thinking GREEN - SANEDI · 2017. 5. 25. · 2 SANEI Annal Reort 2013/14 PLEASE RECYCLE THIS REPORT This annual report was printed on Respecta 100 Satin, a coated paper made from 100%

thinkingGREEN...

reducing ourCARBON FOOTPRINT

ANNUAL REPORT 2013/14

SOLAR ENERGY

WIND ENERGY

BIOENERGY

MARINE ENERGY

2 SANEDI Annual Report 2013/14

PLEASE RECYCLE THIS REPORTThis annual report was printed on Respecta 100 Satin, a coated paper made from 100% post consumer waste, created to guarantee total respect of the environment and of economic and social responsibilities. By using this recycled paper, SANEDI has reduced its environmental impact. Smaller solid ink areas are used on the cover and inside text, to increase the recycle properties of this report and reduce the carbon footprint.

3SANEDI Annual Report 2013/14

SOLAR ENERGYSolar energy is radiant light and heat from the sun, harnessed using a range of ever-evolving technologies.

General information __________________________________________________________________ 4Abbreviations and acronyms ___________________________________________________________ 5Strategic overview ___________________________________________________________________ 7

Vision ___________________________________________________________________________ 7Mission _________________________________________________________________________ 7Values __________________________________________________________________________ 7

Strategic outcome orientated goals _____________________________________________________ 8Legislation _________________________________________________________________________ 10Foreword by the Chairperson _________________________________________________________ 11Board of Directors __________________________________________________________________ 12Chief Executive’s overview ____________________________________________________________ 14Applied Energy Research _____________________________________________________________ 19

Advanced fossil fuel use ___________________________________________________________ 19Shale gas study _______________________________________________________________ 20Carbon capture and storage _____________________________________________________ 20

Clean Energy Solutions ____________________________________________________________ 21Renewable Energy Centre of Research and Development (RECORD) ______________________ 21Wind Atlas for South Africa (WASA) _______________________________________________ 26Ocean Energy Systems (OES) _____________________________________________________ 28The IEA Bioenergy IA ExCo71, Cape Town, South Africa ________________________________ 29ExCo71 workshop _____________________________________________________________ 30ExCo71 study tour visit to University of Cape Town digester ____________________________ 30The Renewal Energy and Energy Efficiency Partnership (REEEP) _________________________ 30

Working for energy programme _______________________________________________________ 33Anaerobic bioenergy cluster ________________________________________________________ 33Greening of public facilities _________________________________________________________ 35Working for energy outreach programme _____________________________________________ 36

Energy Efficiency ____________________________________________________________________ 37Human resources ___________________________________________________________________ 39Communications ____________________________________________________________________ 45Annual Financial Statements __________________________________________________________ 49

Accounting Authority’s responsibilities and approval ____________________________________ 49Board audit and risk committee report _____________________________________________ 50-52Auditor-General’s report _________________________________________________________ 53-58Accounting Authority’s report _____________________________________________________ 59-65Materiality and significance framework _______________________________________________ 66Statement of financial position ______________________________________________________ 67Statement of financial performance __________________________________________________ 68Statement of changes in net assets __________________________________________________ 69Cash flow statement ______________________________________________________________ 70Accounting policies _____________________________________________________________ 71-86Notes to the Annual Financial Statements __________________________________________ 87-102Report on performance against objectives ________________________________________103-121

Table of C ntents


Reducing our carbon footprint

BankersABSA Capital

Company SecretaryCEF Secretariat

Registered nameSouth African National Energy Development Institute (SANEDI)

Physical addressBlock E, Upper Grayston Office Park, 150 Linden Road, Strathavon, Sandton

Postal addressP O Box 9935, Sandton, 2146

Telephone numbers011 038 4300

Email [email protected]

Website addresswww.sanedi.org.za

External auditorsThe Auditor-General of South Africa

Registered office Block C, Upper Grayston Office Park152 Ann Crescent StrathavonSandton 2199

GENERALINFORMATION



AAAMSA Association of Architectural Aluminium Manufacturers of South Africa

AFD French Development AgencyAGSA Auditor-General of South AfricaASSA Academy of Science for South AfricaBEE Black economic empowermentCCS Carbon capture and storageCCT Clean coal technologiesCEF CEF Group of Companies formerly known

as Central Energy FundCEM Clean Energy MinisterialCES Clean Energy SolutionsCEO Chief Executive OfficerCER Centre of Energy ResearchCESAR Centre for Energy Systems Analysis and

ResearchCFT Carbon Fuel TabletCNES Centre of New Energy SystemsCO2 Carbon dioxideCOCATE Large-scale CCS transportation

infrastructure in EuropeCoRD Centres of Research and DevelopmentCPI Consumer Price IndexCPV Concentrator PhotovoltaicsCSAG Climate Systems Analysis GroupCSC Community steering committeeCSP Concentrated Solar PowerCSIR Council for Scientific and Industrial

ResearchCSIR CSP CSIR Concentrated Solar PowerCSTDI Centre for Solar Technology, Development

and InnovationDEA Department of Environmental AffairsDID Gauteng Department of Infrastructure

DevelopmentDKK Danish kroneDoT Department of TransportDoE Department of EnergyDSM Demand Side ManagementDST Department of Science and TechnologyDTU Technical University of DenmarkDBREV Douglas Banks Renewable Energy VisionDTI Department of Trade and Industry

Dx Distribution gridEDI Electricity Distribution IndustryEE Energy efficiencyEEDSM Energy efficiency and demand side

managementEMWG Energy Management Working GroupeNaTIS Electronic National Administration Traffic

Information SystemEPD Energy Performance DatabaseEPWP Expanded Public Works ProgrammeERC Energy Research CentreESI Electricity Supply IndustryETDE Energy Technology Data ExchangeETDEWEB Energy Technology Data Exchange World

Energy BaseFMPPI Framework for Managing Programme

Performance InformationGAAP Generally Accepted Accounting PracticeGEF Global Environment FacilityGHG Greenhouse gasGIZ German Agency for International

CooperationGPDRT Gauteng Province Department of Roads

and TransportGRAP Generally Recognised Accounting PracticeGSEP Global Superior Energy Performance

PartnershipIAS International Accounting StandardsIDC Industrial Development CorporationIEA International Energy AgencyIEP Integrated Energy PlanIFPEN IFP Energies nouvellesIIA Institute of Internal Auditorsipv Institute for PhotovoltaicsISGAN International Smart Grid Action NetworkIT Information technologyIP Internet protocolkW KilowattsLAN Local area networkM&V Monitoring and verificationMEASA Marine Energy Association of South AfricaMoU Memoranda of understandingMTEC Medium Term Expenditure Committee

ABBREVIATIONSAnD ACRonymS


MW MegawattNAAMSA National Association of Automobile

Manufacturers of South AfricaNBI National Business InitiativeNDA National Development AgencyNecsa South African Nuclear Energy Corporation

SOC LimitedNEEA National Energy Efficiency AgencyNIER Newcastle Institute of Energy ResearchNOK Norwegian KroneNRF National Research FoundationNWA Numerical wind atlasOWA Observational wind atlasPAA Public Audit ActPAC Project advisory committeePCSP Pilot CO2 Storage ProjectPDI Previously disadvantaged individualPFMA Public Finance Management ActPPA Power purchase agreementPPC Parliament Portfolio CommitteePSA Plataforma Solar de AlmeríaPV PhotovoltaicsRE Renewable energyRECORD Renewable Energy Centre for Research and

DevelopmentREEEP Renewable Energy and Energy Efficiency

PartnershipsR&D Research and DevelopmentSABS South African Bureau of StandardsSACCCS South African Centre for Carbon Capture

and StorageSACRM South African Coal RoadmapSADC Southern African Development CommunitySAfECCS South Africa - Europe Cooperation on

Carbon Capture and StorageSAGEN South Africa – German Energy ProgrammeSANAS South African National Accreditation

SystemSANEDI South African National Energy

Development InstituteSANERI South African National Energy Research

InstituteSAPIA South African Petroleum Industry

Association

ABBREVIATIONSAnD ACRonymS (CONTINUED)

SAPVIA South African Photovoltaic Industry Association

SARS South African Revenue ServicesSARETEC South African Renewable Energy

Technology CentreSASGI South African Smart Grids InitiativeSASTELA Southern Africa Solar Thermal and

Electricity AssociationSATTIC South African Travel and Tourism Industry

ConferenceSAWEA South African Wind Energy AssociationSAWEP South African Wind Energy ProgrammeSAWS South African Weather ServiceSAYAS South African Young Academy of ScienceSEA Strategic Environmental AssessmentSETRM Solar Energy Technology Road MapSLA Service level agreementSMME Small Micro Medium EnterprisesSMART Specific, measurable, achievable, realistic

and time-boundSOLTRAIN Southern African Solar Thermal Training

and Demonstration InitiativeTAF Technical assistance facilityTIA Technology Innovation AgencyTx Transmission gridUCT University of Cape TownUCT CSAG University of Cape Town Climate Systems

Analysis GroupUNDP United Nations Development ProgrammeURL Uniform Resource LocatorUSTDA US Trade and Development AgencyVNWA Verified Numerical Wind AtlasWASA Wind Atlas of South AfricaWAsP Wind Atlas Analysis and Application

ProgrammeWITS University of the WitwatersrandWfE Working for energy programmeWWF World Wildlife FundWRI World Resource InstituteWSU Walter Sisulu University



VISION

To serve as a catalyst for sustainable energy innovation, transformation and technology diffusion in support of South Africa’s sustainable development that benefits our nation.

MISSION

Advance innovation of Clean Energy Solutions and rational energy use that effectively supports South Africa’s national energy objectives and the transition towards a sustainable, low carbon energy future.

VALUES

InnovationAccountabilityTransparencyIntegrityProfessionalismNational interestBatho Pele

STRATEGiCOVERVIEW


STRATEGiC ouTComEoRiEnTATED GoALS

SANEDI is expected to contribute to government’s twelve outcomes, which are based on government’s Medium Term Strategic Framework (MTSF) that clearly articulates the agenda of the government. SANEDI contributes to the following three outcomes that the Minister of Energy has committed to:



STRATEGiC ouTComES

PROGRAMMES STRATEGiC oBJECTiVES

All/Crosscutting 1. Corporate Governance and Administration

• Corporate, executive, financial, information, supply chain management, governance and compliance support to the Institute;

• Strong collaborative approach and strategic international collaboration;

Enable well informed and high confidence energy planning, decision-making and support policy development

2. Applied Energy Research including subprogrammes for: • Advanced fossil fuels

including carbon capture and storage;

• Clean Energy Solutions;• Smart grids;• Working for energy;• Data and knowledge

management ;• Green transport

programme

• Knowledge creation in support of policy direction ie. viable cleaner energy options;

• Knowledge creation in the energy mobility and green transport sector in support of policy direction;

• Intelligent energy systems infrastructure;

• Demonstrate cleaner energy technology opportunities and solutions;

• Due custodianship of knowledge and data developed within SANEDI;

Support accelerated transformation to a less energy and carbon intensive economy

Foster a culture of energy efficiency and more rational energy use

3. Energy Efficiency programme

• Support the Income Tax Amendment Act section 12I and 12L relating to the tax rebate for energy efficiency improvements;

• 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 (MEV) centre.

STRATEGiC ouTComEoRiEnTATED GoALS


LEGISLATION

The National Energy Act, 2008 (Act No 34 of 2008), Section 7 (2) gave effect to SANEDI’s existence and provides for its primary mandate and specific responsibilities. The Act provides for SANEDI to direct, monitor and conduct Applied Energy Research as well as undertake measures to promote energy efficiency throughout the economy.

The business case that established SANEDI outlines the purpose of the entity and incorporates a set of key activities that SANEDI undertakes on behalf of the state. As the energy landscape is a continually evolving space, it is clear that additional activities and responsibilities will be undertaken by SANEDI in line with its legislative mandate. The underlying principle remains the same, however, in that SANEDI plays a catalytic role in the development of the energy sector, without becoming a player and referee in a particular sector. SANEDI is mindful of the various role players that are active in the energy efficiency sector and endeavours to create value in the area in which it operates.



SANEDI – the South African National Energy Development Institute – is an entity entrusted with the national mandate of coordinating applied energy research, including the uptake of green energy as well as energy efficiency.

I am pleased to report that the past year has seen substantial progress towards the achievement of SANEDI’s goals.

To ensure a successful path and outcome, SANEDI actively seeks and forms partnerships with strategic organisations and entities, both locally and internationally.

One such partnership is with Germany through the South African – German Energy Programme (SAGEN) which aims to improve conditions to become more conducive to increasing investments within South Africa’s renewal energy and energy efficiency industries. It is vital to know that these investments contribute to South Africa being able to secure its energy supply, protect its climate and create jobs.

The MoU that was signed by the South African and French governments aims to provide both industry support and capacity building to commercial banks with regards to energy efficiency and renewable energy investments.

SANEDI also continues to provide Clean Energy Solutions in rural and low income communities through its Working for Energy (WfE) programme. The successful roll-out of biogas digesters in the KwaZulu-Natal, Limpopo and Eastern Cape provinces have improved the lives of many people in those communities through job creation and skills development.

With regard to Carbon Capture and Storage (CCS), the current major focus of SANEDI, through the South African Centre for Carbon Capture and Storage (SACCCS), is the Pilot CO2 Storage Project (PCSP), the

FoREWoRD ByTHE CHAiRPERSon

next milestone in the South African CCS road map. The geological information thus far analysed has been evaluated by an international advisory panel whose recommendations are currently being implemented. Work is also underway with the stakeholder engagement programme and the basin characterisation permitting process for the PCSP.

SANEDI continues to collaborate with internationally renowned research bodies who share an interest in the development of low carbon technologies, one of which is the Newcastle Institute of Energy and Resources in Newcastle, Australia. This institute has rapidly gained recognition as the premier centre of its kind in Australia and is already actively collaborating with SANEDI in the areas of carbon sequestration, solar paint, smart grids and fuel cell development.

ms n mlonziChairperson


BoARDoF DiRECToRS

ms n mlonzi, (Chairperson), BProc. LLB

mr J marriott, (Deputy Chairperson), BSc Chem Eng

ms m modise, BSc (Hon), HED, MSc (Eng)

mr m Vilana, BSc (Accounting) (replaced by Dr C Sita)

Dr D Hildebrandt, BSc Chem Eng, MSc Chem Eng, PhD Chem Eng

ms D Ramalope, BSc (Hon), MSc, MBL

Dr V munsami, BSc (Hon), MSc, PhD

mr G Fourie, Diploma Mech Eng, BCom Economics, MBA

ms P Segoati, B Acc (CA)(SA)

Dr C Sita, MSc Chem Eng (Polymer Engineering) PhD Chem Eng (Polymer Engineering)

mr m Gordon (alternate director), BSc, MBA

Dr R maserumule (alternate director), BSc (Applied Mathematics) PhD (Applied Mathematics)

mr C manyungwana (alternate director), Dip Management, Higher Dip Public Management and Administration, Post Grad Dip Transport Management

WIND ENERGYWind power is the conversion of wind energy into a useful form of energy.


Dr C Sita

mr J marriottms n mlonzi ms m modise

Mr M Vilana Dr D Hildebrandt ms D Ramalope

Dr V munsami mr G Fourie ms P Segoati

mr m Gordon Dr R maserumule

mr C manyungwana


CHiEF ExECuTiVE’SOVERVIEW

The 2013/14 financial year presented us with immense challenges. In spite of this, we have been able to realise great achievements, none of which would have been possible without the enthusiasm and professionalism show by SANEDI Board members, management and staff in dealing with the entity’s three programmes, namely:

Programme 1 – Corporate Governance and Administration; Programme 2 – Applied Energy Research; andProgramme 3 – Energy Efficiency.

Whilst it is human nature to celebrate the wins, we remain mindful of the complex challenges that must be addressed during the next financial year and beyond. I am aware of the need to continually review and improve the effectiveness and efficiency of our processes so that we can take steps towards achieving operational excellence.

Once again he 2013/14 financial year presented SANEDI with challenges that required the entity to proactively undertake the necessary research and development as well as energy efficient decisions in order to remain in line with the funding constraints with which government is faced.

SANEDI’s achievements during this period under review were driven by the need to deliver on its mandate as per the entity’s strategic plan and annual performance plan which form the shareholder’s compact with the Department of Energy (DoE). A vast amount of time and energy was spent on ensuring that the entity’s strategic objectives are specific, measurable, attainable, realistic and time-framed in terms of the SMART concept.

mr K nassiep Chief Executive officer



The audit process determined that the entity has not yet completely achieved the SMART criteria in the setting of its objective. Taking this into consideration, other strategies are being reviewed in order to achieve greater and realistic performance monitoring and evaluation and reach 100 per cent compliance with SMART criteria.

SANEDI has evolved from SANERI and together both entities have been in existence for the past eight years. As CEO, I am pleased to report that yet again we have maintained an unqualified audit report, a feat which bears testimony to the fact that a culture of responsibility and accountable corporate governance exists throughout the organisation. The company performance was rated at 78 per cent.

Programme 1: Corporate Governance and Administration

Financial management

SANEDI’s annual operations are conducted in terms of its strategic plan and its annual performance plan as well as its budget which were prepared in the 2012/13 financial year, the year prior to 2013/14 financial year


which is under review. The plan and budget were submitted to the Minister on 31 January 2013 and approval was obtained in March 2013. The financial outcomes of SANEDI’s operations and results are reported annually in its Annual Financial Statements (AFS), which are published in its annual report. The AFS are prepared in accordance with the requirements of the Public Finance Management Act 1999 (Act No 1 of 1999) (PFMA), the Energy Act 2008 (Act No 34 of 2008), Treasury regulations and Generally Recognised Accounting Practice (GRAP).

To achieve compliance with the PFMA, SANEDI appointed a Chief Financial Officer, Ms L Manamela who assumed duty on 3 March 2014. I welcome Ms Manamela and trust that, with her experience at the Office of the Auditor-General, it will enable us to overcome some of the challenges with process.

Human Resources

The most valuable asset in any organisation is its people. They are the intelligence, the skill, decision makers and the energy behind the success of an organisation. One can have the best of IT systems in the organisation but it will be impossible to operate such systems without people.


The success of an organisation is therefore highly dependent on people and it is of utmost importance to have the necessary structures in place to maximise the potential of each employee. We live in transformed times and it is essential that an environment is created in which all employees are encouraged to reach their full potential. SANEDI has been dependent on the CEF Group of Companies for its human resource (HR) services. Having realised that the HR function is not merely about administering people but more about achieving strategic objectives through people, SANEDI will be appointing an HR manager in the third quarter of the 2014/15 financial year.

SANEDI acknowledges that the development of a country is dependent on the levels of skills development and job creation. A strategy that has been employed to achieve this is SANEDI’s internship programme which is aimed at giving students the opportunity to apply their knowledge in the real world. At the same time, they develop skills which help them to perform better at their jobs. They are provided with experience that makes them stronger and more confident in their abilities. The experience also helps improve their work ethics. By being engaged effectively in the internship programme, students increase their skills and value in the job market. Their employers benefit as well. If and when opportunities become available within SANEDI, they are given the opportunity to apply. They are subjected to an interview process and if they excel they are appointed to the post. Ms F Manganyi was appointed as a procurement intern during the financial year under review. When the procurement officer post became available, she applied and excelled at the interview and was appointed to the post in May 2014. I welcome Ms Manganyi and trust that she will help contribute to procurement processes as procurement is one of key drivers for socio economic change in the country. The internship programme has also helped contribute to youth development in the country in line with the Youth Accord signed by the President and all cabinet ministers.


