state of the power system quarterly update...quarterly update brian dames chief executive 10...
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State of the Power System Quarterly Update
Brian Dames
Chief Executive
10 September 2013
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Key messages
Significant Achievements this Winter
Live Lightly this Summer
Continued Progress with New Build and New Connections
Conclusion
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Key Messages
• Significant achievements over winter:
• We kept the lights on in winter with the help of all South Africans, hard work and disciplined delivery on goals. Thank you to all consumers who Beat the Peak and switched off from 5pm to 9pm
• More maintenance done than in previous three winters
• Improved generation performance to power the economy
• Power bulletin and Power Alert are working
• Live lightly this summer:
• Increased maintenance must be done because our power stations are ageing
• The system will be tight all day in summer due to the load profile
• Use “summer” appliances efficiently
• Continued progress with new build programme:
• There has been progress at Medupi with most of the equipment on site; labour partnership agreement in place, Hitachi issues resolved and workplan in place, progress on C&I issues
• Progress also at Kusile and Ingula
• Sere and Majuba railway construction commenced
• Industrial unrest still a concern
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Key messages
Significant Achievements this Winter
Live Lightly this Summer
Continued Progress with New Build and New Connections
Conclusion
4
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Significant Achievements this Winter
5
• This winter was different in that long
duration generation maintenance was
implemented as planned. Of the 9 units
Eskom committed to maintain, 5 have been
completed, 3 are in execution and 1 will be
released in September 2013.
• In the last quarter the system was tight
however it was better than expected due to
a warmer winter, some savings over peak
and better generation performance.
• Winter peak demand 35 421MW on
11 June 2013 vs. 35 894MW on 7 August
2012.
• Open cycle gas turbines and reduction by
contracted industrial customers were used
to meet demand.
Week Starting Forecast
Expected Shortfall
Inc OCGTs and
operating reserves
Actual Demand
(Including
Interruptibles)
Actual Shortfall Inc
OCGTs and
operating reserves
08/Apr/2013 31600 -432 32393 -1676
15/Apr/2013 31983 -1063 32221 -498
22/Apr/2013 32690 -451 32865 -890
29/Apr/2013 32402 -949 32064 -1134
06/May/2013 33538 -2562 33641 -345
13/May/2013 33959 -3560 33901 -1839
20/May/2013 33742 -2917 34263 -1350
27/May/2013 33834 -3438 33957 -754
03/Jun/2013 34456 -1743 34666 13
10/Jun/2013 35680 -2708 35421 -1227
17/Jun/2013 35230 -1668 35171 -543
24/Jun/2013 35315 -1978 35136 -1408
01/Jul/2013 34872 178 34391 -278
08/Jul/2013 35337 -836 34805 -896
15/Jul/2013 35806 -1155 35301 105
22/Jul/2013 35748 -2162 35227 -231
29/Jul/2013 35285 -1679 35276 -1155
05/Aug/2013 34948 -425 34863 -900
12/Aug/2013 35479 -581 34683 -1537
19/Aug/2013 34952 379 34533 441
26/Aug/2013 34129 -111 32701 1277
02/Sep/2013 33608 494 33331 -158
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6
Monthly Average Percentage Operating
Reserves
• While there is adequate reserve available throughout the day, there is very little
reserve available at peaks.
• The relative reserve levels available during the day are lower in summer.
