1. Department of Energy (DoE) National Electrification Indaba Electrification & Localization Elangeni Hotel, Durban, 15&16 March 2012

2. > South African Association of Consulting Engineers (SAACE) founded in 1952 > Original membership 30 individuals > August 2008 - SAACE transformed to Consulting Engineers South Africa (CESA) > Consists of 485 private CE firms – still growing > Employing more than 22 000 people > South African Association of Consulting Engineers (SAACE) founded in 1952 > Original membership 30 individuals > August 2008 - SAACE transformed to Consulting Engineers South Africa (CESA) > Consists of 485 private CE firms – still growing > Employing more than 22 000 people Promote interests of Members and Clients by: > Regular liaison meetings > Engineering comment on legislation etc > Advisory Notes for Members and Clients > New/revised contracts/forms of agreement > Guidelines on professional practice matters > A peer review and quality management programme > Seminars, workshops and conferences > FIDIC (International Federation of CE Association) Promote interests of Members and Clients by: > Regular liaison meetings > Engineering comment on legislation etc > Advisory Notes for Members and Clients > New/revised contracts/forms of agreement > Guidelines on professional practice matters > A peer review and quality management programme > Seminars, workshops and conferences > FIDIC (International Federation of CE Association)

3. Professionalism and Integrity of Members: 1. In general: ECSA registers professional individual engineers, technologists etc CESA ‘registers’professional Consulting Engineering Firms 2. Credibility of applicants In business > 12 months Nominated & Seconded by CESA member firms 3. Ongoing requirements Subject to CESA Code of Conduct (includes BIMS) Ownership/principals > 50% Professional Engineers/Technologists Primary work (Consulting Engineering) implement and maintain a QMS 1. In general: ECSA registers professional individual engineers, technologists etc CESA ‘registers’professional Consulting Engineering Firms 2. Credibility of applicants In business > 12 months Nominated & Seconded by CESA member firms 3. Ongoing requirements Subject to CESA Code of Conduct (includes BIMS) Ownership/principals > 50% Professional Engineers/Technologists Primary work (Consulting Engineering) implement and maintain a QMS

4. Overview of Presentation > Challenges & Opportunities for Electrification > Electrification & the Engineering Profession > Engineering Contributions to SA’s Infrastructure > How engineer’s can help South Africa > Localization: Definition & Maximization > Localization: CSP Example

5. Limited Generation Plant (Low safety margins) Limited Generation Plant (Low safety margins) Regional (few opportunities for import ) Regional (few opportunities for import ) Increasing Demand (3 million households not electrified) Increasing Demand (3 million households not electrified) Aging Infrastructure (Generation, Transmission, Distribution) Aging Infrastructure (Generation, Transmission, Distribution) Sustainable Income for future expansion Localization (technology transfer, industrialization & jobs) Localization (technology transfer, industrialization & jobs) Energy Efficiency (reduced revenue from electricity sales) Energy Efficiency (reduced revenue from electricity sales) Evolving Government Policy (IPP’s, ISMO, small scale renewable etc) Evolving Government Policy (IPP’s, ISMO, small scale renewable etc) Infrastructure Expansion & Upgrading (Growth, job creation, carbon reduction, localization, diversification etc) Infrastructure Expansion & Upgrading (Growth, job creation, carbon reduction, localization, diversification etc) Poverty Elevation & Growth Cost reduction & Greening Rapid increase in electricity cost Reform & Modernization Industrialization & Job Creation Export of SA knowledge & products

6. Shortage of Experienced Engineers Aging work force (loss of experience, knowledge, mentorship) Aging work force (loss of experience, knowledge, mentorship) Un-sustained infrastructure investment (leads to loss of local engineering knowledge) Un-sustained infrastructure investment (leads to loss of local engineering knowledge) Limited Technology Transfer (limited development of new engineering skills in SA) Limited Technology Transfer (limited development of new engineering skills in SA) Training Young Engineers (generational knowledge transfer, greater career opportunities & faster growth for young engineers than in other countries) Training Young Engineers (generational knowledge transfer, greater career opportunities & faster growth for young engineers than in other countries) Receiving Technological Knowledge from Developed Economies & transferring to other African nations Maintaining & Growing Knowledge through sustained investment in new technologies (Nuclear & Renewable) Moral & Professional Duty to SA Role Models & Leaders in Developing our Nation through our Work Role Models & Leaders in Developing our Nation through our Work