Procurement

It goes without saying that procurement is a key driver in socio economic transformation in the country. SANEDI has overcome challenges with regards to procurement by internalising the function which was previously contracted to the CEF Group of Companies. The CEF Group of Companies is a schedule 2 entity and its processes and systems were not geared to accommodate procurement by a schedule 3A entity. SANEDI has its own procurement committee, bid evaluation committee and bid specification committee which ensure that all procurement is transparent and complies with procurement-related legislation. One key place that technology can benefit a company or state entity is in its procurement process. SANEDI has implemented the Microsoft Dynamix system which will balance the challenges of maintaining efficiency whilst lowering costs and ensuring adherence to the principles of corporate governance throughout the procurement process.

Sustainable operations - reducing the carbon footprint

As usual the annual report has been produced in such a manner that it reduces the carbon footprint of the organisation. The report is printed on 100 per cent recycled paper and the use of inks as well as the design takes the environment into consideration. It is noteworthy to mention that we print a maximum of 100 copies for parliamentary purposes and 400 are produced on credit card type USBs. The costs of producing a printed annual report is in the region of about R450.00 per copy, whilst the costs of producing a digital annual report is about R90.00 per copy. This process realises environmental, financial and marketing benefits. It contributes to the reduction of greenhouse gas emissions, thereby saving the environment in the future. SANEDI is able to save costs in this process and the savings are redirected to other business areas in the entity. In this respect, we are trendsetters in this area.



Programme 2: Applied Energy Research

Advanced Fossil Fuels

South Africa is currently considering its natural gas resources in the form of shale gas and coal bed methane that are viewed as new sources of primary energy. President Jacob Zuma told Parliament in his state of the nation address that the development of shale gas in the Karoo is set to be a game changer for the South African energy economy. SANEDI is currently investigating the energy impacts of shale gas including for example the mitigation of carbon dioxide emissions by fuel switching from coal to gas.

SANEDI serves on the inter-departmental task team on shale gas.

The South African Centre for Carbon Capture and Storage (SACCCS), a division of SANEDI, is planning a pilot carbon dioxide storage project as a “proof of concept” of the technology for South Africa. Already an application for an exploration license has been made and the stakeholder engagement has commenced with the appropriate authorities. The analyses of current results have been reviewed by an international expert panel who have made recommendations regarding continued work. One of the important aspects of this work is capacity building and to this end, inter alia, SACCCS currently has seven bursars studying for post graduate degrees on various aspects of carbon capture and storage.

Clean Energy Solutions

SANEDI acknowledges that what we do today will impact on the environment tomorrow. The manner in which we produce this annual report will bear testimony to the fact that we are conscious of the environment and this is being extended to other areas of research and development.

As the name suggests, the Clean Energy Solutions (CES) portfolio supports government goals of energy security of supply through identifying viable and sustainable diversified energy supply options. It strives to stimulate socio economic upliftment through improved access to modern, clean and affordable energy services and support economic growth – accelerating applied research projects getting to market, ultimately resulting in commercial roll out. CES is also the key point for local and international partnerships to leverage funding, research facilities and share knowledge to accelerate technology development and innovation. The areas of current focus include: wind, solar, biomass, ocean energy technologies and renewable energy technologies in buildings. This is being achieved through the establishment of the Renewable Energy Centre for Research and Development (RECORD), and collaborative projects like the Wind Atlas of South Africa (WASA), and the Solar Energy Technology Road Map in collaboration with DoE, DST and Energy Agency (IEA).

In 2010, the governments of South Africa and the Federal Republic of Germany agreed to implement an energy and climate programme via the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The South African - German Energy (SAGEN) programme aims to promote investment in renewable energy and energy efficiency and thus supports the development of a sustainable energy sector in South Africa. Under the auspices of SAGEN, GIZ is cooperating with SANEDI and RECORD to achieve mutually agreed goals. The achievements by RECORD are detailed under the contents for clean energy.

WASA strives to achieve capacity development and research cooperation through the development and employment of numerical (modelled) wind atlas methods. The project aims to develop capacity to enable long-term planning of large scale exploitation of wind power in South Africa. Capacity is also developed with regards to dedicated wind resource assessment and siting tools for planning purposes.



Working for energy (WfE)

The working for energy (WfE) portfolio is a social programme mainly intended to provide energy services derived from renewable resources to rural and urban low income houses in a manner that facilitates job creation, skills development, community based enterprise development and emancipation of youth, women and people with disabilities and thereby create sustainable livelihoods. It is an integral part of the Expanded Public Works Programme.

There are several projects under the WfE content page which highlight progress with regards to its deliverables.

Programme 3: Energy efficiency

A major achievement under the Energy Efficiency programme is related to tax incentives. Section 12L of the Income Tax Act, which came into effect on 1 November 2013, makes provision for deductions in respect of energy efficiency savings. This tax incentive allows taxpayers to claim deductions of 45 cents per KW hour of energy efficiency savings made against a baseline at the start of each year of assessment.

Another highlight under the programme is the Energy Efficiency and Demand Side Management Hub which is housed at the University of Pretoria. The hub is funded jointly by the Department of Science and Technology (DST) and Department of Energy (DoE). The hub has been instrumental in producing over 100 masters and doctoral students who have specialised and graduated in energy management. Many of these graduates have been absorbed in the energy industry.

Acknowledgements

At the outset, I wish to acknowledge that the milestones for the financial year under review could not have been achieved without the continued support and guidance of the Chairpersons of the Board and Board audit and risk committee and their members.

I would also like to express my deep gratitude to the Ministers of Energy, Ms Dipuo Peters and Mr Ben Martins, the Deputy Minister of Energy, Ms Barbara Thompson, and the Director-General in the Department of Energy, Ms Nelisiwe Magubane as well as the Acting Director-General, Mr Tseliso Maqubela for their ongoing support and encouragement.

We live in an age in which we cannot function in isolation and we are dependent on engagement with stakeholders. I wish to pay tribute to all SANEDI’s stakeholders for their continued support. I believe that SANEDI will continue to play an important role in transforming ordinary people’s lives, stimulating the creation of new businesses, creating jobs and making the South African energy industry a more innovative one with new technologies.

Finally, my thanks and appreciation goes out to the management and staff, without whose loyalty, dedication and service, SANEDI would not have been able to meet its objectives and fulfil its mandate.

mr K nassiep Chief Executive officer SAnEDi




APPLiED EnERGy RESEARCH

ADVAnCED FoSSiL FUEL USE

Electricity generation, liquid fuels production and chemical production use coal to underpin economic activity in South Africa and provide commerce, industry and households with the required energy and chemicals. Moreover, the export of coal is an important foreign exchange earner. Notwithstanding national efforts to increase the use of renewable energies and energy efficiency measures, coal will continue to be the mainstay of South Africa’s development for decades to come. Therefore it is essential that a clean approach be adopted towards the continued use of coal while taking the necessary steps to minimise greenhouse gas emissions. It is to these ends that the activities of the advanced fossil fuels division of SANEDI are directed.


Carbon capture and storage

The main effort of the advanced fossil fuels division work was Carbon Capture and Storage (CCS) through the South African Centre for Carbon Capture and Storage (SACCCS). The principle of carbon capture and storage is the capture of carbon dioxide (for example from coal fired electricity generation and the synfuels industry) and its safe storage in a deep geological formation.

As carbon capture and storage is a global matter, international collaboration was maintained with:

• International Energy Agency Greenhouse Gas;• Carbon Sequestration Leadership Forum; and• Global Carbon Capture and Storage Institute.

Such collaboration has led to access to international expertise in this field as well as the commitment of international funding to the South African Pilot CO2 Storage Project (PCSP).

Stakeholder engagement continued and expanded during the year. The Minister of Energy opened the Third South African Carbon Capture and Storage Conference at the beginning of October 2013. This conference was also attended by representatives from Norway and the World Bank, which indicated funding support for the South African CCS programme.

2013/14 saw significant progress with the development of the PCSP, in particular funding, permitting and PCSP stakeholder engagement.

Shale gas study

South African natural gas resources in the form of shale gas and coal bed methane are new sources of primary energy that are currently under consideration. The advantages of gas include an ease of handling and the production of significantly less greenhouse gas emissions than compared to coal. Such gas resources may be in excess of 485 trillion cubic feet (Tcf) according to top down estimates from the United States Energy Information Agency and others. Currently, it is not known whether it is technically and economically feasible to exploit these resources. In addition there are environmental concerns regarding the exploitation of shale gas resources such as hydraulic rock fracturing. Studies have been done in South Africa by the Department of Mineral Resources and by Econometrix to assess the potential impact of hydraulic fracturing as well as the economic potential for the country, and more studies are underway particularly with regard to resource assessment.

Starting in April 2013, National Treasury, through the Department of Energy, has made funding available for SANEDI to execute a shale gas feasibility study taking into account the work done by other organisations and institutions in the country. The study is planned for completion during financial year 2016/17. It includes the assessment of shale gas exploitation and use, a focus on economic aspects, the job creation potential, the associated environmental issues and the effect it may have on the future energy mix in South Africa. A work plan has been compiled and submitted to the Department of Energy for approval. Preliminary work in this regard has already commenced.




• SACCCS formally started the permitting process for the PCSP with the submission of a request for Section 50(1) permission for a geological investigation (basin exploration and site characterisation) of the Zululand Basin.

• Significant progress was made with stakeholder engagement through engagement with many government officials at national, provincial, district and local levels, as well as with a number of non-government stakeholders.

• An international PCSP advisory committee (PAC) was established to ensure that decisions made with regard to the PCSP were informed by international best practice and experts with CO2 storage and geological exploration experience.

Delays were experienced, however, in initiating the exploration programme of the PCSP. These delays were largely due to the outcomes of the PAC review regarding the geological analysis done to date for the Algoa and Zululand Basins. The PAC review recommended that additional work be conducted before considering whether or not the PCSP should proceed from pre-feasibility stage to the basin exploration stage.

Capacity building has continued for both internal SACCCS personnel and for external persons. Internal development has included sending personnel to take part in operating CCS activities internationally. Five bursars on the bursary programme completed their studies and graduated. A further five bursars are still studying. Another call for bursars is scheduled to be made during 2014.


CLEAn EnERGy SoLuTionS

Renewable Energy Centre of Research and Development (RECORD)

Current collaborative projects

1. Solar Energy Technology Road Map – SETRM (collaboration team: DOE, SANEDI, DST, NT, DTI, GIZ and IEA)

• Mapping current and future solar technologies and how they fit into South Africa’s energy plan over the time milestones of 2020 (short-term), 2030 (medium-term) and 2050 (long-term) and the research that is needed to achieve the objectives; and

• SETRM is conducted in parallel with the DST solar technology study and the DoE IRP. This IEP will form a chapter of the overall SETRM.

2. Solar measuring station project – Solar MET project (collaboration team: GIZ, SANEDI, DST, SU, NMMU, SAWS, USTDA, Eskom)

• Installation/construction of solar MET stations in specific locations in South Africa;

• Ultimate goal is to produce a verified ground measurement solar map of the resources available in SA; and

• This will enable a levelling of the playing field for potential solar installations.


3. Renewable energy testing, training and demo facilities (collaboration team: SANEDI, GIZ, CSIR, TIA, Green Cape, CPUT, SU, NMMU)

• Centre for Solar Technology, Development and Innovation (CSTDI) concept has nodes spread across country at centres of excellence viz Stellenbosch university (SU), Nelson Mandela Metropolitan University (NMMU), and CSIR;

• South African Renewable Energy Technology Centre (SARETEC) at CPUT has been established and building is underway on these premises;

• Centre for Energy Research (CER) at NMMU- PV testing and research facility is established and has commenced with a three year PV yield project.


Site of SARETEC development.DNI map of South Africa showing installed solar measuring stations.

BIOENERGYBioenergy is renewable energy made available from materials derived from biological sources.


main achievements in 2013

• Established algal biofuel research platform on basis of completed published “State of Algal Bioenergy Research in South Africa” study;

• Relevant information shared with industry and action taken in response to special requests that arise from information sharing, viz, involvement in the PV and CSP localisation studies, hosting of industry association (South African Solar Thermal for Electricity Association (SASTELA), South African Photovoltaic Industry Association (SAPVIA), Solar thermal platform (SOLTRAIN), South African Coal Ash Association (SACAA)) stakeholder engagements and networking events;

• Raising awareness of renewable energy through school art competition resulting in the production of a calendar;

• “State of Energy Research in SA” study initiated;• SARETEC established (by all partners) with an

advisory board constituted and first batch of wind energy technicians trained in Germany (July 2013) and first cohort of “train-the-trainers” completed in Germany (Oct-Dec 2013);

An artist’s impression of SARETEC which will initially open to offer a curriculum in wind turbine technician qualification in early 2015.

• Support (financial and technical) for Solar Energy Technology Road Map (SETRM);

• Wind energy and surveillance radar research continued and coordinated between RECORD, the South African Air Force (SAAF) and the Council for Scientific and Industrial Research (CSIR);

• NMMU/SANEDI/RECORD PV expertise and training initiative;

• Ocean energy resource reports complete, edited and in public domain for comment, establishment of Marine Energy Association of South Africa (MEASA) in process;

• Catalysed Eskom and SARETEC collaboration discussions for training of 2000 PV energy technicians;

• Douglas Banks Renewable Energy Vision (DBREV) bursary supported for second consecutive year; and

• RECORD RERE (Renewable Energy Research Excellence) award through SANEA presented.



Pictures and details from achievements

Below: RECORD visits the linear Fresnel test system at Eskom Rosherville.

On 3 July 2013, Ms Kubeshnie Bhugwandin, Mr Wimpy van Rooyen and BB Energy hosted RECORD on a visit to the test linear Fresnel system. BB Energy, a registered ESCo (energy services company) with Eskom, has built a 150 kW thermal Linear Fresnel pilot plant at Eskom, Rosherville. The system was constructed and assembled on site at which provisions were made to bring in raw materials. This was completed in 2012 and is now being tested to address issues such as practical operation, maintenance, start-up and shut down, storm stowing and remote monitoring and control.

Above: The winners of the best commercial application category of the RECORD RERE award given in conjunction

with SANEA.

RECORD was pleased to present the RECORD Renewable Energy Research Excellence (RERE) awards for 2013. These groundbreaking awards recognise the contribution of established as well as up-and-coming researchers and novel renewable energy research in South Africa. The award includes two categories of merit: up-and-coming, young researcher and most promising research leading to commercial application. This year RECORD/SANEDI teamed up with the South African National Energy Association (SANEA) awards, and an awards banquet was held in honour of the excellence in energy in the country on 22 August 2013. RECORD/SANEDI is proud to acknowledge and reward excellence in the renewable energy sector. The winners were: RECORD RERE young researcher award 2013: Johan Kotze, PhD student at the University of Stellenbosch; and RECORD RERE commercial application award 2013: ChargeMaestro-SA, represented by Lindo Makhaye and Sizwe Mchunu.




The objective of the algal bioenergy report is to provide an overview of current algal energy research being carried out at South African universities, universities of technology and other research institutions in order to:

• Identify common themes and priorities in energy research;

• Avoid duplication in research;• Identify possible gaps that are not being

covered by current energy research;• Compile a profile of energy researchers actively

working in the field; and• Make recommendations on future algal energy

research focal areas for South Africa.

This information will be used in the establishment of an algal energy research platform, focused on potential biofuel production.

Above: The calendar produced from the community renewable energy awareness art competition.

An art competition for children in grades one to three was used to generate interest in renewable energy technologies and provide a creative learning experience on a potentially abstract subject. Learners in Jeffrey’s Bay Primary School received a 15-page “Energy activity book” with renewable energy information, energy savings tips as well as games and puzzles for children. After listening to a talk on renewable energy, children were asked to complete an original artwork with the theme “Renewable Energy: The Future, Today!”. Winners and runners-up were selected on the interpretation of the theme, depiction of renewable energy technologies and overall quality of the drawing. A selection of the children’s art work was compiled into a calendar for 2014.



Wind Atlas for South Africa (WASA)

The Wind Atlas for South Africa project (2009 – 2014) is an initiative of the DoE with the principal funders being the South African Wind Energy Programme (SAWEP) funded by the Global Environment Facility (GEF) (R8 million) and the Royal Danish Embassy (DKK 9 998 441.20). SANEDI is the executing partner. The implementation partners include the South African Council for Scientific and Industrial Research (CSIR), University of Cape Town (Climate Systems Analysis Group) (UCT CSAG), South African Weather Services (SAWS) and the Department of Wind Energy from the Technical University of Denmark (DTU) Wind Energy.

The main objective of WASA, achieved through capacity development and research cooperation, is to develop and employ numerical (modelled) wind atlas methods. The project also aims to develop capacity to enable long-term planning of large-scale exploitation of wind power in South Africa, including dedicated wind resource assessment and siting tools for planning purposes, ie a verified with physical wind measurements numerical (modelled) wind atlas and database for South Africa.

Two major milestones were achieved:

• Three years of quality wind measurements and web presence;

• Launch of South Africa’s first Large Scale High Resolution Wind Resource Map

Three years of quality wind measurements and web presence

Fig 1 WASA 10 wind measurement masts sites

Data recovery above 90 per cent for all masts

WASA [email protected] m 1 yEAR

[email protected] m

3 yEARS*

U Data Recovery

[m/s] [m/s] [%] [%]WM01 5.86 6.06 2.7 100WM02 6.21 6.14 -1.8 93.4WM03 7.09 7.14 0.0 100WM04 6.59 6.71 0.9 100WM05 8.64 8.56 -0.8 98.6WM06 7.02 7.36 1.6 99.9WM07 6.85 6.93 0.3 97WM08 7.36 7.34 0.3 100WM09 7.58 8.22 3.0 99.7WM10 6.55 6.55 0.0 98.8

*2-year periods from WM09 and WM10:WM09: 2010-10 to 2013-09 minus the year 2011WM10: 2011-03 to 2012


Table 1: Three years of high quality wind measurement data by october 2013



Web presence since 2010

http://www.wasaproject.info (information)http://www.wasa.csir.co.za (online graphs) http://wasadata.csir.co.za/wasa1/WASAData (data download)http://veaonline.risoe.dk/wasa (wind forecasting based on weather research and forecasting (WRF) model) Website user statistics (January 2014)

1467 registered users60 countries42 346 downloads1 013 users who downloaded data The first Large Scale High Resolution Wind Resource map for South Africa was launched by the Minister of Energy on 31 July 2013.

http://stel-apps.csir.co.za/wasa-data/grids/WASA%20wind%20resource%20information%20sheet%20v%20May%202013%20w.pdf

The WASA high resolution wind resource map offers the following important benefits for planners, policy makers, Eskom and industry:

• Cost and timing savings as the viability in terms of wind speed of a potential site can be predicted with known and traceable accuracy;

• Levels the playing field between small and large industry players in identifying and developing project sites for wind farms;

• Assists the South African government in calculating the potential yield of wind energy resources;

• Identification of potential wind development zones in line with the strategic environmental framework or assessments studies; and

• Scheduling of variable wind resources and long-term grid planning.


