STRATEGIC PLAN 2020–2025 - Energy

1 S T R AT E G I C P L A N. 2020 2025. RP155/2020. ISBN: 978-0-621-48350-5. C ontents List of Figures 3. Abbreviations 4. Executive Authority's Statement 6. Accounting Officer's Statement 9. Official Sign-Off 17. Part A: Our mandate Constitutional Mandate 19. Legislative and Policy Mandates 20. Institutional Policies and Strategies Related to the Five-Year Planning Period 22. Relevant Court Rulings 25. Part B: Our STRATEGIC focus Vision 27. Mission 27. Values 27. Situational Analysis 28. Part C: Measuring our performance STRATEGIC Context 60. Alignment with the 2019 2024 Medium Term STRATEGIC Framework 80. DMRE Strategy Articulation Map 82. Institutional performance information 85. Annexures to the STRATEGIC plan Annexure A: District Development Model 105. Annexure B: Energy Cluster STRATEGIC Responses to MTSF 106.

2 Annexure C: Mining Cluster STRATEGIC Responses to MTSF 110. Annexure D: Policy and Regulatory Cluster STRATEGIC Responses to MTSF 114. Annexure E: Technical Indicator Descriptions (TIDs) 117. S t r a t e g i c P l a n 2 0 2 0 2 0 2 5 << 1. 2 >> D e p a r t m e n t o f M i n e r a l R e s o u r c e s a n d E n e r g y L ist of F igures Figure 1: Global growth projections 28 Figure 18: Annual exploration budgets by commodity (US$M) 41. Figure 2: World trade, industrial production and the manufacturing PMI 29 Figure 19: Contribution of mining to the South African economy 42. Figure 3: Manufacturing PMIs for select countries/region 29 Figure 20: Growth in mining output by sub-sector in 2019 43. Figure 4: Real GDP growth in Africa, 2020 30 Figure 21: South Africa's share of African exploration budgets 2000 2017 43.

3 Figure 5: Contributors to negative growth in GDP in Q3 31 Figure 22: Junior miner licences' in South Africa (2017) 44. Figure 6: South Africa's annualised GDP growth in 2019 31 Figure 23: Mining industry health and safety performance 44. Figure 7: Lower output recorded by most manufacturing sub-sectors 32 Figure 24: Global power capacity by source in the Stated Policies Scenario 47. Figure 8: Mining output 32 Figure 25: Renewable Energy total primary Energy demand by category and region 49. Figure 9: Unemployment rate in South Africa 33. Figure 26: Nuclear Energy production across the globe 49. Figure 10: South African employment rate 33. Figure 27: Final consumption by fuel, sector Sub-Saharan Africa Figure 11: Summary of South Africa's Economic overview 34. (excl. South Africa) 50.

4 Figure 12: Top 40 capital velocity (%) compared with capital expenditure Figure 28: Change in Energy demand and average annual GDP growth (US$BN) 36. rate by region in the Stated Policies Scenario, 2018 2040 51. Figure 13: World exploration trends 2018 37. Figure 29: Natural gas resource discoveries, demand and production in Figure 14: 2019 Annual exploration budgets by region (US$M) 37 selected countries in Africa 51. Figure 15: Annual diamond production million carats 38 Figure 30: South African primary Energy mix 52. Figure 16: Top 10 business risks in the mining and metals sector 40 Figure 31: DMRE organisational structure 57. Figure 17: Annual budget trends 40. S t r a t e g i c P l a n 2 0 2 0 2 0 2 5 << 3. A bbreviations 4IR Fourth Industrial Revolution EMP Environmental Management plan AHTR Advanced High-Temperature Reactor EPP Electricity Pricing Policy AEMFC African Exploration Mining and Finance Corporation ETDP SETA Education, Training and Development Practices SETA.

5 AMD Acid Mine Drainage EV Electric Vehicle B-BBEE Broad-Based Black Economic Empowerment EWSETA The Energy and Water Sector Education Training Authority BW Bid Window EY Ernst & Young CCGE Combined Cycle Gas Engine GDP Gross Domestic Product CCGT Combined Cycle Gas Turbine GHG Greenhouse Gas CCS Carbon Capture and Storage GTL Gas-to-Liquid CCUS Carbon Capture, Utilisation and Storage GTP Geoscience Technical Programme CEF Central Energy Fund GUMP Gas Utilisation Master plan CGS Council for Geoscience GW Gigawatt CHIETA Chemical Industries Education and Training Authority GWe Gigawatt Electrical CIO Chief Information Officer HDSA Historically Disadvantaged South African COGTA Cooperative Governance and Traditional Affairs HELE High Efficiency Low Emission COP Conference of the Parties HR Human Resources CPA Communal Property Association IAEA International Atomic Energy Agency CRU Communal Rental Units IDC Industrial Development Corporation CISF Centralised Interim Storage Facility IDP Integrated Development plan CS Corporate Services IDZ Industrial Development Zone DBSA Development Bank of South Africa IEA International Energy

