WINDAC 2018

WINDAC 2018 Successful transformational change in revenue management among beneficiary communities of South African renewable energy construction companies Date: November 2018 Presentation: Dr Ric Amansure

Introduction Challenges facing RE socio-economic obligations: Ineffective project management of revenue for beneficiary communities Understanding transformational change Good governance Lack of empirical data Legislation Risk management 2

Total sites 2017 = 79 Estimated Total sites = 164 3

Background South Africa: Is regarded Internationally as a highly significant emerging renewable energy market. Has an above-average natural solar and wind resources available. Possesses one of the most effective policy instruments REIPPP Programme Has an accelerated and sustained private investment in renewable energy programme. 4

REIPPPP Renewable Procurement Programme Global success story Sets minimum thresholds and targets for Economic Development set by government Current and prospective Independent Power Producers ( IPP s ) Significant financial contributions Economic Development Development ("ED") See next slide. Quarterly Spend Obligations Development of communities within a 50 Km radius of renewable energy projects Area of Obligation Energy Independent Power Producer towards and Socio- ("SED") Enterprise 5

Investment Figure 2: Cumulative REIPPP investment across bid windows R192.6bn R145.5bn R127.2bn R82.8bn R49.3bn 2012 2013 2014 2015 2016 (Source: SAIREC, 2015) 6

Three Main Streams of Revenue for Economic Development for Beneficiary Communities Community Shareholding: 2.5 - 40 percent of in the project company; Socio-Economic Development ( SED ) creating an enabling environment 1 percent of quarterly revenue from the sale of electricity On average per company, 1.5 Million ZAR Enterprise Development ( ED ) creating black-owned businesses and jobs 0.6 percent of quarterly revenue from sale of electricity 7

SED/ED Challenges Lack of information regarding renewable energy sector in South Africa Meeting the DoE quarterly obligations Initiating meaningful, sustainable and transformational community development projects Capacity to deal with community development Low levels of skills and capacity in beneficiary communities Managing multiple stakeholders 8

Literature Review Independent variables: Education Infrastructure development Human development Change Management Intervening variable: Good governance Dependent variable: Perceived success of revenue management for beneficiary communities. This model alludes to a transformational approach to managing revenue for beneficiary communities. 9

Proposed theoretical Sub-model Transformational change INDEPENDENT VARIABLES INTERVENING VARIABLE DEPENDENT VARIABLE 10

Methodology: Positivistic research paradigm Hypothesis There is a positive relationship between education and the perceived success of revenue management for beneficiary communities of South African renewable energy companies. There is a positive relationship between infrastructure development and the perceived success of revenue management for beneficiary communities of South African renewable energy companies. There is a positive relationship between human development and the perceived success of revenue management for beneficiary communities of South African renewable energy companies. There is a positive relationship between change management and the perceived success of revenue management for beneficiary communities of South African renewable energy companies There is a positive relationship between education and good governance. Definition H8 H9 H10 H11 H12 There is a positive relationship between infrastructure development and good governance. There is a positive relationship between human development and good governance. There is a positive relationship between change management and good governance. There is a positive relationship between good governance structures and the perceived success of revenue management. H13 H14 H15 H16 11

Methodology cont Snowball sampling was used, because this method is appropriate when the members of a special population are difficult to locate - structured questionnaire surveys Exploratory factor analysis (EFA) was used to assess these measured variables in terms of their validity and reliability Structural Equation Modelling (SEM) was used to test the significance of the causal relationships hypothesized between the variables Limitations: The research was limited to the field of global and regional generation of electrical power by renewable energy. 12

Findings Education and infrastructure development loaded together and was redefined and renamed developmental benefits . 13

Summary of all the Sub-model Transformational change hypotheses 14

Conclusion Addressing human development needs as a priority. Prior to construction of the renewable energy facility, gain baseline knowledge and insight regarding the educational and infrastructural needs of the beneficiary communities (including engagement with the community at grassroo Scenario forecasting. Appointing internal and external service providers. Forming possible PPPs or collaborating with other IPPs. Managing finances and financial transactions. Monitoring, evaluating and reporting all activities. Include policies and procedures in all project management processes. 15

Special Projects Unit (SPU) SPU is strategically placed within the Graduate Centre for Management/Graduate School of Business Management (GCM/GSBM), aims to promote the vision and mission of the Faculty of Business and Management Sciences. Its provides: Client centered approach (e.g. the SETAs) Tailor made Short Learning Programmes Quick turnaround time High income generating Capacity to deliver on current demands Track record 16

Thank you 17