The Department of Environmental Affairs and Development Planning (DEADP) is making use of the WASA wind resource map in identifying potential wind development zones in South Africa (http://www.csir.co.za/nationalwindsolarsea/). international recognition and application

• WASA is a partner to the IRENA Global Atlas for Solar and Wind Atlas http://irena.masdar.ac.ae/?map=405;

• In June 2013, the Palestinian Energy Authority produced a RFP “Producing a comprehensive validated atlas for wind energy resource based on satellite data” (RFP No. Phase V-PEA/CS-W)” that on several occasions refers to WASA; and

• World Bank ESMAP program renewable energy mapping (http://www.esmap.org/RE_Mapping) illustrating and referring to WASA in the ToR: renewable energy mapping: Wind Pakistan, South Asia region project ID: P146140.


WASA II

Preparations for the start of the WASA II (Phase 2) project are progressing well. The commencement target date is April 2014. WASA II is a continuation of WASA that will complete a wind atlas for South Africa and will cover KwaZulu-Natal, the remaining parts of the Eastern Cape and parts of the Free State provinces.

Ocean Energy Systems (OES) Ex Co 25, Cape Town, South Africa

Ocean Energy Systems (OES), also known as the Implementing Agreement on Ocean Energy Systems, is an intergovernmental collaboration between countries, operating under a framework established by the International Energy Agency in Paris. Presently, the OES has 21 member countries with a number of other observer countries in the process of joining.

Delegates from 14 member countries − Spain, Monaco, Italy, Belgium, Germany, Ireland, UK, Norway, China, Republic of Korea, Japan, Australia, South Africa and Nigeria – were present at the 25th meeting of OES in Cape Town in October 2013. Monaco, which joined OES in June 2013, is the newest member country. Representatives from other countries were invited to attend the meeting and two – Indonesia and Costa Rica − participated as observers.

The meeting was chaired by Spain and WavEC, from Portugal, provided secretarial services. Delegates participated in a national seminar on ocean energy, organised by SANEDI, on the day before the conference began. The official opening and welcome speech was delivered by Mr Kevin Nassiep, CEO of SANEDI.

The meeting highlighted OES activities, including:

• Tool for estimation of the cost of ocean energy to be initiated during the following year;

• Worldwide web GIS database for ocean energy to be launched early the following year;

• Research project “Assessment of environmental effects and monitoring efforts for ocean wave, tidal and current energy systems” extended for a second period of three years, led by the US Department of Energy (DOE);

• OES workshop on numerical modelling tools which was due to be held in November 2013 as part of the three-year research project, “The exchange and assessment of ocean energy device project information and experience”, led by the US Department of Energy (DOE);

• Collaboration with the Organisation for Economic Co-operation and Development (OECD) on the project, “The future of the ocean economy: Exploring the prospects for emerging ocean industries to 2030”: joint meeting between the OECD and OES due to be held in Paris on 15 May 2014; and

• New activities discussed were technology development road map, permitting and licensing, and assessment of Ocean Thermal Energy Conversion (OTEC) resources.

Left: Ocean Energy Systems at the 25th Executive Committee meeting in Cape Town, South Africa. Represented were: Spain, Portugal, Monaco, Italy, Belgium, Germany, Ireland, UK, Norway, China, Republic of Korea, Japan, Australia, South Africa, Nigeria, Indonesia and Costa Rica.




Delegates visited the 400 MW Palmiet Pumped Storage Scheme located on the Palmiet River near Cape Town. This power plant, built in a biosphere reserve which is regarded as a forerunner in environmental engineering.

At the national seminar on ocean energy in Cape Town, Kevin Nassiep, CEO of SANEDI, highlighted aims to form a marine energy association with the goal of promoting ocean energy for inclusion in South Africa’s long-term Integrated Resource Plan. The plan aims to source over 40 per cent of South Africa’s electrical energy from renewable sources by 2030.

South Africa has been a member of Ocean Energy Systems (OES) since 2010. The seminar was attended by 14 other OES member countries in advance of their executive committee meeting in Cape Town.

At that meeting each national delegate presented up-to-the-minute information on his or her country’s activities and achievements, including policies and technology development, in the field of ocean energy. These covered tidal range, marine current, wave power, salinity gradient and advances in the ability to generate electrical power by harnessing the potential in the temperature difference between cold deep water and warmer surface water.

South Africa was represented by Dr Thembakazi Mali from SANEDI and Mrs Kubeshnie Bhugwandin from Eskom.

Speaking on the first day of the two-day meeting, the Chairperson of OES, José Luis Villate said: “We are delighted with the progress that is being made by our member countries around the world in increasing both the knowledge and practical application of ocean energy systems.”

The meeting was also attended by two observer nations, Indonesia and Costa Rica.


Indonesia is second only to Canada in its length of accessible coastline. This lends itself to profitable exploitation of a wide range of ocean energy technologies and methods.

Costa Rica, with the deep waters of the Pacific and the Atlantic Oceans on each coastline and its proximity to the warmer waters of the tropics, is ideally placed to take advantage of ocean thermal energy conversion (OTEC).

France was invited to join the OES in 2008 and is expected to do so when it hosts the next OES executive committee meeting in Paris in May 2014.

WEBSITE: http://www.ocean-energy-systems.org/

The IEA Bioenergy IA ExCo71, Cape Town, South Africa

The IEA bioenergy’s vision is to achieve a substantial bioenergy contribution to future global energy demands by accelerating the production and use of environmentally sound, socially accepted and cost-competitive bioenergy on a sustainable basis, thus providing increased security of supply while reducing greenhouse gas emissions from energy use.

The 71st meeting of the IEA’s executive committee was held from 21-23 May 2013 in Cape Town. The meeting was hosted by SANEDI.


ExCo71 workshop

A successful workshop on the topic of waste to energy was well attended by ExCo members, task leaders, and observers. The workshop presentations were:

• Status and future of MSW treatment in South Africa, by Cristina Trois, University of KwaZulu-Natal;

• Sustainable waste management worldwide, by Jørgen Haukohl, ISWA, Denmark;

• Drivers for an optimised waste management in low- and medium-income countries, by Herman Huisman, Netherlands;

• AD of the organic fraction of MSW: System overview for source and central separated waste, by David Baxter, JRC Petten, Task Leader Task 37;

• Overview of incineration technologies, by Jürgen Vehlow, KIT Karlsruhe, Germany;

• Energy from Waste – Amsterdam, by Erik Koldenhof, Amsterdam Waste and Energy Company, Netherlands; and

• Best practice of waste management in low- and medium-income countries, by Adam Read, Ricardo-AEA, United Kingdom.

For more detail please visit www.ieabioenergy.com/

ExCo71 study tour visit

In conjunction with ExCo71, 25 attendees participated in the study tour to the University of Cape Town’s (UCT) pilot anaerobic digester, the South African Breweries (SAB) Newlands plant digester, and the Cape Flats waste water treatment works.

The first stop was a pilot 6m3 anaerobic digester commissioned by the Environment & Process Systems Engineering (E&PSE) unit in UCT’s Department of Chemical Engineering in 2010. The digester uses source-separated kitchen waste as biodegradable feedstock and has a capacity of 30 kg/day. Biogas that is generated from the unheated anaerobic digesters is

used to demonstrate cooking of food and for heating water at the Leo Marquard male residence. The total installed cost of the unit was R30 000.

The second stop was SAB Newlands, the oldest operating brewery in Africa. SAB commissioned a UASB anaerobic digester in 2007 in order to reduce its effluent discharge rate and BOD/COD loading to Cape Town’s waste water treatment works. The methane-rich biogas generated was previously flared. Recently, due to a number of factors such as SAB adopting a GHG emission mitigation policy and a dramatic increase in industrial electricity prices, the generated biogas is now integrated into the plant’s energy supply. SAB’s Newlands plant engineering manager, Mr Douglas February, noted that the biogas is currently being used to generate about 12 per cent of the plant’s base load thermal energy (steam) needs.

The final stop was the 200 Ml/day Cape Flats-Waste Water Treatment Works. Over the past two years, the City of Cape Town’s Waste Water Department has been upgrading the facility, primarily to improve the performance of its three 6 000 m3 anaerobic digesters. Previously, these digesters generated biogas at a rate of 400 to 450 Nm3/h. At this biogas generation rate, the plant was able to supply 18 hours of its thermal energy requirements in drying thickened sludge into 5-10% moisture granules. The rest of the rotary drum drying needs are being met by heavy furnace oil and kerosene (paraffin). Given the 21 to 23 MJ/kg calorific value, the granules are mostly used by PPC in their kilns. At certain times, the granules are used by the farming community owing to their chemical content of carbon, nitrogen and phosphates.

The Renewal Energy and Energy Efficiency Partnership (REEEP)

Funding Calls

Having executed nine funding calls since 2002, REEEP has amassed considerable experience in implementing global project calls and in project oversight.




In terms of the ninth funding call, REEEP funded two projects in South Africa to the value of €418 680 (approximately R6 million).

“Sustainable electricity provision at the municipal level in South Africa” developed a model that looks at how business strategies can be developed with city electricity departments to ensure that tariffs enable cities to provide services, while optimising the roll-out of small scale PV in a manner consistent with political priorities. With cities in South Africa responsible for around 40 per cent of the total national power demand, many municipalities depend on surplus revenues from electricity to subsidise their operations. At the same time, government policy requires that they implement EE programmes and facilitate small-scale RE generation, which threatens their financial sustainability. In parallel, the high-end users who generate the greatest revenue are also the most likely to seek alternatives such as small-scale solar PV systems.

The second project, “Powering water supply in South Africa: small hydro opportunities on existing infrastructure”, identifies tangible and profitable opportunities to install mini hydro (e.g. 100kW to 1MW) schemes on existing water supply infrastructure in South Africa using Durban City Council as a model. Durban (eThekwini) Council has progressed the development of two mini hydro schemes on existing infrastructure.

To date, REEEP has funded projects in the southern African region to the value of just over €1 million (approximately R14.2 million) and is in the process of planning for the tenth funding call in 2015.

interventions

Recognising the importance of integrating various programmes, initiatives and themes within renewable energy and energy efficiency, REEEP has also been engaged in targeted interventions aimed at facilitating the commercial deployment of clean energy in a specific sector, technology or region through various


means. Locally, REEEP has been involved with three interventions to date, including productive use of renewable energy (PURE), the 1b m2 energy efficiency intervention and linked open data in urban transport (LOD). The working for energy (WfE) programme within SANEDI’s service delivery programme of government under the Expanded Public Works Programme, was established by the DoE and transferred to SANEDI for implementation. It is a national programme aimed at addressing poverty alleviation and job creation in rural and low income areas, intended to empower the youth, women and people with disabilities via the productive use of renewable energy resources. REEEP has developed a portfolio management tool for WfE that allows accurate data to be captured and information to be disseminated to further programme goals.

As part of promoting energy efficiency, REEEP hosted a two-day workshop in Johannesburg that brought together the various stakeholders involved in EE to contribute towards building a framework for a solid map of EE in the housing sector. The workshop provided a platform for information collection and sharing and formed the foundation for the framework that will be developed in 2015.

On urban transport, REEEP, together with the Institute for Transportation and Development Policy (ITDP) and the World Wide Web Foundation are harnessing the power of LOD to improve decision making and planning to ensure low carbon, sustainable transport systems. REEEP has engaged SANEDI, SALGA and various local municipalities, including Cape Town and Johannesburg, to promote the intervention.

Knowledge management

REEEP continues to play a critical role in knowledge management and information collection, dissemination and sharing. This function allows the region to use data as part of energy development in policy formulation, research and development, monitoring and evaluation, as well as more practical implementation of renewable energy and energy



efficiency hardware. REEEP continues to work with the SADC energy thematic group, SAPP and many other organisations and committees in supporting energy development and initiatives and their progress in the sector.

The annual REEEP regional stakeholder engagement took place in Johannesburg, bringing together various public and private stakeholder groups aimed at sharing information on the energy sector. Highlights, best practice, issues and challenges were discussed and disseminated in an action plan and needs assessment for the region. This strategy focuses attention on key barriers that require attention in facilitating the mandate and function of REEEP, which is to increase energy access and scale up positive activities in the sector for the year.

Against this backdrop REEEP, along with other organisations such as REN21, are continuously updating and managing Reegle. Reegle, a global information portal that provides access to the latest high quality information on renewables, energy efficiency and climate change, is fundamental to the acceleration of the clean energy marketplace, facilitating investments, promoting new legislation and regulations and broadening interest and knowledge in the sector.

REEEP has also facilitated internship opportunities at SANEDI, with the placement of four young energy professionals in various departments of SANEDI and REEEP. Capacity building forms an integral part of skills development and transfer to meet the need of the growing South African energy and renewable energy sectors.

MARINE ENERGYMarine energy refers to the energy carried by ocean waves, tides, salinity and ocean temperature differences.


The working for energy programme (WfE) is a multi-stakeholder and multi-year clean energy programme under the environment and culture subcommittee of the Expanded Public Works Programme, initially funded through the Department of Energy.

The programme is in its fifth year of operation and has gained some traction over the years.

Anaerobic bioenergy cluster

Sufficient progress continues to be made in this type of renewable energy production.

illembe biogas project

The biggest success has been the implementation of the Ndwedwe village project in the Illembe district municipality, where 22 of 26 biogas digesters were constructed and completed, with 17 of them producing biogas.

The balance of the digesters will be completed in the next financial year. The project is earmarked for the launch of the WfE programme by the Minister of Energy.

WORKING FOR EnERGy PROGRAMME


Fort Cox bioenergy project

The planned repairs on the project have been completed and the two bio-digesters have been producing biogas, one from cow dung and the other from pig manure. They are supplying the kiosk and the piglet incubation unit.

The resultant bio-fertiliser is being used in the demonstration garden for agriculture students to study the impacts of various forms of fertilisers, both organic and inorganic, in the production of food. The project is earmarked for the launch of the WfE programme by the Minister of Energy in the next year.

Above: Bio-fertiliser fed food garden at Fort Cox Agricultural College, near Alice in the Eastern Cape.

melani biogas project

The planned repairs on the project have been completed and the bio-digester has been producing biogas from cow dung supplied by the community.

The resultant bio-fertiliser is being used in the food garden, producing vegetables for the early childhood development centre run from the premises of the community hall.

The project is earmarked for the launch by the Minister of Energy in the next year.

mpfuneko bioenergy project

The Mpfuneko project is intended to build 55 bio-digesters in the Gawula Village in Giyani, Limpopo. Fourteen bio-digesters have been built with one unit correctly producing biogas.

The project will be completed in the next financial year.

Above: Mpfuneko Biogas Project in Giyani.

Above: Brick domed biogas digester in Giyani, Limpopo.

WoRKinG FoR EnERGyPROGRAMME

Construction of a biogas digester in Ndwedwe village in KwaZulu-Natal.




Greening of public facilities

Greening of Gauteng schools with the Department of infrastructure Development

Progress has been relatively slow in the commencement of the committed projects, mainly as a result of negotiations on the selection of appropriate institutions for the type and size of the budget to ensure maximum impact of available resources. Agreement has been reached on a number and type of schools in the Sharpeville area for implementation. At the end of the financial year, SANEDI was at the procurement process of service providers to implement various identified technologies for the institutions.

Implementation will ensue in the next financial year.

Lucingweni hybrid minigrid project

Original assets in the Lucingweni minigrid facility have been verified. Permission has been granted by the Department of Energy (DoE) to rehabilitate the facility into a schooling facility. Children currently attending school in a mud school will be moved to the greened and refurbished facility as part of the DoE legacy project in the area.

Greening of public facilities with the national Development Agency

Progress has been relatively slow in the commencement of the committed projects, mainly as a result of stakeholder engagements for the type of technologies proposed.

Implementation will ensue in the next financial year.

Above: Mud School in Lucingweni, Nyandeni District Municipality. Structure to be demolished and children moved to the rehabilitated and greened ECDC by SANEDI.

Above: View of the mud school from the defunct Lucingweni minigrid plant.

NDA-SANEDI partnership to green Thusanang Early Childhood Development Centre in Hammanskraal.


Working for energy (WfE) outreach programme

Current initiatives

The outreach programme is expected to be kick-started with the launch of the biogas projects by the minister.

EPWP reporting

The WfE reported the following results for the EPWP programme:

Tota

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Tota

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66 1394 44

Future projects

The WfE programme management continuously scans the environment to look at opportunities to leverage on available programmes and resources in the clean energy and sustainable development spaces to demonstrate and roll out clean energy interventions suitable for applications in rural and low income communities and institutions.

Attention is also being given to energy conservation initiatives focusing specifically on rural areas and informal settlements, using bio-products derived from the working for water programme.

The foundation to implement the eco-accommodation project has been laid in the current fiancnail year and implementation will ensue in the next financial year with the funding from the Department of Environmental Affairs. Through the extended public works programme, work has commenced with the Departments of Public Works, Environmental Affairs, Social Development and Science and Technology and their state-owned institutions to maximise the impact of service delivery given limited resources available in the energy for the poor space.

Above: Biomass insulation for low income households derived from clearing invasive and alien species through the working for water programme.




Clean energy solutions

The Energy Management Working Group (EMWG) steering committee provides country level input and guides decision making during the strategy development process. Committee members define the approaches, goals, objectives, structure, outreach and communications, and partnerships that will define the EMWG going forward. SANEDI has provided input to ensure that activities through the task forces are designed to be high-impact and will help achieve the goals and objectives of the Global Superior Energy Performance Partnership (GSEP) energy management activities and have helped to identify and secure resources needed to execute EMWG activities.

EnERGyEFFiCiEnCy


SANEDI, on behalf of the Department of Energy, is driving and coordinating the collaborative agreement with the GSEP programme, under which the cool roofs initiative falls. The aim of the initiative is to explore currently existing technologies and further develop a wide range of interventions to have a significant impact on reducing the negative impact of climate change and to improve the thermal comfort of buildings in as many countries as possible. Progress thus far and pending actions include:

• Establishment of testing laboratory in South Africa under the custodianship of SANEDI;

• Establishing of organisation with participation of industry, academics and government; and

• Research and training collaborations.

SANEDI continues to play a critical role in supporting the tax incentives for energy efficiency improvements made in industry and the commercial sector. The Section 12L incentive, which is coordinated by the Department of Trade and Industry (DTI), in conjunction with National Treasury and SARS, focuses on providing an incentive to industry intent on establishing energy efficient facilities.

More broadly, SANEDI continues to work with the French Development Agency (AFD). Under the current agreement, AFD is supporting the establishment of a technical advisory facility in SANEDI. This facility provides technical assistance to commercial and developmental financing institutions in South Africa when these institutions review applications for funding of energy efficiency projects. This is in line with a separate agreement between AFD and specific funding institutions, whereby these institutions will be awarded a credit line to support energy efficiency projects in South Africa.

There have been remarkable achievements from the SANEDI Energy Efficiency and Demand Side Management (EEDSM) Hub at the University of Pretoria. The activities of the hub are jointly funded by the Department of Science and Technology (DST) and the Department of Energy (DoE), and the hub has produced over 100 masters and doctoral students, who have specialised and graduated in energy

management and who are now playing a pivotal role in filling the skills gap for this sought-after expertise in the country.

