoring. Until renewables/ of these is the procurement of the project design and nuclear comprise a more dominate role in energy advisory services consultant who is scheduled to lead supply. This release presents the PCSP The PCSP aims to: division and South Africa with the opportunity to build capacity and experience in monitoring processes and • Demonstrate safe and secure CO2 handling. The approval of the PCN of energy efficiency measures and the roll-out of for the World Bank executed activities means that renewable energies. the undertaken. local municipalities of uMhlabuyalingana in KZN and 22 SANEDI Annual Report 2014/15 . balance of the World Bank funding to SANEDI. The major deliverable for CCS in SANEDI is the Pilot CO2 Storage Project (PCSP) that involves the injection. Successful completion of whereby carbon dioxide (CO2) is captured from an the recipient appraisal will facilitate the transfer of the industrial process. and permanently and safely stored in a deep geological formation. PCSP. fossil fuels remain the main form these activities can now commence. permitting and stakeholder engagement. as well as science and education The PCSP also involves the development of a research centres. Commencement of that phase awaits an appropriate response. provincial legal and regulatory framework in South Africa. procurement. environmental NGOs and organised labour. an application for fuels and renewable/nuclear that has been shown to permission to undertake the basin exploration and work internationally. and local governments. and for the geological investigation and site selection stage. storage and monitoring. namely. Department of Mineral Resources. It is a transition technology between fossil With respect to PCSP permitting. World Bank can proceed with the recipient appraisal of SANEDI and the PCSP division to ensure SANEDI’s Carbon Capture and Storage (CCS) financial management. with monitoring equipment directly relevant to the injection. Most important of primary energy in South Africa. environmental and social policies and procedures adhere to the World Carbon Capture and Storage (CCS) is a technology Bank partner requirements. and The PCSP stakeholder engagement (SE) programme has • Support government in its development of a CCS continued with consultations with national. particularly in the areas of funding. The PCSP monitoring work theme saw progress storage and monitoring of 10 000 to 50 000 tonnes of made on the scoping of a research programme at CO2 in South African geology.

SANEDI Annual Report 2014/15 23 . of fuel switching from coal and crude oil to natural gas use in various sectors of the economy have been The SANEDI Shale Gas project was initiated to obtained. This progress in engagement will then support the permitting programme of the PCSP. a reduction gas exploitation in the country. Large potential During 2014/15. Shale gas has the potential to be a ‘game changer’ for energy supply in South Africa. [Photo: B Beck] The PCSP and the research programme at the Bongwana natural CO2 release will also form the basis for SANEDI’s supply with demand. whereby the SACCCS SE lead as a panelist shared challenges faced by South Africa in raising awareness on CCS. while national capacity-building with regard to shale gas exploitation is part of the study. first in the Zululand basin and subsequently in the Algoa basin. In preparation for the PCSP Bongwana research programme. adjacent to the projects. The PCSP and the Bongwana programme gas exploitation is planned. a reduction in independent assessment of the feasibility of shale electricity use compared with the baseline. These effects include a substantial decrease assist the South African government to obtain an in the emissions of greenhouse gases. The impacts of natural gas use CCS capacity building activities. The impact of shale gas on road use. Important aspects of of crude oil imports. and limited exploitation on water availability and the handling of employment opportunities to local communities living waste water is also an important part of the study. developing skills at on greenhouse gas emissions are also being evaluated. consultations commenced with key stakeholders such as the Mbizana local municipality (Eastern Cape) and Figure 1: Example of bubbles of naturally released CO2 at Ugu district municipality (KwaZulu-Natal) respectively. The SE team was afforded an opportunity to profile SANEDI/SACCCS and the SE work internationally at the 2014 SaskPower (symposium) conference and the 12th greenhouse gas technology (GHGT) conference. and following the approval of the resources of shale gas. which in 2014/15 commenced the development of environmental management plans. Preliminary results on the effects along with the associated challenges. existing industry and farming as well as tourism and national parks is Shale Gas being addressed. Bongwana that will form the basis of the Bongwana natural CO2 release monitoring research programme.Performance information by programme the Sundays River Valley in Eastern Cape are now being engaged and familiarised with the PCSP. for the geological investigation and site selection stage of the PCSP. and the need for a substantial gas the study are to develop scenarios on the matching of infrastructure pipeline network. during 2016/17. ease of handling and the work plan by the Department of Energy. student and professional levels that are relevant to An investigation into the option of using pressurised CCS as well as the extractive industry more generally carbon dioxide for hydraulic fracturing instead of and any other industry requiring environmental water is underway and a risk assessment of shale monitoring. the project lesser environmental impact compared with coal are got well underway and is due to be completed numbered among the aspects that may be considered. The impacts of shale gas will also offer some training and study.

NMMU. training and demo (collaboration team: GIZ. and (UNW) and CSIR. NMMU) • Installation/construction of solar MET stations • RECORD’s Centre for Solar Technology. SANEDI. SAWS. Nelson Mandela Metropolitan • This will enable a levelling of the playing field University (NMMU). and • The first version of this map based on • Centre for Energy Research (CER) at NMMU PV 18 months of data is now available at http:// testing and research facility is established and www. GIZ. Green Cape. Eskom) TIA. 24 SANEDI Annual Report 2014/15 . commenced in 2014 with a three year PV yield project. Solar measuring station project – Solar MET project 2. Figure 2: DNI map of South Africa showing installed solar measuring stations. facilities (collaboration teams: SANEDI. CSIR. SU. Renewable energy testing. University of North West for potential solar installations. DST. Stellenbosch available in SA. University (SU). SU. there is also one on Reunion Island. CPUT. USTDA.sauran.net. in specific locations in South Africa. Performance information by programme Clean energy solutions RECORD (Renewable Energy Centre of Research and Development) Current collaborative projects 1. Development and Innovation (CSTDI) concept • Ultimate goal is to produce a verified ground has collaborative nodes spread across country measurement solar map of the resource at centres of excellence viz.

in the case of wind. The official launch date is 19 May subject to the availability of the Minister of the Department of Higher Education and Training (DHET). This will support three wind technician student bursaries. SANEDI Annual Report 2014/15 25 . but.Performance information by programme • South African Renewable Energy Technology Centre (SARETEC) at CPUT is under way on the Bellville campus premises: o Building is almost complete and is on schedule for opening in May 2015. and o A further agreement which will channel funds from GIZ and the Danish government towards equipment transport. curriculum development. o The wind turbine technician and PV technician curriculum development is still in process. which record solar impact and performance development of a bio energy training data in order to model best cases for South Africa. is nearing completion. o The 2015 project agreement contract between SANEDI and CPUT/SARETEC is in process. o Discussions have begun on the Figure 3: Instruments at CER at NMMU. programme and curriculum. jointly funded by RECORD and GIZ. Figure 4: Site of SARETEC building construction in January 2015. is expected shortly. training courses and bursaries through RECORD.

Such an assessment should be conducted on a regular basis to ensure that it is current and provides information useful for decision-makers. RECORD serves on the According to Professor Daya Reddy.” 26 SANEDI Annual Report 2014/15 . State of energy research study SAIREC 2015 Conference The state of energy research study. related funding. was launched on 21 May 2014. most subcommittees and Academy of Science of South Africa: “This report can on the international advisory committee. It focuses on the state of energy research in the country The South African International Renewable Energy with respect to current Conference showcases renewable energy on a global areas. it must be recognised that a status report of this nature is heavily dependent on stakeholder participation to supply data. Hence it is important to view this report as the first in a potential series of such reports and an opportunity to place a ‘peg in the sand’. Although considerable effort has been expended in trying to compile a comprehensive report. host this year’s conference in Cape Town. scale and South Africa was honoured to win the bid to needs and resources. It will take place on 4-7 October 2015. president of the local organising committee. Performance information by programme Figure 5: Delivery of the Nordex donated nacelle at the SARETEC premises on 2 July 2014. be regarded as an important baseline assessment that can inform future energy research investment in South W2E platform launch Africa. requested by RECORD and funded by GIZ.

These exciting awards recognise the contribution of upcoming researchers and novel renewable energy research in South Africa. research identifies common themes and priorities.Performance information by programme The Waste to Energy (W2E) research study was The award includes two categories of merit: up- completed in November 2014 and provided an and-coming young researcher. Mr Christiaan Taljaard and Ms and Ms Marlett Balmer. formed to look at priorities in the research area that will be addressed to drive A commendation of excellence in this category was W2E technologies from a research perspective. which was represented by Christiaan Taljaard. The 2014 on 14 August at the Maslow Hotel in Sandton. RECORD/SANEDI is proud to acknowledge and reward as well as possible gaps not being covered by current excellence in the renewable energy sector. Mr Karel Malan Talbot. Figure 6: Winners of the RECORD RERE young researcher Figure 7: Winners of the RECORD RERE commercial award 2014: (left to right) Dr Karen Surridge-Talbot. RECORD carried out at South African universities. universities was pleased to present the RECORD RERE awards for of technology and other research institutions. awarded to Molelekoa Mosesane. a student at the University of Stellenbosch. (W2EP) in December 2014. SANEDI Annual Report 2014/15 27 . Marlett Balmer. Dr Thembakazi Mali. Mr application award 2014: (left to right) Dr Karen Surridge- Molelekoa Mosesane. a PhD student at the Tshwane University of Technology. Dr Thembakazi Mali. This review was then used in the RECORD RERE young researcher award 2014 is Karel establishment of a waste to energy research platform Malan PhD. The RECORD RECORD RERE (Renewable Energy Research RERE commercial application award 2014 is EcoVest Excellence) Award Holdings. The energy research. and most promising overview of current waste to energy research being research leading to commercial application. This competition was again held in partnership with the South African National Energy Association (SANEA).

Southern Africa markets for clean energy in developing countries. The Renewal Energy and Energy Efficiency This function allows the region to use data as part of Partnership (REEEP) energy development in policy formulation. REEEP works closely (REEEP) for Southern Africa since 2009. Performance information by programme The RECORD calendar competition create energy access and combat climate change. RECORD/SANEDI and GIZ launched a risk mitigation strategies for projects such as energy photography competition. REEEP is an with the Southern African Development Community international non-profit organisation that advances (SADC) energy thematic group. support a portfolio of high potential ventures that civil society and all levels of government to transfer 28 SANEDI Annual Report 2014/15 . development and application of sound policy and The South African government launched the highly regulation is to have an accurate understanding of acclaimed REIPPPP programme in 2011. In order was hailed as global success story. REEEP. REEEP knowledge to policy. as well SANEDI has hosted the regional secretariat of the as more practical implementation of renewable energy Renewable Energy and Energy Efficiency Partnership and energy efficiency hardware. REEEP has been advancing clean energy in southern Africa since the first projects in the region were launched in July 2005. and helped shape the region’s clean energy progress over the decade. one of the initial hurdles for the environmentally friendly energy source of the future. Power Pool (SAPP) and many other organisations in which scale and replication is built by connecting and committees in supporting energy development funding to projects. REEEP continues amateur and professional photographers to submit to play a critical role in knowledge management and works interpreting the theme
 “REnergy for a green information collection. By continuously feeding this knowledge back into the projects and programmes’ portfolio. REEEP monitors and evaluates projects within their policy. REEEP seeks to grow markets for clean energy. South through the application of renewable energy and Africa has forged ahead with tapping into this energy efficiency. financial and commercial environments to gain insight into opportunities and barriers. practice to knowledge and and initiatives and their progress in the sector. which the opportunities and constraints involved. through its regional and international secretariats. research and development. REEEP uses donor funding to supports and promotes the engagement of industry. dissemination and sharing in future”. has supported 22 and 20 projects in South Africa and southern Africa respectively. Since then. monitoring and evaluation. The competition called on upgrades in low-income housing. the region. Due to the finite nature of fossil fuel reserves For any country seeking to become sustainable and excellent renewable energy resources. Energy security is paramount in South Africa in order Knowledge is power to accommodate a growing economy and sustainable future. often attracting private finance. To celebrate the to assist in the overcoming of this hurdle. REEEP has great achievements towards an environmentally driven the development of various financial models and friendly future. as well as the policy framework.

By making currently include the food-energy-water nexus. environment. solid business models. to help move a legal framework forward to promote large-scale rollout of solar water heaters and map out In 2013/14 the 1 billion m2 effort focused on South the road to national legislation. support from municipalities and investors and improve international organisations and the private sector. REEEP efficiency in the housing sector together with SANEDI. scientists energy service delivery. from key international and local projects. REEEP has also worked of positive energy buildings — buildings that produce closely with municipal and provincial governments more energy than they consume — by 2023. is currently involved in a number of focal areas and Over 30 delegates. financiers and foundation leaders. including one exploring community-driven hubs. with certification enabling the sale of carbon Global Buildings Performance Network (GBPN). Each of these initiatives REEEP has demonstrated that change in the energy has not only been a step in the right direction for the sector is possible. including government representatives. strives credits and offsetting – key financial schemes for some to bring about the creation of 1 billion square meters clean energy business models. two critical areas for urban-built environment growth over the next decade. SANEDI Annual Report 2014/15 29 . useable data and information. which faces unique challenges in the buildings sector. REEEP Moving forward brought the initiative to South Africa. Figure 8: Energy Efficiency in the household sector: REEEP hosted its second EE workshop in Cape Town with a focus on how to overcome financial and regulatory challenges in implementing EE across various household types. REEEP-funded gold standard workshops buildings. quantifying the benefits of access to renewable energy and numerous examples of success stories available. In March. Building a foundation Focal area: Energy efficient buildings: 1 billion m2 Being able to pinpoint opportunities attracts further investment and enables market growth for clean REEEP presented its initiative for positive energy energy. “1 billion m2” at the May 2013 EE Global have also helped market development and project conference. Africa and China. Focal areas in the region awareness of the benefits of clean energy. and clean energy in buildings. primarily in REEEP recognises the importance of building local low-income housing. in collaboration with the launches. aiming to catalyse long-term and researchers.Performance information by programme knowledge of industry best practices and raise distributed energy markets. local knowledge of the potential of sustainable among others. but also for job creation and poverty alleviation. REEEP co-hosted the capacity to ensure the sustainability and replication first of a series of high-level working groups on energy of clean energy markets in southern Africa. took part in the working group. The effort.

In the morning recognise-climate-innovations learners can bring discharged batteries packs from 2 http://www.za/?10381/wwf-sa-awards- make a natural distribution point. At full capacity. self-taught designers.a renewable energy micro-utility project for rural deploying the solar panels every morning. the SolarTurtle is expected the usual commitment towards the green economy. These bottled battery packs are carried home to best projects by the public2. This small 2008. The shipping container is fitted with a solar battery charging station. list/Q%2CR%2CS%2CT 30 SANEDI Annual Report 2014/15 . She will be responsible for .org. of twelve 300Wp solar panels totalling 3. to provide basic electricity for around 300 households The SolarTurtle is proud to be associated with this plus one or two institutions.wwf. The SolarTurtle prototype project started in July 2014 and the PV system installation was completed The SolarTurtle was also a finalist in the better living in March 2015.za/110green/flagships/ recharged batteries can be returned home with them.betterlivingchallenge. amongst others. A communities in the Eastern Cape in the next few flagship is an organisation that has made more than months. A standard 6m container has been challenge (BLC) in October 2014. After school the 3 https://www. it was voted as one of the 4).za/community- public-vote-awards-go/ their area to school for recharging. life for all. The SolarTurtle functions as an the batteries and managing sales of electricity and electricity distribution point. Micro-grid capabilities are also possible for solver by the WWF1. These panels are mounted on a unique panel improvement solutions that support a better quality of deployment system that is both robust and secure. The idea is to find a school initiative. phone charging as it shows that the public finds the SolarTurtle both and other energy efficient devices. manufacturers and retailers. (Figure 1). In December 2014 the SolarTurtle was named a 110% The next step is to deploy the SolarTurtle in rural green flagship by the Western Cape government3. Schools also 1 http://www. resistant shipping container.co. While the SolarTurtle can recharge multiple battery packs at once (Figure did not win the overall prize. Established by WWF Sweden in surrounding businesses and institutes. and a solar battery charging station that was overwhelmingly positive. operates satisfactory. The solar battery novel and useful and can make a difference to their charging station has been tested and the system lives. recharging electrification. This is very encouraging provide basic electricity for lighting. Performance information by programme SolarTurtle For their efforts the learners will earn a delivery fee. The BLC is a call to converted into a functional solar powered micro-utility designers and innovators.westerncape. Over the course of two weeks hundreds of The inside of the container holds a 5kW SMA solar people came to see the SolarTurtle and the response PV system. creating awareness of the value of innovation as a tool to tackle climate change. The outside of the container boasts an array students and professionals.6kW (Figure tradesmen. A female entrepreneur will be approached and trained SANEDI is a proud sponsor of the prototype SolarTurtle to operate the SolarTurtle. This would allow the school to feed electricity directly from the SolarTurtle. In charge multiple battery packs of different sizes during February 2014 the project was proclaimed as a climate the day. architects and engineers to develop home 3). which can The SolarTurtle has already received a lot of attention.gov. the climate solver platform is an international power station is assembled off-site then transported platform that displays the best technologies to reduce to an off-grid community where it provides an easily carbon emissions and support energy access while accessible source of electricity to the local community. neatly packaged in a theft energy efficient devices. in an off-grid community next to which the SolarTurtle can be deployed.

while increasing access will also focus on offering solutions to South Africa’s to cheaper. thereby giving power a renewable energy micro-franchise model. SANEDI Annual Report 2014/15 31 . The event aims to educate electrification solution. which is a primary energy source the accessibility of alternative energy sources and in many rural communities. before it heads to the rural Eastern Cape. unemployment. safer energy for longer periods. energy and climate crises. Figure 10: Two large side-frames unlock and unfold to reveal the solar panels hidden behind. Figure 9: SolarTurtle with its solar panels folded away for extra security and easy transport. cleaner. the use of kerosene. Women to the people. Figure 11: Once the two side frames are open gas struts lift all the panels up and lock into place. The technology can reduce the public about the benefits of renewable energy. The event The first prototype has been built and will soon be will serve as the unveiling of the completed SolarTurtle deployed in a rural community as a proof of concept. the SolarTurtle is a social business linked to rural landscape of South-Africa. Once this prototype has been tested it is expected that many more of these SolarTurtles will be dotting the In short.Performance information by programme This year the SolarTurtle has been invited to the in communities take ownership of these solar WWF’s renewable energy festival hosted at Green franchise businesses to provide a fast and sustainable Point Stadium on 28 March.

in power generation. in order Strategic initiatives and technological advancements to achieve a low carbon future. advancements are needed to change the status quo owned entity Eskom is faced with a situation of dealing in the quality of power. conditioned by two symptomatic challenges: The International Energy Agency (IEA) states that by • The acquisition of adequate investment. battery packs. In the South African context. where the adequate and stable supply of electricity is a national crisis. Due to imperfect market conditions. economic strategic are needed to modernise the electrical system by planning needs to critically assess environmental urgently addressing the viability of an electrical utility impacts along with sustainability in terms of the long. infrastructure is the • Non-technical and technical losses. secure and stable supply of electricity. The distribution of electricity is represented of electricity. the • Supply quality. 4 www. availability and reliability. • Revenue management. This • The consistent maintenance of infrastructure and means an even greater dependency for developing valuable assets. As such.khayapower. the security and efficiency of energy and minimum cost to maximum benefit output. A To this end.za 32 SANEDI Annual Report 2014/15 . state. in the following ways: term use of coal. The development an increasing population and changing consumer of clean energy strategies and technological needs. Smart Grids programme Background It is undeniable that South Africa’s economy is coal with a “market failure” in securing an adequate supply intensive. However. central nerve and a high level priority in ensuring a • Effective resource deployment. economic growth and development. The financial implications are that the by a market disequilibrium which is constituted by a costs outweigh the benefits based on the analysis of high demand-side coupled with a constricted supply economic values. South Africa remains one of the leading contributor to CO2 emissions. and ineffectual support of asset management is adversely • Customer base and promotion of customer choice. aging power plants are pushed beyond sustainable energy supply is a critical component in their capacity to support a rapidly evolving economy. Performance information by programme Figure 12: Inside the container is a solar battery charging Figure 13: Unveiling of the SolarTurtle at the WWF Renewable station that can recharge multiple Khaya Power4 bottled Energy Festival on 28 March 2015.co. and 2030 energy demands will have increased by 45%. countries such as South Africa.