0%
10%
20%
30%
40%
50%
60%
Jan
20
09
Mar
20
09
May
20
09
Jul 2
00
9
Sep
20
09
No
v 2
009
Jan
20
10
Mar
20
10
May
20
10
Jul 2
01
0
Sep
20
10
No
v 2
010
Jan
20
11
Mar
20
11
May
20
11
Jul 2
01
1
Sep
20
11
No
v 2
011
Jan
20
12
Mar
20
12
May
20
12
Jul 2
01
2
Sep
20
12
No
v 2
012
Jan
20
13
Mar
20
13
May
20
13
Jul 2
01
3
Ave
rage
Mo
nth
ly %
Op
era
tin
g R
ese
rve
s
Monthly Avg at 06:00 Monthly Avg at 15:00 Monthly Avg at Peak Monthly Avg at 22:00
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Increased Open Cycle Gas Turbine usage
7
High Usage in winter
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Higher maintenance levels in winter than before
• More maintenance was done during this winter than in the three preceding years for the
same period - This is inline with the strategy towards achieving a sustainable generation
fleet
• Improved generation plant performance, although not yet stabilised
• Additional short term outages were executed as part of “unplanned outages”
Planned
Maintenance
%
2010 2011 2012 2013
Jan 11.8 10 12.5 13.07
Feb 10.6 7.6 12.8 9.7
Mar 10.7 8.4 13.5 9.1
April 11.6 8.7 13.8 7.94
May 7 6.3 10.5 10.48
June 2.6 4.5 7.41 9.76
July 1.72 2.9 5.45 7.98
Aug 6.36 5.97 5.44 7.83
Sep 10.66 8.8 5.27
Oct 8.54 9.56 8.36
Nov 9.06 7.64 9.63
Dec 12.31 15.58 13.06
Year to date
average
(August) 7.80 6.80 10.18 9.48
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We are focused on delivering our goals
9
What Eskom said What Eskom did
Maintain at least 9 generation units between April
and August
Of the 9 units Eskom committed to maintaining over
winter to ensure long-term sustainability of the plant, 5
have been completed, 3 are in execution and 1 will be
released in September 2013
We will implement an 80:10:10 generation strategy
over 5 years
In execution – with additional resources deployed to
assist
We would sign up independent power producers
where possible
• Signed round 1&2 Renewable energy programme
(± 2000MW) of which 320 MW will be operational
by end March 2014
• Signed 1005 MW DoE (OCGT X 2) Peaker to be
operational mid-2015
• Short term and Medium Term IPPs contracted
until December 2013 - decision to continue based
on available funding
Demand-side management programme in place to
reduce demand and obtain energy savings
Continued with existing programme
Communicate with our stakeholders on the state of
the system
Intensified communication to Beat the Peak in Winter
& continued with extensive programme of
engagement with stakeholders. 49M business
partners increased to 122
We would improve coal handling and coal quality to
reduce load losses
Coal quality improvement initiatives at Tutuka and
Arnot being implemented. Coal related losses have
reduced at Tutuka but remain a concern at Arnot. 9
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South Africans have kept the lights on over winter through participating in Power Alert. Average peak demand reduction of 348 MW over evening peak which is enough to power
17 million 20W lamps, or
3.8 million laptops
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Key messages
Significant Achievements this Winter
Live Lightly this Summer
Continued Progress with New Build and New Connections
Conclusion
11
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Why is Summer different?
Unlike previous Summers this one is different - far more maintenance is planned
20 000
22 000
24 000
26 000
28 000
30 000
32 000
34 000
36 000
38 000
23:00 02:00 05:00 08:00 11:00 14:00 17:00 20:00 23:00 02:00
MW Summer & Winter load profiles
Typical Winter Day Typical Summer Day
Winter : A Peak
profile - peak is
much higher but
for a shorter
period : forecast
this winter
around 36.5 GW
Summer: Table Mountain
Profile - load profile is much
flatter, peak of 32 – 33 GW, so
if there is a constraint, the
system is constrained for the
entire day
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Outlook for summer
• The system remains tight in summer, with different challenges due to the
summer load profile
• Unlike winter, where the demand increases during the evening peak (5pm to
9pm), the demand profile during summer is much flatter with an increased
demand profile throughout the day, primarily due to air-conditioning and
geysers. If there is a constraint, the system is constrained for the entire
day
• Unlike winter where residential customers had the greatest impact, during the
summer, it is primarily the commercial sector that can make the biggest
difference
• The challenge is to ensure that there is sufficient generation capacity
throughout the day, as we continue with our maintenance plan and focus on
reducing unplanned outages
• Summer is typically maintenance season, but this summer maintenance will
increase based on the generation strategy as most of the maintenance is
fixed and cannot be deferred. Outages will be done to ensure that we can
comply with environmental legislation
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Outlook for summer (ctd…)
• Additional supply and demand-side options have been identified, to meet
medium term electricity demand, but is dependent on funding availability as
a result of the MYPD3 8% determination
• Cahora Bassa continues to operate at 1300 MW with the final 200 MW
expected to be restored later this year
• The open cycle gas turbines will run harder during summer
• Approximately 2 100 MW of interruptible demand, for up to two hours a
week, is available from the aluminium smelters to help manage the
frequency of the power system during unexpected events.