The German Agency for International Cooperation (GIZ) has continued to support energy efficiency in South Africa under the South Africa – German Energy Programme (SAGEN) has been put in place.

Already, technical consultants in energy efficiency and renewable energy have been appointed by GIZ and are stationed at either the DoE or SANEDI. These international experts have been invaluable in supporting initiatives such as policy mapping for the DoE, database establishment for the Section 12L tax incentive and drafting the parameters governing the introduction of Section 12L.

SANEDI has become a facilitator for energy service market companies (ESCo) and Cogeneration (Cogen) providing knowledge, networks and training in these areas. An international team of experts was tendered in 2012 to assist SANEDI in taking over this role at the SANEDI offices and to facilitate between the client and the ESCo. In this first transition period, good ties were set up with the Department of Energy, the South African Association of Energy Services Companies (SAEEs), the Energy Intensive User Group (EIUG), the National Cleaner Production Center of South Africa (NCPC-SA) and various other stakeholders.

One of the demonstration projects for energy efficiency awareness in the building sector, the My green home project, was developed with financial assistance from the SAGEN programme. The project is led by the Green Building Council of South Africa (GBCSA) and is partnering with 49M and SANEDI. A South African family, selected by open tender, is monitored over a period of six months in their endeavour to better understand the impact of their behaviour and to improve their energy consumption by 40 percent.

A GIS database was developed for solar water heaters (SWH) with support from SAGEN. It provides size, location and capacity of solar water heaters from the national roll-out programme.

EnERGy EFFiCiEnCy



hUMANRESouRCE MANAGEMENT

inTRoDuCTion

The SANEDI human resource (HR) function is contracted to the CEF Group of Companies and is managed through a service level agreement. The function involves activities undertaken to attract, develop and retain an effective workforce within the organisation in order to attain its organisational objectives. CEF HR can be seen as a partner to SANEDI helping to co-ordinate HR services and providing immediate support for SANEDI’s key organisational activities.

SANEDI is still dependent on CEF’s human resource policies, procedures, programme, systems and processes to attract, develop and retain requisite skills within SANEDI through effective recruitment and selection processes, facilitation of training and development, transparent performance management processes, attractive remuneration and effective payroll system and a healthy and safe work environment as well as skills development through an internship programme.

SANEDI has a performance management system that provides standards according to which the performance of individual employees is monitored and measured to allow for management of performance and the rewarding of deserving employees.


The following policies were developed for SANEDI:

• Performance management policy;• Internship policy; • Leave policy and procedure; • Study assistance for employees policy; and • HIV/AIDS and other life threatening diseases

policy.

The performance management policy of SANEDI recognises the value of a performance-based institutional culture that promotes employee productivity, engagement, and development by aligning individual performance goals with the entity’s mission, strategic goals and objectives.

The internship programme is aimed at giving students the opportunity to apply their knowledge in real world environments. At the same time, they will develop skills which will help them perform better at their jobs. They are provided with experience that will make them stronger and more confident in their abilities. The experience also helps improve their work ethics. By being engaged effectively in the internship

HumAn RESouRCE MANAGEMENT

programme, students increase their skills and value in the job market. Their employers are likely to benefit as well.

The study assistance policy for employees is designed to encourage personal and professional development of staff, thereby benefitting the organisation. Employees are encouraged to take responsibility for their own development. The purpose of the policy is to provide assistance to all permanent employees for part-time study in order to obtain appropriate academic qualifications. The field of study embarked on must be related to the employees’ position or the general objectives of the organisation.

Filling of senior positions

The CFO position was advertised and filled by an external candidate with effect from 3 March 2014.

The Company Secretary post was advertised. A suitable candidate was identified but the post could not be filled due to the high salary expectations. The position of Company Secretary therefore has to be re-advertised.

Personnel costs by programme

Programme Total expenditure for

the entity

Personnel expenditure

(TCTC)


as a % of total expenditure

No of employees

Average personnel cost per employee

Corporate Governance and Administration 25 825 580.27 9 950 283.53 39% 16 621 892.72 Applied Energy Research 50 180 888.22 20 937 620.15 42% 34 615 812.36 Energy Efficiency 8 685 926.21 4 529 917.91 52% 5 905 983.58



Personnel cost by salary band

Level Personnel expenditure

% personnel expenditure

to total personnel

cost

No of employees

Average personnel cost per employee

Top management /senior management (P1-4) 3 163 806.59 9% 2 1 581 903.30 Middle management (P5-7) 11 282 003.44 32% 19 593 789.65 Junior staff (P8-12) 20 972 011.56 59% 34 616 823.87 Total 35 417 821.59 55 2 792 516.82

Performance rewards

Level Performance Rewards


% of performance rewards to total personnel cost

Top management /senior management (P1-4) 769 128.00 3 163 806.59 24%Middle management (P5-7) 3 847 672.16 11 282 003.44 34%Junior staff (P8-12) 442 504.00 20 972 011.56 2%

Reasons for staff leaving

Reason numberDeath 0Resignation 1Dismissal 0Retirement 0Ill health 0Expiry of contract 0Other 0Total 1

Labour relations; misconduct and disciplinary action

nature of disciplinary action numberVerbal warning 0Written warning 0Final written warning 0Dismissal 0



Staff demographics

SANEDI has a staff complement of 45. The profile is as follows:

Category WM IM Cm BM WF IF CF BFCEO 0 0 1 0 0 0 0 0CFO 0 0 0 0 0 0 0 1Senior managers 4 1 0 1 0 0 0 1Financial manager 0 0 0 0 0 0 1 0Manager: CS/office of the CEO 0 0 0 0 0 1 0 0IT manager 0 1 0 0 0 0 0 0System administrator 0 0 0 0 0 0 0 1Accountants 0 0 0 1 0 0 0 1Centre managers 1 0 0 0 2 0 0 0Project managers 0 0 0 1 0 0 0 0Geologist 0 0 0 0 0 0 0 1Public awareness officer 0 0 0 1 0 0 0 2Project officers 0 1 0 2 0 0 0 0Project coordinators 0 0 0 0 0 0 0 2Procurement officer 0 0 0 0 0 0 0 1Helpdesk officer 0 0 0 0 0 0 0 1Admin officer 0 0 0 0 0 1 0 2Research assistants 0 0 0 0 1 0 0 0Personal assistant 0 0 0 0 0 0 1 1Consultants 4 0 0 0 0 0 0 0Receptionist 0 0 0 0 0 0 0 1Driver 0 0 0 1 0 0 0 0Interns 0 0 0 3 0 0 0 2Refreshment officers 0 0 0 0 0 0 0 2Total 9 3 1 9 3 2 1 17

There is 71 per cent black representation and 51 per cent female representation.

Future HR plans and goals

SANEDI will be appointing its own HR manager in the third quarter of the new financial year. A draft HR strategy was put in place for the entity in August 2013. The HR manager will finalise the strategy for approval by the remuneration committee. The HR strategy will provide a road map by outlining how the organisation will leverage its human capital to address the mandate of the organisation.




The following staff were not at the photoshoot:

− R Abrahamse − J Nankoo − E Nkile − R Hamid − S Sekoa


K NassiepCEO

Dr M Bipath

L Smith

N Algio

Dr S Hietkamp

J Schaffler S Nyathi

B Beck

A Otto S JumbaC Snyman

E Nyandoro

T Mokoena N Faleni

L Radebe

R Raselavhe

P ModikoS Tshivhase

F Manganyi

Dr AD Surridge W Ingcobo

Dr T MaliW Jali

K Mpheqeke

D Batte


E DeesK Modingoana

T Yusuf

Dr K Surridge-Talbot

D Coetzer S Msweli

S Nxumalo

C Borchard

M Monewe D Phakula

B Kamaki

N Garane

D Mahlangu

T Soci

L ManamelaD Lundall N Cassim B Bredenkamp

D Mahuma

D Govender B Xakaza

T Benuka

T Snyer




SABC3, Engineering News, Mining Weekly and the Star are just some of the official media partners of Sustainability Week and the event receives extensive coverage including being featured on Soweto TV. SANEDI participated with an exhibition. Some of the senior managers made presentations at the conference. SABC 3 and Soweto TV took interest in SANEDI’s stand and requested follow up interveiws. This opened an opportunity for SANEDI CEO, senior manager and a public awareness officer to appear on SABC 3’s “Talk with Noleen” for which the topic was sustainability and energy conservation.

CommuniCATionSExhibitions

During 2013/14, SANEDI successfully participated in three exhibitions. These events were Sustainability Week, an Energy Post Graduate Conference 2013 and the Africa Energy Indaba.

Sustainability week: 24 – 26 July 2013

This is an exciting multifaceted week with integrated events traversing sectors and emphasising opportunities in the green economy that engage consumers. The event has multiple stakeholders including national, provincial and local government, government agencies, utilities, and the private sector and civil society. Although Sustainability Week is run by a private company, opportunites are created for small companies and NGOs to exhibit as well as explore fund raising opportunities in partnership with selected charities.


CommuniCATionS

Above: SANEDI stand during EPC 2013

Soweto TV also flighted an interview with SANEDI’s Green Transport manager focusing on different fuel options and propulsion sytems available in South Africa, the progress made in this area and the challenges preventing a full roll out.

Energy Post Graduate Conference (EPC)

The Energy Post Graduate Conference (EPC) draws together government, private sector, academia and research agencies to showcase research to create national and international exposure and enhance employment opportunities. It is also a platform for students and key players in the energy sector to share information and knowledge regarding challenges and resolution methods.

SANEDI partnered with the National Research Foundation and the Department of Science and Technology to make the event a success. SANEDI was thus offered an opportunity to present and to exhibit at it.

Women in Energy Africa Forum: 1 october 2013

Gallagher Convention Center in Midrand, Johannesburg, was the venue for the forum culminating with a glittering awards ceremony honouring excellence in this business sector. Actively supporting the female work-force and helping economic growth, SANEDI and its stakeholders supported the conference.

Attracting female leaders and top ranking executives who have earned their energy stripes internationally, the forum was supported by SANEDI and its stakeholders. The forum is a platform to learn from cutting edge energy sector policy making, engineering and innovation.

The forum featured a wide spectrum of inspirational content relating to green energy and energy efficiency, paralleling SANEDI’s current portfolio of projects. These ranged from energy data to advanced fossil fuels, solar, wind, hydro, biomass, geothermal and nuclear. The topics were explored from a woman’s perspective and a national perspective of empowering and generating future female voices of authority in South Africa on energy and its usage.

Articles

SANEDI published at least eight articles in 2013/14 in various publications, magazines etc:

• Children of Fire;• World Environmental Day – Theme – “Eat,

think and save”: creating awareness about food waste and food security;

• Roundtable discussion with Houston mayoral delegation;

• Women in energy;• Performance of the SANEDI-funded Energy

Efficiency & Demand Side Management (EEDSM) Hub at Pretoria University;

• A diplomatic shade of green – foreign embassy publication; and

• Policy and legislation: building the future we want to live.



CommuniCATionS

Website revamp

A revamp of the website was undertaken with assistance from GIZ which provided funding and also helped in redesigning it to make it more attractive and informative. Below are the statistics which show great improvement in terms of website hits.

Source name number of hitsPolity.org.za 9The Green Business Guide 9Engineering News 7Legalbrief 6All Africa.com 4ESI Africa 4Parliamentary Monitoring Group 4Africa Green Media 3Interact Media Defined 3

Corporate social responsibility

On 18 July, SANEDI’s Mandela Day activities took the form of a partnership with Soweto TV and Saint Gobain to visit the Kids Educare Centre in Kliptown, Soweto. Batho Pele and accountability are some of the values to which SANEDI aspires - working together, caring for people and going beyond the call of duty.

Starting the day with prayer and lots of singing with the toddlers, SANEDI staffers really got into living the spirit of the country’s iconic grandfather, Nelson Mandela. Donations to make life better for the toddlers and their teachers ranged from a jungle gym

to mattresses, blankets, groceries, cleaning materials and much more.

The second phase of the project, in which a temporary structure with water rain harvesting tanks will be donated, is ongoing.

The highlight of the day was the planting of trees donated by Miss Earth organisers, ensuring that SANEDI gives back not only to the community, but to the environment also.

2013 SANEDI: global news

2013 SANEDI: South African news47

1

6

1 2 1

10 9

0

7 5 4

14

0

20

0

10

24

11

2

712

34

Jan Feb Mar Apr may Jun Jul Aug Sep oct Nov Dec


CommuniCATionS

Media coverage

Press Releases:• The Golden Lions Rugby Union – signed with SANEDI• SANEDI’s energy partner with Women in Energy Africa Forum• Mandela Day celebrations• Glamour Magazine: green tips and awareness• French state visit: SANEDI / AFD technical assistance facility agreement

Radio:• Kingfisher Radio, Port Elizabeth – two interviews• SAFM Women in Energy – Recording of Karen Surridge-Talbot• SAFM Women in Energy – Interview with Nothemba Mlonzi• SAFM – Interview with Dr. Thembakazi Mali• KAYA: Interview with David Mahuma• Kaya Green Tips – Saturday mornings at 11:10am with Michelle Garsforth-Venter (12 months)• SAFM: SANEDI on Nancy Richard’s the Green Show• EDEN FM: regional radio Garden Route

Television:• SABC 3 3 Talk with Noleen• Soweto TV Sustainability Week – green transport• Soweto TV: energy and health tour



In terms of the Public Finance Management Act (Act No 1 of 1999)(PFMA), the SANEDI Board of Directors (the Board) is required to maintain adequate accounting records and is responsible for the content and integrity of the Annual Financial Statements and related financial information included in this report. It is the responsibility of the Board to ensure that the Annual Financial Statements fairly represent the state of affairs of the entity as at the end of the financial year, including the results of its operations and cash flows for the reporting period. 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.

The Annual Financial Statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP), including any interpretations, guidelines and directives issued by the Accounting Standards Board.

The Annual Financial Statements are based on appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates.

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. To enable the Board to meet these responsibilities, the Accounting Authority has set standards for internal controls, aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties, to reduce and/or avoid risk to the entity. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing and monitoring all known forms of risk across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined policies and procedures.The Board is of the opinion that, based on the information and explanations given by management, the internal controls in place provide reasonable assurance that the financial records can be relied on for the preparation of the Annual Financial Statements. Although extreme diligence is applied, these internal financial controls can only provide reasonable, and not absolute, assurance against material misstatement or deficit.

The Accounting Authority is primarily responsible for the financial affairs of the entity.

The external auditors are responsible for independently auditing and reporting on the entity’s Annual Financial Statements. The audited Annual Financial Statements set out on pages 67 to 102 which have been prepared on a going concern basis, were approved by the Accounting Authority on 29 July 2014 and were signed on its behalf by:

ms Rosette nothemba mlonzi Chairperson: SAnEDi Board of Directors

AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014ACCOUNTING AUTHORITY’S RESPONSIBILITIES AND APPROVAL


AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014BOARD AUDIT AND RISK COMMITTEE REPORT

We are pleased to present our report for the financial year ended 31 March 2014.

Charter

The audit and risk committees (the committee) are guided by a detailed charter that is reviewed and approved on an annual basis. The committee has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein. The members of the two committees are the same members and the committee meetings occurred on the same dates.

membership

The committee members were appointed by the Board of Directors and the committee comprises of three non-executive members. The audit committee and risk committee consists of the same members as listed hereunder and are required to meet on a minimum of four occasions per annum, as per the charter. Board audit committee and Board risk committee

Name Appointed Re-appointed ResignedMr V Magan (Chairperson) 1 January 2008 1 January 2011Ms M Nyathi 1 January 2008 1 January 2011 1 January 2014Ms P Segoati 23 October 2013Dr C Sita 23 October 2013Dr R Maserumule 23 October 2013Dr D Hildebrandt 23 October 2013

During the financial year, four meetings were held and attendance was as follows:

Name 23 April 2013 27 July 2013 30 July 2013 24 January 2014Mr V Magan Y Y Y YMs M Nyathi Y Y Y N/A*Ms P Segoati N/A N/A N/A YDr C Sita N/A N/A N/A YDr R Maserumule N/A N/A N/A YDr D Hildebrandt N/A N/A N/A N/A

y = Attended meeting N = Apology receivedN/A = Not a member at the date of meeting * = Not a member at the date of the meeting, but present at the meeting

internal audit

The committee considered and approved the internal audit charter and approved the annual work plan for the internal audit function. The internal audit function is responsible for reviewing and providing assurance on the adequacy and effectiveness of the internal control environment across operations. 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.



The Chief Audit Executive has direct access to the committees, primarily through the Chairperson. The audit committee is also responsible for the assessment of the performance of the internal audit function. An external quality assurance review was performed in March 2013 by the Institute of Internal Auditors (IIA). In April 2013 they reported positive results and rated the internal audit function as “general conformance”, in accordance with the IIA Standards.

The internal audit function is independent and had the necessary resources, budget, standing and authority within the entity to enable it to discharge its functions. The Chief Audit Executive, through a service level agreement, reports functionally to the Chairperson of the audit committee and administratively to CEF (SOC) Limited.

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. We believe that internal audit contributes to the improvement of internal controls within the entity.

internal control effectiveness

The audit committee has noted that the current internal controls that are in place need to be reviewed and improved to ensure that the system is appropriate in all material respects relating to:

• Reduce risks to an acceptable level; • Meet the business objectives; • Ensure all assets are adequately safeguarded; and• Ensure that transactions undertaken are recorded in the accounting records.

Internal and external audit provides the audit committee with reasonable assurance that the majority of internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the internal and external auditors, we noted deficiencies with various internal controls and these have been brought to the attention of management. Corrective measures are being undertaken to rectify these and to avoid similar deficiencies in future.

Corporate governance

We acknowledge that the entity continues to strive towards applying sound principles of good corporate governance. Management confirms that the content and quality of the monthly and quarterly reports prepared and issued by the Chief Executive Officer during the year under review were properly formulated and have complied with the PFMA.

Risk management

The Board assigned the oversight responsibility of the risk management function to the risk committee. The entity implemented a risk management strategy, which includes a fraud prevention plan. A formal risk assessment was undertaken for the year ended 31 March 2014 with quarterly reviews, updates and reports. Consequently, internal audit used this data to prepare the three-year rolling strategic plan and an annual operating audit plan. The risk committee monitored the significant risks faced by the entity through risk reporting, evaluation of the reports and participation in a risk assessment workshop. We are satisfied that significant risks have been managed to an acceptable level.


Annual Financial Statements

We have:

• reviewed and discussed the audited Annual Financial Statements to be included in the annual report with the Auditor-General of South Africa and the Chief Executive Officer and Chief Financial Officer;

• reviewed the entity’s compliance with legal and regulatory provisions; • reviewed the Auditor-General of South Africa management report and management responses thereto;• reviewed accounting policies and practices; and • reviewed significant adjustments resulting from the audit.

Conclusion

We therefore recommend that the Board approve the audited Annual Financial Statements.