greater efficiency will of energy and integration of renewable energy to meet result.generators. • Better facilitate and manage the connection and • Safety: There will be a reduction of injuries and operation of all sources of energy. consumers and those that do both – disturbances to the quality of power. for example. • Give consumers more choice so they can optimise energy use. Smart grids will also contribute intelligently integrate the actions of all users connected towards minimising the costs of interruption and to it . the value application of a smart grid has desirability of a smart grid project is steadily gaining benefits in the following key areas: attention in South Africa. smart grid employs • Environmental: Integrating renewable energy innovative products and services together with into the grid will significantly improve the intelligent monitoring. • Economics: Electricity is an essential commodity for the economy. jobs Platform Smart Grid (ETPSG) has been incorporated being created. Based on the ETPSG definition. the energy demand of various consumers. transmission and consumption of self-healing technologies to: electricity which will also constitute a reduction in CO2 emissions in comparison to the BUA grid. Shaping the face of smart grids in South Africa • Provide consumers with greater information and choice of supply. economic and • Security: Greater security will be possible secure supplies. namely the improvement and as a key business enabler. improved business establishing a smart grid. in the South African electricity distribution industry SANEDI Annual Report 2014/15 33 . In comparison with the BUA grid. They define • Reliability: By lessening the occurrence of a smart grid as follows: power cuts and the disadvantage of widespread load shedding. the outcome of substantial benefits that come with to improved customer service. The gathered. by theft or negligence. fatalities related to the grid. documentation framework for smart grids. consumers The definition articulated by the European Technology will benefit from prices being kept down. and appropriate technology contributes. in order to efficiently deliver sustainable. and (Electricity Chief Directorate) and is focused on the • Deliver enhanced levels of reliability and security introduction of the various concepts of smart grids of supply. Smart grid is an essential the manner in which electricity is produced. amongst others. control. transformative network that facilitates the efficiency distributed and consumed. the electricity supply will be “A smart grid is an electricity network that can more reliable. the attractiveness of this technology is attracting much interest in respect • Efficiency: By reducing the cost and improving of the benefits it produces. and generation. As a result.Performance information by programme Understanding the “smart” in smart grids The shift towards implementing a smart grid strategy in South Africa is intended to fast track the development The effective deployment of technology in the of an adequate electricity supply system or network electricity supply industry (ESI) is recognised worldwide for two basic reasons. communication. and positive returns on the gross into the South African Smart Gird Initiative (SASGI) domestic product (GDP). SANEDI’s Smart Grid programme aligns with the • Significantly reduce the environmental impact of strategic objectives of the Department of Energy the whole electricity supply system.” through reducing risks caused. For much that has been efficiency and improved business sustainability. The implementation of upgrade of the “business as usual” (BUA) grid. Smart grids render their What is a smart grid? deliverables on a broader scale of benefits.

engineering grid vision for South Africa. Work groups are also co-opted intermittently and • Municipality revenue enhancement. subject matter experts. the figure below. and identifying local smart grid SANEDI and chaired by the Department of Energy. thereby promoting smart grids. It plays a role in respect of evaluating options pertaining to grid 34 SANEDI Annual Report 2014/15 . interactive. The enablers. • Easy access to local case studies. to contribute to policy formulation. • Smart grids vision for South Africa (vision Governance structure document). The three focus areas are supported by higher learning SASGI’s role comprises a number of activities which institutions. A business plan was developed for rolling out intelligence. An economically evolved. It SANEDI’s Smart Grid team leading the South African may have a role to play in engaging organised labour. SASGI is on technology deployment. • Workgroups that provide technical support to the The governance structure of SASGI is illustrated in Smart Grids team. and the need arises. solution architects. SASGI also evaluates and makes • Asset management. To this end. focussing especially Initiative (SASGI) was established in 2012. The following are the achievements of SASGI to date: flexible and efficient and will enable South Africa’s energy use to be sustainable for future generations. and and applied research. setting of standards an industry forum established under the guidance of and specifications. to provide The South African smart grid vision statement is as guidance in the establishment of standards. include coordinating and facilitating the smart subject matter experts. to identify follows. technology functionality. the South African Smart Grid electricity supply industry (ESI). within the electricity supply industry. consultants and electricity integrates issues relating to smart grids which emerge retailers. Consideration is also given to the design this programme. technology and standards formulation. SASGI has three focus areas: policy • Highly technically-competent members serving as formulation. It also coordinates and bodies. Industry and stakeholder cooperation is regarded It plays a role in the assessment of smart grid as holding the key to the effective deployment of developments which are unfolding in the South African technology. research and development institutions. Smart Grids Initiative depending on the need and discussion issues at hand. subject matter experts are called on as and when • Energy efficiency demand side management. recommendations for adopting grid modernisation and intelligence. main objectives of SASGI are to facilitate cooperation. and to provide leadership in the deployment of appropriate technology. • Distributed generation. Performance information by programme (EDI). which builds into the DoE’s policy and implementation of smart grid demonstration development in the following areas: pilots and evaluation of results and lessons learnt. electricity system that is intelligent. product developers. technology enabled.

Japan. • Sponsoring activities which build a global Spain. Belgium. Russia. for certain joint expenses at its secretariat. The institution is managed by its executive committee South Africa. following: France. operating under ISGAN is a mechanism for bringing high level the IEA framework for international energy technology government attention and action to accelerate the co-operation. It is supported by a secretariat which is based at accepted as a full member of the International the Korea Smart Grid Institute. Denmark. Sweden. South Africa. although it does have a common fund optimisation approach. India. Italy. power generators and more. on a technology investment contributions. Participation in ISGAN is voluntary. represented by SANEDI. transmission and distribution system experience to the benefit of the local ESI. address gaps in United States (25 countries). Norway. and development and deployment of smarter electricity currently includes Australia. institutions. Switzerland. Projects are and in particular the distribution sector.Performance information by programme Figure 14: SASGI Governance Structure. the European Commission. Germany. Austria. Canada. In April 2011. Finland. has been (exco). the aim is to promote the requirements The ISGAN community includes representatives of of South Africa and to leverage the international governments. Smart Grid Action Network (ISGAN). was able to largely task shared through participation of in-kind embark. amongst others. Korea. knowledge and tools. Through operators. ISGAN was formally established as The role of ISGAN the IEA implementing agreement for a cooperative programme on smart grids (ISGAN). national laboratories and research the SANEDI interventions and SASGI guidance the ESI. Singapore. South Africans membership of the International ISGAN is organised as the IIEA implementing Smart Grid Action Network (ISGAN) agreement for cooperative programme on smart grids. As a member of ISGAN. and the understanding of smart grids. grids around the world and is responsible for the China. the Netherlands. Mexico. and accelerate smart grid deployment. Ireland. SANEDI Annual Report 2014/15 35 .

and project coordination. ISGAN is also open to entities designated by participating governments. number of electric and plug-in hybrid electric vehicles. ISGAN will strive but to develop a guide on how to deploy various smart to establish collaboration strong cooperative ties grid technologies. the clean energy ministerial in 2010. improvement of operational efficiency. technology action plan released by the major integration of growing supplies of both utility- economies forum global partnership in 2009. and scale and distributed. and created by the substantial global investments smart electric grids play a key role in enabling being made in smart grids. government cooperation. Africa’s journey toward achieving a smarter grid. accommodation of an increasing implementing agreements. input to national policy and regulation for the industry • To work as efficiently as possible. ISGAN is open to governments of IEA member as These four areas have resulted in the selection of nine well as non-member countries. reliable. provide policy and regulatory input. at addressing issues within the municipality and to • Though the primary focus is on government-to. the Smart ministerial. small-scale renewable • Leveraging cooperation with other initiatives and energy systems. issue 3. in addition to satisfying all IEA Grid demonstration pilot. This technical assistance. Performance information by programme • Building on the momentum of and knowledge • ISGAN recognises that robust. the Smart Grid and projects to the ministers of the clean energy Maturity Model (SGMM) survey and second. programme was formally initiated in September 2014 where appropriate. The Electricity Chief Directorate and the Smart Grids and select private sector and industry associations team strategically want the projects to not only provide and international organisations.1 (revised August 2012). of R179. 36 SANEDI Annual Report 2014/15 . within the EDI that require policy and regulatory input. implementing agreement reporting requirements. greenhouse gas (GHG) emission reductions • Fulfilling a key recommendation in the smart grid through the management of electricity demand. Our projects ISGAN objectives European Donor Funded Smart Grids Programme These objectives and the associated scope of activities are described in the ISGAN Annex 1 programme of The European Union (EU) made available a seed funding work. • Consistent with the IEA framework for The Department of Energy has identified four areas international energy technology cooperation. on invitation of the municipalities to participate in projects that are aimed ISGAN executive committee. business case and lessons learned with existing smart grid organisations. ISGAN is organised as a task shared IEA Implementing and application of energy efficient technologies to Agreement (2011) and was launched as an initiative of their full potential. It involves • ISGAN participants report periodically on progress two phases which run in parallel: first. reports.4  million to National Treasury over a two- year period which was intended to accelerate South • ISGAN facilitates dynamic knowledge sharing. with the revised end date being June 2016.

It is done to assess the to improve the status of the utility. and helps the utility’s smart grid maturity status. prioritise options and measure various responsibilities in the electricity progress during implementation. distribution network value chain. The SGMM electricity network and organisational status of a utility. projects and participating municipalities: DoE Priorities Smart grid projects Participating municipalities Distributed Generation Active Network Management eThekwini Monitoring and Evaluation of IPPs DoE implemented Revenue enhancement Revenue enhancement Nala Naledi Govan Mbeki Thabazimbi Mogale City Advanced metering infrastructure in City Power residential and commercial customer base Asset management Advanced Asset Management Msunduzi Nelson Mandela Bay Energy Efficiency Demand Side Energy efficiency in Public buildings DoE Implemented Management Table 1: Priorities. methodology provided below in figure 1 illustrates the This complements the demonstration projects as it seven steps which are required to achieve a smart grid addresses root cause issues and provides a strategic journey. utilities to apply a programmatic approach in tracking • Developing a smart grid strategy and roadmap progress during the smart grid journey. The model provides a management tool • Performing a gap analysis to assess what using a common language and framework for defining corrective measures need to be taken to improve key elements of smart grid transformation. The Smart Grid Maturity Model (SGMM) was developed • Conducting an “as is analysis” to determine the by a collective of electricity distributors (utilities) and is utility’s current organisational and electricity maintained by Carnegie Mellon Software Engineering network status. The model also with key stakeholders in the utility who hold enables utilities to plan.Performance information by programme The table below illustrate the priority areas. direction for the municipality in the long term. projects and municipalities The Smart Grid Maturity Model Assessment is the An SEI certified navigator is assigned to assess the second part of the project done in parallel with the smart grid maturity and required framework needed demonstration projects. The smart grid journey comprises a number of Smart Grid Maturity Model (SGMM) Assessment successive implementation steps: SGMM methodology • Formulating a smart grid vision which sets the course for the smart grid journey. Institute (SEI). SANEDI Annual Report 2014/15 37 .

38 SANEDI Annual Report 2014/15 . The SGMM survey comprises the following: Sections 5-12 present multiple choice questions organised by SGMM domain that address each • Sections 1 and 2 capture contact information for expected characteristic in the model. are over 175 questions in the SGMM survey. Performance information by programme • Preparing a business case and value proposition to implement the strategy and roadmap. The survey evaluates each utility in a two by two • Section 3 collects key data about the responding matrix format. and five maturity data and help to generate meaningful comparative levels along the Y axis (as shown in Figure 15). the responding utility and the person completing the survey. each • Section 4 collects grid performance data that is grouped under different domains and measured along used to correlate the impact of increasing smart the five maturity levels. Figure 15: Smart Grid Road Map (diagram from SEI). • Mapping out the required functionalities to support the vision and strategy roll out. comprising eight domains along the organisation and will be used to normalise survey X axis (as illustrated in Figure 15). and • Formulating implementation guidelines which ensure the successful smart grid journey. There data for users. The entire SGMM methodology is mapped out below in figure 14. Some questions are repeated grid maturity with overall grid performance. and in different domains in order to test the robustness of previous questions appraised.

Performance information by programme Figure 16: SGMM domains (diagram from SEI). Figure 17: Maturity Levels (diagram from SEI). SANEDI Annual Report 2014/15 39 .

Analysis phase Annexure B Detailed scope of work. 40 SANEDI Annual Report 2014/15 . the entire methodology. as they have relatively a good control of their grid. funding is broken down into programme have the following in common: they have percentages to ensure that the allocated funds are been divided into seven phases. A project close-out report closes lessons learned Project close-out individual projects. Design phase 4. with approval of optimally used by the municipalities. putting up PV roof top panels. Performance information by programme Projects in detail All projects within the EU Donor funded Smart Grid each of the seven phases. Initiation phase Annexure A High-level scope of wor 2. Policy Business case Business cases and how to guides for all four priority recommendations and How to guide areas are developed. design and baseline assessment 3. deliverables that close out each phase. In completing Implementation Deliverables Detail 1. Integration phase Integration report Change management strategy. Implementation phase Implementation report Service level agreements. report Table 2: Table of project phases and deliverables Active Network Management Project (one various business units in the electricity department municipality) to this vision. Ethekwini has already identified that there is a growing number of residential • Dispense free basic electricity (FBE) to 1 000 customers and small businesses that have started indigent customers. There are seven phases in this project and Ethekwini is presently is the third phase (project The Active Network Management of small scale design). Ethekweni completed • Implement inclining block tariff (IBT) with the a full SGMM survey in 2014 and have gone through selected indigent customers. and commercial customer base project (one municipality) Ethekwini is tasked with this project. Procurement phase Procurement report Details of all procurement of goods and services carried out by municipality 5. change control measures and certificate of completion are documented 6. The objective of The advanced metering infrastructure (AMI) in this project is to document the systems and process residential and commercial customer base project required by utilities to manage small scale embedded focuses on piloting the systems and processes to: generators within their grid. embedded generation onto the distribution grid and the implementation of an Advanced Distribution Advanced metering infrastructure in residential Management System (ADMS). capacity development and skill transfer programme are documented 7. They have a draft smart • Implement a time of use (TOU) tariff in both grid vision document and are presently realigning customer bases.

processes and technical capabilities to effectively manage the distribution of electricity. infrastructure is required. and report. In order to City Power has completed the SGMM assessment. the technical ability to manage their customer bases and is intended to address the maintenance and effectively.Performance information by programme City Power. The Smart Grids team intends to document the benefits and savings of this Municipalities have immense problems when it comes approach. and address the technical part. The grids concepts to address revenue challenges in TOU tariff will significantly reduce the demand for municipalities. Conclusion Management and technical staffs can take informed decisions based on what the data analytics provide. The advanced asset management (AAM) project The objectives of this project are to give municipalities originates from the DoE’s Electricity Chief Directorate. In order assessment and has also concluded three phases of for NERSA to provide for cross-subsidies for low income the demonstration project. The smart grids concept addresses improved and remain sustainable over time. circuit concluding the project design phase. and ultimately make it available to every to revenue collection. Customers are charged different on using advanced metering infrastructure/smart prices according to when the electricity is used. electricity in peak periods. analyse space are determined. They lack proper management municipality in South Africa. The Smart Grids team plays the role of introducing new management processes to Advanced asset management project (two the municipalities and the supervision of every detail municipalities) of the project implementation phase. As a result. These deliverables become the Bay is to focus on critical grid assets. Revenue enhancement project (five municipalities) The initiation of the TOU tariff is a very important element of the use and pricing of electricity in South The revenue enhancement projects are focused African municipalities. The objectives of this project Workforce management is also automated with a are far reaching. there are four deliverables to be achieved by the implementation of the EU donor funded Smart The scope of the AAM project at Nelson Mandela Grids programme. These field devices generate data that is integrated into a back-office for data analytics. Ultimately. the participating utility. is maintenance and refurbishment of critical assets. substation. and it is thus very important that free basic electricity is provided to Nelson Mandala Bay has concluded the SGMM them through an efficient and reliable system. The municipality is in the domestic customers as required by the electricity fourth phase of the programme. Sensors and intelligent devices are installed Five municipalities are participating and currently across assets such as transformers. maintenance and refurbishment in a very advanced way. thereby reducing technical and non- refurbishment backlogs in the distribution grid of technical losses. on behalf of the City of Johannesburg. pricing policy (EPP1) the IBT has been introduced. breakers and more. The sensors basis and foundation on which future projects in this and intelligent devices are used to monitor. These reports then inform scheduling of SANEDI Annual Report 2014/15 41 . the boundaries of every municipality. revenue collection will be municipalities. an advanced metering is presently in the project design phase. We have indigent customers within better control of the municipal grid.

regulatory Grids components deployed. and analysis of implementing a smart grids project. and that provides a step-by-step approach to what others. • Experiences in integrating rooftop photovoltaics The effectiveness of this document is to inform on distribution networks with active distribution decision makers in their course of action. and the Global Smart Grid Federation (GSGF). a two-day global forum on the generation (SSREG) interconnection – spanning all outlook of distributed solar power in South Africa was financial. The knowledge base is an Setting the Scene important factor of the success of the smart grids programme as such lessons will equip all Mr Kadri Nassiep (CEO of SANEDI) provided an stakeholders to make informed decisions based overview of the programme for the global forum on on the outcomes of their reports and what past unleashing rooftop photovoltaics in South Africa. at the nexus of regulatory and business models for 42 SANEDI Annual Report 2014/15 . utilities. The intent of initiating smart grids projects through the • To share international experience and lessons participating municipalities is to present a in sustainable PV integration with South African policy recommendation that is applicable and stakeholders. and network management. a smart grid is and how to implement it. The purpose of this guide is to facilitate the successful Over 200 delegates attended the forum and the implementation of smart grids projects. and appropriate to South African conditions. utility Energy Development Institute (SANEDI). Business cases will provide for solar photovoltaics. Department of Energy (DoE). Regulatory and utility business model frameworks for Continuous efforts of the Smart Grids programme solar photovoltaics Rooftop photovoltaic workshop The regulatory framework is the central set of guidelines governing small scale renewable electricity On 23-24 March 2015. a detailed outline of the viability of initiating a • Regulatory and utility business model frameworks smart grids project. experiences have taught them. • To facilitate an exchange of stakeholder • How to guides on the various types of Smart viewpoints regarding the technical. This session focused on topics Energy Regulators Initiative. The essence of the and institutional implications of solar PV for South how to guide is to have a standardised blueprint African consumers. Performance information by programme The four deliverables are: International Smart Grid Action Network (ISGAN). This two-day • Policy and regulatory recommendations global forum focused on two goals: derived from the projects. Eskom Clean term financial viability. The forum was co-hosted by the deployment of distributed renewable generation. procedural and technical aspects of the hosted at the Eskom Academy of Learning in Midrand. programme comprised the key themes: • Business cases outlining the benefit against cost. South African National Guided by the SSREG regulatory framework. programme – to facilitate controlled and standardised Johannesburg. National business models must begin shifting to maintain long- Energy Regulator of South Africa (NERSA). The development of business cases will provide • Setting the scene. a comprehensive account of the cost-benefit • International perspective. developers. 21st Power Partnership. • Lessons learned from projects and shared with industry.

the United States of America (full retail rate net energy metering (NEM) and shift Global forum wrap-up toward unbundling). The impending principles for SSREG tariff design were enumerated. significant tariff increases in the country will have a huge impact on consumers. SANEDI. dynamic operation of electricity collaboration and relationships with institutions such distribution grids. thereby providing a foundation for as ISGAN. information and communications A diverse range of international experiences were technology. eg Spain (feed in tariff (FIT)). CSIR. institutional. Cape Town City Electricity (rate unbundling and avoided cost). requiring holistic approaches International perspective and governing frameworks that bridge the areas of power engineering. NERSA and Eskom to vigorously drive the technology journey. SABS. policy and regulatory shifts across the power sector. Some of the more pressing challenges include the Australia (NFIT at higher-than-retail-rate). of technical. Lessons significant infrastructure investment backlogs which is learned will be synthesised and key regulatory in the order of R35 billion and growing. Thailand (FIT Adder). and how approaches must The transition to ADNM. South Africa must not communications and control technologies to allow reinvent the wheel but must take advantage of ongoing more efficient. We must increasing amounts of distribution generation to be constantly seek to align strategically to established effectively integrated into power systems. and in particular ADNM to evolve to capture SSREG opportunities while mitigating support rooftop PV (RTPV) integration. journey and not a once off event. consumer engagement. Germany (FIT). Tamil Nadu (NEM). electricity presented. on distribution networks with active distribution network management As a way forward. we must learn from both international and local experiences shared on various platforms Active distribution network management (ADNM) that South Africa is party to. SANEDI Annual Report 2014/15 43 . Efforts to place the Experiences in integrating rooftop photovoltaics customer at the centre remain a serious challenge.Performance information by programme distributed generation. entails a host potential adverse impacts. bodies like DoE. GSGF. and more. Grid modernisation is a brings together a range of advanced energy. utility business practices. and SASGI among others.

Performance information by programme Research to investigate the sustainability of decentralised renewable energy systems in South Africa The concept of the sustainability of minigrids as an option for the electricity service delivery in remote and rural communities in South Africa has not yet been thoroughly investigated. applicable. Energy Research. The programme has four components. where Energy. and all new and current projects are subjected to the EPWP protocols. Eastern Cape and the Northern WfE and EPWP Cape and the North West. Limpopo. 44 SANEDI Annual Report 2014/15 . the roll out of its project pipeline in KwaZulu-Natal. social acceptability. skills development and energy services delivery. The study will be completed in the next financial year and will provide proposed implementation strategies for the implementation of minigrids in South Africa. To this end. most of WfE’s projects are at extensive demonstration stage in terms of clean energy options. Energy Saving and Community Outreach. and assessing their Working for Energy Programme socio-economic impacts on targeted beneficiaries and communities. in partnership with the national Department of Environmental Affairs (DEA) and the Department of International Development (DFID) through CARDNO Emerging Markets has initiated a study to determine challenges impeding the implementation of minigrids in South Africa. in terms of job creation. with special emphasis on relevance energy access. namely. This stage will be followed by sustainable people with disabilities. women and understood. Works Programme (EPWP). Gauteng. It is aimed at delivering clean energy solutions to rural and urban low income The full roll out will ensue only after the offerings communities through labour intensive methods where have been refined and the cost benefits are fully possible. SANEDI. with special emphasis on youth. The sustainability of the projects The Working for Energy (WfE) Programme is a has emerged as an area needing attention and the multi-year renewable energy programme under the number of project increase and need operation and environment and culture sector of the Expanded Public maintenance capabilities on the ground. Renewable WfE has been fully integrated into the EPWP. fiscus funding for the WfE as part of government’s service delivery interventions to communities on the WfE is in its sixth year and has gained traction with fringes of service delivery programmes of government. Applied research in rural energy provision Due to its novelty.

stages of completion. Figure 19: Melani Village biogas project SANEDI Annual Report 2014/15 45 . Mpfuneko biogas project Melani and Fort Cox biogas project Over 30 of 55 biogas digesters were completed during Phase 1 of the Melani and Fort Cox Agricultural College the reporting period with an additional 15 at various projects have been completed. in Greater Giyani District Municipality in Limpopo. The Ndwedwe rural energy project in the iLembe About 100 households and early childhood district municipality has been completed.Performance information by programme Bio-Energy cluster projects Phase 2 of the Melani project. families. in partnership with the University of Fort Hare. with the development centres under the National Development implementation of 26 biogas digesters. commenced in the current year ILembe biogas project with the signing of the implementation agreement and the commencement of the stakeholder engagement. solar panels Agency (NDA) will benefit from implementation of this and rain water harvesting tanks in some water deprived project. Figure 18: Completed biogas digester in Mpfuneko Village. The balance will be completed and commissioned in the next financial year.

