Cleaner Fuels 2 Programme: progress; Independent Systems & Market Operator (ISMO) Bill [B9-2012]: briefing

Meeting Summary

The Department of Energy briefed the Portfolio Committee on its Cleaner Fuels 2 (CF 2) programme. In its presentation it indicated what it deemed to be the desirable scenario in terms of cleaner fuels; it also gave a bit of insight into the background of the programme, namely the CF 1 programme and the specifications that had been transferred from the Euro specifications. It tabulated the originally envisaged pathway as well as the current pathway due to the challenges that were encountered. It then noted the programme’s objectives and approach in fulfilling its mandate.

The Committee engaged with the presentation and sought clarity on various issues such as cost recovery mechanisms; specification models other than that of the Euro region; refining capacities as well as refining margins, amongst other things. The Committee noted that the date of full commencement would be 2017 and, in the interim, the Department would source transitional fuels.

The Department of Energy then made a presentation on the proposed Independent Systems & Market Operator (ISMO) legislation that would seek to match supply of electricity with demand. The presentation outlined the current industry position; the proposed industry structure; elaboration on what the ISMO was; the purpose and functions of the ISMO; as well as providing a full overview of the Bill.

The Committee raised concerns on issues surrounding the systems operator and the effects on the markets as well as on Eskom with the proposed legislation. It sought clarity as to how exactly the buying and the selling were to occur, as well as on the transfer processes and the effects that these would have on matters such as personnel.

The Chairperson called for continual engagement with the proposed legislation up until the moment of full implementation, with monitoring of the transitional measures that were to be taken.