Appreciation

The committee expresses its sincere appreciation to the Board, Chief Executive Officer, management, internal audit and the Auditor-General of South Africa for their ongoing support .

mr V magan (Chairperson)28 July 2014



Report on the financial statements

introduction

1. I have audited the financial statements of the South Africa National Energy Development Institute (SANEDI) set out on pages 67 to 102, which comprise the statement of financial position as at 31 March 2014, 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 the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the general notice issued in terms thereof and 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.

REPoRT oF THE AuDiToR-GEnERAL To PARLiAmEnT on SouTH AFRiCAn nATionAL EnERGy DEVELoPmEnT inSTiTuTEFOR THE YEAR ENDED 31 MARCH 2014



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 2014 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 matters

7. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Restatement of corresponding figures

8. As disclosed in note 20 to the financial statements, the corresponding figures for 31 March 2013 have been restated as a result of an error discovered during 2014 in the financial statements of the SANEDI at, and for the year ended 31 March 2013 prior balance sheet.

material losses

9. As disclosed in note 2 to the annual financial statements, material losses to the amount of R839 000 were incurred as a result of destroyed, misappropriated and written off property, plant and equipment.

10. As disclosed in note 4 to the annual financial statements, material losses to the amount of R1 972 000 were incurred as a result of a write-off of irrecoverable trade debtors.

REPoRT on oTHER LEGAL AnD REGuLAToRy REquiREmEnTS

11. In accordance with the PAA and the general notice issued in terms thereof, I report the following findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report, non-compliance with legislation as well as internal control. 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. Accordingly, I do not express an opinion or conclusion on these matters.

Predetermined objectives

12. 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 2014.

• Programme 2: Applied Energy Research on page 109 to 119• Programme 3: Energy Efficiency on page 119 to 121



13. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

14. 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. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMPPI).

15. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

16. The material findings in respect of the selected programmes are as follows:


usefulness of reported performance information

17. FMMI issued by National Treasury requires indicators and targets to be specific and well defined. Performance indicators and targets must be well defined by having clear data definitions so that data can be collected consistently and is easy to understand and use. A total of 46% of performance indicators and targets were not well defined.

18. Treasury Regulation 30.1.3(g) requires the strategic plan to form the basis for the annual report, therefore requiring consistency of objectives, indicators and targets between planning and reporting documents. A total of 100 per cent of the reported objectives, indicators and targets were not consistent with those in the approved strategic plan. This was due to the changes made to the planned objectives, indicators and targets during the financial year.

Reliability of reported performance information

19. I did not raise any material findings on reliability of the reported performance information for programme 2: Applied Energy Research.

Programme 3: Energy Efficiency

usefulness of reported performance information

20. FMPPI issued by National Treasury requires indicators and targets to be specific and well defined Performance indicators and targets must be well defined by having clear data definition so that data can be collected consistently and is easy to understand and use. A total of 40 per cent of performance indicators and targets were not well defined.



Reliability of reported performance information

21. I did not raise any material findings on the usefulness and reliability of the reported performance information for programme 3: Energy Efficiency.

Additional matter

22. I draw attention to the following matter.

Achievement of planned targets

23. Refer to the annual performance report on pages 103 to 121 for information on the achievement of planned targets for the year. 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 on page 17, 18 and 20 of this report.

Compliance with legislation

24. I performed procedures to obtain evidence that the public entity had complied with applicable legislation regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows.

Audit committees

25. For a period during the year, the audit committee was not composed of three members as required by section 77 (a) (i) of the Public Finance Management Act.

Annual financial statements

26. The financial statements submitted for auditing were not fully compliant with the requirements of SA Standards of GRAP as required by section 55(1) (a) and (b) of the PFMA. Material misstatements identified by the AGSA relating to, classification of expenditure, accuracy and classification of revenue from exchange and non-exchange, valuation of property, plant and equipment, valuation of deferred income, notes on prior period errors, were subsequently corrected resulting in the financial statements receiving an unqualified audit opinion.



Procurement and contract management

27. The procurement processes did not comply with the requirements of a fair SCM system as per section 51(1) (a)(iii) of the PFMA, in that:

• the bid documentation did not specify the evaluation and adjudication criteria to be applied.• Contracts and quotations were awarded to bidders who did not submit a declaration on whether

they are employed by the state or connected to any person employed by the state, which is prescribed in order to comply with Treasury regulation.

• Goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1.

• Quotations were awarded to suppliers whose tax matters had not been declared by the South African Revenue Services to be in order as required by Treasury Regulations 16A9.1 (d) and the Preferential Procurement Regulations.

• Contracts were awarded to bidders that did not score the highest points in the evaluation process, as required by section 2(1) (f) of Preferential Procurement Policy Framework Act and Preferential Procurement Regulations.

• Invitations for competitive bidding were not always advertised for a required minimum period of 21 days, as required by Treasury Regulations 16A6.3(c).

Expenditure management

28. The accounting authority did not take effective steps to prevent irregular and fruitless and wasteful expenditure, as required by section 51(1)(b)(ii) of the PFMA.

Asset management

29. As reported in paragraph 9 above, the public entity proper control systems to safeguard and maintain assets were not implemented, as required by sections 50(1)(a) and 51(1)(c) of the Public Finance Management Act.

internal control

30. I considered internal control relevant to my audit of the financial statements, annual report on performance against predetermined objectives and compliance with legislation. 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.



Leadership

31. Management did not exercise adequate oversight responsibility regarding financial and performance reporting and compliance as well as related internal controls

Financial and performance management

32. Non-compliances with laws and regulations reported above could have been avoided had the accounting authority implemented proper controls over monitoring of compliance with laws and regulations.

33. As indicated in paragraph 26, this report, the financial statements contained numerous misstatements that were corrected. This was mainly due to the public entity migrating to a new accounting package and that there was no adequate user needs analysis done prior to the project being initiated.

Pretoria31 July 2014


The Directors present the Accounting Authority report that forms part of the audited Annual Financial Statements for the year ended 31 March 2014.

The South African National Energy Development Institute (SANEDI) is incorporated in terms of section 7 of the National Energy Act 2008 (Act No 34 of 2008), and is listed as a national public entity in terms of schedule 3 of the PFMA as amended.

The Board of Directors acts as the Accounting Authority in terms of the PFMA.

1. members

Name Appointed Resigned/term endedMs N Mlonzi 1 September 2011Mr J Marriott 1 September 2011Mr M Vilana 1 September 2011Ms D Ramalope 17 October 2011Mr M Gordon (alternate director) 17 October 2011Prof E Meyer 1 September 2011 20 August 2013Dr D Hildebrandt 1 September 2011Dr R Maserumule (alternate director) 26 June 2012Ms P Segoati 23 October 2013Ms M Modise 1 September 2011Mr C Manyungwana (alternate director) 3 September 2013 Dr V Munsami 1 February 2013 Mr G Fourie 1 January 2013

2. Attendance of meetings

Name 15 may 2013 29 July 2013 15 october 2013 23 october 2013Ms M Mlonzi Y Y Y YMr J Marriott Y Y Y NMr M Vilana N Y N NMs D Ramalope N Y Y YMr M Gordon (alternate director) N N N NProf E Meyer N N N/A N/ADr D Hildebrandt N Y N YDr R Maserumule (alternate director) Y Y Y YMs P Segoati N/A N/A Y YMs M Modise Y N N NMr C Manyungwana (alternate director) N/A N/A N NDr V Munsami N Y N NMr G Fourie N Y N Y

y = Attended meeting n = Apology received N/A = Not a member at the date of meeting

AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014ACCOUNTING AUTHORITY’S REPORT



Board audit committee and Board risk committee

Name Appointed Re-appointed ResignedMr V Magan 1 January 2008 1 January 2011Ms M Nyathi 1 January 2008 1 January 2011 1 January 2014Ms P Segoati 23 October 2013Dr C Sita 23 October 2013Dr R Maserumule 23 October 2013Dr D Hildebrandt 23 October 2013

Attendance of meetings

Name 23 April 2013 27 July 2013 30 July 2013 24 January 2014Mr V Magan Y Y Y YMs M Nyathi Y Y Y N/A*Ms P Segoati N/A N/A N/A YDr C Sita N/A N/A N/A YDr R Maserumule N/A N/A N/A YDr D Hildebrandt N/A N/A N/A N/A

y = Attended meeting n = Apology receivedN/A = Not a member at the date of meeting * = Not a member at the date of the meeting, but present at the meeting

2. Secretary

The Secretary of the entity is CEF (SOC) Limited incorporated in South Africa and its business and postal addresses are as follows:

Business address Block C, Upper Grayston Office Park 152 Ann Crescent Strathavon Sandton 2199

Postal address PO Box 786141 Sandton 2146



3. 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 2008 (Act No 34 of 2008). In terms of the Act, the main business and operations of SANEDI are:

• Applied Energy Research; and • Energy efficiency.

The principal activities of SANEDI are outlined below:

• Undertake energy efficiency measures as directed by the Minister;• Increase energy efficiency throughout the economy;• Increase the gross domestic product per unit of energy consumed; • Optimise the utilisation of finite energy resources; • Direct, monitor, conduct and implement energy research and technology development in all fields

of energy, other than nuclear energy; and • Promote energy research and technology innovation.

In addition to the above mentioned, SANEDI is expected to provide the following:

• Training and development in the field of energy research and technology development; • Establishment and expansion of industries in the field of energy; • Commercialisation of energy technologies resulting from Applied energy research programmes;• Register patents and intellectual property in its name resulting from its activities;• Issue licenses to other persons for the use of its patents and intellectual property;• Publish information concerning its objectives and core functions; • Establish facilities for the collection and dissemination of information in connection with research,

development and innovation;• Undertake any other energy technology development related activity, as directed by the Minister,

with the concurrence of the Minister of Science and Technology; • Promote relevant energy research through cooperation with any entity, institution or person

equipped with the relevant skills and expertise within and outside the Republic; • Make grants to educational and scientific institutions in aid of research, by promoting the training

of research workers by granting bursaries or grants in aid of research; • Undertake the investigations or research that the Minister, after consultation with the Minister of

Science and Technology, may assign to it; and • Advise the Minister and the Minister of Science and Technology on research in the field of energy

technology.

4. Review of financial position

The entity’s business and operations and the results thereof are clearly reflected in the attached Annual Financial Statements. No material fact or circumstance has occurred between the accounting date and the date of this report.



SANEDI received an MTEF allocation of R134.334 million against a budget submission of R228.096 million; R63.344 million being for the operations of SANEDI and R69 million for SACCCS and R2 million for Hydraulic Fracturing. An additional sum of R7.219 million was received from membership and sponsorship fees received from external funders. A total of R6 million was received from the Department of Science and Technology (DST) during the year.

For the financial year under review, SANEDI incurred expenditure of R84.692 million towards the achievement of its pre-determined objectives as detailed in the annual performance report. The shortfall from the Department of Energy (DoE) allocation for overheads was funded from income received from membership and sponsorship fees during the financial year and monies rolled over from the previous financial year.

A net surplus of R9.006 million was achieved, mainly as a result of the additional funding over and above the MTEF allocation, which SANEDI received from its sponsorship fees, membership fees and other grants from international governments and donors. There was also a less than expected spending on operational expenditure and projects expenditure due to delays in finalisation of project plans. (For further explanations on the performance against budget refer to note 22 in the financial statements.)

SANEDI’s assets continue to exceed liabilities, with a positive cash balance being maintained. It is anticipated that funds not spent by SANEDI will, subject to approval of the National Treasury and DoE, be utilised towards the achievement of SANEDI’s objective in the next financial year.

5. Going concern

SANEDI’s assets exceed its liabilities by R17.408 million. SANEDI has applied for approval of retention of the current surplus funds of R9.006 million from the National Treasury in terms of section 53(3).

The Directors believe that the entity will operate for the next 12 months given the revised allocation received from MTEC for the next financial year.

6. Review of operations

The Government Gazette No 34175, dated 1 April 2011, states that in terms of section 21 of the National Energy Act, 2008 (Act No 34 of 2008):

“I (The President of the Republic of South Africa), hereby fix 01 April 2011 as the date on which Chapter 4 of the said Act shall come into operation.

“Chapter 4 of the National Energy Act, 2008 (No. 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)). All assets, liabilities, and staff of SANERI and NEEA are legislated to be vested in SANEDI.

“The establishment of SANEDI therefore comprises the incorporation of two functioning bodies into one.

“The relevant sections of the National Energy Act (sections 7 to 15) are operationalised. All employees (including board members) of SANERI and NEEA are transferred to SANEDI and all assets and liabilities are transferred to SANEDI. 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. Mechanisms to ensure that CEF continues to provide support services and systems for SANEDI are in place.”



The 2013/14 financial year has been mirrored by similar challenges that have been experienced in the 2012/13 financial year. The entity had to appoint a CFO which was additional to the establishment in order to achieve compliance with the PFMA. Seeing that the Energy Act makes provision for SANEDI to be an independent entity outside of the CEF Group of Companies and to reduce its dependency on CEF, a new IT infrastructure had to be rolled out. With new systems being implemented, it required new policies/procedures/practice notes which warranted change management to ensure compliance. A Company Secretary which will be additional to the establishment will be appointed in the new financial year which will assist in strengthening governance and compliance. The annual performance plan for 2014/15 was approved by the Minister of Energy and will pave the way for SANEDI’s achievement of its key deliverables.

Summarized below are the highlights of the year:

South African Centre for Carbon Capture and Storage (SACCCS)

The focus of the SACCCS activities is the Pilot CO2 Storage Project (PCSP) with its first injection scheduled for 2017. In this regard, the results of the Algoa Basin and Zululand Basin studies were evaluated by an international panel of experts which recommended that further analyses of current and newly discovered geological core samples be undertaken before SANEDI embarks on an exploration programme. The PCSP stakeholder engagement programme commenced through engagements with national, provincial and local government bodies. The permitting process for the exploration programme was initiated. Other highlights included the completion of the CSLF-financed “Non-Climate Change Impacts of Carbon Capture and Storage” that addresses, inter alia, job creation/preservation, and the third Carbon Capture and Storage Conference that was opened by the Minister of Energy. At that conference, Norway and the World Bank pledged future financial support for the PCSP. Capacity building programmes such as the bursary programme continued.

Energy Efficiency and Demand Side management Hub

The Energy Management Working Group (EMWG) steering committee provides country level input and guides decision making during the strategy development process. Committee members refine the approaches, goals, objectives, structure, outreach and communications, and partnerships that will define the EMWG going forward. SANEDI has provided input to ensure that activities through the task teams are designed to be high-impact and will help achieve the goals and objectives of the Global Superior Energy Performance (GSEP) partnership energy management activities and have helped to identify and secure resources needed to execute EMWG activities.

SANEDI, on behalf of the Department of Energy, is driving and coordinating the collaborative agreement with the GSEP partnership, under which the Cool Roofs Initiative falls. The aim of the initiative is to explore existing technologies and develop a wide range of interventions to have a significant impact on reducing the negative effect of climate change and to improve the thermal comfort of buildings in as many countries as possible. Progress thus far and pending actions include:

• Establishment of a testing laboratory in South Africa under the custodianship of SANEDI;• Establishment of industry organisation with participation of industry, academics and government;

and• Research and training collaboration.



SANEDI continues to play a critical role in supporting the tax incentives for energy efficiency improvements made in industry and the commercial sector. The Section 12L incentive, which is coordinated by the Department of Trade and Industry (DTI), in conjunction with National Treasury and SARS, focuses on providing an incentive to industry intent on establishing energy efficient facilities.

More broadly, SANEDI continues to work with the French Development Agency (AFD). Under the current agreement, AFD supports the establishment of a technical advisory facility in SANEDI. This facility provide technical assistance to commercial and developmental financing institutions in South Africa when these institutions review applications for funding of energy efficiency projects. This is in line with a separate agreement between AFD and specific funding institutions, whereby these institutions will be awarded a credit line to support energy efficiency projects in South Africa.

There have been remarkable achievements from the SANEDI Energy Efficiency and Demand Side Management (EEDSM) Hub at the University of Pretoria. The activities of the hub are jointly funded by the Department of Science and Technology (DST) and the Department of Energy (DoE), and the hub has produced over 100 masters and doctoral students, who have specialised and graduated in energy management and who are now playing a pivotal role in filling the skills gap for this sought-after expertise in the country.

The German Agency for International Cooperation (GIZ) has continued to support energy efficiency in South Africa and the South Africa – German Energy Programme (SAGEN) has been put in place.

Technical consultants in energy efficiency and renewable energy have been appointed by GIZ and are stationed at either the DoE or SANEDI. These international experts have been invaluable in supporting initiatives such as policy mapping for the DoE, database establishment for the 12L tax incentive and drafting the parameters governing the introduction of Section 12L.

Working for energy programme (WfE)

The working for energy (WfE) programme is gaining momentum in the bioenergy sector, with all repairs in Melani Village being completed and new projects in Giyani and Illembe progressing well. These initiatives have also produced job opportunities in accordance with the environment and culture sub-sector of the Expanded Public Works Programme.

The greening of public facilities and waste to energy projects had a slow start mainly as a result of attempts to consolidate procurement processes to gain economies of scale and scope since the projects are spread out across the country. Implementation is anticipated early in the new financial year.

SANEDI is also working with stakeholders in the Expanded Public Works Programme to source and leverage capital and operational funding for the next financial year and beyond. The next phase will include other forms of clean energy within its scope, such as energy saving.

Wind Atlas of South Africa (WASA)

The Minister of Energy released WASA’s first High Resolution Wind Resource Map for South Africa in March 2013. The updated wind resource map was presented at the WASA seminar on 8 April 2014 in Cape Town.



The wind resource map offers the following important benefits for developers, policy makers, utilities and industry:

• Cost and timing savings as the bankability of a potential wind farm site can be estimated with known and traceable accuracy;

• Levels the playing field between small and large industry players to identify and develop project sites for wind farms;

• Assists the South African government in estimating the potential yield of the wind energy resources;• Identifies potential wind development zones in line with the strategic environmental framework or

assessments’ studies; and• Enables wind power forecasting and long-term grid planning.

Also launched at the seminar was the WASA Extreme Wind Atlas for South Africa. The Extreme Wind Atlas, apart from assisting in selecting the correct wind turbines, is also being used to update South Africa’s building load codes.

The government of Denmark made further financial support available and SANEDI was chosen to manage WASA Phase 2 with the implementation partners − the South African Weather Service, CSIR, University of Cape Town and DTU Wind Energy (Denmark). WASA Phase 2 will cover KwaZulu-Natal, remaining areas of the Eastern Cape and parts of the Free State provinces.

7. Subsequent events

The directors are unaware of any other matters or circumstances arising since the end of the financial year that are not otherwise dealt with in the Annual Financial Statements and which significantly affect the financial position of the entity or the results of the operations.

8. Approval

The audited Annual Financial Statements set out on pages 67 to 102 which have been prepared on the going concern basis, were approved by the Accounting Authority on 29 July 2014 and were signed on its behalf by:

ms Rosette nothemba mlonzi Chairperson: SAnEDi Board


AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014MATERIALITY 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 or the group of companies;

• 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; and

• Section 54(2) - The criteria to determine the level of significance was based upon the guiding principles as set out in the “Practice Note on applications under Section 54 of the PFMA No 1 of 1999 (as amended) by Public Entities” as published by National Treasury during 2006, subject to adjustments for any Section 54(4) exemptions.