The anaerobic digester been concluded and the implementation will ensue in will be installed in the next financial year. Seliba and Kgomoco regarding the completion of the greening of the school Primary Schools) in Sharpeville have been identified in the Sol Plaatjie Municipality has been concluded. Gauteng. the next financial year. The efficient lighting and water heating solar water heating. Lehlasedi. Greening of Gauteng schools Greening of Tsireleco high school in Kimberley Through the partnership with the Gauteng Department of Infrastructure Development. Project implementation will commence in reclaimed from the Lucingweni minigrid project the next financial year. Figure 21: Thusanang Day Care Centre in Hammanskraal. Project implementation will commence in the next financial year. biogas. efficient lighting and financial year. These Project implementation will commence in the next include cool surfacing. Greening of Thusanang early childhood development centre (ECDC) An MOA between SANEDI and the Thusanang ECDC regarding the greening of the ECDC in Tshwane metropolitan municipality has been concluded. All procurement matters have projects have been concluded. Seliba and Kgomoco Primary Schools in Sharpeville. under the Renewable Energy Centre of Research and Development (RECORD). for greening using clean energy interventions. Performance information by programme Lucingweni renewable energy legacy project Greening of Tygerkloof combined school An MOA between SANEDI and the Nelson Mandela An MOA between SANEDI and the Tygerkloof Metropolitan University has been concluded for the combined school regarding the greening of the school establishment of a renewable energy centre on its in the Dr Ruth Mompati district municipality has been campus using some of the renewable energy assets concluded. 46 SANEDI Annual Report 2014/15 . four An MOA between SANEDI and the Tsireleco high school schools (Emmanuel. Lehlasedi. Figure 20: Identified Emmanuel.

SANEDI Annual Report 2014/15 47 . which will focus on using waste from construction of the projects seem small relative to the value added industries to various forms of energy. of Equivalents Workdays resources from other relevant stakeholders that have Full Time Total No. similar socio-developmental mandates in framing new of of initiatives for the future. be created during the operation and maintenance of these interventions. Figure 23: Waste produce farm which can be used for bioenergy from the Bana Ba Kwale agricultural farm. During this financial year. Figure 22: Woody waste emanating from the value adding industry which can be used for various energy forms in Heidelberg. the capital investments. Identified beneficiaries will need extensive training to enable them to undertake the functions. the real sustainable jobs will will be implemented over the next MTRF. SANEDI has been approved to implement waste to 82 140 6 109 energy projects with the Natural Resource Management branch of the Department of Environmental Affairs. Total No.Performance information by programme EPWP reporting Future project pipeline SANEDI continues to seek partnerships to leverage Training Days Beneficiaries Total No. in partnership with the national Development Agency in the North West. While the working days derived during the These projects.

• To develop technical know-how. Centre for Energy Systems Analysis and Research planning and policy development. methodologies In addition. and the associated projected CO2 emissions. The aim is to develop sections of two major national government reports.to long-term under different of energy research and related data. in energy planning and to meet the objectives of the the 16th annual IUAPPA world clean air conference and integrated energy plan (IEP) and national climate to students and staff of the University of Stellenbosch’s change response strategy. support national and local energy planning and policy. (CESAR) • To develop the necessary skills and resources to support the following: A Department of Science and Technology (DST) funded o Energy modelling programme o Planning o Analysis Background o Energy technology innovation. an energy data repository and technical capacity to the 2012 IEP and the 2013 mitigation potential study. and • To contribute towards the development of a The Centre for Energy Systems Analysis and Research centralised energy planning database which is (CESAR) was established in May 2009 with the stated up to date and can support the requirements of aim of being the authority in the field of energy data multiple government institutions (national and for the purpose of modelling and planning. assumptions. a mechanism for energy modelling and planning The study produced two data-rich working papers to support the alignment of national and local which were extensively referenced in the transport government energy objectives. University of Cape Town National Energy Development Institute (SANEDI). Performance information by programme Data and knowledge management • To collaborate with international bodies regarding research on energy data. mechanical engineering faculty as a research lecture. energy modelling. CESAR local). The (UCT) collaboration CESAR programme managed by SANEDI has remained a Department of Science and Technology (DST) funded Historical (2009 – 2012) programme following the restructuring. analysis of regional transport demand in South • To collect and maintain an open central database Africa in the medium. is one of the centres that previously resided with SANERI. considering • To research and develop suitable models for the what the resulting demand for liquid fuels would be South African energy system. CESAR aims to provide an energy platform and results were disseminated in presentations to the where national and local decision makers are assisted South African National Energy Association (SANEA). knowledge. The • To provide research support and advice on project focused on the development of a number government initiatives regarding energy data of models which. when combined. energy modelling and planning. but is incorporated under the South African Energy Research Centre (ERC). The CESAR programme within SANEDI contracted ERC The CESAR programme was initiated to provide to undertake research during the period 2009 to 2012. can be used to collection. The study input data. The second working paper was accepted for the 2013 Objectives international energy workshop in Paris. and The aim of this project was to perform a comprehensive human capacity in energy modelling and planning. develop scenarios around the likely future energy and 48 SANEDI Annual Report 2014/15 . scenario assumptions and in addition.

The complete data set required In order to meet the mandate of CESAR. and a fuel demand model were developed for this study: (spreadsheet). discussed in detail. of which 10 were from South Africa. A number Analytica). One of study to build on the foundation that was developed. and transport sector study was completed as a direct • A fuel demand model. a time budget model (spreadsheet). Transport study phase 2 • The ERC programme produced five masters in 2009 and eight masters in 2010–2011. This initiative is sponsored (‘useful’ energy) as well as the amount of energy by SANEDI. used to project income growth and GDP the current and future vehicle parc as well as the growth in a consistent manner). The second paper focused on Current (2014 – 2017) the projection of the future demand under different scenario assumptions. input into the IEP process for the transport sector and the 2013 mitigation potential study. a freight demand associated energy demand. SANEDI Annual Report 2014/15 49 . of modelling techniques were combined to provide a computable general equilibrium model (in a novel and rigorous methodology for estimating GAMS. DST and UCT. The papers are stand. and a broad range of input assumptions were • A time budget model. 40 of which were develop a fully functioning energy modelling group at South African participants and over 94 papers CESAR within SANEDI. • Modelling of regional liquid fuels demand in the • A freight demand model. planning and policy development. The future energy demand of the transport implemented with data providers Statistics South sector was calculated in terms of services performed Africa. This allows analysis of the are managed by SANEDI and the ERC. a collaboration to replicate the results of the model are provided in agreement between the ERC. • Provision of research support and advice on two papers and a report on two stakeholder workshops government initiatives regarding energy data that were held during the course of the project were collection. DoE and NERSA. Data with which to populate transport sector models is sparse in South Africa. The collaboration agreement specifies that Summary of outputs the ERC will capacitate and train SANEDI-appointed energy modellers with relevant technology skills and • The international energy workshop (IEW) 2012 knowledge. The first paper focused on the modelling. energy working paper series. and SANEDI was concluded in 2014 for the period 2014-2017. characterisation of the current vehicle parc of South Africa by province. were presented. • A vehicle parc model. substitution between alternative energy forms and • Data-rich working papers and five models were modes as well as an appraisal of the evolution of the developed in the study: a vehicle parc model (in technological improvements in vehicles.Performance information by programme infrastructure requirements of the transport sector the PHD’s has joined the university as a lecturer. energy modelling and planning. A detailed report consisting of an executive summary. and its major influences in terms of both energy and • An open database for energy research data was emissions. New user registrations supplied (‘final’ energy). University of Cape Town spreadsheet format. and completed as deliverables. In the end five models model (spreadsheet). • A computable general equilibrium model. The transport phase 2 study follows up on the previous • The UP programme produced two PhDs. The long-term vision for the DST is to held in Cape Town had over 180. • Support for the DoE and international bodies alone data-rich documents currently part of the ERC regarding research on energy data.

relates to the prioritisation of the direction for research • Methodology for projections. iron and steel. The main question is how to meet the • Validated data stored in a database. Data First. study phase 1. shocks and their implications.development of energy to support the alignment of national and local efficiency targets in heavy industry (nonferrous government energy objectives. Together with CESAR (SANEDI). universal access to energy. energy transport sector link between CGE model and energy security and energy efficiency. the multitudes of science • Transition scenarios. chemical sector based on the long range analysis dedicated specialised skills and relevant tools. energy needs of the transport sector in the future • Economic model which can project future considering the uncertainty in future fuel prices production for key industrial sectors. only be achieved by an appropriate level of funding. 50 SANEDI Annual Report 2014/15 . These objectives can metals. All datasets will be in compatible form so production for key sectors. amongst others considered during the period of the study: The DST’s interest in energy related data and modelling • Update of base year assumptions. Conclusion UCT). These challenges and system model in SATMGE will also be included. and and technology development. such as more detail in the road freight and rail categories. and as user inputs will be published on ERC and SANEDI • Economic model which can project future websites. investment decisions. that it can be integrated for IEP purposes or other public databases (Open Energy Database. Performance information by programme refine areas that had gaps and focus on a new set of • Calibrated model for each of the industrial sectors aspects that were not covered under the transport in TIMES. of technology choices in the industrial sector. economic development The following are potential working papers to be and environmental commitments. uncertainties in turn threaten the economy. A climate mitigation. • Light industry study. DoE and ERC (UCT) the following projects are under consideration: The DST funded programme CESAR aims to provide this mechanism for energy modelling and planning • Heavy industry study . and technology costs compared to performance. investor confidence. This will include technology assumptions for the vehicle parc and future technologies as well as The energy sector is facing serious challenges. non-metallic minerals. and technology related development opportunities that could potentially stem from the energy sector and Future projects the enormous opportunity for technology and science skills incubation within priority focus areas. current vehicle parc model with key assumptions • Validated data stored in a database. Continuing from the previous study an update of the • Calibrated model for each of the sectors in TIMES.

SANEDI Annual Report 2014/15 51 . resulting in a massive stretch the quantum of energy efficiency savings. subject to all the conditions in the 12L an overall assurance function on behalf of the South regulations being met. and the on the current SANEDI resources allocated to this task. energy efficiency forms a mandatory component in a series of criteria relating to this industrial manufacturing incentive. A decision of major importance was the for energy efficiency savings in terms of section 12L of announcement by the Minister of Finance in his the Income Tax Act as amended came into operation budget vote speech to Parliament on 25 February 2015 on 1 November 2013. African Revenue Services (SARS) and various national government departments.Performance information by programme Energy Efficiency programme whilst in the case of 12I. that the expected tax relief would be increased from a 45 cents deduction on taxable income per kilowatt These particular tax incentives are being introduced hour of energy saved (45c/kWh) to 95c/kWh and for businesses that can show measurable energy that cogeneration projects would now be eligible for savings and SANEDI has been tasked with providing this incentive. Energy Efficiency (12L and 12I) tax incentives Section 12L incentives include all energy efficiency projects that reduce energy use and is claimable The promulgation of the regulations on the allowance until 2020. These new developments have seen an exponential increase in the interest shown for these energy The 12L regulation sets out the process for determining efficiency tax incentives. requirements for claiming the proposed tax deduction.

In addition the user will find technology for electric water heaters in South Africa national and international energy efficiency news. It provides easy access to technologies in appliances was gathered by SANEDI on information that is up to date and relevant for both the most energy consuming appliances in building and local and international investors in energy efficiency.bigee. feel and look of the website of the following appliances shows the most energy is attractive and user friendly. and an updated standard that governs this appliance. to school pupils submitting assignments. Performance information by programme bigEE (Bridging the information gap Since www.net is an international website. South African page in January 2015 and the site has since become operational and is upgraded on a Energy efficiency best available technologies in continual basis. best available energy efficient appliances and the best technologies for A substantial body of information about best available energy efficient buildings.bigee. as well as efficiency knowledge in three main categories: country-wide savings potential. The page displays data knowledge appliances on energy efficiency policies. policies and other The international bigEE website launched the energy efficiency factors. buildings. appliances and policies. 52 SANEDI Annual Report 2014/15 . Also included is a graph showing market penetration The information on www. professors. The summary Furthermore the design. posing of questions. appliances in developing countries) South Africa has contributed enormously on the best available technologies in appliances. theses. user suggestions and any other opinion the user may desire Electric heaters – the site includes best available appropriate to voice out. In terms of the appliances the following will be the The website provides user friendly options such as BATs vs non-BAT information dissemination: suggesting improvement. the levels of efficiency that can be gained from these from company CEOs. households and uploaded on the side. it on energy efficiency in buildings and provides country-specific information according to its member countries’ levels of energy efficiency. students writing their appliances.net provides energy of this appliance between 2001 and 2011. As such the website can intensive and most used appliances and also highlights be used by any interested party to gather information . To date.

country-wide A study by Eskom. Ovens in energy consumption is explained in the following are one of the biggest consumers of energy. The standard type of pool pump by energy consumption Energy efficient televisions . The the LED televisions are more energy efficient than LCD campaign recommended reducing the running time and CRT. how the global market is transforming promote energy efficiency. country-wide savings potential. Africa. so the types: LED. electric technology for these items. and Plasma. Furthermore the contents include graphs of swimming pool pumsp by four hours per day to showing penetration rate of TV in SA HH 2000-2013. from A+++ (most those that are not so energy efficient. The contents efficient) to G (less efficient). SANEDI Annual Report 2014/15 53 .website includes the and annual sales from 2000-2011.includes best available using 1. Also in terms of energy consumption.including best available • Market share of cookers by fuel type (gas. Also available are and non-built in cookers from 1999 to 2013. achieve a 40% saving. Finally the website shows those that are very energy efficient and proposed energy label programme. LCD. as well as built-in ovens temperatures in summer and winter. which are broken down into six categories. Contents also include and dual fuel). and market characteristics for residential housing in South • Energy class distribution of ovens (2014). CRT. and how uses at least 232 kWh of electricity per month. The comparison best available oven technology in South Africa. requirement for different climatic zones in South • Annual sales of all formats (electric stove. technology in television in South Africa. used in a national programme to savings potential. which will identify the TV also includes the country-wide savings potential. found that a 750W pump from LCD to LED as the new market standard. RPTV. gas and Africa (via climatic zone map) in terms of their coal) from 1999 to 2013. included are graphs showing: Swimming pool pumps .Performance information by programme Energy efficient ovens (stoves) . is shown.1kW swimming pool pump is also included. pool pumps energy • Market share of electric ovens by functionality.

The work on buildings HH 2000-2011 (in terms of fridge/freezers and free. and the types of bulbs that of models by energy rating (small. Each sub-category is broken down further into size or Energy efficiency best available technologies in carrying capacity. categories) as well as SA energy labeling A (more energy efficient) to G (least energy efficient) and a proposed HVAC.contents include best appliances are available.best available technology in SA in terms of energy labelling (A+++ to D) are also included. are included. baseline scenario efficient. penetration rates in SA HH by sub- category (freezers. Penetration rates of refrigerators in SA technologies in buildings.contents include Water heating (solar. “medium” The following is information on the best available and “large”. thus mitigating the risk of load shedding sales (2014-2018). information is ongoing. HVAC. Graphs showing penetration demand for electricity from the national grid will rate by washing machine type (auto front loading. freezers and fridge/freezers. as available technology of this appliance in SA. are one of the biggest consumers of electricity. and will also assist consumers of electrical appliances to know what energy efficient Energy efficient refrigerators . country-wide savings potential. This top loading and semi-auto) in SA HH 2003-2013 (%). we are able to deduce that South Africa is becoming one of the most energy Energy efficient clothes dryers and washer dryers . energy cass distribution of models for front and available technology on this appliance in SA. and annual sales by subcategory. electric geysers is gradually decreasing and the market country-wide saving potential. auto decrease as the uptake of solar geysers improves. well as what they can do to make their buildings more wide saving potential and market characteristics energy-efficient. country. refrigerators (fridges). since electric geysers ranges in the market. and energy class distribution of which is currently one of the biggest energy challenges dryers and washer dryer models (2010). graphs showing electricity A+++ to D A+++. country. top loaders (2010) and the proposed energy label from wide savings potential. organised under “small”. Performance information by programme Energy efficient dishwashers . efficient countries with innovative energy efficient website includes best available technologies of this technologies for buildings and appliances. 54 SANEDI Annual Report 2014/15 . and categories of for solar geysers is developing quickly. graphs showing distribution lighting design in buildings. fridge-freezers) 2000-2013 Lighting – best available technology in SA in terms of and forecast 2014-2018. with the most efficient and D the least consumption of dishwashers. The “medium” and “large”. This indicates washing machines based on the most popular capacity that energy efficiency is possible.the use of best available technology in this appliance in SA. These measures are listed below and buildings for the purposes of categorization these categories will henceforth be referred to “small”. etc) . forecast the grid. Africa has with respect to SWH. information therefore indicates the best that South total number of units in SA HH by sub-category 2009. With the information provided.contents include best 2013. fridges. heat pump. This will appliance in SA. thus saving them money. in South Africa. annual assist in decreasing the demand for electricity from sales of dryers and washer dryers (1999-2013). standing freezers). Energy efficient washing machines . medium and large are efficient. (A) vs efficiency scenario (B).

known as and 17 are previously disadvantaged individuals (PDIs) TEOP/POET (technology. since this buildings .the website will include the best available technology in terms building measurement Plug devices (building functionality oriented devices) and verification equipment in South Africa. In this case the website the DST/DoE/SANEDI assistance programme. whereby the building reporting period. Fourteen journal papers were published and 22 conference papers were also published and presented. the need for heating and cooling of buildings. 30.5% are black.Performance information by programme Building insulation . SANEDI Annual Report 2014/15 55 . performance . Building insulation therefore reduces energy resource in buildings. equipment. operation and (56. Of the 23 will include the methodology used by UP when dealing students supported through SANEDI. The energy efficient response were experienced in finalising the activities for this is retrofits and maintenance. 62 students components and replaces them with energy efficient are registered at the Hub. (University of Pretoria) energy and electricity have been inexpensive. with 23 being funded through equipment and technologies. Management (EEDSM) Hub Building retrofit and maintenance – historically. the Hub was still able to complete 89 owner removes the energy inefficient features and EEDSM-projects. white). using external funding. upgrade .the website will include the best available technology in South Africa in terms of plug devices Energy Efficiency and Demand Side (that promote energy efficiency). resulting in many of South Africa’s buildings having been Although major funding and contractual challenges constructed inefficiently.the website will include the best available controls the level at which heat is gained in summer technology in terms of applications on alternative and lost in winter. and the website will include the best available technology in Measurement and verification building energy building insulation in South Africa. six are women with building retrofits and maintenance.4% are Asian and the remainder performance).energy efficiency in buildings Applications on alternative energy resource in is inevitably linked to building insulation.

printed annual report and distributed. all invoices financial within 30 days 30 days after must be paid within processes. Performance information by programme Report on performance against objectives Programme 1: Administration and corporate governance Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Corporate Annual report Compliance Achieved All corporate governance Strategic plan to relevant documents were – to comply Annual legislation/ submitted as per the with relevant performance plan policies/ compliance calendar. an intern has and quarterly leave and she was been appointed newsletters. DoE official Achieved SANEDI participated events: 4 and assisted with arrangements for the IEA-EE indicators workshops held in SA. In the management through monthly 10 went on maternity interim. communicator’s Number of Achieved The quarterly forum meetings quarterly newsletter was and reports. legislation/ Quarterly reports procedures policies/ procedures To have Percentage of 100% of creditors Achieved In terms of the effective creditors paid paid within PFMA. contribution. as well as SAIREC SteerCo 56 SANEDI Annual Report 2014/15 . DoE not replaced. newsletters: 4 completed. The distribution will participating in continue until the DoE official events next issue is due. DoE Achieved All communicator communicator’s forum meetings forum meetings held by the DoE (and reports were attended and presented): 6 presentations were rendered on behalf of SANEDI Annual report Achieved Communications contribution : 1 assisted in the (editorial and drafting of the design) Chairperson’s report for the annual report. after all relevant all relevant 30 days systems and documentation documentation procedures have been received have been received Effective and Measurable Number of Not achieved The resource She is scheduled to comprehensive contact with main monthly (lower responsible for the resume duties on stakeholder stakeholders level) newsletters monthly newsletters 1 June 2015.

and currently under water and waste evaluation. six bursars comprehensive bursaries are studying stakeholder to suitable management candidates Clean Energy Solutions Manage and Coordinate Establish solar Not achieved The report on the The progress report coordinate renewable energy photovoltaic first year of the PV from NMMU is Renewable R&D platform at platform which was awaited. natural carbon dioxide releases planning commenced with international participation Effective and Support activities Award of Achieved Currently. concern of overlap geography and with work of PASA surface issues The Pilot CO2 Storage Interim PCSP Not achieved Interim PCSP The World Bank determination Project (PCSP) as a foundation foundation has advertised of the “proof of concept” documentation documentation.Programme 2 : Energy Research and Development Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Advanced Fossil Fuels (including Carbon Capture and Storage) Determination An appraisal of DoE approved Achieved of the potential shale gas energy workplan for shale gas matters with Contract in place Achieved Annual target for in the energy respect to carbon for four tasks four contracts in economy of dioxide as an place – 3 RfP’s closed South Africa extraction agent. Energy R&D NMMU and the 4th quarter target through begin yield/ was not achieved. for expressions of potential and for CCS in SA Interim pre. RECORD performance measurements Prefeasibility Not achieved Funding not available Seek funding for study on due to budgetary ocean energy compiling an constraints resource map ocean energy resource map Publish the “State Achieved of energy research in SA” study SANEDI Annual Report 2014/15 57 . carbon dioxide Bank approval of in SA the project concept The pilot monitoring notes and procuring project at Bongwana processes. Not achieved pre-feasibility interest for project appropriateness feasibility data (exploration) plan technical advisory of technologies analyses and results for other services for the Pilot for the Interim feasibility Not achieved Gate 2 deliverables CO2 Storage Project – geological (exploration) plan not completed due submissions close 20 storage of to delays in World April 2015. by DoE because of risk assessment. demand task not approved and supply match. The 4th issues.