7. Despite challenges South African Engineers, contractors and manufacturers have delivered challenging new projects to Government in the recent past …

8. SA’s Engineers bring valuable local knowledge to the project: > Multi-discipline engineering services (mechanical, electrical, structures, civil, nuclear..) > Local Design & Building Standards > Local site conditions (geotechnical, seismic, wind etc). > Local Regulations (Building, Environmental, Legal, Water, Electricity use etc. etc.) > Knowledge of local construction techniques & materials > Local site supervision, project management & bid bid preparation > Grid connections & sub-stations to Eskom Standards > Strong ties with local construction & manufacturing industries, government & Eskom > Supported by robust industry institutions like CESA, NIASA, SASTELA, SAICE etc) > History of successful collaboration with foreign vendors & engineers > Multi-discipline engineering services (mechanical, electrical, structures, civil, nuclear..) > Local Design & Building Standards > Local site conditions (geotechnical, seismic, wind etc). > Local Regulations (Building, Environmental, Legal, Water, Electricity use etc. etc.) > Knowledge of local construction techniques & materials > Local site supervision, project management & bid bid preparation > Grid connections & sub-stations to Eskom Standards > Strong ties with local construction & manufacturing industries, government & Eskom > Supported by robust industry institutions like CESA, NIASA, SASTELA, SAICE etc) > History of successful collaboration with foreign vendors & engineers SA’s Engineers can bring guidance to Government policy: SA’s Engineers can bring guidance to Government policy: > Technical and economic assessment of existing infrastructure > Projections for infrastructure investment > Feasibility studies > Tender evaluations > Localization potential & requirements > Education policy on developing the engineering profession > Training of government’s technical staff > Regional integration > Technical and economic assessment of existing infrastructure > Projections for infrastructure investment > Feasibility studies > Tender evaluations > Localization potential & requirements > Education policy on developing the engineering profession > Training of government’s technical staff > Regional integration

9. Localization is the transfer of new technologies from technology providers (typically from developed countries) to local market (typically developing countries). Complete transfer involves the knowledge to design, manufacture and install the technology as well adapt and further develop the technology. Localization creates jobs in design (engineering), manufacturing and construction, thereby stimulating growth, alleviating poverty and ensuring a sustainable economy. Technologies can be adapted and exported to other African countries. If other African countries follow South Africa’s lead in electricity policy, with regional integration a bigger market will form, encouraging specialization. South Africa could become a leading exporter of technology and engineering services.

10. Regulation & Tender Criteria Encouraging Technology Transfer not only in Manufacturing but also Engineering Giving preference to technologies that have a higher potential for localization Giving preference to technologies that have a high potential for further development Maximizing the market for technologies through policy certainty and assigning enough MW to the technology to build a local engineering & manufacturing base Maximizing the market for technologies through policy certainty and assigning enough MW to the technology to build a local engineering & manufacturing base Policy and implementation for providing small scale projects (own generation, off grid etc) Off grid small scale applications for electrification of rural households. Offering attractive return on investment for technology vendors to invest in SA.

11. Problems with current IRP allocation & policy: > 1000 MW allocation in IRP2010 (~100MW/ per year) > Undersubscribed compared to wind (8400MW) and PV (8400MW) > Allocation to sufficient to maximize localization (200MW/year required) > Project scale could be increased to up to 250MW/plant maximize economies of scale > Tarrifs in direct competition with cheaper PV, does not recognize CSP advantages for energy storage (dispatchibility) and localization potential

12. Advantages Greater Localization Potential (up to 60% immediately, 80% long term) Manufacturing can be implemented in existing factories (steel & car industry) Larger component for local civil & structural and mechanical engineering Energy storage option (base load & dispatchibility) Commonalities in design with thermal power stations (power blocks, heat exhangers etc) Utility Scale (up to 250MW) Further development potential Labour intensive manufacturing Local O & M Exportable to neighbouring countries Adaptable Process heat for local industries Built in poor developed areas Implemented in high DNI areas where water use will not grow Dramatically due to low population density Implemented in high DNI areas where water use will not grow Dramatically due to low population density Thermal boosting for existing coal fired power stations Adopted by Eskom and Sasol