The Department of Minerals and Energy is responsible for ensuring exploration, development, processing, utilisation and management of South Africa's mineral and energy resources. As the country's economy continues to grow, energy is increasingly becoming a key focus.

The Electricity and Nuclear Branch is responsible for electricity and nuclear-energy affairs, while the Hydrocarbons and Energy Planning Branch is responsible for coal, gas, liquid fuels, energy efficiency, renewable energy and energy planning, including the energy database.

Energy policy

The DME's Energy Policy is based on the following key objectives:

• Attaining universal access to energy by 2014;
• Accessible, affordable and reliable energy, especially for the poor;
• Diversifying primary energy sources and reducing dependency on coal;
• Good governance, which must also facilitate and encourage private-sector investments in the energy sector; and
• Environmentally responsible energy provision.

Estimates suggest that R107-billion will be needed between 2005 and 2009 to meet South Africa's growing energy needs. Eskom will invest R84-billion over the next five years. The balance of R23-billion is reserved for independent power producer (IPP) entrants.

By May 2005, the department was in the process of procuring 1 000 megawatts (MW) through Independent Power Producers (IPPs), which are expected to be commissioned in 2008. The refurbishment of three power stations - Camden in Ermelo, Grootvlei in Balfour, and Komati in Middelburg - will result in an additional 3 800 MW to the system.

Eskom will spend about R12-billion on the recommissioning of these stations. This is about 40 percent of the cost of a new station. About 10 percent of the costs will go towards improving environmental performance such as particulate emissions and water controls.

At least 36 000 jobs are expected to be created, directly and indirectly, until 2007, during both construction and operational phase activities.

Energy in the economy

Energy comprises about 15 percent of South Africa's gross domestic product (GDP), creating employment for about 250 000 people. The total electricity sales by Eskom in 2003 grew to 196 980 gigawatt-hour (GWh). The peak demand on the integrated system totalled 31 928 MW.

Total liquid-fuels sales in 2001 grew by 0.3 percent to 20 934 million litres (ML). These figures demonstrate the growth of the South African economy and the importance of energy as a key driver of the country's economy.

This energy intensity is above average, with only 10 other countries having higher commercial primary energy intensities. It is largely a result of the economy's structure, with dominating large-scale, energy-intensive primary mineral beneficiation and mining industries.

In addition, coal is relied on for the generation of most of the country's electricity and a significant proportion of its liquid fuels. Furthermore, South Africa's industry has not generally used the latest in energy-efficient technologies, mainly as a result of relatively low energy costs.

Government has been persistently engaging members of the Organisation of Petroleum Exporting Countries (OPEC) through diplomatic channels to increase production.

Household use of energy

Energy consumed by households represents about 17percent of South Africa's net use. Most household energy is obtained from fuel wood (50 percent of net household energy), primarily in rural areas, with the remainder from coal (18 percent), illuminating paraffin (7 percent) and a small amount from liquid petroleum gas.

Rural households comprise the majority of poor homes and are characterised by severe poverty. In terms of basic energy services, their "energy poverty" is exacerbated by the increasing scarcity of fuel-wood. Wood and paraffin are their main energy sources, with few having access to electricity.

Source: South Africa Yearbook 2005/2006