Report on performance against objectives

Objective Indicator Target Performance Reasons for variance Interventions put
result in place to address
non-achievement
Clean Energy Solutions

Facilitate Implement Achieved Some funding
renewable information received
energy research exchange sessions
collaboration with funding
counterparts
Fund and manage Achieved
existing projects
Manage algal Achieved
bioenergy
platform
Initiate “State of Achieved
waste to energy
research in SA”
study
Contribute to Ongoing support Achieved Ongoing HCD
renewable energy to SARETEC (South collaboration with
skills development African Renewable GIZ
Energy Technology
Centre) and
preparation of
first classes in
South Africa
Renewable energy Achieved
skills development
bursary through
Douglas Banks
Renewable Energy
Vision (DBREV)
Fund
Collaborative Achieved
study/training
conducted
through GIZ
Marketing and Raising Achieved
awareness creation renewable energy
and RECORD
awareness
through events,
conferences,
website, articles,
etc
Present the Achieved
RECORD
Renewable
Energy Research
Excellence Award
in partnership
with SANEA
Facilitation Achieved
and support
of renewable
energy industry
association
knowledge
sharing events

58 SANEDI Annual Report 2014/15

Report on performance against objectives

Objective Indicator Target Performance Reasons for variance Interventions put
result in place to address
non-achievement
Clean Energy Solutions

Collaborative Manage and Creation of an Not achieved Care was taken with
projects, pilots, coordinate the observational the site selection
demonstrations WASA programme wind atlas. process that no EIA
Conceptualise a issues were triggered
framework for and the sites to be
WASA phase II. representative of
the WASA 2 domain
which resulted
in that the site
selection process
was only concluded
in November 2014.
The impact of that
is that the mast
selection can only
be completed by
August 2015 after
which the site
description report
can be finalised and
submitted
Facilitate the Building of mobile Partially Mobile plant Talks with DST for
construction and waste to energy achieved construction has collaboration have
operation of the plant delayed due to a late been initiated
mobile waste to start and therefore
energy plant ordering and receipt
of parts.
Support Waste to energy Partially Proposal sent to a
municipalities hub concept achieved number of donors
through document but no support
establishing a produced has been received,
waste to energy However, progress
hub has been made
on the web based
guideline for MSW
for municipalities
Facilitate the Complete and Not achieved Draft roadmap
development of produce road map document with
the SA Solar Energy the DoE and DST
Technology Road waiting for an
Map (SETRM) interdepartmental
consultation
Facilitate the Update and Achieved
development and maintain the
uptake of EE in EE housing
the housing and database on the
building sector SANEDI website
in SA through with current
collaborative information
efforts and
demonstration
Coordinate the Set up two MET Achieved
set- up of solar stations and
measuring stations initiate solar atlas
with DST

SANEDI Annual Report 2014/15 59

Report on performance against objectives

Objective Indicator Target Performance Reasons for variance Interventions put
result in place to address
non-achievement
Clean Energy Solutions

Representation of Maintain and Achieved
SA in international manage existing
fora, whereby IEA and REEEP
technical implementation
knowledge is agreements
gained and skills including
are shared and Horizon 2020
transferred and other EU-SA
initiatives with
DST and execute
key objectives
outlined in
the respective
agreements/
contracts
Smartgrids

Stakeholder
engagement
(SASGI)
activities
Steering Industry Four meetings Achieved
Committee participation
meetings and contribution
towards
establishing Smart
Grids in SA
• Minutes
• Workshops
• Seminars
Policy Work Metering code Metering code Partially This target has
Group dealing established guidelines for SA achieved direct relationship
with industry with NRS0409. Had
inputs towards several meetings
developing a with NERSA and
national policy ESKOM to discuss
the way forward to
establish a smart
metering code for SA.
Had a comprehensive
literature review
and came to the
conclusion that
New Zealand and
Australia have a
smart metering code
relevant to SA. NERSA
has the responsibility
to adapt both
standards to relevant
SA standards.

60 SANEDI Annual Report 2014/15

Delays can be attributed to the formal project approval being received from the DoE in Sept 2014. Technology Smart meter Develop an Not achieved Met with the NRS049 and standards functionality industry approved team – they have workgroup guideline report guideline a document that that deals with covers the electricity industry inputs smart metering towards the functionality. Collaboration agreement with University of Pretoria to produce first draft. standards AMI security AMI security Partially The ToR has been guideline guideline report achieved developed for the University of Pretoria to carry out the evaluation using the NIST (USA) guideline as reference. It is development their mandate to of national produce the report smartgrid and not SANEDI’s. Industry is established at the University of at the University advised that it is not to deal with Pretoria of Pretoria necessary at present industry to establish a smart SG skills meter test and development evaluation centre.Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Smart Grids Investigate the role Investigate the Partially The ToR has been of the DSO role of the DSO achieved developed. Delays report can be attributed to the formal project approval being received from the DoE in Sept 2014. SANEDI Annual Report 2014/15 61 . Applied SGMM assessment Five SGMM Achieved Research of EU donor reports Workgroup is funded projects established to Documenting of Four case studies Achieved get industry industry existing document inputs and case studies share project knowledge with the industry Marketing and Establish the SASGI minutes Achieved awareness SASGI website ISGAN information workgroup is for information presentations established to clearing for the deal with the industry development Attend conferences Utility week and Achieved of the and share AMEU standardised knowledge message for the industry Training and Establish a smart Establish a smart Achieved The value proposition development meter test and meter test and was demonstrated workgroups evaluation centre evaluation centre to industry.

Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Smart Grids ISGAN Participate in Attend two Exco Achieved SANEDI hosted the ISGAN Exco meetings 9th ISGAN EXCO and meetings public workshop at Participate in the Radisson Hotel Annexure 3 in Sandton. Delays can • Assess process to do best be attributed to • Design practice AMI the formal project • Procure • FBE approval being • Development • TOU. Annexure 6 the municipalities meetings and international communities. systems. Outstanding electricity revenue practice AMI. IBT. process necessary achieved completed its EEDSM) to implement AMI infrastructure. achieved have completed the study to improve systems and project approval municipal process to do best phase. system in DoE chosen public buildings Installation of control sensors in DoE chosen buildings 62 SANEDI Annual Report 2014/15 . IBT. There activities was representation Participate in from the DoE. process infrastructure. • Training • Monitoring and verification • Handover Public buildings Demonstrate that Installation of Not achieved This is a DoE Energy (EEDSM) energy efficiency a smart meter Efficiency Directorate and demand in DoE chosen (Mr Mabusela) management can buildings responsibility be optimized by Installation incorporating of a building smart grid management technology. EEDSM phases. are six other collection TOU. Delays can • Assess in commercial be attributed to • Design buildings the formal project • Procure approval being • Development received from the • Installation DoE in Sept 2014. • Training • Monitoring in commercial and buildings verification • Handover Revenue To demonstrate Create Partially All five municipalities enhancement systems. project approval in a utility systems and phase. Monitor and evaluate outputs AMI integration To demonstrate Create the Partially City Power has (FBE. IBT received from the • Installation • EEDSM DoE in Sept 2014. FBE. EU donor To demonstrate Create the Not achieved The DoE has yet to funded that IPPs can be infrastructure for define this project as programme : net metered and billing and net it requires input from IPP net net billed metering with its IPP office metering study a chosen utility.

systems and element in it has distribution • Assess process to do been removed. • Handover Working for Energy Renewable Melani village 55 biogas Not achieved Implementation Mass Energy biogas project digesters agreement finalised implementation to Provision Phase 2 implementated between the ensue in the next (University of Fort and handed over University of Fort quarter. achieved Municipality is (ADAM) to improve systems and making good utility asset process to do best progress whilst management practice asset Mzundusi is going • Assess management to be dropped • Design from the project • Procure due to internal • Development challenges. grid) • Design best practice • Procure ANM in a DSO • Development • Installation • Training • Monitoring and verification • Handover Asset To demonstrate Create Partially Nelson Mandela Management systems. The IPP onto the systems in a DSO. contemplated since all received RFP’s were extremely high priced. Gauteng DID Five biogas Not achieved Negotiation with Alternative delivery greening of schools digesters preferred service method has been project completed provider in process. Delays • Installation can be attributed to • Training the formal project • Monitoring approval being and received from the verification DoE in Sept 2014. process infrastructure. Site selection is in process. Hare) Hare with the service provider. Negotiation process is unfolding. contemplated since all received RFP’s were extremely high priced. SANEDI Annual Report 2014/15 63 . generation. NDA greening of Five biogas Not achieved Negotiation with Alternative delivery facilities project digesters preferred service method has been completed provider in process.Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Smart Grids Active network To demonstrate Create the Partially The target addresses management Active network necessary achieved imbedded (IPP integrationmanagement infrastructure. Negotiation process is unfolding. Stakeholder engagement process commenced.

establish a clean energy centre under the RECORD and safekeeping of balance of material for Walter Sisulu University and Cape Peninsula University of Technology. efficiency under the department of science within the school Greening of Complete Not achieved Delays were Tshireleco high implementation encountered school of a biogas soliciting RFQ’s digester project and hand over 64 SANEDI Annual Report 2014/15 . hand over is expected at the end of the financial year. M&V. Continuous engagement with SoE oversight branch and the Office of the Minister Lucingweni Complete Not achieved Contract has been community ECDC implementation of concluded with conversion project community ECDC Nelson Mandela conversion project Metropolitan and hand over University to remove obsolete equipment in the facility and clear the site for conversion. Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Working for Energy Mpfuneko biomass Complete Partially Construction is at project implementation achieved the level of 49 biogas of 20 biogas digesters. Balance digesters project of six digesters will and hand over be completed in the next two quarters and commission. Illembe rural biogas Project hand Not achieved Process awaiting project over to response from the Ndwedwe district Ministry in respect municipality of the launch of the project. School and clinic Implementation Partially Two solar water WFE is currently renewable energy of a achieved heaters have looking at alternative demonstration demonstration been installed and costs effective centre project centre for commissioned and processes for renewable the energy efficiency digesters energy and lighting has been energy partially done.

Database fully Achieved data respository accurate. Water quality assessment. low pressure biogas digester installation envisaged by the end of quarter 2 in the 2015/16 financial year Working for Implementation Not achieved Awaiting dates from Outreach of the outreach Ministry regarding Programme programme for the launch of the Working the program as for Energy requested by the Programme Chairperson NDA greening of Scoping and Not achieved Project completion schools project planning envisaged by the end completed of of Quarter 2 of the SWH Projects 2015/16 financial year. Gauteng DID Scoping and Not Achieved Baseline studies greening of schools planning completed. SWH Projects Installation envisaged by the end of Quarter 2of the 2015/16 financial year Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Data and Knowledge Management Integrated EE Functional. water purification system. developed and integrated and populated user. RFQ are project completed of being evaluated.Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Working for Energy Tygerkloof high Scoping and Not achieved Alternative turnkey school planning contract has been completed concluded with the school to source specified technologies from the OEM.friendly database SANEDI Annual Report 2014/15 65 .

that the funding PDI ratio: 35%.5m. Number of externally development Number of funded projects: 86. PDI ratio: 50%. projects: 37. development. Report on performance against objectives Programme 3: Energy Efficiency Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Support the Successfully Second annual Not achieved The procurement dti and SARS support tax review/ report restrictions did with the energy processes as completed for 12I not allow for the efficiency measured by publishing of the component of annual review report the Income Tax and to customer Launch and Achieved Seven applications Amendment satisfaction implement processed and 57 Act (Sections online system new applications 12l and 12L) to accurately received relating to process 12L tax rebates applications for energy efficiency Fully process 5 Partially 12i delays improvements 12I and 10 12L achieved experienced due applications to pressures on improving 12L Regulations with four 12l applications evaluated and seven 12L applications processed EEDSM Hub Continue the Number of journal Achieved Number of journal (Research Energy Efficiency publications: 15. initiatives that will modules/short External funding: be tracked against courses offered: R0. registered Number of modules/ and market students: 100. Number of strengthen energy conference conference papers: 3. externally funded 19%. Number of Female student ratio: existing set of KPIs. and enterprise graduates: 23. External funding: Black and 26% Asian R2. agreement between SANEDI. publications: Centre) Hub initiative to Number of 10.5m. Female student It should be noted ratio: 19%. short courses transformation Number of offered: 7. a comprehensive 45. DST and UP was only finalised fairly late in the 2014/15 financial year which created a vacuum in the continued performance of the EEDSM Hub 66 SANEDI Annual Report 2014/15 . related research. papers: 24. Number of registered human capacity Number of students: 54.

Data on the industrial buildings still necessary. Best available Achieved Unstructured data technologies with regards to and non – appliances is in the best available process of analysis. analysed and adopted. technologies With regards to buildings.Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Industry Support industry Complete Achieved It is important to support stakeholders bigEE project note the launch of towards achieving successfully the South Africa page improved energy and continual up – efficiency in dating of information collaboration as new data is with international collected. Since there was no initial target work is upgraded on a continual basis. data has been collected. a contract with the University of Pretoria has been entered into objectives outlined. The appliance sub- project will sign off in the close of May 2015 With regards to the buildings. SANEDI Annual Report 2014/15 67 . data has been collected in the form of documents containing the technical aspect of the technology appliance in question. 10 extra buildings were gathered. Best available Achieved The appliances technologies and aspect of the project non-best available has been completed technologies actor and uploaded on the constellation website. With regards to best practices. Browsers partners are continually encouraged to leave comments for the improvement of the website. 20 best practice examples are to be submitted. 20 residential best practice and 10 commercial best practices gathered and submitted.

as almost completely per contracted committed to RE/ outputs EE projects with the three participating banks National M&V Partially Document completed position paper achieved but not yet uploaded developed on the international platform 68 SANEDI Annual Report 2014/15 . Climatic zone map Achieved The climatic zone map was developed and is constantly being updated by the CSIR Provide TAF Achieved The entire facility is function. EE policies Achieved The EE policies covers both appliances and buildings. 20 best practice examples are to be submitted. There are no considerable differences. 20 residential best practice and 10 commercial best practices gathered and submitted. 10 extra buildings were gathered. Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement Actor Achieved With regards to best constellation practices. Data on the industrial buildings still necessary.

including the DoE. the basic activities building blocks are in place and the activity is now regarded as urgent by all the key role-players. involving independent M&V (electricity and interaction with the the shareholder and function other energy shareholder and multiple external where relevant) other stakeholders. existing energy achieved M&V process are in independent M&V (electricity and place with SANAS for function other energy tax related incentives where relevant) efficiency activities National M&V Achieved Awaiting DoE’s input/ position paper decision on taking developed this proposal forward SANEDI Annual Report 2014/15 69 .Report on performance against objectives Objective Indicator Target Performance Reasons for variance Interventions put result in place to address non-achievement National M&V Establish a national Consolidate all Partially Longer-term activity This is an ongoing Centre consolidated existing energy achieved requiring detailed activity. National Join and Join and Not achieved Due to budgetary Champion for participate in participate in constraints. stakeholders. SANEDI EE IEA-DSM task IEA-DSM Task exco decided to not 24 relating to 24 relating to formally participate the study and the study and in this IEA task benchmarking benchmarking of consumer of consumer behaviour impacts behaviour on the efficient use impacts on the of energy amongst efficient use of all participating energy amongst countries all participating countries National M & V Establish a national Consolidate all Partially All systems and the Centre consolidated. efficiency However.

both internally and externally. produce a current beneficial relationships that will contribute to its and up-to-date credibility in the public eye. and smarter energy in South Africa. In 2014/15. SANEDI’s communications team has been A quarterly hard at work advancing SANEDI through upholding an newsletter was excellent standard of promoting the institution to its introduced. stakeholders. The operative One of these conferences was Sustainability Week and function of communications contributes effectively Africa Energy Indaba. the team has report of SANEDI’s taken significant steps in circulating accurate and activities and keep consistent information to the public and achieving its stakeholders informed about maximum exposure of its programmes and as an what is happening organisation. 70 SANEDI Annual Report 2014/15 . Report on performance against objectives Communications Communications is a fundamental element One of the vehicles that has been very successful in contributing towards the direct success of SANEDI in marketing SANEDI activities is participation in various the field of energy and its role in contributing to cleaner conferences by means of presentations and exhibitions. to SANEDI’s business activities. a platform to earn it much deserved attention in the energy space and showcase some of the excellent work it does in this country. This has been achieved by solidifying its structured to relationships and continuously forging more mutually. Many of the initiatives set SANEDI on in the organisation.

The Soweto. Last year SANEDI partnered with Soweto TV three organisations . water harvesting tanks.Report on performance against objectives Mandela Day 2014 centre. The This was the second time SANEDI had visited the success of Mandela Day 2015 was a team effort by all centre. After realising that the centre is in desperate need for improvement. SANEDI Annual Report 2014/15 71 . and the staff from the Ministry. team was joined by the Deputy Minister of Energy.Department of Energy. SANEDI and St Gobain to donate some basic necessities to the and Soweto TV. which was to provide and Soweto TV to bring a better life to the babies and the day care centre with a new temporary structure. Ms Thembisile Majola. the partners agreed on a SANEDI joined hands with the Department of Energy second phase of the project. fencing and mini kitchen. toddlers of the Kidos Educare Centre in Protea South.

and development by development. It is envisaged that a human resources • Leave policy and procedure. programmes. strategic goals. and objectives. SANEDI is still dependent on CEF’s human resources policies. management. The HR department. as it is known in private companies is concerned with the management of people within SANEDI has a performance management system an organisation within the parameters of policies. HR. that provides standards by which the performance procedures and systems. manager will be appointed • Study assistance for employees policy. attractive remuneration. develop and retain requisite recognises the value of a performance based skills within SANEDI through effective recruitment institutional culture that promotes employee and selection processes. to allow for management of performance and the undertake a number of activities which include rewarding of deserving employees. procedures. training and development and performance appraisal. or people programme. an effective payroll mission. and a healthy and safe work environment is designed to maximise employee performance of as well as skills development through an internship an employer’s strategic objectives. agreement. employee recruitment. in of individual employees is monitored and measured partnership with line departments in an organisation. transparent performance management aligning individual performance goals with the entitiy’s processes. systems and The performance management policy of SANEDI processes to attract. and • HIV/AIDS and other life threatening diseases. 72 SANEDI Annual Report 2014/15 . SANEDI: SANEDI’s HR function is contracted to the CEF Group • Performance management policy. PART C: Human resource management Human resources management (HRM) in organisations system. of Companies and is managed through a service level • Internship policy. engagement. Labour relations also plays a The following policies have been developed for critical role in the management of staff. facilitation of training and productivity.

academic qualifications. The purpose of the policy them stronger and more confident in their abilities. skills which will help them perform better at their Employees are encouraged to take responsibility for jobs. By for part time study in order to obtain appropriate effectively being engaged in the internship programme. to benefit as well.Human resource management The internship programme is aimed at giving students The study assistance policy for employees is designed the opportunity to apply their knowledge in real world to encourage personal and professional development environments. At the same time. Their employers are likely general objectives of the company. The field of study embarked students will increase their skills and make themselves on must be related to the employee’s position or the valuable in the job market. they will develop of staff thereby benefitting the organisation. They are provided with experience that will make their own development. is to provide assistance to all permanent employees The experience also helps develop their work ethic. Personnel costs by programme Personnel Personnel expenditure (TCTC) expenditure Total expenditure as a % of total No of Average personnel Programme for the entity expenditure employees cost per employee Corporate governance and administration R45 456 606 R15 484 707 34% 22 R703 850 Energy Research and Development R58 222 924 R20 062 110 34% 33 R607 943 Energy Efficiency R9 088 457 R2 599 695 29% 2 R1 299 848 Personnel cost by salary band % personnel Personnel expenditure to total Average personnel Level expenditure personnel cost No of employees cost per employee Top management /senior management (P1-4) R4 039 441 11% 2 R2 058 466 Middle management (P5-7) R24 009 278 64% 18 R1 348 848 Junior staff (P8-12) R9 700 300 26% 37 R263 521 Performance rewards % of performance rewards Level Performance rewards Personnel expenditure to total personnel cost Top management / Senior management (P1-4) R717 042 R4 039 441 17% Middle management (P5-7) R4 921 096 R24 009 278 20% Junior staff (P8-12) R1 507 860 R9 700 300 15% SANEDI Annual Report 2014/15 73 .

misconduct and disciplinary action Nature of disciplinary action Number Verbal warning 0 Written warning 0 Final written warning 0 Dismissal 0 Staff demographics SANEDI has a staff complement of 52. The profile is as follows: Category WM IM CM BM WF IF CF BF CEO 0 0 1 0 0 0 0 0 CFO 0 0 0 0 0 0 0 1 Senior managers 4 1 0 1 0 0 0 1 Financial manager 0 0 0 0 0 0 1 0 Manager: CS/Office of the CEO 0 0 0 0 0 1 0 0 IT manager 0 1 0 0 0 0 0 0 System administrator 0 0 0 0 0 0 0 1 Accountants 0 0 0 2 0 0 0 1 Centre managers 0 0 0 0 2 0 0 0 Project managers 0 1 1 1 0 0 0 0 Geologist 0 0 0 0 0 0 0 1 Public awareness officer 0 0 0 1 0 0 0 2 Project officers 0 1 0 3 0 0 0 0 Project coordinators 0 0 0 0 1 0 0 2 Procurement officer 0 0 0 0 0 0 0 1 Admin officer 0 0 0 0 0 1 0 2 Research assistants 0 0 0 0 1 0 0 0 Personal assistant 0 0 0 0 0 0 1 1 74 SANEDI Annual Report 2014/15 . Human resource management Reasons for staff leaving Reason Number % of total no of staff leaving Death 0 0% Resignation 2 67% Dismissal 0 0% Retirement 0 0% Ill Health 0 0% Expiry of contract 0 0% Other 1 33% TOTAL 3 100% Labour relations.