The significant Rand level was determined as being 1 per cent of Revenue as follows:

APPRoVAL LEVELS in TERmS oF SECTion 54

Public entity’s board approval levels < R890 980Obtain DoE approval and inform National Treasury > R890 980


notes2014

R’000

Restated2013

R’000Assets

non-Current Assets 8 287 4 820Property plant and equipment 2 3 921 2 943 Intangibles assets 3 4 366 1 877

Current Assets 155 118 148 340Receivables from exchange transactions 4 3 856 2 261Cash and cash equivalents 5 151 262 146 079

Total Assets 163 405 153 160

LiabilitiesCurrent Liabilities (145 997) (144 758)Payables from exchange transactions 8 (9 530) (11 589)Unspent conditional grants and receipts 6 (129 201) (125 248)Provisions 7 (7 266) (7 921)

Total Liabilities (145 997) (144 758)

net AssetsAccumulated surplus (17 408) (8 402)

AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014STATEMENT OF FINANCIAL POSITION


AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014STATEMENT OF PERFORMANCE

notes2014

R’000

Restated2013

R’000Revenue Revenue from non-exchange transactions 9 83 242 66 638Revenue from exchange transactions 9 10 456 15 234

Total Revenue 93 698 81 872

Expenditure Employee related costs 11 (34 036) (32 041)Project costs (16 229) (19 892)Depreciation and amortisation 2,3 (3 038) (737)Finance costs 12 - (125)Repairs and maintenance (162) (139)Operating expenses 10 (30 355) (11 696)(Loss)/Gain on foreign exchange (53) (46)Impairments 2 (819) -

Total Expenditure (84 692) (64 676)

Surplus for the year 9 006 17 196


AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014STATEMENT OF CHANGES IN NET ASSETS

notes

Accumulated Surplus

R’000

Total Net AssetsR’000

Opening balance as at 31 March 2012 as restated (9 256) (9 256)

Surplus for the year ended 31 March 2013 16 556 16 556

Closing balance as at 31 March 2013 7 300 7 300

Prior period errors 20 1 102 1 102

Restated opening balance 8 402 8 402

Surplus for the year 9 006 9 006

Balance at 31 march 2014 17 408 17 408


AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014CASH FLOW STATEMENT

notes2014

R’000

Restated2013

R’000Cash flows from operating activities

Receipts 161 998 156 614Grants 145 481 133 910Interest income 9 298 3 822Membership fees and sponsorships 7 219 18 882

Payments (149 527) (60 243)Employee costs (32 744) (27 545)Suppliers (44 983) (32 573)Transfers of funds (71 800) -Finance costs - (125)

net cash flows from operating activities 13 12 471 96 371

Cash flows from investing activitiesPurchase of property, plant and equipment (3 133) (2 837)Proceeds from sale of property, plant and equipment 58 15Purchase of other intangible assets (4 213) (1 947)

net cash flows from investing activities (7 288) (4 769)

net increase in cash and cash equivalents 5 183 91 602

Cash and cash equivalents at the beginning of the year 5 146 079 54 477

Cash and cash equivalents at end of the year 5 151 262 146 079


AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014ACCOUNTING POLICIES

1. Presentation of Annual Financial Statements

1.1 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, guidelines and directives issued by the Accounting Standards Board.

These Annual Financial Statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention unless otherwise specified. They are presented in South African Rand.

The financial statements have been prepared on a going concern basis and the accounting policies have been applied consistently throughout the period.

1.2 Translation of foreign currencies

Foreign currency transactionsA foreign currency transaction is recorded, on initial recognition in Rands, 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. At each reporting date:

• Foreign currency monetary items are translated using the closing rate; • 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; 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.

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.

When a gain or loss on a non-monetary item is recognised directly in net assets, any exchange component of that gain or loss is recognised directly in net assets. When a gain or loss on a non-monetary item is recognised in surplus or deficit, any exchange component of that gain or loss is recognised in surplus or deficit.

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.

1.3 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. Events after the reporting date that are indicative of conditions that arose after the reporting date are dealt with by way of a note.

1.4 Property, plant and equipment

Property, plant and equipment are tangible non-current assets that are held for use in the supply of goods or services or for administrative purposes, and are expected to be used during more than one period.



Carrying amountsAll property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Cost The cost of 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

• The cost or fair value of the item can be measured reliably.

The cost of an item of property, 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. Trade discounts and rebates are deducted in arriving at the cost.

Where an item of property, plant and equipment is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired non-monetary asset’s fair value is not determinable, its deemed cost is the carrying amount of the asset given up.

Cost includes costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, or to replace a part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

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, or at the average borrowing rate where the general pool of borrowings is utilised.

DerecognitionThe carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. Such difference is recognised in the surplus or deficit when the item is derecognised.

Depreciation Depreciation is charged so as to write off the depreciable amount of the assets, other than land, over their estimated useful lives to estimated residual values, 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. Where significant parts of an item have different useful lives to the item itself, these parts are depreciated over their estimated useful lives.



The useful life of the assets is reviewed annually.

The following methods and rates are used during the year to depreciate property, plant and equipment to estimate residual values:

item Average useful life Furniture, fittings and communication equipment 2 – 15 years Office equipment 5 years Computer equipment 3 yearsLeasehold improvements Over the period of the lease

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The methods of depreciation, useful lives and residual values are reviewed annually.

1.5 intangible assets

An asset is identified as an intangible asset when it:

• is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, assets or liability; or

• arises from contractual rights or other legal rights, regardless of whether those rights are transferable or separate from the entity or from other rights and obligations. An intangible asset is an identifiable non-monetary asset without physical substance.

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.

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. If assessed as having an indefinite useful life, the intangible asset is not amortised but tested for impairment annually and impaired if necessary. If assessed as having a finite useful life, 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.

Research Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

Development costsDevelopment costs are capitalised only if they result in an asset that can be identified, and it is probable that the asset will generate future economic benefits and the development cost can be reliably measured. Otherwise it is recognised in surplus or deficit.



Derecognition Intangible assets are derecognised on disposal, or when no future economic benefits or service potential are expected from its use or disposal.

The gain or loss arising from the derecognition of an intangible asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the intangible asset. Such a difference is recognised in surplus or deficit when the intangible asset is derecognised.

Amortisation is recognised in profit and loss, on a straight line basis, to their residual values as follows:

item useful life Computer software 2 years

1.6 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. 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. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets held for sale (or disposal group) are measured at the lower of its carrying amount and fair value less costs to sell.

A non-current asset is not depreciated (or amortised) while it is classified as held for sale, or while it is part of a disposal group classified as held for sale.

Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale are recognised in surplus or deficit.

1.7 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. When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return.

Non-cash-generating assets are assets other than cash-generating assets.

identificationThe entity assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. If any such indication exists, the entity estimates the recoverable service amount of the asset.Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.

When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired.Irrespective of whether there is any indication of impairment, 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. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset is tested for impairment before the end of the current reporting period.



Value in useValue in use of an asset is the present value of the asset’s remaining service potential.

The present value of the remaining service potential of an asset is determined using the following approaches:

Depreciated replacement cost approachThe present value of the remaining service potential of a non-cash-generating asset is determined as the depreciated replacement cost of the asset. The replacement cost of an asset is the cost to replace the asset’s gross service potential. This cost is depreciated to reflect the asset in its used condition. An asset may be replaced either through reproduction (replication) of the existing asset or through replacement of its gross service potential. The depreciated replacement cost is measured as the reproduction or replacement cost of the asset, whichever is lower, less accumulated depreciation calculated on the basis of such cost, to reflect the already consumed or expired service potential of the asset.

The replacement cost and reproduction cost of an asset is determined on an “optimised” basis. 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. Overdesigned assets contain features which are unnecessary for the goods or services the asset provides. Overcapacity assets are assets that have a greater capacity than is necessary to meet the demand for goods or services the asset provides. 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.

Restoration cost approachRestoration cost is the cost of restoring the service potential of an asset to its pre-impaired level. 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 latter cost is determined as the depreciated reproduction or replacement cost of the asset, whichever is lower.

Recognition and measurementIf the recoverable service amount of a non-cash-generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. This reduction is an impairment loss.

An impairment loss is recognised immediately in surplus or deficit.

After the recognition of an impairment loss, 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, less its residual value (if any), on a systematic basis over its remaining useful life.

Reversal of an impairment lossThe 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. If any such indication exists, the entity estimates the recoverable service amount of that asset.

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. The carrying amount of the asset is increased to its recoverable service amount. The increase is a reversal of an impairment loss. 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.


A reversal of an impairment loss for a non-cash-generating asset is recognised immediately in surplus or deficit.After a reversal of an impairment loss is recognised, 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, less its residual value (if any), on a systematic basis over its remaining useful life.

Re-designationThe 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.

1.8 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating lease payments are recognised as an expense on a straight line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.

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.

Any contingent rent is recognised separately as an expense when paid or payable and are not straight lined over the lease term.

1.9 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. A financial asset is:

• Cash; • A residual interest of another entity; or • A contractual right to:

− Receive cash or another financial asset from another entity; and − Exchange financial assets or financial liabilities with another entity under conditions that are

potentially favourable to the entity

A financial liability is any liability that is a contractual obligation to:

• Deliver cash or another financial asset to another entity; or • Exchange financial assets or financial liabilities under conditions that are potentially unfavourable

to the entity.

Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments, excluding those instruments that:

• The entity designates at fair value at initial recognition; or• Are held for trading.




Financial instruments at fair value comprise financial assets or financial liabilities that are:

• Derivatives; • Combined instruments that are designated at fair value; and • Instruments held for trading.

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 or • On initial recognition it 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; • Non-derivative financial assets or financial liabilities with fixed or determinable payments that are

designated at fair value at initial recognition; 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.

Financial assets The entity’s principal financial assets are accounts receivable and cash and cash equivalents.

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 costInvestments 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.

initial measurement The entity measures a financial asset and financial liability at amortised cost initially at its fair value, plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

Subsequent measurement The entity measures all financial assets and financial liabilities after initial recognition using the following category:

• Financial instruments at amortised cost.


All financial assets measured at amortised cost, or cost, are subject to an impairment review.

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, minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.

Gains and lossesFor financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.

Trade and other receivablesTrade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, 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. 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.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement.

Trade and other receivables are classified as loans and receivables.

Trade and other payables All financial liabilities are measured at amortised cost, comprising original debt less principal payments and amortisations.

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. These are initially and subsequently recorded at fair value.

DerecognitionThe entity derecognises financial assets using trade date accounting. The entity derecognises a financial asset only when:

• The contractual rights to the cash flows from the financial asset expire, are settled or waived; • The entity transfers to another party substantially all of the risks and rewards of ownership of the

financial asset; or• The entity despite having retained some significant risks and rewards of ownership of the financial

asset, 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, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer.




In this abovementioned case, the entity:

• Derecognises the asset; and • Recognises separately any rights and obligations created or retained in the transfer.

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. Newly created rights and obligations are measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or deficit in the period of the transfer.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.

Financial liabilitiesThe entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished, that is when the obligation specified in the contract is discharged, cancelled, expires or is waived.

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, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, 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).

Fair value measurement considerationsThe best evidence of fair value is quoted prices in an active market. If the market for a financial instrument is not active, the entity establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. 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, the entity uses that technique. The chosen valuation technique makes maximum use of market inputs and relies as little as possible on entity-specific inputs. It incorporates all factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments. Periodically, an entity calibrates the valuation technique and tests it for validity using prices from any observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on any available observable market data.

1.10 Provisions

Provisions are recognised when:

• The entity has a present obligation as a result of a past event; • It is probable that an outflow of resources embodying economic benefits will be required to settle

the obligation; 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. Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. 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.Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. 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.

Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as an interest expense.

A provision is used only for expenditures for which the provision was originally recognised. Provisions are not recognised for future operating deficits.If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.

Contingent assets and contingent liabilitiesContingent assets and contingent liabilities are not recognised.

1.11 Revenue

1.11.1 Revenue from exchange transactions

Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange.

measurement Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

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;

• The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;• It is probable that the economic benefits or service potential associated with the transaction will

flow to the entity; 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, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

The amount of revenue can be measured reliably;

• It is probable that the economic benefits or service potential associated with the transaction will flow to the entity;

• The stage of completion of the transaction at the reporting date can be measured reliably; and • The costs incurred for the transaction and the costs to complete the transaction can be measured

reliably.

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. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the significant act is executed.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

interest, royalties and dividends

Revenue arising from the use by others of entity assets yielding interest, royalties and dividends is recognised when:

• It is probable that the economic benefits or service potential associated with the transaction will flow to the entity;

• The amount of the revenue can be measured reliably; and• Interest is recognised in surplus or deficit, using the effective interest rate method.

1.11.2 Revenue from non-exchange transactions

Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an entity either receives value from another entity without directly giving approximately equal value in exchange or gives value to another entity without directly receiving approximately equal value in exchange.

Stipulations on transferred assets are terms in laws or regulation, or a binding arrangement imposed upon the use of a transferred asset by entities external to the reporting entity.

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.


Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used, but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified.

Recognition An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.

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, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

measurement Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity.

When, as a result of a non-exchange transaction, the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. 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, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.

Gifts and donations, including goods in-kind, 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.

Services in-kind are not recognised.

membership fees Revenue from membership fees are recognised as revenue from non-exchange transactions revenue and are recognised and measured in accordance with GRAP 23.

Conditional grants and receipts Revenue received from conditional grants, donations and funding are recognised as revenue to the extent that the entity has complied with any of the conditions embodied in the agreement. To the extent that the conditions have not been met a liability is recognised.

1.12 irregular, fruitless and wasteful expenditure and unauthorised expenditure

Irregular expenditure as defined in section 1 of the PFMA is expenditure incurred in contravention of, or that is not in accordance with:

• A requirement of the PFMA (Act No 29 of 1999); or• A requirement of the State Tender Board Act (Act No 86 of 1986), or any regulations made in terms

of the Act; or • A requirement in any provincial legislation providing for procurement procedures in that provincial

government.




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. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised. 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. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

Unauthorised expenditure means:

• Overspending of a vote or a main division within a vote; and• Expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in

accordance with the purpose of the main division.

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. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

When an Accounting Authority determines the appropriateness of disciplinary steps against an official, the Accounting Authority must take into account:

• The circumstances of the transgression; • The extent of the expenditure involved; and• The nature and seriousness of the transgression.

All unauthorised, irregular or fruitless and wasteful expenditures are disclosed as a note to the annual financial statements of the entity.

1.13 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until the assets are substantially ready for their intended use or sale. Qualifying assets are assets that necessarily take a substantial period to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets.

Other borrowing costs are recognised as an expense in the period in which they are incurred.

1.14 Key accounting judgments and key sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. 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.


Significant judgment includes:

Going concern Management considers key financial metrics and loan covenant compliance in its approved medium-term budgets, together with its existing term facilities, to conclude that the going concern assumption used in the compiling of its annual financial statements is relevant.

Other Provisions For other provisions, estimates are made of legal or constructive obligations resulting in the raising of provisions, and the expected date of probable outflow of economic benefits to assess whether the provision should be discounted.

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. These calculations require the use of estimates and assumptions.

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. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets.

useful lives of property, plant and equipment and intangible assetsThe entity’s management determines the estimated useful lives and related depreciation charges for property, plant and equipment and intangible assets. This estimate is based on the condition and use of the individual assets, in order to determine the remaining period over which the asset can and will be used.

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. The quoted market price used for financial assets held by the entity is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined by using valuation techniques. The entity uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The carrying values of trade receivables and payables are assumed to approximate their fair values.

1.15 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. Events after the reporting date that are indicative of conditions that arose after the reporting are dealt with by way of a note.




1.16 Employee Benefits

Short-term employee benefitsShort-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. Short-term employee benefits include items such as:

• wages, salaries and social security contributions; • 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; and

• bonus, 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, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.

When an employee has rendered service to the entity during a 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), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, the entity recognises that excess as an asset (prepaid expense) to the extent that the prepayment will lead to for example, a reduction in future payments or

• a cash refund; and • as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost

of an asset.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. 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.

The entity recognises the expected cost of bonus, 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. A present obligation exists when the entity has no realistic alternative but to make the payments.

Post-employment benefits: defined contribution plansWhen an employee has rendered service to the entity during a reporting period, the entity recognises the contribution payable to a defined contribution plan in exchange for that service: as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the reporting date, an entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.

1.17 Related parties

The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the national sphere of government are considered to be related parties.


Key management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.

Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.

Only transactions with related parties not at arm’s length or not in the ordinary course of business are disclosed.

1.18 Budget information

A reconciliation between the statement of financial performance and the budget has been included in the Annual Financial Statements, as the recommended disclosure as determined by National Treasury, as the Annual Financial Statements and the budget are not on the same basis of accounting. Refer to note 23 - Reconciliation between budget and statement of financial performance.

1.19 new Standards and interpretations

Standards and interpretations effective and adopted in the current year In the current year, 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 Standards and interpretations have been published and are mandatory for the entity’s accounting periods beginning on or after 1 April 2013 or later periods but are not relevant to its operations.

1. GRAP 18: Segment reporting The objective of this Standard is to establish principles for reporting financial information by segments. The disclosure of this information will:

• Enable users of the financial statements to better understand the entity’s past performance, to evaluate the nature and financial effects of the activities in which it engages and the economic environments in which it operates;

• Identify the resources allocated to support the major activities of the entity and assist in making decisions about the allocation of resources; and

• Enhance the transparency of financial reporting and enable the entity to better discharge its accountability obligations.

The Standard has been approved by the Board but its effective date has not yet been determined by the Minister of Finance. It is unlikey that the Standard will have a material impact on the entity’s Annual Financial Statements.

2. GRAP 20: Related party disclosures The objective of this Standard is to ensure that a reporting entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties.

The Standard has been approved by the Accounting Standards Board but its effective date not yet been determined by the Minister of Finance. It is unlikely that the Standard will have a material impact on the entity’s Annual Financial Statements.



2. Property, plant and equipment

2014 2013

CostAccumulateddepreciation

Carrying values Cost

Accumulated depreciation

Carrying values

Furniture and fixtures 1 626 (408) 1 218 1 446 (149) 1 297Office equipment 156 (48) 109 155 (22) 133Computer equipment 3 408 (1 075) 2 334 660 (209) 451Leasehold improvements 74 (32) 38 1 066 (176) 890Communication equipment 273 (54) 219 233 (61) 172Total 5 538 (1 617) 3 921 3 560 (617) 2 943

Reconciliation of property, plant and equipment – 2014

opening balance Additions

Disposals/ impairments Transfers Depreciation Total

Furniture and fixtures 1 297 183 (3) - (259) 1 218Office equipment 133 2 - - (26) 109Computer equipment 451 2 776 (19) - (871) 2 337Leasehold improvements 890 - (749) - (103) 38Communication equipment 172 172 (68) - (57) 219Total 2 943 3 133 (839) - (1 316) 3 921

Reconciliation of property, plant and equipment – 2013

opening balance Additions

Disposals/ impairments Transfers Depreciation Total

Furniture and fixtures 166 1 249 - - (118) 1 297Office equipment 17 133 - - (17) 133Computer equipment 276 341 (15) - (151) 451Leasehold improvements 40 1 016 - - (166) 890Communication equipment 108 98 - - (34) 172Total 607 2 837 (15) - (486) 2 943

Management has reviewed useful lives as at 31 March 2014 and concluded that they fairly reflect the expected usage of assets.

noTES To AnnuAL FinAnCiAL STATEmEnTSFOR THE YEAR ENDED 31 MARCH 2014


3. intangible assets

31 march 2014

2014 2013

CostAccumulated Depreciation

Carrying Values Cost

Accumulated Depreciation

Carrying Values

Computer software 6 465 (2 099) 4 366 2 251 (374) 1 877

Reconciliation of intangible assets – 2014

opening Balance Additions Disposals Transfers Amortisation Total

Computer software 1 877 4 213 - - (1 724) 4 366

Reconciliation of intangible assets – 2013

opening Balance Additions Disposals Transfers Amortisation Total

Computer software 173 1 947 (44) - (199) 1 877

4. Receivables from exchange transactions

Financial assets at amortised cost

2014R’000

Restated2013

R’000Receivables from exchange transactions 7 118 8 578Employee costs in advance 16 11Prepayments 963 52Provision for bad debts (4 646) (6 821)Other receivables from non-exchange transactions - -Interest receivable 405 441

3 856 2 261

Trade and other receivables are not pledged as security. The entity does not hold any collateral as security.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.

