Asset Management, Smart Metering, Water
and renewable Energy Industrial Hub
Presented by Jerry Mafereka and Lindelani Errol Sibisi
16 August 2012
ICUE Conference 2012
Industry background
 Sources of energy are becoming scarce and COP17 Targets for mitigating against
negative Climate Change are massive.
 Thus ESKOM as a major supplier of energy is embarking on a drive to boost supply of
energy from alternative sources while simultaneously reducing demand for electricity.
 The Energy Industry in South Africa is not as developed as in most countries thus
ESKOM needs more capacity to meet growing demand.
 However, there are very few local and well equipped suppliers hence the on-going
importation for both the New Build Programme of Power Stations and Integrated
Demand Management (IDM) Technologies.
 Eskom seeks to build an industry by building a group of home-grown companies that
can assist ESKOM (and later other clients) and compete globally especially in Africa.
 The reality is that energy problems of South Africa are too complex and profound that
no one company can solve them.
 This process will create thousands of jobs and empower hundreds of companies to
help solve South Africa’s energy problems.
Eskom Transformation Imperatives
Create a society which allows all of its participants to generate economic growth
within a framework that provides consistency and stability
This is an investment in the future of South Africa
Correcting the inequalities of the Apartheid era
80% of population receiving 25% of total remuneration
90% owning less than 5% percent of the JSE
40% black South Africans unemployed compared to 10% of white South
Africans (Skills-based problem)
Demographics
Ownership of JSE
White South
Africans
12%
Black South
Africans
4%
50%
40%
30%
20%
Black South
Africans
88%
All data at November 2005 Source for all charts: DTI
White South
Africans
96%
10%
0%
Unemployed Black Unemployed White
South Africans
South Africans
What Eskom Supplier Development & Localization
Strategy wants to Achieve
• Increase the level of
participation by black
owned businesses
mainstream economy
(ESKOM AND OTHERS)
• Increase the real market in
the SA economy
More economic participants
Mainstream Economy
BEE
Upliftment
• Increase income through
resultant economic growth
Mainstream Economy
Second Economy
Second Economy
Higher Economic Growth
A Bigger Market for All
Eskom’s Capital Investment Plans
 ESKOM will spend over R1trillon over the next 20 - 30 years on New
Build and IDM Programmes because the current fleet of power
stations will be due for decommissioning during this period.
 About 40% of this amount is to be spend on developing the local
energy industry focusing on small black owned companies
 This will be done through:
 Skills development
 Localisation
 Industrialisation
 Job creation for decent work
 Enterprise development
ESKOM’s socio-economic development objectives
Key performance area
Definition
Skills development
• Increasing the skill base (number and skill level) of
South African workers in areas relevant to the energy
sector and where there is a national scarcity of skills
Localisation
- Country
- Province/Region
- Site/Operation
Industrialisation
• Utilisation of Eskom and suppliers’ spend to develop
South African based suppliers relevant to the energy
sector (focusing primarily on B-BBEE and Black Owned
suppliers)
• Utilisation of Eskom and suppliers’ spend to foster
the establishment of new competitive industries in
the energy sector
Employment and job
creation
• Creation of new jobs by suppliers as a direct result of
Supplier development (SD)
• Providing a platform for SA-based suppliers to
Eskom business
develop into national and international suppliers,
through Capability & Capacity & Competitiveness
development
|6
Industrial Hub
Asset Management, Smart Metering, Water and
renewable Energy Industrial Hub
Strategic Objectives & Modus Operandi
 “Utilisation of Eskom and suppliers’ spend to foster the
establishment of new competitive industries in the energy
sector”
 Create new black owned companies in the energy sector
 Boost small black owned companies in the energy sector to
be competitive globally
 Create jobs
 Increase the skill base in the energy sector
 Boost the reliability of suppliers in the local industry through
fostering best practice
The Key Pillars of Industrial Hubs
 Hub Management Office
 ESKOM SD&L and Foundation, SABEF, ZIMELE and a
Consortium of SMME’s
 Duties: manage the running of the industrial hub and
stakeholder relationships
 Scope of Work to cover:
 Asset management
 Large Scale Manufacturing of Capital Goods
 Construction and renovation of building
 Provision of related services
 Smart Metering
 ESCOs
 Smart ICT Grids Local Water and Renewable Energy
 Water and Renewable Energy
 Generation of water from water
 Renewable energy
Hub Management Office
 Consist:
Asset
Management
Smart Metering
Water and
Renewable Energy
The Drivers of Industrialization & Localization
Framework and Programme Management Office
 Drivers of the programme will provide assistance such
as:




Business opportunities
Funding
Training
Incubation
 Drivers are to be identified by ESKOM and financed by
its Global ICT Suppliers, National & Provincial DFIs.
 Local Beneficiary Companies / Enterprises / Co-Ops /
NGOs / CBOs be vetted by accredited empowerment
verification agencies for eligibility.
Products & Services for Eskom Business
• Companies are to be grouped according to areas of specialisation
• Each areas will have a champion who is part of the management team
Asset Management
Cables and Conductors
Motors
General Conductors
Air Heaters & Fans
Properties (Facilities)
Vehicles
Manufacturing
Clamps
Voltage Regulators
Capacitive Voltage
Transformers
Coupling Capacitors
Grinding Elements
Retail
Coal supply
Buying and Hiring
services for:
•Fleet
•Cranes
•Aerial Platforms
•Drill Equipment
•Lubricants
•Chemicals
Support Services
Maintenance Services
HR Specialist
Recruitment
Professional Services
Print Material
Metering strategy
Monitoring systems
Catering
Smart Meter Systems
Courier Services
External Auditors
Travel Management
Industrial Hub Framework
Western
Cape
Eastern
Cape
•
Cyber
Tech
SAP
•
•
•
•
Hitachi
IBM
SIEMENS
Construction
Water and
Renewable Energy
Smart Metering
•
•
•
•
•
IBM
T-Systems
Manufacturing
SEDA TTP
IDC
ESKOM
Retail
Support Services
KwaZulu
Natal
Khayelitsha
Free State
Saldana
Mpumalanga
Atlantis
Gauteng
Northern
Cape
Sir Lowry’s
Pass
Drivers
Asset
Management
Market: ESKOM and other
customers
Management Office
(Consortium , Drivers,
SABEF and ESKOM)
Areas
Incubation: Cape Peninsula
University of Technology
Training and Education Institutions
(e.g. CPUT)
B BBEE
SMME’s
Limpopo North West
Typical Activities of the hub

Induction of companies




Qualify companies to be added to the hub database



A competitive process according ESKOM requirements will be followed
Sell companies in the hub to other energy suppliers



FET’s, Technical Universities and Academic Universities will provide training
Training programmes will also be put in place for ad hoc training programmes
Identify opportunities within and outside of ESKOM for companies in the industrial hub


Companies must meet set criteria
Add to a database that will be available to the market
Train and educate new companies on energy related aspects and leadership



Identify existing ESKOM suppliers who would be registered under the hub
Use SABEF to induct new companies into the hub
Identify other structure to induct new companies
Use a portal to advertise opportunities to members of the hub
Sell members to funders
Manage hub activity


Report on statics
 Number of companies added
 Success rate of the hub
Perform above mentioned activities
Eskom Supplier Evaluation Process
1
Buyers
Identify
focus areas
2
3
4
Suppliers
7
Comply with
buyer
Capture buyer
requirements
Contracting
contract
requirements
Verification of
evaluation data
Invite
Suppliers to
participate
Assisted self
assessments
Facilitate access to supplier
development resources
5
Develop
improvement
plan
Continuous Improvement cycle
6
Implement
improvement
plan
Example of Targets & Outputs from the Smart Metering Pilot
Study
Skills development
• Through the Smart Energy School train over 15000
individuals within and out of ESKOM
Localisation
• Build and empower 300 new local companies
• Focus on Youth owned – 50%; and Women
owned – 25%
• Empower 200 existing local companies
Industrialisation
Employment and job
creation
• Boost the Smart Metering companies
• Build a Smart Metering School
• Create over 15 000 jobs
• Focus on black, young, women and disabled
individuals
Supplier development
• The 500 companies will be able to offer services to
other clients such as local municipalities and across
Africa
• Zimele will be able to grow to compete
internationally
Why do we think we will
Succeed?
We are ready to partner with
ESKOM in SMME Development…