Training costs of personnel Training expenditure as a percentage Number of Average Programme/activity/ Personnel Training of personnel employees training cost objective expenditure expenditure cost trained per employee Corporate governance and administration R15 087 215 R291 334 2% 11 R26 484 Energy research and development R20 062 109 R293 192 1% 15 R19 546 Energy efficiency R2 599 695 R78 068 3% 2 R39 034 SANEDI Annual Report 2014/15 75 .Human resource management Category WM IM CM BM WF IF CF BF Consultants 4 0 0 0 0 0 0 0 Receptionist 0 0 0 0 0 0 0 1 Driver 0 0 0 1 0 0 0 0 Interns 0 0 0 3 0 0 0 2 Refreshment officers 0 0 0 0 0 0 0 2 Total 8 4 2 12 4 2 2 18 There is 79% black representation and 55% women representation.

Human resource management B Beck Dr S Hietkamp A Otto S Jumba J Schaffler S Nyathi C Snyman K Nassiep CEO N Algio Dr AD Surridge W Ingcobo L Smith W Jali Dr T Mali K Mpheqeke E Nyandoro D Batte Dr M Bipath T Mokoena N Faleni R Raselavhe L Radebe P Modiko S Tshivhase F Manganyi The following staff were not at the photoshoot: −− R Abrahamse −− J Nankoo −− E Nkile −− R Hamid −− S Sekoa 76 SANEDI Annual Report 2014/15 .

Human resource management

D Coetzer S Msweli C Borchard
D Mahlangu
T Yusuf B Kamaki

K Modingoana Dr K Surridge-Talbot N Garane T Snyer
E Dees T Soci S Nxumalo M Monewe D Phakula

L Manamela T Benuka
D Lundall N Cassim B Bredenkamp
D Mahuma
D Govender B Xakaza

SANEDI Annual Report 2014/15 77

Report of the auditor-general to Parliament on the
South African National Energy Development Institute

PART D:
Financial Information

78 SANEDI Annual Report 2014/15

Report of the auditor-general to Parliament on the
South African National Energy Development Institute

Report on the financial statements

Introduction
1. I have audited the financial statements of the South African National Energy Development Institute (SANEDI)
set out on pages 97 to 134, which comprise the statement of financial position as at 31 March 2015, the
statement of financial performance , statement of changes in net assets and cash flow statement and the
statement of comparative and actual information for the year then ended, as well as the notes, comprising
a summary of significant accounting policies and other explanatory information.

Accounting Authority’s responsibility for the financial statements
2. The Accounting Authority is responsible for the preparation and fair presentation of these financial
statements in accordance with South African Standards of Generally Recognised Accounting Practice (SA
Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act
No. 1 of 1999) (PFMA), and for such internal control as the Accounting Authority determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.

Auditor-general’s responsibility
3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my
audit in accordance with International Standards on Auditing. Those standards require that I comply with
ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my
audit opinion.

Opinion
6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the
South African National Energy Development Institute as at 31 March 2015 and its financial performance
and cash flows for the year then ended, in accordance with SA Standards of GRAP and the requirements
of the PFMA.

Emphasis of matter
7. I draw attention to the matter below. My opinion is not modified in respect of this matter.

SANEDI Annual Report 2014/15 79

In accordance with the Public Audit Act of South Africa. 80 SANEDI Annual Report 2014/15 . Report on other legal and regulatory requirements 9. verifiable. as required by the National Treasury’s Framework for managing programme performance information (FMPPI). time bound and relevant. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned programmes. Predetermined objectives 10. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. the corresponding figures for 31 March 2014 have been restated as a result of a correction of error discovered during 2014 in the financial statements of the South African National Energy Development Institute for the year ended. I do not express an opinion or conclusion on these matters. 14. 2004 (Act No. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. The material findings in respect of the selected programmes are as follows: Programme 2: Applied Energy Research Usefulness of reported performance information Measurability of indicators and/or targets Performance targets not specific The National Treasury Framework for managing programme performance information (FMPPI) requires that performance targets be specific in clearly identifying the nature and required level of performance. A total of 28% of the targets were not specific in clearly identifying the nature and the required level of performance. 12. As disclosed in note 19 to the annual financial statements. I have a responsibility to report findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report. accurate and complete. I assessed the reliability of the reported performance information to determine whether it was valid. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information for the following selected programmes presented in the annual performance report of the public entity for the year ended 31 March 2015: • Programme 2: Applied Energy Research on page 57 to 65 • Programme 3: Energy Efficiency on page 66 to 69 11. 13. Report of the auditor-general to Parliament on the South African National Energy Development Institute Restatement of corresponding figures 8. measurable. non-compliance with legislation and internal control. 31 March 2014. I evaluated the reported performance information against the overall criteria of usefulness and reliability. specific. 25 of 2004) (PAA) and the general notice issued in terms thereof. I further performed tests to determine whether indicators and targets were well defined. Accordingly.

Performance indicators not well-defined The National Treasury Framework for managing programme performance information (FMPPI) requires that indicators/measures should have clear unambiguous data definitions so that data is collected consistently and is easy to understand and use.Report of the auditor-general to Parliament on the South African National Energy Development Institute Performance targets not measurable The National Treasury Framework for managing programme performance information (FMPPI) requires that performance targets be measurable. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. indicators and targets. SANEDI Annual Report 2014/15 81 . A total of 100% of the indicators were not well defined in that clear. collate. The required performance could not be measured for a total of 21% of the targets. Reliability of reported performance information The National Treasury Framework for managing programme performance information (FMPPI) requires that institutions should have appropriate systems to collect. Indicators not verifiable The National Treasury Framework for managing programme performance information (FMPPI) requires that it must be possible to validate the processes and systems that produce the indicator. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. unambiguous data definitions were not available to allow for data to be collected consistently. A total of 100% of the indicators were not verifiable in that valid processes and systems that produce the information on actual performance did not exist. Programme 3: Energy Efficiency Measurability of indicators and targets Performance target not specific The National Treasury Framework for managing programme performance information (FMPPI) requires that performance targets be specific in clearly identifying the nature and required level of performance. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. This was due to the lack of standard operating procedures for the accurate recording of actual achievements. The information presented with respect to Programme 2: Applied Energy Research was not reliable when compared to the source information and/or evidence provided. verify and store performance information to ensure valid. A total of 69% of the targets were not specific in clearly identifying the nature and the required level of performance. accurate and complete reporting of actual achievements against planned objectives.

This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. Consequently. Additional matter 15. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. The institution’s records did not permit the application of alternative audit procedures. I draw attention to the following matter: Achievement of planned targets 16. collate. Report of the auditor-general to Parliament on the South African National Energy Development Institute Performance targets not measurable The National Treasury Framework for managing programme performance information (FMPPI) requires that performance targets be measurable. was presented in such a manner that the nature and level of actual performance was not clearly identified. Reliability of reported performance information The National Treasury Framework for managing programme performance information (FMPPI) requires that institutions should have appropriate systems to collect. This information should be considered in the context of the material findings on the usefulness and reliability of the reported performance information for the selected programmes reported in paragraph 14 of this report. Performance indicators not verifiable The National Treasury Framework for managing programme performance information (FMPPI) requires that it must be possible to validate the processes and systems that produce the indicator. This was due to the fact that management was aware of the requirements of the FMPPI but did not receive the necessary training to enable application of the principles. indicators and targets. unambiguous data definitions were not available to allow for data to be collected consistently. the actual performance could not be measured. The required performance could not be measured for a total of 85% of the targets. A total of 100% of the indicators were not verifiable in that valid processes and systems that produce the information on actual performance did not exist. contrary to the requirements of the FMPPI. Refer to the annual performance report on page(s) 56 to 69 for information on the achievement of the planned targets for the year. 82 SANEDI Annual Report 2014/15 . A total of 100% of the indicators were not well defined in that clear. This was due to the fact that the annual performance report. Performance indicators not well-defined The National Treasury Framework for managing programme performance information (FMPPI) requires that indicators/measures should have clear unambiguous data definitions so that data is collected consistently and is easy to understand and use. I was unable to obtain the information and explanations I considered necessary to satisfy myself as to the reliability of information presented with respect to Programme 3: Energy efficiency. verify and store performance information to ensure valid. accurate and complete reporting of actual achievements against planned objectives.

The Accounting Authority did not take effective steps to prevent irregular expenditure. as set out in the general notice issued in terms of the PAA. were subsequently corrected resulting in the financial statements receiving an unqualified audit opinion. Material misstatements identified by the AGSA relating to valuation of conditional grants. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on the annual report on performance against predetermined objectives and the findings on non-compliance with legislation included in this report. notes on prior period errors and changes in accounting policies. The financial statements contained misstatements that were corrected. as required by section 51(1)(b)(ii) of the Public Finance Management Act. Expenditure management 19. My findings on material non-compliance with specific matters in key legislation. I considered internal control relevant to my audit of the financial statements. This was mainly due to staff members not fully understanding the requirements and the application of the financial reporting framework. Financial and performance management 22. Management did not exercise adequate oversight responsibility regarding financial and performance reporting and compliance as well as related internal controls. plant and equipment. I performed procedures to obtain evidence that the public entity had complied with applicable legislation regarding financial matters. financial management and other related matters. valuation of property.Report of the auditor-general to Parliament on the South African National Energy Development Institute Compliance with legislation 17. Pretoria 31 July 2015 SANEDI Annual Report 2014/15 83 . annual report on performance against predetermined objectives and compliance with legislation. are as follows: Annual financial statements 18. accuracy of revenue from exchange transactions. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 55(1)(b) of the PFMA. Internal control 20. 23. Leadership 21. Non-compliances with laws and regulations could have been avoided had the Accounting Authority implemented proper controls over monitoring of compliance with laws and regulations.

annual financial statements for the year ended 31 March 2015 General information Country of incorporation and domicile South Africa Nature of business and principal activities Energy research and development Registered office Block C. Upper Grayston Office Park 150 Linden Street Strathavon Sandton 2199 Postal address PO Box 9935 Sandton 2146 Bankers ABSA Auditors Auditor-general of South Africa Secretary Vacant 84 SANEDI Annual Report 2014/15 . Upper Grayston Office Park 150 Linden Street Strathavon Sandton 2199 Business address Block E.

annual financial statements for the year ended 31 March 2015 Index Accounting Authority’s responsibilities and approval 86 Board audit and risk committee report 87 Accounting Authority’s report 90 Materiality and significance framework 96 Annual financial statements: Statement of financial position 97 Statement of financial performance 98 Statement of changes in net assets 99 Cash flow statement 100 Accounting policies 101 Notes to the annual financial statements 119 SANEDI Annual Report 2014/15 85 .

assessing. systems and ethical behaviour are applied and managed within predetermined policies and procedures. to reduce and/ or avoid risk to the entity. these internal financial controls can only provide reasonable. It is the responsibility of the board to ensure that the annual financial statements fairly represent the state of affairs of the entity. The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP). 1 of 1999). the SANEDI Board of Directors (the board) are required to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. based on the information and explanations given by management. annual financial statements for the year ended 31 March 2015 Accounting Authority’s responsibilities and approval Accounting Authority’s responsibilities and approval In terms of the Public Finance Management Act. were approved by the Accounting Authority on 31 July 2015 and were signed on its behalf by: Ms Rosette Nothemba Mlonzi Chairperson SANEDI Board of Directors 86 SANEDI Annual Report 2014/15 . These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards. 1999 (Act No. is above reproach. The focus of risk management in the entity is on identifying. in ensuring the entity’s business is conducted in a manner that. The annual financial statements are based on appropriate accounting policies. the Accounting Authority has set standards for internal controls. the internal controls in place provide reasonable assurance that the financial records can be relied on for the preparation of the annual financial statements. and not absolute assurance against material misstatement or deficit. in all reasonable circumstances. guidelines and directives issued by the Accounting Standards Board. the entity endeavours to minimise it by ensuring that appropriate infrastructure. effective accounting procedures and adequate segregation of duties. The board acknowledges that it is ultimately responsible for overall internal financial controls established by the entity and places considerable importance on maintaining a strong control environment. including any interpretations. as at the end of the financial year. The board is of the opinion that. aimed at reducing the risk of error or deficit in a cost effective manner. Although extreme diligence is applied. While operating risk cannot be fully eliminated. managing and monitoring all known forms of risk across the entity. consistently applied and supported by reasonable and prudent judgments and estimates. The external auditors were engaged to express an independent opinion on the annual financial statements and have been given unrestricted access to all financial records and related data. including the results of its operations and cash flows for the reporting period. The audited annual financial statements set out on pages 97 to 134 which have been prepared on a going concern basis. To enable the board to meet these responsibilities. The standards include the proper delegation of responsibilities within a clearly defined framework. The Accounting Authority is primarily responsible for the financial affairs of the entity. controls.

The internal audit function is responsible for reviewing and providing assurance on the adequacy and effectiveness of the internal control environment across operations. primarily through its chairperson. The committee comprises three independent non-executive members. two of whom are experts in the field of finance with the other members being representatives of the shareholder. Charter The audit and risk committee (the committee) has adopted a formal terms of reference as its audit committee charter. The charter is reviewed and approved on an annual basis. The chief audit executive has direct access to the committees. The audit committee is also responsible for the assessment of the performance of the internal audit function. The committee is required to meet on a minimum of four occasions per annum. The committee has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein. The chief audit executive is responsible for reporting the findings of the internal audit work against the agreed audit plan to the committee on a quarterly basis. four meetings were held and attendance was as follows: 24 April 26 May 27 May 28 July 22 October 2014 2014 2014 2014 2014 Ms P Motsielwa (Chairperson) Y Y Y Y Y Mr V Magan Y Y Y Y N Dr C Sita N Y Y Y Y Ms M Modise N Y N Y Y Dr R Maserumule (alternate member) Y N N N Y Dr D Hildebrandt Y N Y N Y Y = Attended meeting N = Apology received Internal audit The committee considered and approved the internal audit charter and approved the annual work plan for the internal audit function. Membership The committee members were appointed by the Board of Directors. Board audit committee and board risk committee Name Appointed Re-appointed Resigned Ms P Motsielwa (Chairperson) 23 October 2013 Mr V Magan 1 January 2008 1 January 2011 Dr C Sita 23 October 2013 Ms M Modise 23 October 2013 Dr R Maserumule (alternate member) 23 October 2013 Dr D Hildebrandt 23 October 2013 During the financial year. This was SANEDI Annual Report 2014/15 87 . The internal audit function is required to undergo a quality review by an independent reviewer every four years.annual financial statements for the year ended 31 March 2015 Board audit and risk committee report Board audit and risk committee report We are pleased to present our report for the financial year ended 31 March 2015. as per the charter.

budget. challenges with the operational effectiveness of the committees for the year under review. This was mainly caused by inability of the committee meetings to quorate as some departmental representatives do not have alternates for the committee. standing and authority within the entity to enable it to discharge its functions. We also take note of the improvement in the control environment as noted from the reduction in the number of issues raised by the internal and external auditors. This is achieved by means of the risk management process. There were. The matter has been escalated to the office of the Minister of Energy and is receiving urgent attention. annual financial statements for the year ended 31 March 2015 Board audit and risk committee report undertaken in April 2013 and the review reported positive results and rated the internal audit function as “general conformance”. through a service level agreement. as well as the identification of corrective actions and suggested enhancements to the controls and processes. 88 SANEDI Annual Report 2014/15 . as several instances of non‐compliance with internal controls were reported by both internal audit and AGSA. We are satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the entity in its audits. Internal and external audit provides the audit committee with reasonable assurance that the majority of internal controls are appropriate and effective. internal audit and the Auditor‐General of South Africa (AGSA) provide the audit committee and management with assurance that the internal controls are adequate and effective. From the various reports of the internal and external auditors. reports functionally to the chairperson of the audit committee and administratively to CEF SOC Limited. In line with PFMA requirements. Internal control effectiveness The system of internal controls is designed to provide cost‐effective assurance that assets are safeguarded and that liabilities are effectively managed. Corrective measures have been undertaken to rectify these deficiencies. To this extent the entity has endeavoured to ensure that oversight sub-committees aimed at assisting the board to advance its strategic direction are established and operational with all respective charters reviewed on an annual basis. we noted deficiencies with various internal controls which were brought to the attention of management. however. We believe that internal audit contributes to the improvement of internal controls within the entity. as well as the identification of corrective actions and suggested enhancements to the controls and processes. Corporate governance We acknowledge that the entity continues to strive towards applying sound principles of good corporate governance. in accordance with the IIA Standards. The internal audit function is independent and had the necessary resources. The system of internal control was not entirely effective during the year under review. Overall we are satisfied with advancements made by the entity towards applying best practice on corporate governance in the interest of the entity and its stakeholders. This is achieved by means of evaluating the effectiveness of the management of identified risks. The chief audit executive.

and • Reviewed the annual financial statements for any significant adjustments resulting from the audit. We have also reviewed SANEDI’s implementation plan for the audit issues raised in the AGSA management report and continuous oversight will be exercised to ensure that all matters are adequately addressed. Conclusion The committee expresses its sincere appreciation to the board. Ms P Motsielwa (Chairperson) 31 July 2015 SANEDI Annual Report 2014/15 89 . management. 2004 (Act No. internal audit used this data to prepare the three-year rolling strategic plan and an annual operating audit plan. evaluation of the reports and participation in risk assessment workshop. which includes a fraud prevention plan. • Reviewed the AGSA management report and management responses thereto. • Reviewed information on pre-determined objectives to be included in the annual report. • Reviewed the entity’s compliance with legal and regulatory provisions. chief executive officer. We are satisfied that significant risks have been managed to an acceptable level. Annual financial statements We have: • Reviewed and discussed the unaudited annual financial statements to be included in the annual report. internal audit and the AGSA for their ongoing support. • Reviewed accounting policies and practices. The auditors continue to have unrestricted access to the committee and we are satisfied that they have had unrestricted access to systems and records to enable them to arrive at their opinion. updates and reports. The entity implemented a risk management strategy. skill and competence of the auditor. The committee also congratulates SANEDI for achieving another unqualified audit report. with the AGSA and the accounting officer. 25 of 2004). Auditor-general’s report The audit committee has met the auditor‐general of South Africa and discussed its report to ensure that there are no unresolved issues.annual financial statements for the year ended 31 March 2015 Board audit and risk committee report Risk management The Board assigned the oversight responsibility of the risk management function to the committee. Appointment of auditors The AGSA continues to serve as the independent external auditors of the public entity as mandated by the Public Audit Act. We are also satisfied as to the independence. A formal risk assessment was undertaken for the year ended 31 March 2015 with quarterly reviews. We have reviewed the audit strategy and audit fees and we are satisfied that the audit strategy adopted is adequate for an organisation of this nature and size. Consequently. The risk committee monitored the significant risks faced by the entity through risk reporting.

and is listed as a national public entity in terms of schedule 3 of the Public Finance Management Act. as amended. 34 of 2008). The South African National Energy Development Institute (SANEDI) is incorporated in terms of section 7 of the National Energy Act 2008 (Act No. 1999 (Act No 1 of 1999) (PFMA). The Board of Directors acts as the Accounting Authority in terms of the PFMA. annual financial statements for the year ended 31 March 2015 Accounting Authority’s report Accounting Authority’s report The directors present the Accounting Authority report that forms part of the audited annual financial statements for the year ended 31 March 2015. 1. Name Appointed Resigned/term ended Ms N Mlonzi 1 September 2011 Mr J Marriott 1 September 2011 Mr M Vilana 1 September 2011 Ms D Ramalope 17 October 2011 Mr M Gordon (alternate director) 17 October 2011 Dr D Hildebrandt 1 September 2011 Dr R Maserumule (alternate director) 26 June 2012 Ms P Motsielwa 23 October 2013 Ms M Modise 1 September 2011 Mr C Manyungwane (alternate director) 3 September 2013 Dr V Munsami 1 February 2013 Mr G Fourie 1 January 2013 Attendance at meetings Name 11 June 2014 29 July 2014 8 October 2014 Ms M Mlonzi Y Y Y Mr J Marriott Y Y N Mr M Vilana N N N Ms D Ramalope Y Y N Mr M Gordon (alternate director) N N N Dr D Hildebrandt Y Y N Dr R Maserumule (alternate director) N N N Ms M Modise N Y Y Dr C Sita N N Y Mr C Manyungwane (alternate director) N N N Ms P Motsielwa Y Y Y Mr G Fourie N Y Y Y = Attended meeting N = Apology received 90 SANEDI Annual Report 2014/15 .