At 31 March 2014, R0.2million (2013: R 1.306million) were past due but not impaired.

The ageing of amounts past due but not impaired is as follows:1 month past due 1 162 268 2 months past due - -3 months past due 638 1 038




Trade and other receivables impairedThe amount of the provision was R4.646 million as at 31 March 2014 (2013: R 6.821 million) 2014

R’000

Restated2013

R’000The ageing of these receivables is as follows:Over 6 months 4 646 6 821

Reconciliation of provision for impairment of trade and other receivables:Opening balance 6 821 203Written back 2 175 6 618Provision for doubtful debts - -

4 646 6 821

The creation and release of provision for impaired receivables have been included in operating expenses in surplus. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above.

5. Cash and cash equivalents

Cash and cash equivalents consist of the following:

Cash on hand 10 10Bank balances 151 252 146 069

151 262 146 079

There are no restrictions placed on the realisation or usability of cash balances. The entity does not have access to any additional undrawn facilities.

6. unspent conditional grants and Third Party funds

unspent conditional grants and receipts comprises:Unspent grants and Third Party Funds 129 201 125 248

movement during the yearBalance at the beginning of the year 125 248 59 457Additions during the year and interest 95 202 84 233Income recognition during the year (19 449) (18 442)Transfers (71 800) -

129 201 125 248

These amounts are invested in money market accounts and interest accrues to the invested money.


6. unspent conditional grants and Third Party funds (continued)

Unspent conditional grants and receipts comprises:2014

R’000

Restated2013

R’000Danish Commercial building project 454 703European Union Project (COCATE) 524 489FP7 66 63SA Carbon Capture and Storage Centre 86 070 16 036Centre for Energy Systems and Research 4 098 2 000SA Road Coal Map 752 1 096SDC EE Monitoring and Implementation Project 940 3 881Working for Energy Programme 25 137 27 784EU AID Demo Project 4 288 71 800REEEP - -Wind Resource Mapping 4 221 1 396Shale Gas 1 627 -Energy Efficiency 1 024 -

129 201 125 248

7. Provisions

Reconciliation of provisions – 2014opening balanceR’000

utilisedR’000

AdditionsR’000

ClosingR’000

Bonus provision 7 921 (7 921) 7 266 7 266

31 march 2013opening balanceR’000

utilisedR’000

AdditionsR’000

Bonus provisionR’000

Bonus provision 4 350 (4 350) 7 921 7 921

The bonus provision is calculated based on a percentage of the entity’s performance and the individual performance ratings of staff members.

8. Payables from exchange transactions

2014R’000

Restated2013

R’000Trade payables and accruals 9 530 6 399Other payables - 5 190

9 530 11 589



9. Revenue

9.1 Revenue non-exchange is made up as follows:

2014R’000

Restated2013

R’000Grants received 83 242 66 638

9.2 Revenue from exchange transactions is made up as follows:

Interest received 225 3 822Membership fees and sponsorships 8 130 11 397Other Income 2 101 15

10 456 15 234

Interest is earned on monies 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 67 -Income from current account 9 1 531Profit on sale of assets 25 15Refund 2 000 -

2 101 1 546

10. operating expensesAdvertising 1 092 426Bank charges 23 17Audit fees 715 465Legal fees 33 5Donations - -Entertainment 114 254Gifts 302 82Insurance 205 113Conferences and seminars 65 360Lease rentals on operating lease 4 005 2 348Marketing 5 088 1 612Postage and courier 16 7Printing and stationery 489 444Subscriptions and membership fees 353 92Telephone and fax 384 139Transport and freight - -Travel – local 3 190 890 Travel – overseas 2 496 1 141Administration 5 026 3 290Other expenses - 11Consulting fees 7 008 -

30 604 11 696



11. Employee related costs

2014R’000

Restated2013

R’000Basic 25 656 22 416Bonus 5 090 6 646Medical aid – entity contributions 405 312UIF 63 44WCA 42 34SDL 301 240Other payroll levies 5 3Leave pay provision charge 1 037 552Employee welfare and training 366 722Provident and pension contributions 1 071 993Travel, motor car, accommodation, subsistence and other allowances - 79

34 036 32 041

12. Finance costs Other interest paid - 125

13. Cash generated from operations Surplus 9 006 17 196Adjustments for: Depreciation and amortisation 3 038 538Accrued expenses 776 964Movements in bonus provision - 3 571Foreign exchange transactions 53 46Impairments 819 -Provision for bad debts reversal (2 175) -Other Income - (691)

Changes in working capital:

954 74 747Trade and other receivables (1 595) 12 112Payables from exchange transactions (2 059) (978)Unspent conditional grants and receipts 3 953 63 613Provisions 655 -

12 471 96 371



14. Commitments

operating lease commitments: CEF (SoC) Limited

minimum lease payments due – 2014

R’000

Restated2013

R’000Within one year 339 651

Block E, Upper Grayston Office Park, 150 Linden Road, 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 2 369 1 959Second to fifth year inclusive 6 451 8 727

8 820 10 686

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 five 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.

Printing equipment

operating lease commitments for printing equipment

minimum lease payments due – Within one year 72 72 Second to fifth year inclusive 108 181

SANEDI has entered into a 36 month lease for photocopiers. The lease has no escalation clause and is payable monthly in advance.

Defaults and breaches

There was no default during the period of principal, interest, sinking fund or redemption terms of loans payable. No terms were renegotiated before the financial statements were authorised for issue.



14. Commitments (continued)

Contractual commitments

2014R’000

Restated2013

R’000Within one year 21 886 28 745

SANEDI has entered into various contracts with service providers for the achievement of its key deliverables for the working for energy programme, the Centre for Energy Systems Research, the Energy Efficiency and Demand Side Management Hub and various projects under the clean energy programme.

Capital commitments approved not contracted for

within one year 1 080 100

These are Capex commitments budgeted for and approved by the Board but not contracted for.

15. Contingencies

Surplus funds

SANEDI has a surplus for the year ended 31 March 2014 amounting to R9.006 million (2013: R17.196 million). A request has been submitted to National Treasury to retain the surplus, in terms of Section 53 of the PFMA.

16. Related parties

Compensation to key management –

31 march 2014

Basic salaryR’000

AllowancesR’000

Performance bonusR’000

Subsistence and travel

R’000LeaveR’000

Entity contributions

R’000

Total

R’000Mr KM Nassiep - Chief Executive Officer

1 719 132 769 75 71 206 2 972

Ms L Manamela - Chief Financial Officer

84 2 - - - 10 96

Dr AD Surridge 1 123 108 465 7 - 204 1 906Mr D Batte 1 174 24 397 - - 86 1 681Dr M Bipath 1 058 84 500 15 49 200 1 907Dr T Mali 1 076 66 429 46 46 222 1 885Mr C Snyman 905 21 - - - 75 1 001Mr D Mahuma 1 174 24 247 35 - 77 1 557Mr B Bredenkamp 1 118 24 465 85 - 224 1 916 Total 9 431 485 3 272 264 166 1 304 14 922



31 march 2013

Basic salaryR’000

AllowancesR’000

Performance bonusR’000

Subsistence and travel

R’000LeaveR’000

Entity contributions

R’000

Total

R’000Mr KM Nassiep - Chief Executive Officer

1 699 132 769 51 137 190 2 978

Ms L Manamela - Chief Financial Officer

- - - - - - -

Dr AD Surridge 1 110 108 465 7 - 182 1 871Mr D Batte 1 045 24 397 - - 89 1 556Dr M Bipath 1 045 84 500 26 49 - 1 705Dr T Mali 1 064 66 429 48 46 220 1 873Mr C Snyman 735 17 - - - 48 800Mr D Mahuma 1 161 24 247 20 - 66 1 518Mr B Bredenkamp 1 105 24 465 82 - 202 1 878Total 7 950 371 2 808 230 233 1 018 12 609

members’ emoluments

Committee fees2014

R’000

Restated2013

R’000Mr J Marriott 32 93 Ms N Mlonzi 24 90Ms M Modise* - -Mr M Vilana* - -Dr D Hilderbrandt* 24 74 Mr M Gordan*(alternate director) - -Prof E Meyer* - 46 Ms D Ramalope* - -Dr R Maserumule * (alternate director) - -Ms P Segoati 8 -Mr G Fourie* - -Mr C Manyungwana* (alternate director) - -Dr C Sita* - -Dr V Munsami* - -Total 88 303

* These members are not remunerated in their personal capacity.



16. Related parties (continued)

Board Audit Committee

Committee fees2014

R’000

Restated2013

R’000Mr V Magan 27 50Ms M Thomani - 26Ms M Nyathi 12 33Dr C Sita* - -Dr R Maserumule - -Dr D Hildebrandt 4 -Ms P Segoati - -Total 43 109

* These members are not remunerated in their personal capacity.

SANEDI has been established by the Department of Energy and in terms of national legislation. SANEDI is ultimately controlled by the Department of Energy.

Grants received

Department of Energy 134 344 127 910Department of Science and Technology 6 000 6 000

All transactions with related parties are at arm’s length and will not be disclosed separately.

17. Financial instruments

introduction

The entity has a risk management and central treasury function that manages the financial risks relating to the entity’s operations. The entity’s liquidity, credit, foreign exchange and interest rate risks are monitored continually. 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.

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. Throughout the year under review it has been, and remains, the entity’s policy that no speculative trading in derivative instruments be undertaken.




Credit risk

Financial assets, which potentially subject the entity to concentrations of credit risk, pertain principally to trade receivables and investments in the South African money market. Trade receivables are presented net of the allowance for doubtful debts.

The exposure to credit risk with respect to trade receivables is not concentrated due to a large customer base.

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. Losses are not expected as a result of non-performance by these counter parties.

Credit limits with financial institutions are revised and approved by the Board quarterly.

Fair value

The entity’s financial instruments consist mainly of cash and cash equivalents, trade receivables, trade payables and long-term debt.

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.

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.

Trade receivables

The carrying amounts of trade receivables net of provision for bad debt, approximates fair value due to the relatively short-term maturity of this financial asset.

Trade payables

The carrying amounts of trade payables approximates fair value due to the relatively short-term maturity of these liabilities.

The carrying value of short-term borrowings approximates fair value due to the relatively short-term maturity of these liabilities. The fair values of other long-term borrowings are not materially different from the carrying amounts.


maturity profile

The maturity profiles of financial assets and liabilities at the statement of financial position date are as follows:

At 31 march 2014

Less than 1 year

R’000

Between 1 and 5 years

R’000over 5 years

R’000non-interest

R’000TotalR’000

Cash and cash equivalents 151 262 - - - 151 262Trade and other receivables 3 856 - - - 3 856Total financial assets 155 118 - - - 155 118

Liabilities Trade and other payables 9 530 - - - 9 530

At 31 march 2013

Less than 1 year

R’000

Between 1 and 5 years

R’000over 5 years

R’000

Held to maturity

investmentsR’000

TotalR’000

Cash and cash equivalents 146 079 - - - 146 079Trade and other receivables 2 261 - - - 2 261Loans receivable - - - - -Total financial assets 148 340 - - - 148 340


Financial instruments by category:

31 march 2014

Loans and receivables

R’000

Fair value through

profit and loss – held for

trading R’000

Fair value through profit

and loss –designated

R’000non-interest

R’000TotalR’000

Cash and cash equivalents 151 262 - - - 151 262Trade and other receivables 3 856 - - - 3 856Total financial assets 155 530 - - - 155 530




At 31 march 2013

Loans and receivables

R’000

Fair value through

profit and loss – held for

tradingR’000

Fair value through profit

and loss –designated

R’000 non-interestTotalR’000

Cash and cash equivalents 146 079 - - - 146 079Trade and other receivables 2 261 - - - 2 261Loans receivable - - - -Total financial assets 148 340 - - - 148 340


Liquidity risk

The entity manages liquidity risk through proper management of working capital, capital expenditure and actual vs forecast cash flows. Adequate reserves and liquid resources are also maintained.

18. Fruitless and wasteful expenditure

2014R’000

Restated2013

R’000Reconciliation of fruitless and wasteful expenditure

Opening balance 2 -Fruitless and wasteful expenditure – relating to current year - 2Less: Amounts condoned by the Board of Directors - -

Fruitless and wasteful expenditure awaiting condonation 2 2

No fruitless and wasteful expenditure was incurred during the financial year. Prior year fruitless and wasteful expenditure was incurred as a result of late payments made to a supplier.

19. irregular expenditure

Reconciliation of irregular expenditure

Opening balance 12 644 -Irregular expenditure – relating to current year 6 458 12 644Less: Amounts condoned by Board - -

Irregular expenditure awaiting condonation 19 102 12 644



Condonation of irregular expenditure

Subsequent to the financial year, at the Board meeting held on 11 June 2014, the Board of Directors approved the condonation of irregular expenditure.

As at 31 March 2014, none of the irregular expenditure had been condoned by National Treasury.

Contravention of legislation Preferential Procurement Policy Framework Act (PPPFA)

Correct procurement processes not followed:

• No notification for deviations from procurement process above R1 million The procurement decision was enacted while SANEDI was still a Schedule 2 public entity within the CEF group. This resulted in irregular expenditure of R2.970 million (2013: R3.266 million)

Urgent procurement:

• Three responsive quotes were not obtained in all instances. This resulted in irregular expenditure of R0.662 million (2013: R3.29 million).

• Procurement of goods and services above R30 000 from 8 December 2012 should have been evaluated as per PPPFA legislation. This resulted in irregular expenditure of R0.726 million (2013: R7.672 million).

Contravention of legislation (National Treasury Regulations)

• Correct procurement processes not followed: Approval of application in terms of Treasury regulation 16A 6.4 to deviate from the standard procurement process. This resulted in irregular expenditure of R1.377 million (2013: Nil).

• Expenditure not approved by the delegated authority: Approval of the audit for SACCCS not approved by internal audit as per Treasury regulations 3.1.9 R0.219 million (2013: Nil).

No tax clearance certificates

• Goods and services were procured from suppliers without obtaining confirmation that their tax matters were in good order, resulting in irregular expenditure of R1.211 million (2013: Nil).

Bid advertising for a shorter period

Bids were not advertised in the appropriate publications for the periods as prescribed in terms of the Treasury regulations resulting in irregular expenditure of R0.322 million (2013: Nil).

20. Prior Period errors

Revenue from exchange transactions/ retained income

SANERI VAT receivable balance incorrectly recorded in SANEDI trade and other receivables was corrected.



Trade and other payable/revenue from exchange transactions

• Uncleared balances relating to travel and subsistence were incorrectly accounted for, resulting in duplicate entries in clearing accounts. Credit balances for invoices already paid, which were reflecting in the creditor’s statements, were corrected.

• Cut off errors in the capturing of leave resulted in the correction of leave provision balance to account for leave in the correct period.

Deferred income/revenue from non-exchange transactions

• Correction of an incorrect classification between SANEDI expenditure and expenditure funded from grants.

• CESAR deferred income balance was corrected with monies incorrectly accounted for under SACCCS.

Cash and cash equivalents

The correction of the error(s) results in adjustments as follows:

Statement of financial position

Receivables from exchange transactions 462Trade and other payables 1 730Deferred income (1 090)Retained income (462)

Statement of financial performance

Revenue from non-exchange transactions 1 090Revenue from exchange transactions (1 531)Operating expenses (199)

21. Events after balance sheet date

Subsequent to the financial year, at the Board meeting held on 11 June 2014, the Board of Directors approved the condonation of irregular expenditure amounting to R17.320 million.



22. Statement of comparative and actual information

notes

Original Budget

R’000

Budget Adjustments

R’000

Final budget

R’000

Final outcome

R’000Variance

R’000

Actual outcome

as a percentage of original

budget

Actual outcome

as a percentage

of Final budget

Financial performanceGrants and other receipts

1 228 096 - 228 096 93 698 138 398 41 41

Total income 228 096 - 228 096 93 698 138 398 41 41

Employee costs 2 32 567 6 758 39 325 34 036 5 289 87 105Depreciation and asset impairment

- 695 695 3 856 (3 161) - 555

Project costs 3 183 291 (27 975) 155 316 16 229 139 086 9 10Operating expenditure

4 12 238 20 522 32 760 30 571 2 189 250 93

Total expenditure 228 096 - 228 096 84 692 145 403 37 37

Surplus for the year - - - (9 006) (9 006)

notes1. The Budget included DoE MTEF allocation for SANEDI, SACCCS, and hydraulic fracturing. Income from external

funders included the AFD and EU Smart metering and roll-over funds from previous financial year. During the financial year SANEDI had to surrender to the RDP fund R71.8 Million due to the rules of the fund requiring that any unspent funds be surrendered to the RDP fund. The project plan for the project was only approved late in the year and as such did not allow sufficient time to implement prior to the end of the financial year. Not all the funds were recognised through the income statement but recognised as deferred income to be spent per the approved annual plans.

2. The increase in employee costs is due to the bonus provision for the 2013/14 financial year. The underspending on the budget is due to some vacancies that were not filled during the financial year such as that of the Company Secretary and the HR practitioner. The CFO vacancy was filled during the last month of the financial year. To date advertisements for a Company Secretary have been placed. SANEDI has gone out on open tender for an HR consultant to assist during the next 12 months with HR functions, policies and procedures and setting up systems for HR.

3. The decrease in project costs is a result of the slow progress on the SACCCS project, and the reduction of SANEDI’s contribution towards GTP as the project is unfunded. There has also been underspending as a result of project plans that have not been approved in time and delays in procurement processes.

4. Redirected project funds to operational expenditure, including increase in travel, CEF management fees and rental expenditure for the CEF building as well as the SANEDI building.



objective indicator Target Performance result Comments

interventions put in place to address non-achievement

Programme 1: Administration and Corporate Governance

Executive Support

Responses and presentation to DoE and the Minister of Energy

Executive support to the DoE and Minister provided

Achieved The entity has supported the Minister and the DoE in terms of responses to parliamentary questions, representation and support on various international committees/conferences, presentations to parliament, tabling of the annual report and the annual performance plan.