6 Agency DEA Department of Environmental Affairs IEP Integrated Energy plan DIRCO Department of International Relations and Cooperation iGAS South African Gas Development Company DMRE Department of Mineral Resources and Energy IGR Intergovernmental Relations Framework Act DoE Department of Energy IMF International Monetary Fund DPSA Department of Public Service and Administration INEP Integrated National Electrification Programme DRC democratic republic of congo IPCC International Panel on Climate Change dti Department of Trade and Industry IPP Independent Power Producers dtic Department of Trade, Industry and Competition IRP Integrated Resource plan DWS Department of Water and Sanitation Li-ion Lithion-ion 4 >> D e p a r t m e n t o f M i n e r a l R e s o u r c e s a n d E n e r g y LNG Liquid Natural Gas PV Photovoltaic MES Minimum Emission Standards PwC Pricewaterhouse Coopers MHSC Mine Health and Safety Council REIPPPP Renewable Energy Independent Power Producer Procurement MHSI Mine Health and Safety Inspectorate Programme MMPD Mining.

7 Minerals and Energy Policy Development RR Research Reactor MoU Memorandum of Understanding S&P Standard & Poor's MPR Mineral and Petroleum Regulation SADC Southern African Development Community MPRDA Mineral and Petroleum Resources Development Act SADPMR South African Diamond and Precious Metals Regulator MQA Mining Qualifications Authority SANEDI South African National Energy Development Institute Mt Megaton SAPS South African Police Service MTSAO Medium Term STRATEGIC Adequacy Outlook SARB South African Reserve Bank MTSF Medium Term STRATEGIC Framework SARS South African Revenue Service MW Megawatt SCA Supreme Court of Appeal MYPD Multi-Year Price Determination SDT State Diamond Trader NCOP National Council of Provinces SEMAs Specific Environmental Management Acts NDP National Development plan SET Science, Engineering and Technology NEES National Energy Efficiency Strategy SFF STRATEGIC Fuel Fund NEMA National Environmental Management Act SHS Solar Home Systems NERSA National Energy Regulator of South Africa SLP Social and Labour plan NMOG National Macro Organisation of Government SMME Small.

8 Medium and Micro Enterprises NNR National Nuclear Regulator SMR Small Modular Reactors NRWDI National Radioactive Waste Disposal Institute SOE State Owned Enterprise NSP National STRATEGIC plan SOP Standard Operating Procedures ODG Office of the Director-General SSF STRATEGIC Stock Fuel PASA Petroleum Agency of South Africa TWh Terawatt-hours PBMR Pebble Bed Modular Reactor WEF World Economic Forum PMI Purchasing Managers' Index WEO World Economic Outlook POA Programme of Action WiE Women in Energy PPP Public Private Partnership WSP Workplace Skills plan PSETA Public Service Education and Training Authority S t r a t e g i c P l a n 2 0 2 0 2 0 2 5 << 5. E x ecutive A U T H O R I T Y ' S S tatement The existence of the Department of Mineral contribution of industry sectors and enable them to create and processing of the DMRE's regulatory frameworks Resources and Energy (DMRE) is premised economic benefits for the country which are accelerated will be accelerated to enable these interventions.

9 This growth and job creation. includes the enablement of industry to invest in the on its vision of becoming a leader in the Energy supply mix through self-generation. The IRP2019. transformation of South Africa's economic Energy security promotes economic growth, development, decision indicates that the Nuclear New Build Programme growth agenda through the sustainable and social equity through expanded access to Energy must commence immediately, adding 2 500 MW to the development of the mining and Energy services that are sustainable and contribute to the grid, as this is a no-regret option in the long term. The sectors. reduction of pollution and mitigation of the effects of DMRE will commence immediately with procurement global climate change. The Integrated Resource plan 2019 processes to ensure the security of Energy supply, and is This vision will be operationalised by focusing on (IRP2019) is the leading policy framework for addressing considering Small Modular Reactors (SMRs) to take into regulating, transforming and promoting the mining and the short- to long-term challenges that the country faces, account the pace and scale that the country can afford.

10 Energy sectors; providing affordable Energy for growth and provides much needed policy certainty in the area Furthermore, the market will be tested for robust costing and development; and ensuring that all South Africans of Energy security and affordability. IRP2019 formulates and funding options towards nuclear generation. The derive sustainable benefit from the country's mineral specific interventions to address electricity infrastructure development of the roadmap for the 2 500 MW Nuclear wealth. For the execution of its mandate, and to enable development, based on least-cost electricity supply and New Build Programme will commence soon while an the achievement of its vision, the DMRE is supported by demand balance, taking into account security of supply oversight monitoring plan for the Koeberg Life Extension various entities whose mandates and operating models and protection of the environment.