• Increase the gross domestic product per unit of energy consumed. • Direct.annual financial statements for the year ended 31 March 2015 Accounting Authority’s report 2. and • Energy efficiency. 34 of 2008). SANEDI Annual Report 2014/15 91 . • Optimise the utilisation of finite energy resources. other than nuclear energy. Nature of business Main business and operations The main business and operations for the South African National Energy Development Institute (SANEDI) are defined in Chapter 4 of the Energy Act. Board audit committee and board risk committee Name Appointed Re-appointed Resigned Mr V Magan 1 January 2008 1 January 2011 Ms P Motsielwa 23 October 2013 Dr C Sita 23 October 2013 Dr R Maserumule (alternate director) 23 October 2013 Dr D Hildebrandt 23 October 2013 Attendance at meetings Name 25 April 26 May 27 May 28 July 22 October 2014 2015 2015 2014 2014 Mr V Magan Y Y Y Y N Ms P Motsielwa Y Y Y Y Y Dr C Sita Y N Y Y Y Ms M Modise N Y N Y Y Dr R Maserumule (alternate member) Y N N N Y Dr D Hildebrandt Y N Y N Y Y = Attended meeting N = Apology received 3. • Increase energy efficiency throughout the economy. • Establishment and expansion of industries in the field of energy. In addition to the above. 2008 (Act No. In terms of the Act. and • Promote energy research and technology innovation. the main business and operations of SANEDI are: • Energy research and development. The principal activities of the South African National Energy Development Institute are outlined below: • Undertake energy efficiency measures as directed by the Minister. monitor. SANEDI is expected to provide the following: • Training and development in the field of energy research and technology development. conduct and implement energy research and technology development in all fields of energy.

There were no unspent administrative allocation funds at the end of the financial year. 4. as directed by the Minister. Going concern SANEDI’s assets exceed its liabilities by R15 million. annual financial statements for the year ended 31 March 2015 Accounting Authority’s report • Commercialisation of energy technologies resulting from energy research and development programmes. with a positive cash balance being maintained in respect of third party funding earmarked for research projects. by promoting the training of research workers by granting bursaries or grants in aid of research. after consultation with the Minister of Science and Technology. may assign to it. • Undertake the investigations or research that the Minister. • Undertake any other energy technology development related activity. dated 1 April 2011 states that in terms of section 21 of the National Energy Act. 34175. We continue to allocate a large percentage of the overall budget towards funding research programmes with a total of 64% allocated for projects and 36% for administrative activities as we strive towards the achievement of set targets. and • Advise the Minister and the Minister of Science and Technology on research in the field of energy technology.035 million from the National Treasury in terms of section 53(3) of the PFMA. • Promote relevant energy research through cooperation with any entity. institution or person equipped with the relevant skills and expertise within and outside the Republic. All material subsequent events have also been adequately disclosed in the financial statements note 20. 2008 (Act No. • Establish facilities for the collection and dissemination of information in connection with research. SANEDI has applied for approval of the current surplus funds of R0. • Issue licenses to other persons for the use of its patents and intellectual property. The entity’s assets continue to exceed liabilities. Review of operations Government Gazette No. • Register patents and intellectual property in its name resulting from its activities. 5. • Publish information concerning its objectives and core functions. 34 of 2008): 92 SANEDI Annual Report 2014/15 . All other programme funding is being spent as agreed with the relevant third parties. with the concurrence of the Minister of Science and Technology. 6. Review of financial position The entity’s business and operations and the results thereof are clearly reflected in the accompanying annual financial statements. The overall allocation for the financial year under review was R168 million. • Make grants to educational and scientific institutions in aid of research. The directors believe that the entity will operate for the next foreseeable 12 months given the revised allocation received from MTEC for the next financial year. development and innovation.

The South African shale gas delegation (SANEDI. DST.” Below are summaries of the highlights of the year: Centre for Carbon Capture and Storage The World Bank has advertised for expressions of interest for project technical advisory services for the pilot CO2 storage project (PCSP) . The remaining objectives to be achieved are related to energy efficient buildings. actor constellation in both appliances and buildings have been completed and will in future only be updated with time. and staff of SANERI and NEEA are legislated to be vested in SANEDI. liabilities. The appliances data has been collected.annual financial statements for the year ended 31 March 2015 Accounting Authority’s report “I (The President of the Republic of South Africa). DSW. All additional aspects such as climatic zone map. best available energy efficient appliances and the best technologies for energy efficient buildings. Furthermore the design. Mechanisms to ensure that CEF continues to provide support services and systems for SANEDI are in place. to school pupils submitting assignments. SANEDI Annual Report 2014/15 93 . Chapter 4 of the National Energy Act. Energy efficiency bigEE (Bridging information gap on energy efficiency in buildings and appliances) The international bigEE website launched the South Africa page in late January 2015 and the page has since been operational and upgraded on continual basis. Funding which is currently allocated to SANERI through the science vote should be budgeted for within the DoE budget and allocated to SANEDI through transfers and subsidies. The page displays data knowledge on energy efficiency policies. 2015. It provides easy access to information that is up to date and relevant for both local and international investors of energy efficiency. The establishment of SANEDI therefore comprises the incorporation of two functioning bodies into one. 34 of 2008) provides for the establishment of the South African National Energy Development Institute (SANEDI) as a successor to the previously created South African National Energy Research Institute (Pty) Ltd (SANERI) and the National Energy Efficiency Agency (NEEA) (a division of CEF SOC (Ltd). PetroSA.submissions closed 20 April 2015. DoE. The relevant sections of the National Energy Act (sections 7 to 15) are operationalised. 70% of the funds have been utilised and about 80% of the work completed. professors. feel and look of the website is attractive and user friendly.from company CEOs. As such the website can be used by any interested party to gather information . students writing their theses. The pilot monitoring project at Bongwana natural CO2 releases planning commenced with international participation. 2008 (No. All assets. All employees (including board members) of SANERI and NEEA are transferred to SANEDI and all assets and liabilities are transferred to SANEDI. Since the launch of the bigEE project to date. analysed and uploaded and will be closing in the coming months. The first shale gas task (task 7 COs emission reductions due to fuel switching from coal to gas) was completed and the draft report is being addressed by the shale gas steering committee. hereby fix 01 April 2011 as the date on which Chapter 4 of the said Act shall come into operation. PASA) to the USA took place in March.

annual financial statements for the year ended 31 March 2015 Accounting Authority’s report Appliances The appliances part of the project has been completed and the subproject sign off will be end of May 2015. Wind Atlas of South Africa (WASA) A WASA presentation was made to the Danish Minister for Climate. • “Template 7” for SANS 10400XA.net/ (select South Africa). who indicated that his office could assist with this endeavour. The following documents outline the policy position of South Africa regarding the appliances and the topics that have been covered: • “Template 8” (policy package in South Africa).bigEE. The Danish Minister encouraged the application of WASA to enhance the wind data and analysis in the revised and future revisions of the independent resource plan (IRP). The masts. washing machine. This resulted in the masts’ site selection only being completed at the end of November 2014. that are dependent on the site selection. While an environmental impact assessment (EIA) is no longer required for wind met masts. and it was only in the third quarter that solutions started to emerge. Buildings On the building aspect of the project. were published in January 2015. The information is available on www. tumble dryers. In addition to the appliances. Contracting of service providers is taking place with the masts and equipment installation envisaged to be completed by June or July 2015 and with wind measurements. The data that can be expected on the web has been collected in the form of documents relating to refrigerators and freezers. • “Template 7” for SWH/HP programme. 94 SANEDI Annual Report 2014/15 . seemingly insurmountable challenges were encountered. data capturing and display to start July or August 2015. The project has leverages on the EEDSM partnership between SANEDI and the University of Pretoria. Therefore. TVs and other electrical appliances. installation and equipment tenders. the Danish ambassador and delegation on 2 Sept 2014 at the University of Cape Town (UCT). any other EIA listed activities that are triggered can result in a full EIA having to be done which could take up to six months and more to complete. and • “Template 7” 12L tax incentive. The documents are specifically outline the technical aspect of the captured appliance technology. The WASA 2 wind measurements work package (WP22) CSIR team improvised and a rapid environmental screening study was undertaken that confirmed that no other environmental issues were triggered at the identified sites. five policy documents have been developed as well. • “Template 7” for residential mass rollout programme/CFL programme. The EEDSM head has been contracted to assist in collecting data on best available technologies in buildings. The issue of awareness raising and training of the WASA phase 1 results was also raised with the Danish ambassador. special care was taken in the selection of the wind met masts sites so that they will not trigger a full EIA and can still meet the input requirements for the WASA 2 modelling to be representative of the WASA 2 domain. Energy and Buildings.

Approval The audited annual financial statements set out on pages 97 to 134 which have been prepared on the going concern basis. not otherwise dealt with in the annual financial statements which significantly affect the financial position of the entity or the results of the operations. Subsequent events The directors are not aware of any other matters or circumstances arising since the end of the financial year.SANEDI Board SANEDI Annual Report 2014/15 95 .annual financial statements for the year ended 31 March 2015 Accounting Authority’s report 7. 8. were approved by the Accounting Authority on 31 July 2015 and were signed on its behalf by: Ms Rosette Nothemba Mlonzi Chairperson .

annual financial statements for the year ended 31 March 2015 Materiality and significance framework Materiality and significance framework For purposes of materiality (as per PFMA sections 50(1) and 55 (2)) and significance (as per PFMA sections 54(2)) framework the following acceptable levels were agreed with the Executive Authority in consultation with the Auditor.General of South Africa: • Section 50(1): Material facts to be disclosed to the Minister of Energy are considered to be facts that may influence the decisions or actions of the Stakeholders of the Public Entity. 1 of 1999 (as amended) by Public Entities” as published by National Treasury during 2006 subject to adjustments for any Section 54(4) exemptions. • Section 54(2): The criteria to determine the level of significance was based on the guiding principles as set out in the “Practice Note on applications under Section 54 of the PFMA No. • Section 55(2): Disclosure of material losses in the annual financial statements will be for all losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the year. The significant Rand level was determined as being 1% of revenue as follows: APPROVAL LEVELS IN TERMS OF SECTION 54 Public Entity’s board approval levels < 1 134 500 Obtain DoE approval and inform National Treasury > 1 134 500 96 SANEDI Annual Report 2014/15 .

plant and equipment 2 2 781 3 926 Intangible assets 3 2 326 4 366 Current assets 371 802 154 155 Receivables from exchange transactions 4 6 743 2 893 VAT receivable 207 - Cash and cash equivalents 5 364 852 151 262 Total assets 376 909 162 447 Liabilities Current liabilities (361 369) (146 942) Payables from exchange transactions 8 (14 901) (10 058) Unspent conditional grants and receipts 6 (338 957) (129 618) Provisions 7 (7 511) (7 266) Total liabilities (361 369) (146 942) Net assets Accumulated surplus (15 540) (15 505) SANEDI Annual Report 2014/15 97 .annual financial statements for the year ended 31 March 2015 Statement of financial position Statement of financial position at 31 March 2015 Restated 2015 2014 Notes R’000 R’000 Assets Non-current assets 5 107 8 292 Property.

annual financial statements for the year ended 31 March 2015 Statement of financial performance Statement of financial performance Restated 2015 2014 Notes R’000 R’000 Revenue Revenue from non-exchange transactions 9 106 965 84 091 Revenue from exchange transactions 9 6 421 9 520 Total revenue 113 386 93 611 Expenditure Employee related costs 11 (39 955) (34 032) Project costs (51 770) (16 573) Depreciation and amortisation 2.3 (4 846) (3 040) Repairs and maintenance (342) (163) Bad debts (538) - Operating expenses 10 (15 868) (30 363) (Loss)/Gain on foreign exchange (39) (53) Impairments 2 7 (819) Total expenditure (113 351) (85 043) Surplus for the year 35 8 568 98 SANEDI Annual Report 2014/15 .

annual financial statements for the year ended 31 March 2015 Statement of changes in net assets Statement of change in net assets Accumulated Total net assets surplus R’000 Notes R’000 Opening balance as at 31 March 2014 8 402 8 402 Prior period errors 19 (1 465) (1 465) Surplus for the year 8 568 8 568 Restated opening balance as at 31 March 2014 15 505 15 505 Surplus for the year 35 35 Balance at 31 March 2015 15 540 15 540 SANEDI Annual Report 2014/15 99 .

plant and equipment 14 58 Purchase of other intangible assets (1 375) (4 213) Net cash flows from investing activities (1 780) (7 288) Net increase in cash and cash equivalents 213 590 5 183 Cash and cash equivalents at the beginning of the year 5 151 262 146 079 Cash and cash equivalents at end of the year 5 364 852 151 262 100 SANEDI Annual Report 2014/15 . annual financial statements for the year ended 31 March 2015 Cash flow statement Cash flow statement Restated 2015 2014 Notes R’000 R’000 Cash flows from operating activities Receipts 321 660 161 998 Grants 301 478 145 481 Interest income 17 640 9 298 Membership fees and sponsorships 2 542 7 219 Payments (106 290) (149 527) Employee costs (29 954) (32 744) Suppliers (72 048) (44 983) Transfers of funds (4 288) (71 800) Net cash flows from operating activities 12 215 370 12 471 Cash flows from investing activities Purchase of property. plant and equipment (419) (3 133) Proceeds from sale of property.

They are presented in South African Rand. These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention unless specified otherwise. Translation of foreign currencies Foreign currency transactions A foreign currency transaction is recorded. Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow. and • Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.2. Presentation of annual financial statements 1. When a gain or loss on a non-monetary item is recognised in surplus or deficit. When a gain or loss on a non-monetary item is recognised directly in net assets. • Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. guidelines and directives issued by the Accounting Standards Board. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in surplus or deficit in the period in which they arise.annual financial statements for the year ended 31 March 2015 Accounting policies Accounting policies 1. by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. on initial recognition in Rands.1. At each reporting date: • Foreign currency monetary items are translated using the closing rate. any exchange component of that gain or loss is recognised directly in net assets. The financial statements have been prepared on a going concern basis and the accounting policies have been applied consistently throughout the period. any exchange component of that gain or loss is recognised in surplus or deficit. Basis of preparation The annual financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations. SANEDI Annual Report 2014/15 101 . 1.

Cost includes costs incurred initially to acquire or construct an item of property. or to replace a part of. plant and equipment are tangible non-current assets that are held for use in the supply of goods or services or for administrative purposes. Finance costs directly associated with the construction or acquisition of major assets are capitalised at interest rates relating to loans specifically raised for that purpose. annual financial statements for the year ended 31 March 2015 Accounting policies 1. Derecognition The carrying amount of an item of property. plant and equipment. 1.3. Where an item of property. the carrying amount of the replaced part is derecognised. plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. or • The cost or fair value of the item can be measured reliably. plant and equipment is acquired in exchange for a non-monetary asset or monetary assets. or for a nominal cost. Carrying amounts All property. plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. the asset acquired is initially measured at fair value (the cost). If a replacement cost is recognised in the carrying amount of an item of property. Property. its cost is its fair value as at date of acquisition. or service it. Where an item of property. plant and equipment is recognised as an asset when: • It is probable that future economic benefits or service potential associated with the item will flow to the entity. or a combination of monetary and non-monetary assets. or at the average borrowing rate where the general pool of borrowings is utilised. The cost of an item of property. and are expected to be used during more than one period. plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. plant and equipment Property. plant and equipment is acquired at no cost. its deemed cost is the carrying amount of the asset given up. Events after the reporting date that are indicative of conditions that arose after the reporting are dealt with by way of a note.4. If the acquired non-monetary asset’s fair value is not determinable. 102 SANEDI Annual Report 2014/15 . The cost of an item of property. plant and equipment and costs incurred subsequently to add to. Trade discounts and rebates are deducted in arriving at the cost. Events after the reporting date Recognised amounts in the annual financial statements are adjusted to reflect events arising after the reporting date that provide evidence of conditions that existed at the reporting date.

and the carrying amount of the item. or • Arises from contractual rights or other legal rights.annual financial statements for the year ended 31 March 2015 Accounting policies The gain or loss arising from the derecognition of an item of property. 1. these parts are depreciated over their estimated useful lives. the SANEDI Annual Report 2014/15 103 . Cost Intangible assets are initially recognised at cost if acquired separately or internally generated or at fair value if acquired as part of a business combination. fittings and communication equipment 2 – 15 years Office equipment 5 years Computer equipment 3 years Leasehold improvements Over the period of the lease Each part of an item of property. Initial recognition An intangible asset is recognised when: • It is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the entity and • The cost or fair value of the asset can be measured reliably. If assessed as having an indefinite useful life. licensed. Where significant parts of an item have different useful lives to the item itself. Depreciation Depreciation is charged so as to write off the depreciable amount of the assets. regardless whether those rights are transferable or separate from the entity or from other rights and obligations. plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The following methods and rates are used during the year to depreciate property. plant and equipment to estimated residual values: Item Average useful life Furniture. transferred. over their estimated useful lives to estimated residual values. Such difference is recognised in the surplus or deficit when the item is derecognised. useful lives and residual values are reviewed annually. assets or liability. using the straight line method to write off the cost of each asset that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. plant and equipment is determined as the difference between the net disposal proceeds. The methods of depreciation. if any.5 Intangible assets An asset is identified as an intangible asset when it: • Is capable of being separated or divided from an entity and sold. either individually or together with a related contract. other than land. An intangible asset is an identifiable non-monetary asset without physical substance. rented or exchanged.

or while it is part of a disposal group classified as held for sale. Non-current assets held for sale (or disposal group) are measured at the lower of their carrying amount and fair value less costs to sell. annual financial statements for the year ended 31 March 2015 Accounting policies intangible asset is not amortised but tested for impairment annually and impaired if necessary. if any. and it is probable that the asset will generate future economic benefits and the development cost can be reliably measured. or when no future economic benefits or service potential are expected from its use or disposal.6 Non-current assets held for sale and disposal groups Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. A non-current asset is not depreciated (or amortised) while it is classified as held for sale. it is amortised over its useful life using a straight line basis and tested for impairment if there is an indication that it may be impaired. Management must be committed to the sale. The gain or loss arising from the derecognition of an intangible asset is determined as the difference between the net disposal proceeds. which should be expected to qualify for recognition as a completed sale within one year from the date of classification. to their residual values as follows: Item Useful life Computer software 2 years 1. If assessed as having a finite useful life. Such a difference is recognised in surplus or deficit when the intangible asset is derecognised. 104 SANEDI Annual Report 2014/15 . Development costs Development costs are capitalised only if they result in an asset that can be identified. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Otherwise it is recognised in surplus or deficit. on a straight line basis. Derecognition Intangible assets are derecognised on disposal. and the carrying amount of the intangible asset. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale are recognised in surplus or deficit. Amortisation is recognised in profit and loss. Research Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

the entity estimates the recoverable service amount of the asset. to reflect the already consumed or expired service potential of the asset. The depreciated replacement cost is measured as the reproduction or replacement cost of the asset.7 Impairment of non-cash-generating assets Cash-generating assets are those assets held by the entity with the primary objective of generating a commercial return. that intangible asset is tested for impairment before the end of the current reporting period. This impairment test is performed at the same time every year. Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use. Value in use Value in use of an asset is the present value of the asset’s remaining service potential. When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount. it is impaired. When an asset is deployed in a manner consistent with that adopted by a profit- orientated entity. Irrespective of whether there is any indication of impairment. The replacement cost and reproduction cost of an asset is determined on an “optimised” basis. If an intangible asset was initially recognised during the current reporting period. This cost is depreciated to reflect the asset in its used condition. Identification The entity assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. less accumulated depreciation calculated on the basis of such cost. The present value of the remaining service potential of an asset is determined using the following approaches: Depreciated replacement cost approach The present value of the remaining service potential of a non-cash-generating asset is determined as the depreciated replacement cost of the asset. it generates a commercial return. If any such indication exists.annual financial statements for the year ended 31 March 2015 Accounting policies 1. the entity also tests a non-cash-generating intangible asset with an indefinite useful life or a non-cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable service amount. An asset may be replaced either through reproduction (replication) of the existing asset or through replacement of its gross service potential. Overdesigned assets contain features which are unnecessary for the goods or services the asset provides. The replacement cost of an asset is the cost to replace the asset’s gross service potential. whichever is lower. Non-cash-generating assets are assets other than cash-generating assets. The rationale is that the entity would not replace or reproduce the asset with a like asset if the asset to be replaced or reproduced is an overdesigned or overcapacity asset. Overcapacity assets are assets that SANEDI Annual Report 2014/15 105 .