Support services (services dependent on CEF)

Quarterly evaluation of services rendered: records management;security management; legal services; facilities management; secretariat; human resource; internal audit; supply chain management

Quarterly evaluation of services rendered as documented in the SLA

Achieved The amount of dependency on the CEF Group of Companies has been reduced drastically. Services from CEF include the treasury function, legal services, internal audit and human resources.

Corporate governance

Compliance to relevant legislation/policies/procedures

Compliance to relevant legislation/policies/procedures

Partially achieved

Complied in terms of submitting annual report, strategic plan, APP and quarterly reports. There still seem to be challenges with regards to procurement /finance

The procurement policy and the policy relating to irregular expenditure has been tabled at the Board audit committee and has been recommended to the Board for approval. Once the necessary approval has been obtained, information sessions will be held to create awareness, thereby assisting the change management process and achieving compliance

PERFoRmAnCE AGAinST oBJECTiVES FOR THE YEAR ENDED 31 MARCH 2014




Programme 1: Administration and Corporate Governance (continued)

Corporate governance(continued)

Effective and efficient operations/administration

Effective and efficient operations /administration

Achieved Management reviews its business intelligence on an ongoing basis to ensure that it supports its vision and mission in order to achieve its objectives. Management is reviewing all policies/procedures/practice notes to ensure that they are aligned to best practice thereby achieving operational excellence

Corporate and programme marketing and communication services

Corporate and programme marketing and communication plan approved and implemented

Corporate and programme marketing and communications plan approved and implemented

Not achieved Plan submitted but not accepted by SANEDI EXCO and is in the process of being completely re- drafted.

The revised draft strategy is ready for submission to EXCO together with the stakeholder engagement strategy, the public relations strategy and the media plan

Monitoring and evaluation of corporate and programme and marketing and communication plan

Not achieved Plan submitted but not accepted by SANEDI EXCO and is in the process of being completely re – drafted

The services of Government Communication Information Services (GCIS) has been sought to assist in this area as per the cost containment measures from National Treasury

Financial management and management accounting

SANEDI budget coordinated and aligned to strategic plan and annual performance plan

SANEDI budget coordinated and aligned to strategic plan and annual performance plan

Achieved The budget is coordinated and aligned to the strategic plan and the annual performance plan as per the Framework for Strategic Plans and Annual Performance Plans






Financial Management and management accounting(continued)

Spending monitored and financial performance reported

Spending monitored and financial performance reported

Achieved Monthly budget committee meetings are held where spending is monitored and financial performance is reported

Debt and revenue due to SANEDI managed and accurately and timeously recorded and the cash book managed

Debt and revenue due to SANEDI managed and accurately and timeously recorded and the cash book managed

Achieved The appropriate processes are followed to manage and record debt and revenue owing to SANEDI

SANEDI assets managed

SANEDI assets managed

Achieved SANEDI assets are managed according to the asset management policy

SANEDI expenditure and creditors managed

SANEDI expenditure and creditors managed

Achieved SANEDI expenditure managed in terms of the PFMA and other related guidelines including cost containment measures

Programme management accounting reporting

Programme management accounting reporting

Achieved Utilising Programme accounting provides senior managers with the ability to accurately assess and monitor programme budgets and ensure that the programme/project is on budget. Senior managers can quickly address any cost overruns and revise budgets if necessary






ICT infrastructure and systems

ICT strategic plan developed, approved and implemented; Mechanism to enhance energy data collection and storage provided; Relocate SANEDI to its own offices; Implement hardware infrastructure according to the needs of SANEDI

Develop and approve policy and procedure for existing IT systems

Achieved SANEDI is no longer dependent on the CEF Group of Companies for ICT infrastructure and systems. It therefore requires its own IT related policies and procedures

Develop, approve and implement firewall services for SANEDI’s network

Achieved A firewall is essential to a network. Without a firewall, the entity will be exposed to theft or disclosure of internal data and unauthorised access to information which could result in negative publicity and lawsuits

Implement SANEDI’s own internet infrastructure

Achieved SANEDI had to implement its own internet infrastructure as it is no longer dependent on CEF for its IT services

Finalise the implementation of the ERP system

Achieved Management reviewed its business processes and the ERP system was identified as the best system to support its business objectives. The system is now being implemented







ICT infrastructure and systems(continued)

Develop and approve an ICT disaster recovery plan and implement; Enterprises resources management system implemented; Project management system implemented; Exchange server approved and implemented; SANEDI domain created, approved and implemented; SLA with CEF for ICT services provided

Finalise the implementation of the project system

Achieved SANEDI’s project environment warranted the implementation of project management software as it has the capacity to help plan, organise and manage resources which will assist in contributing to the key deliverables of the entity

Implement telephone services for SANEDI

Achieved The IP telephony system makes use of the standard LAN which helps to reduce the operational costs. The entity was dependent on CEF for its services





ICT infrastructure and systems(continued)

Implement knowledge management for SANEDI

Achieved The entity recognises that effective knowledge management is the key driver for new knowledge and ideas. Through knowledge management, staff are able to create, transfer and apply knowledge to achieve the objectives of the entity. This assists in reducing costs

Maintain current ICT systems

Achieved New systems which are implemented need to be constantly maintained. Maintenance usually includes virus scans and back up of data.

Offer support to business in all regards to all ICT systems

Achieved SANEDI has its own helpdesk function which provides “in house” support to its staff.

Manage the close out of SANERI

Books of SANERI audited and closed out and de- register SANERI as a company

Close out SANERI books and de-register SANERI as a company

Partially achieved

The SANERI VAT issue is still outstanding. The service of SARS was engaged to try to resolve this issue. With staff turnover, SARS was always challenged with a new official coming on board who did not know the history and background of the issue

It will be escalated to another level to bring the matter to conclusion







Advanced Fossil Fuels and CCS

Clean coal technologies

To facilitate the optimisation and efficient use of coal and decrease greenhouse gas emissions

Financial management of the SACRM

Achieved 100% support rendered to the SACRM

Oil and gas frameworks

To facilitate the optimisation and efficient use of oil and gas and decrease greenhouse gas emissions

Analysis of R&D gaps

Achieved Submitted to the DoE

Carbon capture and storage

To determine the potential and appropriateness of technologies for the geological storage of carbon dioxide

Completion of current projects

Achieved The following projects have been completed: 1. SAfeCCS 2. COCATE 3. Zululand Basin

SACCCS governance review

Achieved The SACCCS governance review is now completed and discussions have commenced on the implementation of the consultants’ recommendations

Funding for Pilot CO2 Storage Project

Achieved USD 27 million (~R280 million) has been allocated by the World Bank for the Pilot CO2 Storage Project in addition to the R197 million committed by the Department of Energy. The Norwegian government has also committed NOK 17 million (~R30 million) to the PCSP





Advanced Fossil Fuels and CCS (continued)

Carbon capture and storage (continued)

To determine the potential and appropriateness of technologies for the geological storage of carbon dioxide(continued)

Public engagement: engage with five stakeholders every quarter

Achieved 26 stakeholders have been engaged with respect to PCSP. Stakeholders engaged so far include national and provincial authorities, district and local municipalities, environmental organisations and other interested and affected parties

Finalisation of Gate 2 criteria

Achieved The PCSP Gate 2 Deliverables were developed and approved by the SACCCS board of governors to ensure the PCSP is developed in accordance with South African and international best practice

Establishment and activation of international PCSP Advisory Committee (PAC)

Achieved The international PAC was established with four world experts in geological exploration and CO2 storage. The experts have vast experience from industry and research and will ensure the PCSP is developed in accordance with international best practice

PAC review of geological information of Algoa and Zululand Basins

Achieved The first meeting of the international PAC was held. The focus of the meeting was a review of the geological analysis done to date on the two areas of interest for the PCSP







Advanced Fossil Fuels and CCS (continued)

Carbon capture and storage (continued)

To determine the potential and appropriateness of technologies for the geological storage of carbon dioxide(continued)

Implementing of PAC recommendations

Partially achieved

Draft call for proposals given to the World Bank as it will be going out on call

The implementation of the PAC recommendations will be done in partnership with the World Bank

CCS Conference Achieved The third South African CCS conference was held and included a presentation from then Minister of Energy Dikobe Ben Martins

Shale gas To determine the potential of shale gas in SA

Compilation of a shale gas investigation work plan

Partially achieved

Report was submitted in September 2013. Awaiting approval of the workplan by the DoE

Interdepartmental task team has been appointed by the Department of Energy. Awaiting clarity from the DoE regarding approval of the workplan


Clean Energy Solutions

Operationalise RECORD

Coordinate renewable energy research in SA; Facilitate renewable energy research collaboration;Contribute to renewable energy skills development; Support renewable energy business development;Marketing and awareness creation of the Renewable Energy Centre of Research and Development and renewable energy in SA

Establish a renewable energy centre (PV expertise between NMMU and iPV University of Stuttgart for research and development

Achieved SANEDI and GIZ have an agreement in place to provide NMMU with funding of R3million. Equipment has been purchased and testing has commenced





Clean Energy Solutions (continued)

Operationalise RECORD (continued)

Securing additional funding

Achieved GIZ has undertaken to provide RECORD with R500 000. Industry has also pledged its support of R1.7 million to the research and development of renewable energy

Skills development bursary scheme for tertiary education

Achieved 35 wind turbine technicians were trained in Germany. Of these, eight wind turbine trainers were trained. These skills have been absorbed in industry in South Africa. RECORD has hosted knowledge sharing workshops. The Douglas Bank Renewable Energy vision for South Africa has been funded for the past three years

Explore opportunities for standards development support

Achieved Meetings were held with SABS on renewable energy technology standards. Subsequent to late 2012 and meetings with SANAS, funding was leveraged through the GEF programme to address discussion issues








Projects, pilots and demonstration

WASA; Mobile waste to energy plant;Solar Road Map

Creation of an observational wind atlas

Achieved The wind atlas uses physically measured wind data. This is required for verifying modelling and comparison purposes

Conceptualise a framework for WASA Phase ii

Achieved WASA ii covers the remaining areas of the Eastern Cape, KwaZulu-Natal and parts of the Free State.

Conceptualising waste to energy hub concept

Not achieved Protracted contract negotiations with NECSA (Researcher left Wits- collaboration with NECSA initiated )

Contract now in place and expected to proceed as planned

Finalise road map process with IEA, DoE, DST and TIA

Not achieved Road map not yet finalised as completion date for road map is end of June

All is on track and final draft is under review

Support to the solar parks project

Meterological facility

Test and demonstration facility

Initiate set up of solar measuring station

Achieved All meterological stations are installed across South Africa. Funding has been leveraged from GIZ and USTDA. Measurements commenced last year and are on track for two-year project

Pre-feasibility for test and demo facility

Not achieved It was decided that this would start on a small scale at centres that already have the expertise and there are ongoing efforts to partner and fundraise (initial concept close out report)

Individual nodes of excellence have been identified and are being supported in order to initiate the new concept of a decentralised facility






International collaboration

Representation of South Africa in an international Forum where technical knowledge is gained and skills are transferred; Globalisation of expertise and leveraging of research funding

Maintain existing IEA implementing agreements and REEEP and EUFP7

Achieved The international collaboration provides SANEDI with the opportunity to gain knowledge and skills on an international platform


Smartgrids

SA smart grid vision that will set the direction to enhance supply reliability and the effective operations of the electricity distribution industry (EDI)

Minutes of stakeholder workshops; Report and presentation to SANEDI Board of Directors; Submit a briefing document to DoE

Approved smart grid vision for SA

Not achieved Document submitted to the DoE. Awaiting feedback

Engage the DoE so that alignment with the department can be obtained on the way forward for the project







Smartgrids (continued)

Compile current state assessment to, amongst others, define the EDI constraints from a holistic system reliability and real time data availability perspective

Terms of reference document; Resource requirements identified; Smart grid scoping document

Terms of reference for evaluation study defined; Contract for current state evaluation planned; Key staff secondment framework approach in place

Not achieved Programme as reflected in the 2013/14 APP was put on hold in August 2013.In quarter 4, SANEDI focused on finalising the concept paper, developing and finalising the business plan with the DoE which is to be submitted to National Treasury as the revised plan for the EU funding.The new business plan is aligned to the DoE priorities. Eight projects have been developed and finalised. Collaboration agreements have been developed with Mogale City, City Power, Thabazimbi and eThekwini to implement various aspects of the smart grid solution. Collaboration agreements are under discussion and are to be finalised with Nelson Mandela Bay, Msundusi and Ekurhuleni. A well-attended workshop on active network management was held with SASGI members. Presented a paper at the Distributech Conference – The Electricity Utility of the Future 21st Century positioning for a low carbon future






Compile current state assessment to amongst others, define the EDI constraints from a holistic system reliability and real time data availability perspective(continued)

Terms of reference document; Resource requirements identified; Smart grid scoping document (continued)

Contract for current state evaluation planned

Not achieved As above

Key staff secondment framework/approach in place


Technology, governance and service gap analysis and defined solutions /actions to realise the smart grid vision – minutes of Work Group Technology, regulatory, institutional, policy skills, ICT gaps and propose solutions identified

Minutes of workgroup technology, regulatory, institutional, policy, skills, ICT gaps and propose solutions identified

Technology work wroup established


Standards to be developed identified


Smart grid business case

Motivation for smart grid with clearly defined project proposals including a funding plan

Draft smart grid business case

Achieved

Smart grid implementation plan

Pilot project running, applied research and results as defined in respect of the pilot project demonstrated

Pilot site progress report on first phase lessons learnt defined

Not achieved Project put on hold








Consolidated smart grid industry guideline

Business case and how to guide and national strategy for smart grids

Draft national smart grid strategy



Working for Energy

Renewable energy provision

Invite tenders , process, assess, approve project proposals – Melani Village biogas project

Approved project proposals to develop 5MW

Achieved Awaiting launch and handover to the Melani community. It is intended that the project will be launched by the Minister and will be combined with the soil turning at Melani Phase 2 as well as at Fort Cox

Melani Village biogas project Phase 2

Implementation of the revised implementations

Not achieved Delays in the procurement process resulting mainly from the University of Fort Hare not being able to provide SANEDI with a BEE certificate. An initial payment could not be made to start the project. A BEE certificate is required to load a vendor on the vendor registration system for payment purposes

A certificate has now been received and the project has since commenced in the new financial year





Working for Energy (continued)

Renewable energy provision (continued)

Fort Cox bio energy project Phase 2

Complete implementation of project and handover

Achieved The intention is to have the Minister launch the project. It will be combined with the other Melani Village projects

Mpfuneko biomass project


Partially achieved

13 of 55 bio-digesters completed. Delays in the administrative processes. The balance is scheduled for completion at the end of May/June

Balance of bio-digesters being completed

Illembe rural biogas project


Not achieved 22 of 26 bio-digesters have been completed. There were delays in the administrative processes. The balance is scheduled to be completed in May/June. This project is proposed for the official launch of the programme

Balance of bio-digesters being completed

School and clinic renewable energy demonstration centre

Implementation; establishment of a demonstration centre for renewable energy and energy efficiency under the department of science within the school

Not achieved The project was delayed due to protracted stakeholder engagements between the provincial Departments of Basic Education and Infrastructure Development. The projects have been re-grouped to ensure ease of implementation and economies of scale and scope. The latter has also affected the pace of the procurement process

All projects have been combined. Selection has been completed. The planning and procurement process will be fast tracked to ensure that the projects are successfully delivered in the new financial year






Renewable energy provision (continued)

Working for energy outreach programme

Implementation of the outreach programme for the working for energy programme

Not achieved The implementation of the project is linked to the launch of the programme. A communique was sent to the DoE Ministry for possible dates in May for the launch

A communique will be forwarded to the Ministry at DoE for new dates from the new Minister

Programme 3: Energy efficiency

EEDSM Hub - Research Centre-

Continue the EE hub initiative to strengthen energy related research, human capacity development, market transformation and enterprise development initiatives that will be tracked against a set of KPI’s;Transform the hub into a fully fledged CORD

Number of journal publications: 14Number of conference papers: 26Number of registered students: 105Number of graduates: 27Number of modules/short courses offered: 45Number of externally funded projects: 40External funding: R3.1 millionFemale student ratio: 21%PDI ratio: 55%

Achieved An independent review of the past five-year period was commissioned by the Department of Science and Technology and undertaken by CAMCO, with exemplary results.Recommendations from this report, to broaden the scope of activities are currently being discussed with the DST and initial indications are that funding for this activity will be significantly increased from 2015, based on the outstanding work delivered through the hub




Programme 3: Energy efficiency (continued)

Support the Income Tax Amendment Act (Section 12I and 12L) relating to the tax rebate for energy efficiency improvements

Successfully support tax processes as measured by the annual review and to customer satisfaction

Continued support to 12I incorporating refinements from review process; Support development and implementation of 12L

Achieved National Treasury, together with SARS, DTI and the DoE have expressed their satisfaction with the work done in this area and, in particular, the resulting report from a series of roadshows conducted in each province, to promote and address the energy efficiency tax incentives.

International recognition, as well as local media have further emphasised the success of this initiative

Industry support

Support industry stakeholders towards achieving improved energy efficiency in collaboration with international partners

Complete the bigEE project successfully

Partially achieved

Delays in the procurement processes have resulted in the final deliverable on appliance data in South Africa being delayed

Currently still in the SANEDI procurement system

Provide TAF function successfully

Achieved This project received great acknowledgement, by being officially included in the series of contracts and treaties signed during an official presidential visit by the French President to South Africa in December 2013






Programme 3: Energy efficiency (continued)

Industry support (continued)

Support industry stakeholders towards achieving improved energy efficiency in collaboration with international partners(continued)

Member of the active working group

Achieved These include a number of SABS technical committees, the energy efficient leadership network, the GEF-funded standards and labelling working group and the Eskom-funded energy efficient lighting design competition

National champion for EE

Establish a coordinated national EE communication platform to integrate and synergise efforts

Implement a coordinated national EE communication and awareness monitoring platform to track campaigns, impacts and plan/integrate activities going forward

Not achieved Draft strategy not approved by SANEDI EXCO and currently being re-drafted

The services of Government Communications Information Service (GCIS) have been sought to assist in this area, as per the Cost Containment recommendations from National Treasury

National M&V centre

Establish a national consolidated independent M&V function

Consolidate all existing energy (electricity and other energy where relevant) efficiency activities

Partially achieved

Longer-term activity requiring detailed interaction with shareholder and other stakeholders. However, the basic building blocks are in place and the activity is now regarded as urgent by all the key role-players, including the DoE

This is an ongoing activity, involving the shareholder and multiple external stakeholders



A state owned entity established under Section 7 of the national Energy Act 2008, (Act No. 34 of 2008).

Telephone: 011 038 4300Physical Address: BLOCK E,

Upper Grayston Office Park, 150 Linden Road, Strathavon, Sandton

Postal Address: PO Box 9935, Sandton, 2146 Email: [email protected]

Website: www.sanedi.org.za

RP157/2014ISBN: 978-0-621-42801-8

PLEASE RECYCLE THIS REPORT

thinking GREEN - SANEDI · 2017. 5. 25. · 2 SANEI Annal Reort 2013/14 PLEASE RECYCLE THIS REPORT This annual report was printed on Respecta 100 Satin, a coated paper made from 100%

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