The present value of the remaining service potential of the asset is determined by subtracting the estimated restoration cost of the asset from the current cost of replacing the remaining service potential of the asset before impairment. The increase is a reversal of an impairment loss. less its residual value (if any). whichever is lower. the carrying amount of the asset is reduced to its recoverable service amount. the depreciation (amortisation) charge for the non-cash- generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised for the asset in prior periods. less its residual value (if any). Reversal of an impairment loss The entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a non-cash-generating asset may no longer exist or may have decreased. The carrying amount of the asset is increased to its recoverable service amount. The latter cost is determined as the depreciated reproduction or replacement cost of the asset. A reversal of an impairment loss for a non-cash-generating asset is recognised immediately in surplus or deficit. on a systematic basis over its remaining useful life. the depreciation (amortisation) charge for the non- cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount. Restoration cost approach Restoration cost is the cost of restoring the service potential of an asset to its pre-impaired level. If any such indication exists. An impairment loss recognised in prior periods for a non-cash-generating asset is reversed if there has been a change in the estimates used to determine the asset’s recoverable service amount since the last impairment loss was recognised. This reduction is an impairment loss. After a reversal of an impairment loss is recognised. on a systematic basis over its remaining useful life. 106 SANEDI Annual Report 2014/15 . The determination of the replacement cost or reproduction cost of an asset on an optimised basis thus reflects the service potential required of the asset. An impairment loss is recognised immediately in surplus or deficit. After the recognition of an impairment loss. Recognition and measurement If the recoverable service amount of a non-cash-generating asset is less than its carrying amount. the entity estimates the recoverable service amount of that asset. annual financial statements for the year ended 31 March 2015 Accounting policies have a greater capacity than is necessary to meet the demand for goods or services the asset provides.

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.annual financial statements for the year ended 31 March 2015 Accounting policies Re-designation The redesignation of assets from a cash-generating asset to a non-cash-generating asset or from a non- cash-generating asset to a cash-generating asset only occurs when there is clear evidence that such a redesignation is appropriate. SANEDI Annual Report 2014/15 107 . or • Exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity. The aggregate benefit of incentives is recognised as a reduction of rental expense over the lease term on a straight line basis over the lease term.9 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity. 1.8 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A financial liability is any liability that is a contractual obligation to: • Deliver cash or another financial asset to another entity. excluding those instruments that: • The entity designates at fair value at initial recognition. and – Exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity. Any contingent rent is recognised separately as an expense when paid or payable and is not straight lined over the lease term. A financial asset is: • Cash. 1. or • A contractual right to: – Receive cash or another financial asset from another entity. • A residual interest of another entity. Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments. or • Are held for trading. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. Operating lease payments are recognised as an expense on a straight line basis over the lease term.

or • On initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. • Non-derivative financial assets or financial liabilities with fixed or determinable payments that are designated at fair value at initial recognition. and • Instruments held for trading. Financial assets The entity’s principal financial assets are accounts receivable as cash and cash equivalents. • Combined instruments that are designated at fair value. 108 SANEDI Annual Report 2014/15 . Initial measurement The entity measures a financial asset and financial liability at amortised cost initially at its fair value. A financial instrument is held for trading if: • It is acquired or incurred principally for the purpose of selling or repurchasing it in the near-term. annual financial statements for the year ended 31 March 2015 Accounting policies Financial instruments at fair value comprise financial assets or financial liabilities that are: • Derivatives. and • Financial instruments that do not meet the definition of financial instruments at amortised cost or financial instruments at cost. Financial assets and financial liabilities are recognised on the entity’s statement of financial position when the entity becomes a party to the contractual provisions of the instrument. The entity has the following types of financial assets (classes and category) as reflected on the face of the statement of financial position or in the notes thereto: Class Category Loans receivable Financial asset measured at amortised cost Trade and other receivables Financial asset measured at amortised cost Cash and cash equivalents Financial asset measured at amortised cost Investments Financial asset measured at amortised cost Financial liabilities The entity has the following types of financial liabilities (classes and category) as reflected on the face of the statement of financial position or in the notes thereto: Class Category Trade and other payables Financial liability measured at amortised cost Initial recognition The entity recognises a financial asset or a financial liability in its statement of financial position when the entity becomes a party to the contractual provisions of the instrument.

When a trade receivable is uncollectable. minus principal repayments. SANEDI Annual Report 2014/15 109 . Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement. The carrying amount of the asset is reduced through the use of an allowance account. and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectability. a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. are subject to an impairment review. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. it is written off against the allowance account for trade receivables. Trade and other payables All financial liabilities are measured at amortised cost. Gains and losses For financial assets and financial liabilities measured at amortised cost or cost. and are subsequently measured at amortised cost using the effective interest rate method. plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount. probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. and the amount of the loss is recognised in the income statement within operating expenses. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits. and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Trade and other receivables are classified as loans and receivables. These are initially and subsequently recorded at fair value. Trade and other receivables Trade receivables are measured at initial recognition at fair value. Significant financial difficulties of the debtor. or cost. comprising original debt less principal payments and amortisations. or through the amortisation process.annual financial statements for the year ended 31 March 2015 Accounting policies Subsequent measurement The entity measures all financial assets and financial liabilities after initial recognition using the following category: • Financial instruments at amortised cost. The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition. All financial assets measured at amortised cost.

the entity: – Derecognises the asset and – Recognises separately any rights and obligations created or retained in the transfer. In this abovementioned case. has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party. when the obligation specified in the contract is discharged.e. Financial liabilities The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or deficit in the period of the transfer. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid. Any liabilities that are waived. On derecognition of a financial asset in its entirety. i. including any non-cash assets transferred or liabilities assumed. expires or is waived. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions. Newly created rights and obligations are measured at their fair values at that date. • The entity transfers to another party substantially all of the risks and rewards of ownership of the financial asset. forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on revenue from non-exchange transactions (taxes and transfers). Valuation techniques include using recent arm’s length market transactions between knowledgeable. willing parties. the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit. The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. cancelled. The entity derecognises a financial asset only when: • The contractual rights to the cash flows from the financial asset expire. is recognised in surplus or deficit. and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. the entity uses that technique. annual financial statements for the year ended 31 March 2015 Accounting policies Derecognition The entity derecognises financial assets using trade date accounting. If the market for a financial instrument is not active. discounted cash flow analysis and option pricing models. reference to the current fair value of another instrument that is substantially the same. The chosen valuation technique makes maximum use of market inputs and relies as little as possible on entity- 110 SANEDI Annual Report 2014/15 . if available. are settled or waived. or • The entity despite having retained some significant risks and rewards of ownership of the financial asset. Fair value measurement considerations The best evidence of fair value is quoted prices in an active market. the entity establishes fair value by using a valuation technique.

10 Revenue 1. but disclosed in the notes. services. The reimbursement is treated as a separate asset. it is virtually certain that reimbursement will be received if the entity settles the obligation. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. 1. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party. or has liabilities extinguished.10. the present obligation (net of recoveries) under the contract is recognised and measured as a provision. Where the effect of time value of money is material. The amount recognised for the reimbursement does not exceed the amount of the provision. an entity calibrates the valuation technique and tests it for validity using prices from any observable current market transactions in the same instrument (i.If an entity has a contract that is onerous. Provisions Provisions are recognised when: • The entity has a present obligation as a result of a past event.1 Revenue from exchange transactions exchange Exchange transactions are transactions in which one entity receives assets or services. Contingent assets and contingent liabilities Contingent assets and contingent liabilities are not recognised. the carrying amount of a provision increases in each period to reflect the passage of time. and directly gives approximately equal value (primarily in the form of cash. without modification or repackaging) or based on any available observable market data.e. the reimbursement is recognised when. SANEDI Annual Report 2014/15 111 .annual financial statements for the year ended 31 March 2015 Accounting policies specific inputs. or use of assets) to another entity in exchange. and • A reliable estimate can be made of the obligation The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. Where discounting is used. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation. goods. Periodically. and only when. Provisions are not recognised for future operating deficits. This increase is recognised as an interest expense. • It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. A provision is used only for expenditures for which the provision was originally recognised. It incorporates all factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

When a specific act is much more significant than any other acts. Interest. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: • The amount of revenue can be measured reliably. royalties and dividends Revenue arising from the use by others of entity assets yielding interest. • It is probable that the economic benefits or service potential associated with the transaction will flow to the entity. revenue is recognised only to the extent of the expenses recognised that are recoverable. the recognition of revenue is postponed until the significant act is executed. • It is probable that the economic benefits or service potential associated with the transaction will flow to the entity. revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. and • The costs incurred for the transaction and the costs to complete the transaction can be measured reliably. Sale of goods Revenue from the sale of goods is recognised when all the following conditions have been satisfied: • The entity has transferred to the purchaser the significant risks and rewards of ownership of the goods. Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. royalties and dividends is recognised when: 112 SANEDI Annual Report 2014/15 . Stage of completion is determined by services performed to date as a percentage of total services to be performed. net of trade discounts and volume rebates. and • The costs incurred or to be incurred in respect of the transaction can be measured reliably Rendering of services When the outcome of a transaction involving the rendering of services can be estimated reliably. • The amount of revenue can be measured reliably. annual financial statements for the year ended 31 March 2015 Accounting policies Measurement revenue is measured at the fair value of the consideration received or receivable. When services are performed by an indeterminate number of acts over a specified time frame. revenue is recognised on a straight line basis over the specified time frame unless there is evidence that some other method better represents the stage of completion. • The stage of completion of the transaction at the reporting date can be measured reliably. • The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. When the outcome of the transaction involving the rendering of services cannot be estimated reliably.

it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction. if any. Recognition An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue. but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified. 1. or gives value to another entity without directly receiving approximately equal value in exchange. Stipulations on transferred assets are terms in laws or regulation. Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be returned to the transferor. as a result of a non-exchange transaction. SANEDI Annual Report 2014/15 113 . When a liability is subsequently reduced.10. except to the extent that a liability is also recognised in respect of the same inflow. it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition. In a non-exchange transaction. the entity recognises an asset. the amount of the reduction in the liability is recognised as revenue. Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used. and • The amount of the revenue can be measured reliably. using the effective interest rate method. When. Interest is recognised in surplus or deficit. recognised as revenue. because the taxable event occurs or a condition is satisfied. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle the obligation at the reporting date. an entity either receives value from another entity without directly giving approximately equal value in exchange. unless it is also required to recognise a liability. and the amount of the increase in net assets.annual financial statements for the year ended 31 March 2015 Accounting policies • It is probable that the economic benefits or service potential associated with the transaction will flow to the entity. As the entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset.2 Revenue from non-exchange transactions Non-exchange transactions are transactions that are not exchange transactions. Measurement Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity. or a binding arrangement imposed upon the use of a transferred asset by entities external to the reporting entity.

and where recovered. and • Expenditure not in accordance with the purpose of a vote or. The expenditure is classified in accordance with the nature of the expense. in the case of a main division. Irregular. All expenditure relating to irregular expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. Membership fees Revenue from membership fees are recognised as revenue from non-exchange revenue and are recognised and measured in accordance with GRAP 23. Unauthorised expenditure means: • Overspending of a vote or a main division within a vote.11. fruitless and wasteful expenditure and unauthorised expenditure Irregular expenditure as defined in section 1 of the PFMA is expenditure incurred in contravention of. it is subsequently accounted for as revenue in the statement of financial performance. it is subsequently accounted for as revenue in the statement of financial performance. and where recovered. are recognised as assets and revenue when it is probable that the future economic benefits or service potential will flow to the entity and the fair value of the assets can be measured reliably. or that is not in accordance with: • A requirement of the Public Finance Management Act. is subsequently accounted for as revenue in the statement of financial performance. To the extent that the conditions have not been met a liability is recognised. Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. Services in-kind are not recognised. The expenditure is classified in accordance with the nature of the expense. annual financial statements for the year ended 31 March 2015 Accounting policies Gifts and donations.86 of 1986). or • A requirement in any provincial legislation providing for procurement procedures in that provincial government. or any regulations made in terms of the Act. 1999 (Act No. and where recovered. or • A requirement of the State Tender Board Act. not in accordance with the purpose of the main division. All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. Conditional grants and receipts Revenue received from conditional grants. 29 of 1999) (PFMA). 1. 1986 (Act No. including goods in-kind. All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. donations and funding are recognised as revenue to the extent that the entity has complied with any of the conditions embodied in the agreement. including goods and services in-kind. The expenditure is classified in accordance with the nature of the expense. 114 SANEDI Annual Report 2014/15 .

The entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Use of available information and the application of judgment are inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. If there are indications that impairment may have occurred. SANEDI Annual Report 2014/15 115 . Other provisions For other provisions. • The extent of the expenditure involved. estimates are made of legal or constructive obligations resulting in the raising of provisions. estimates are prepared of expected future cash flows for each group of assets. Qualifying assets are assets that necessarily take a substantial period to get ready for their intended use or sale. irregular or fruitless and wasteful expenditures are disclosed as a note to the annual financial statements of the entity. together with its existing term facilities. management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Other borrowing costs are recognised as an expense in the period in which they are incurred. until the assets are substantially ready for their intended use or sale. These calculations require the use of estimates and assumptions. Borrowing costs Borrowing costs directly attributable to the acquisition. Impairment testing The recoverable (service) amounts of individual assets and cash-generating units have been determined based on the higher of value-in-use calculations and fair values less costs to sell. Key accounting judgments and key sources of estimation uncertainty In preparing the annual financial statements. and • The nature and seriousness of the transgressio All unauthorised. 1. Significant judgment includes: Going concern Management considers key financial metrics in its approved medium-term budgets. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets.12. and the expected date of probable outflow of economic benefits to assess whether the provision should be discounted. the Accounting Authority must take into account: • The circumstances of the transgression. 1. construction or production of qualifying assets are added to the cost of those assets. to conclude that the going concern assumption used in the compiling of its annual financial statements is relevant.annual financial statements for the year ended 31 March 2015 Accounting policies When the Accounting Authority determines the appropriateness of disciplinary steps against an official.13.

This estimate is based on the condition and use of the individual assets. cars and cellphones) for current employees. The carrying values of trade receivables and payables are assumed to approximate their fair values. Short-term employee benefits include items such as: • wages. the entity recognises that excess as an asset (prepaid expense) to the extent that the prepayment will lead to for example. are used to determine fair value for the remaining financial instruments. If the amount already paid exceeds the undiscounted amount of the benefits. The fair value of financial instruments that are not traded in an active market (for example. incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees render the related service and  non-monetary benefits (for example. a reduction in future payments or • a cash refund and • as an expense. • short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service. • bonus. after deducting any amount already paid. salaries and social security contributions. annual financial statements for the year ended 31 March 2015 Accounting policies Useful lives of property. Fair value estimation The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. plant and equipment and intangible assets. medical care. in order to determine the remaining period over which the asset can and will be used. plant and equipment and intangible assets The entity’s management determines the estimated useful lives and related depreciation charges for property. The quoted market price used for financial assets held by the entity is the current bid price. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. The entity uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. the entity recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service: • as a liability (accrued expense). When an employee has rendered service to the entity during a reporting period. Other techniques. and free or subsidised goods or services such as housing. unless another Standard requires or permits the inclusion of the benefits in the cost of an asset. such as estimated discounted cash flows.14 Employee benefits Short-term employee benefits Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service. 1. 116 SANEDI Annual Report 2014/15 . over-the counter derivatives) is determined by using valuation techniques.

that management in their dealings with the entity. directing and controlling the activities of the entity. as the recommended disclosure as determined by National Treasury. only entities within the national sphere of government are considered to be related parties.16 Budget information A reconciliation between the statement of financial performance and the budget has been included in the annual financial statements. after deducting any contribution already paid. in instances where they are required to perform such functions. A present obligation exists when the entity has no realistic alternative but to make the payments. 1.annual financial statements for the year ended 31 March 2015 Accounting policies The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or. an entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to. Post-employment benefits: Defined contribution plans When an employee has rendered service to the entity during a reporting period. Refer to note 23 - Reconciliation between budget and statement of financial performance. as the annual financial statements and the budget are not on the same basis of accounting.15 Related parties The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. in the case of non-accumulating absences. SANEDI Annual Report 2014/15 117 . Close members of the family of a person are considered to be those family members who may be expected to influence. The entity measures the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the reporting date. incentive and performance related payments when the entity has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. If the contribution already paid exceeds the contribution due for service before the reporting date. 1. a reduction in future payments or a cash refund. and as an expense. or be influenced by. Key management are those persons responsible for planning. unless another Standard requires or permits the inclusion of the contribution in the cost of an asset. As a consequence of the constitutional independence of the three spheres of government in South Africa. including those charged with the governance of the entity in accordance with legislation. Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed. the entity recognises the contribution payable to a defined contribution plan in exchange for that service: as a liability (accrued expense). The entity recognises the expected cost of bonus. when the absence occurs. for example.

A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error. or misuse of. the entity has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations: Standards and interpretations not yet effective or relevant The following approved Standards of GRAP that have been issued. reliable information that was available and could reasonably be expected to have been obtained and taken into account in preparing these financial statements. are likely to affect the annual financial statements when they are adopted as these Standards have been used to formulate and inform the current accounting policies and disclosures: 1. mistakes in applying accounting policies. The statement of changes in net assets will be amended in the prior year comparative financial statements as one line item. GRAP 20: Related party disclosures 2. Any prior period error affecting the third set of comparable financial statements shall be disclosed as a narrative note to the prior period error note.17 Prior period error Prior period errors are omissions from.18 New standards and interpretations Standards and interpretations effective and adopted in the current year In the current year. but are not yet effective. and 3. Such errors result from mathematical mistakes. 118 SANEDI Annual Report 2014/15 . and misstatements in. GRAP 32: Service concession arrangements: grantor. annual financial statements for the year ended 31 March 2015 Accounting policies 1. oversights and/or misinterpretations of facts. GRAP 108: Statutory receivables Adoption of the amendments to the Standards of GRAP issued in 2012 and various interpretations of the Standards of GRAP did not have a significant effect on the financial statements. the entity’s financial statements for one or more prior periods arising from a failure to use. 1.

amounting to R13 727 were received from the company insurance for a stolen laptop. Intangibles assets 31 March 2015 2015 2014 Accumulated Carrying Accumulated Carrying Cost depreciation values Cost depreciation values Computer software 7 840 (5 514) 2 326 6 465 (2 099) 4 366 SANEDI Annual Report 2014/15 119 . Property.annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements Notes to the annual financial statements 2. (749) (99) 42 Communication equipment 172 172 (68) (57) 219 Total 2 948 3 133 (839) (1 316) 3 926 Management has reviewed useful lives at 31 March 2015 and concluded that they fairly reflect the expected usage of assets. (267) 956 Office equipment 108 67 . plant and equipment 2015 2014 Accumulated Carrying Accumulated Carrying Cost depreciation values Cost depreciation values Furniture and fixtures 1 630 (674) 956 1 626 (407) 1 219 Office equipment 223 (79) 144 156 (48) 108 Computer equipment 3 601 (2 123) 1 478 3 413 (1 075) 2 338 Leasehold improvements 74 (50) 24 74 (32) 42 Communication equipment 288 (109) 179 273 (54) 219 Total 5 816 (3 035) 2 781 5 542 (1 616) 3 926 Reconciliation of property. (18) 24 Communication equipment 219 15 . . (27) 108 Computer equipment 456 2 776 (19) (875) 2 338 Leasehold improvements 890 . plant and equipment – 2014 Opening Disposals/ balance Additions impairments Depreciation Total Furniture and fixtures 1 297 183 (3) (258) 1 219 Office equipment 133 2 . plant and equipment – 2015 Opening Disposals/ balance Additions impairments Depreciation Total Furniture and fixtures 1 219 4 . (31) 144 Computer equipment 2 338 333 (133) (1 060) 1 478 Leasehold improvements 42 . Proceeds. (55) 179 Total 3 926 419 (133) (1 431) 2 781 Reconciliation of property. 3.

8 million) were past due but not impaired. conditions should not exist that indicate impairment.7 million (2014: R1. Intangibles assets (continued) Reconciliation of intangibles assets– 2015 Opening balance Additions Amortisation Total Computer software 4 366 1 375 (3 415) 2 326 Reconciliation of intangibles assets– 2014 Opening balance Additions Amortisation Total Computer software 1 877 4 213 (1 724) 4 366 4. 1 162 3 – 6 months past due 1 131 638 6 – 12 months past due 538 - 120 SANEDI Annual Report 2014/15 . Receivables from exchange transactions Financial assets at amortised cost Restated 2015 2014 R’000 R’000 Receivables from exchange transactions 7 883 7 021 Employee costs in advance – 15 Prepayments 32 98 Project prepayments 2 883 – PAYE control 34 – UIF control 3 – Provision for bad debts (5 180) (4 646) Recoverable fruitless and wasteful expenditure 12 – Interest receivable 1 076 405 6 743 2 893 Trade and other receivables are not pledged as security. The ageing of amounts past due but not impaired is as follows: 1 – 3 months past due . annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements 3. At 31 March 2015 R1. however. Trade and other receivables past due but not impaired Trade and other receivables which are less than 3 months past due are not considered to be impaired. The entity does not hold any collateral as security.

6. The entity does not have access to any additional undrawn facilities. SANEDI Annual Report 2014/15 121 .annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements Trade and other receivables impaired The amount of the provision was R5.7 million) 2015 2014 R’000 R’000 The ageing of these receivables is as follows: Over 6 months 5 180 4 646 Reconciliation of provision for impairment of trade and other receivables: Opening balance 4 646 6 821 Amounts written off as uncollectable – (2 175) Additional provision 534 – Provision for doubtful debts 5 180 4 646 The creation and release of provision for impaired receivables have been included in operating expenses in surplus. These amounts are invested in money market accounts and interest accrues to the invested money. (71 800) 338 957 129 618 *An amount of R106 million was repaid. 417 Additions during the year and interest 264 619 95 202 Income recognition during the year (55 280) (19 449) Transfers* .2 million as of 31 March 2015 (2014: Restated R4. Unspent conditional grants and third party funds Unspent conditional grants and receipts comprises: Unspent grants and third party funds 338 957 129 618 Movement during the year Balance at the beginning of the year 129 618 125 248 Prior period error . The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. on 30 April 2015. to the RDP Fund for the EU AID demo project and the Danish renewable energy programme. 5. Cash and cash equivalents Cash and cash equivalents consist of: Cash on hand 15 10 Bank balances 364 837 151 252 364 852 151 262 There are no restrictions placed on the realisation or usability of cash balances.

Unspent conditional grants and third party funds (continued) Restated 2015 2014 R’000 R’000 Unspent conditional grants and receipts comprises: Danish commercial building project 460 472 European Union project (COCATE) 457 524 FP7 135 67 SA Carbon Capture and Storage centre 190. annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements 6.984 4 110 SA road map 755 734 SDC EE monitoring and Implementation project 1 380 940 Working for energy programme 19. 122 SANEDI Annual Report 2014/15 .693 85 736 Centre for energy systems and research 4.755 25 137 EU AID demo project 94. (51) SASGI . Provisions Reconciliation of provisions – 2015 Opening balance Utilised Additions Closing R‘000 R‘000 R‘000 R‘000 Bonus provision 7 266 (7 266) 7 511 7 511 Reconciliation of provisions – 2014 Opening Utilised Additions Bonus balance R‘000 R‘000 provision R‘000 R‘000 Bonus provision 7 921 (7 921) 7 266 7 266 The bonus provision is calculated based on a percentage of the entity’s performance and the individual performance ratings of staff members.343 4 288 REEEP 431 797 Wind resource mapping 2 331 4 221 Shale gas 9 134 1 627 Danish renewable energy programme 13 545 - EEDSM 179 1 024 Energy efficiency . (8) Green transport 375 - 338 957 129 618 7.

annual financial statements
for the year ended 31 March 2015
Notes to the annual financial statements
8. Payables from exchange transactions
Restated
2015 2014
R’000 R’000
Trade payables 745 889
Accruals 11 630 6 695
PAYE control - 7
WCA 93 -
UIF control 6 11
SDL control - 21
Salary control 28 144
Garnishee control 29 -
Medical aid fund control 20 38
Leave provision 2 350 2 253
14 901 10 058

9. Revenue

9.1 Revenue non exchange is made up as follows:
MTEF allocation 51 685 61 374
Recognition of unspent conditional grants 55 280 22 717
106 965 84 091

9.2 Revenue from exchange transactions is made up as follows:
Interest received 832 225
Membership fees and sponsorships 5 512 7 260
Other income 77 2 035
6 421 9 520
113 386 93 611

Interest is earned on monies in invested in money market accounts with various banks through CEF (SOC) Limited
per the service level agreement.

9.2.1 Other Income
Income from tenders 19 67
Other debtors written-off - (66)
Income from current account - 9
Profit on sale of assets - 25
Refund - 2 000
PV of creditors 58
77 2 035

SANEDI Annual Report 2014/15 123

annual financial statements
for the year ended 31 March 2015
Notes to the annual financial statements
10. Operating expenses
Restated
2015 2014
R’000 R’000
Advertising 258 1 092
Bank charges 30 23
Audit fees 818 715
Consulting and legal fees 228 6 792
IT licence fees 363 -
Entertainment 186 114
Electricity 505 -
Insurance 283 205
Conferences and seminars 1 364 70
Lease rentals on operating lease 3 251 3 949
Marketing and promotional expenditure 1 512 5 420
Postage and courier 3 16
Printing and stationery 658 489
Subscriptions and membership fees 1 931 451
Telephone and fax 563 384
Travel – local 1 380 3 199
Travel – overseas 678 2 496
Administration expenses 1 857 4 948
15 868 30 363
11. Employee related costs
Basic 29 135 25 396
Bonus 7 796 5 090
Medical aid – entity contributions 450 438
UIF 77 68
WCA 51 45
SDL 358 320
Other payroll levies 6 5
Leave pay provision charge 164 1 145
Employee welfare and training 425 154
Recruitment and relocation costs 96 -
Provident and pension contributions 1 144 1 156
Travel, motor car, accommodation, subsistence and other allowances 253 215
39 955 34 032

In terms of SANEDI’s leave pay policy, employees are entitled to accumulated vested leave pay benefits not taken
within a leave cycle, provided that any leave pay benefits not taken within a period of one year after the end of
the leave cycle are forfeited.

124 SANEDI Annual Report 2014/15

annual financial statements
for the year ended 31 March 2015
Notes to the annual financial statements
12. Cash generated from operations
Restated
2015 2014
R’000 R’000
Surplus 35 8 568
adjustments for:
Depreciation and amortisation 4 846 3 040
Impairments (7) 819
Foreign exchange transactions - 53
Accrued expenses (82) (1,496)
Movement on bonus provision 245 655
Provision for bad debts reversal - (2 175)

Changes in working capital:
210 333 3 007
Trade and other receivables (3 849) (632)
Payables from exchange transactions 4 843 (731)
Unspent conditional grants and receipts 209 339 4 370
215 370 12 471

13. Commitments

Operating lease commitments: CEF (SOC) Limited
Minimum lease payments due –
Within one year 408 339

Block C, Upper Grayston Office Park, 152 Ann Crescent, Strathavon, Sandton. The entity has leased Portion 13,
remaining Extent of Erf 14, Portion 1 of Erf 14 Simba Township, together with the building erected thereon
from CEF (SOC) Limited. The agreement commenced on 1 April 2012 and the rent payable shall annually, on the
anniversary date, escalate by 10% or alternatively, shall escalate in accordance with the CPI, whichever is greater.
Either party shall be entitled to terminate this lease on six months’ written notice to the other party.

Operating lease commitments: City Square Trading 522 (Pty) Ltd
Minimum lease payments due –
Within one year 2 589 2 369
Second to fifth year inclusive 3 567 6 451
6 156 8 820

Block E, Upper Grayston Office Park, Erf 20 Simba Township, Sandton. SANEDI leased units 9 – 12 on the second
floor of Block E, Upper Grayston Office Park, located at Erf 20 Simba Township, Sandton, from City Square Trading
522 (Pty) Ltd. The lease commenced on 1 May 2012 and the rent payable shall annually, on the anniversary date,
escalate by 8.25%. The lease terminates on 30 April 2017. SANEDI has the option to extend the lease for another
5 years.

SANEDI also leased unit 1 on the ground floor of Block E, Upper Grayston Office Park, located at Erf 20 Simba
Township, Sandton, from City Square Trading 522 (Pty) Ltd. The lease commenced on 1 January 2013 and the rent
payable shall annually, on the anniversary date, escalate by 8.25%. The lease terminates on 31 December 2017.
SANEDI has the option to extend the lease for another five years.

SANEDI Annual Report 2014/15 125

sinking fund or redemption terms of loans payable. 126 SANEDI Annual Report 2014/15 . Contractual commitments Within one year 149 647 21 886 Second to fifth year inclusive 5 786 - 155 433 21 886 SANEDI has entered into various contracts with service providers for the achievement of its key deliverables for the Danish renewable energy programme. Capital commitments approved not contracted for Within one year 840 1 080 These are capex commitments budgeted for and approved by the board but not contracted for. interest. Working for Energy (WfE) programme. Contingencies Surplus funds SANEDI has a surplus for the year ended 31 March 2015 amounting to R0.035 million (Surplus 2014: R8. No terms were renegotiated before the financial statements were authorised for issue. annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements 13. 14. in terms of Section 53 of the Public Finance Management Act. Defaults and breaches There was no default during the period of principal. the Centre for Energy Systems Research. Commitments (continued) Restated 2015 2014 R’000 R’000 Printing equipment Operating lease commitments for printing equipment Minimum lease payments due – Within one year 59 72 Second to fifth year inclusive 5 ­ 0 181 109 253 SANEDI has entered into a 36 months’ lease for photocopiers. the Hub for energy efficiency and demand side management and various projects under the clean energy programme. A request has been submitted to National Treasury to retain the surplus.6 million). The lease has no escalation clause and is payable monthly in advance.

10 96 financial officer Dr AD Surridge 1 123 108 465 7 . 0 . .chief 84 2 . - Dr D Hilderbrant 6 24 Mr M Gordan* . . 51 183 1 939 Dr T Mali 1 141 66 423 51 (44) 181 1 818 Mr C Snyman 1 068 24 310 32 61 18 1 513 Mr D Mahuma 1 242 24 356 7 118 20 1 767 Mr B Bredenkamp 1 183 24 499 85 88 182 2 061 Total 11 078 510 3 767 274 666 744 17 039 31 March 2014 Basic Performance Subsistence Entity 2014 Salary Allowances Bonus and travel Leave contributions R’000 Mr KM Nassiep - chief executive officer 1 719 132 769 75 71 206 2 972 Ms L Manamela . 77 1 557 Mr B Bredenkamp 1 118 24 465 85 224 1 916 Total 9 431 485 3 272 263 166 1 304 14 921 Members’ emoluments Committee fees Restated 2015 2014 R’000 R’000 Mr J Marriott 7 32 Ms N Mlonzi 23 24 Ms M Modise* . 75 1 001 Mr D Mahuma 1 174 24 247 35 . 136 21 1 849 Dr M Bipath 1 122 84 499 . 86 1 681 Dr M Bipath 1 058 84 500 15 49 200 1 906 Dr T Mali 1 076 66 429 46 46 222 1 885 Mr C Snyman 905 21 . . Related parties Compensation to key management – 31 March 2015 Basic Performance Subsistence Entity 2015 Salary Allowances Bonus and travel Leave contributions R’000 Mr KM Nassiep - chief executive officer 1 825 132 717 97 182 32 2 985 Ms L Manamela - chief financial officer 1 064 24 . 204 1 907 Mr D Batte 1 174 24 397 .annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements 15. - Dr R Maserumule * (alternate director) . - Ms D Ramalope* . - Mr M Vilana* . - Prof E Meyer* . . - Ms P Motsielwa 25 8 SANEDI Annual Report 2014/15 127 . 29 15 1 132 Dr AD Surridge 1 191 108 537 2 45 92 1 975 Mr D Batte 1 242 24 426 .

credit. 128 SANEDI Annual Report 2014/15 . - Dr D Hildebrandt 15 4 55 43 * These members are not remunerated in their personal capacity. - Ms M Nyathi . The entity’s liquidity. - Dr V Munsami* . Financial instruments Introduction The entity has a risk management and central treasury function that manages the financial risks relating to the entity’s operations. - Dr C Sita* . 12 Dr C Sita* . annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements Committee fees (continued) Restated 2015 2014 R’000 R’000 Mr G Fourie* . 16. Approved policies exist for managing these risks. Risk profile The entity utilises the services of risk management and the treasury department in CEF (SOC) Limited to manage the financial risks relating to the entity’s operations. Grants Received Department of Energy 162 685 134 344 Department of Science and Technology 5 100 6 000 All transactions with related parties are arm’s length and will not be disclosed separately. SANEDI is ultimately controlled by the Department of Energy. - Dr R Maserumule . foreign exchange and interest rate risks are monitored continually. SANEDI has been established by the Department of Energy and in terms of national legislation. - Mr C Manyungwana* . - 61 88 * These members are not remunerated in their personal capacity Board audit committee Committee fees Ms P Motsielwa 25 - Mr V Magan 15 27 Ms M Thomani .

and remains.annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements Risk management objectives and policies The entity’s objective in using financial instruments is to reduce the uncertainty over future cash flows arising from movements in foreign exchange and interest rates. SANEDI Annual Report 2014/15 129 . approximates fair value due to the relatively short term maturity of this financial asset. The following methods and assumptions are used to determine the fair value of each class of financial instrument: Cash and cash equivalents The carrying amounts of cash and cash equivalents approximates fair value due to the relatively short term maturity of these financial assets. Credit limits with financial institutions are revised and approved by the board quarterly. Trade payables The carrying amounts of trade payables approximates fair value due to the relatively short-term maturity of these liabilities. Credit risk Financial assets. As at 31 March 2014 no financial asset was carried at an amount in excess of its fair value and fair values could be reliably measured for all financial assets that are available for sale or held for trading. trade receivables and trade payables. Losses are not expected as a result of non-performance by these counter parties. Trade receivables The carrying amounts of trade receivables net of provision for bad debt. Throughout the year under review it has been. pertain principally to trade receivables and investments in the South African money market. The entity manages counter party exposures arising from money market and derivative financial instruments by only dealing with well-established financial institutions of a high credit rating. the entity’s policy that no speculative trading in derivative instruments be undertaken. The carrying value of short-term borrowings approximates fair value due to the relatively short-term maturity of these liabilities. which potentially subject the entity to concentrations of credit risk. The exposure to credit risk with respect to trade receivables is not concentrated due to a large customer base. The fair values of other long term borrowings are not materially different from the carrying amounts. Trade receivables are presented net of the allowance for doubtful debts. Fair value The entity’s financial instruments consist mainly of cash and cash equivalents.

14 901 At 31 March 2014 Held to Less than 1 Between 1 and maturity year 5 years Over 5 years Investments Total Cash and cash equivalents 151 262 . . 14 901 130 SANEDI Annual Report 2014/15 . . . 364 852 Trade and other receivables 6 743 . . . . 207 Total financial assets 371 802 . . . . . . . . . . . . 364 852 Trade and other receivables 6 743 . 371 802 Liabilities Trade and other payables 14 901 . 10 058 Financial instruments by category: 31 March 2015 Fair value Fair value through Profit through Profit Loans and and loss – held and loss –des- receivables for trading ignated Non-interest Total Cash and cash equivalents 364 852 . annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements Maturity profile The maturity profiles of financial assets and liabilities at the statement of financial position date are as follows: At 31 March 2015 Less than 1 Between 1 and year 5 years Over 5 years Non-interest Total Cash and cash equivalents 364 852 . 154 155 Liabilities Trade and other payables 10 058 . 6 743 VAT receivable 207 . . 371 802 Liabilities Trade and other payables 14 901 . . . 151 262 Trade and other receivables 2 893 . . 207 Total financial assets 371 802 . . 2 893 Loans receivable Total financial assets 154 155 . 6 743 VAT receivable 207 . . . . . . .

154 155 Liabilities Trade and other payables 10 058 . . The amounts disclosed in the table are the contractual undiscounted cash flows. 10 058 Liquidity risk The entity manages liquidity risk through proper management of working capital. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. . 151 262 Trade and other receivables 2 893 . . . At 31 March 2015 Less than 1 Between 1 and year 5 years Over 5 years Non-interest Total Liabilities Trade and other payables 14 901 . 10 058 Commitments 21 886 . 31 944 17. 14 901 Commitments 149 647 5 786 . . . .annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements At 31 March 2014 Fair value Fair value through Profit through Profit Loans and and loss – held and loss –des- receivables for trading ignated Non-interest Total Cash and cash equivalents 151 262 . . . . . . 2 893 Loans receivable Total financial assets 154 155 . - Fruitless and wasteful expenditure awaiting condonation 36 2 SANEDI Annual Report 2014/15 131 . . . Adequate reserves and liquid resources are also maintained. . Fruitless and wasteful expenditure Restated 2015 2014 R’000 R’000 Reconciliation of fruitless and wasteful expenditure Opening balance 2 - Fruitless and wasteful expenditure – relating to current year 34 2 Less: Amounts condoned by the Board of Directors . The table below analyses SANEDI’s financial liabilities based on the remaining period at the statement of financial position to the contractual maturity date. capital expenditure and actual versus forecasted cash flows. . 155 433 Total financial liabilities 164 548 5 786 . 170 334 At 31 March 2014 Less than 1 Between 1 and Over 5 years Held to Total year 5 years maturity investments Liabilities Trade and other payables 10 058 . . . 21 886 Total financial liabilities 31 944 .

BEEE scores not considered • Goods and services were procured from suppliers without taking into account the BEEE score of the subcontractor resulting in irregular expenditure of R0. the Board of Directors approved the condonation of irregular expenditure. As at the 31 March 2015. Irregular expenditure Restated 2015 2014 R’000 R’000 Reconciliation of irregular expenditure Opening balance 19 102 12 644 Irregular expenditure – relating to current year 426 6 458 Less: Amounts condoned by Board ­(19 102) - Irregular expenditure awaiting condonation 426 19 102 Condonation of irregular expenditure At the board meetings held on 11 June 2014 and 29 June 2015. Deviation not approved by appropriate authority • Goods and services were procured from suppliers without deviation from open procurement process being approved by the Accounting Authority resulting in irregular expenditure of R0. (2014: R1 211 million). none of the irregular expenditure had been condoned by the National Treasury.098 million. No tax clearance certificates • Goods and services were procured from suppliers without obtaining confirmation that that their tax matters were in good order resulting in irregular expenditure of R0. All fruitless and wasteful expenditure was condoned by the Board after the financial year.151 million.726 million). The necessary steps have been taken to recover the money from the individual staff. 18. Contravention of legislation (Preferential Procurement Policy Framework Act).377 million). annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements Current year fruitless and wasteful expenditure is as a result of: • Interest caused by delays with interbank transfers. and • Two late payments to supplier.177 million. 132 SANEDI Annual Report 2014/15 . resulting in payments being allocated late. Amount will be recovered from the employee who caused the irregular expenditure. Prior year fruitless and wasteful expenditure was incurred as a result of late payments made to a supplier. Staff have signed an acknowledgement of debt. (2014: R1. (2014: R0.

Prior period errors Trade and other receivables • Prepayments relating to straight-lining of operating lease were corrected. The balances for clearing accounts were written off to the statement of financial performance. Trade and other payable/revenue from exchange transactions • Uncleared balances relating to travel and subsistence. Coal Roadmap and CESAR deferred income balance was corrected with monies incorrectly accounted for under SANEDI. REEEP. affecting the 2012/13 financial year impacts directly on the accumulated surplus. amounting to R1. Operating expenditure • Invoices relating to the prior year were corrected with monies incorrectly accounted for under the current financial year. SANEDI Annual Report 2014/15 133 . plant and equipment 5 Receivables from exchange (963) Trade and other payable (528) Deferred Income (417) Statement of financial performance Revenue from non-exchange transactions (849) Revenue from exchange transactions 936 Personnel costs (4) Depreciation 2 Operating expenses 130 Repairs and maintenance 1 Project costs 222 Prior period errors. The correction of the error(s) results in adjustments as follows: Statement of financial position Restated 2014 R’000 Property. resulting in duplicate entries in the clearing accounts.annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements 19. Deferred income/revenue from non-exchange • SACCCS. salary advances and PAYE were incorrectly accounted for.5 million.

3. The variance in projects expenses was as a result of delays in the approval of project plans and finalisation of project agreements with affected parties. These vacancies were not additionally budgeted for. Further details are provided in the performance report. 2.319 684 113 386 206 298 35% 35% Total income 319 684 . 21. an amount of R106 million was repaid to the RDP fund for the EU AID demo project and the Danish renewable energy programme. Moreover interest that was not budgeted for was earned on grants from money market investments. 43 439 39 955 3 484 92% 92% Depreciation and asset impairment . 16 696 16 780 (84) 101% 101% - Total expenditure 319 684 . 134 SANEDI Annual Report 2014/15 . 4. Additional Grants from the RDP funds were received for the EU smart metering projects. The increase in employee costs is due to new project related vacancies which arose as a result of new projects undertaken during the year. Events after balance sheet date Subsequent to the financial year.259 549 51 770 207 779 20% 20% Operating expenditure 4 16 696 . . on 30 April 2015. . Key vacancies such as the one for the company secretary and the HR manager were not filled during the year.319 684 113 386 206 298 35% 35% Employee costs 2 43 439 . Operating expenditure is in line with the budget and the variance was as a result of cost saving measures that were applied by the entity during the year.319 684 113 351 206 333 35% 35% Surplus for the year 35 Notes 1. annual financial statements for the year ended 31 March 2015 Notes to the annual financial statements 20. 4 846 (4 846) -100% -100% Project costs 3 259 549 . Statement of comparative and actual information Actual Actual outcome outcome as a as a percentage percentage Original Budget Final Final of original of final Notes budget adjustments budget outcome Variance budget budget Financial performance Grants and other receipts 1 319 684 .

SANEDI Annual Report 2014/15 135 .

Strathavon.za Website: www. Sandton Postal Address: PO Box 9935. A state-owned entity established under Section 7 of the National Energy Act 2008.sanedi. Sandton.org. Telephone: 011 038 4300 Physical Address: BLOCK E. 150 Linden Road.za RP244/2015 ISBN: 978-0-621-43838-3 ANNUAL REPORT 2014/15 PLEASE RECYCLE THIS REPORT . 2146 Email: exec@sanedi.org. Upper Grayston Office Park. 34 of 2008). (Act No.