• An energy conservation scheme or similar measure is needed as a safety
net
• This summer, please remember that less is more. The less electricity you
use the more electricity will be available to go around
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Projected system outlook
• With the maintenance that needs to be done, and the available capacity the system will remain tight
• Supply and demand side levers are required to improve the picture
• Unplanned allowance must be within 4500 MW
4500 MW unplanned
allowance
Date UCLF Planned Forecast Surplus including gas
09-Sep-13 4500 5590 33172
16-Sep-13 4500 5005 33000
23-Sep-13 4500 4659 32432
30-Sep-13 4500 5234 32776
07-Oct-13 4500 4109 32558
14-Oct-13 4500 4277 32753
21-Oct-13 4500 4310 32656
28-Oct-13 4500 4587 32553
04-Nov-13 4500 5237 33070
11-Nov-13 4500 6214 32698
18-Nov-13 4500 5663 32497
25-Nov-13 4500 6138 31875
02-Dec-13 4500 6360 32058
09-Dec-13 4500 6508 31796
18-Dec-13 4500 6570 29735
23-Dec-13 4500 6760 29043
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Coal stocks at sufficient levels
16
Actual Stock days F2008, F2012, F2013 vs YTD Actual F2014
25 25 22
20 19 18 17 18
15
12 13 13
40 39 39
36 38
41 41 44 43
41 39 39 38
39 40 42
43 44 45
47 47 48
49 47 48
51 50 51 52
0
10
20
30
40
50
60
APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
Sto
ck d
ays
Months
Actual Stock days F2008,F 2012, F2013 vs YTD Actual F2014
2007/8 2011/12 2012/13 2013/14
• Coal stock days are above the expected level of 42 days and end of August
2013 at 52 days
• Gaps at two stations that are below the targeted levels are being addressed
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Communication concept: LIVE LIGHTLY
Few of us think about how we live our lives
and the impact we have on others and our
surroundings.
We are guided by our habits and our routine,
whereby, we consume excessively in many
spheres of our lives… And we do it blindly.
Live lightly is a fresh and inspiring invitation
to re-assess our wasteful and unsustainable
everyday life behaviours.
Challenge Solution It is a social movement that relies on self-
discipline and the human drive to improve
once you know your impact.
Its momentum is sustained through
experiencing real benefits personally
Less is more this Summer.anltimately
competing with your peers.
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How to Live Lightly this Summer
• Saving electricity reduces pressure on the grid and cuts your electricity bill and South Africa’s carbon emissions
• The power system remains vulnerable all day during Summer
1. Use air-conditioning efficiently
- Set air-conditioning at 23 degrees
- Close windows and doors to optimize conditioning
- Switch off 30 minutes before leaving the office
2. Continue to switch off all geysers and pool pumps from 5pm to 9pm
3. Limit pool filtering cycles to 2 cycles daily, not between 5pm & 9pm
4. Switch off all non-essential lighting
5. Respond to the Power Alert and Power Bulletin messages by switching off all appliances that are not being used
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Key Messages
Winter review
Summer Outlook
New Build and New Connections
Conclusion
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Continued Progress with New Build
• Eskom is committed to completing the new build programme and has put the
necessary resources in place to do so – under the leadership of Mr Dan Marokane
• The labour partnership agreement between contractors, labour and Eskom has been
finalised at Medupi and Kusile. This caters for working conditions, mechanism for
dispute resolution and a productivity commitment
• Despite, the recent strike, there has been overall labour stability at Medupi. Good
progress has been made and the first unit is expected on-line in the 2nd half 2014
• Technical issues with Hitachi has been resolved at Medupi and are being implemented
and we are making progress with the Alstom C&I issue.
• Work at the Kusile site is progressing well
• Work has commenced at Sere and is expected to be commissioned by 2014/2015
• Ingula is on track
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June 2012
There is significant progress compared to one year ago
June 2013
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New Connections being added to the network
• Eskom has not turned down any request for new connections and
processes all requests.
• Eskom has enough capacity for its customers for most of the day. The
challenge is meeting the few hours at peak. This is where new
arrangements should be considered with residential customers and
large customers.
• Can large customers structure their production such that they shift
their production out of the peak periods?
• Currently we have 87 projects in the pipeline with a potential total
capacity of 3525MW coming on stream in the next 10 years.
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Required capacity per sector grouping
Economic sector Number of
projects
Additional
Demand
(MVA) Collection, Purification and Distribution of Water 1 3
Ferro chrome 10 848
Ferro manganese 1 22
Inter-urban railway transport 10 174
Manganese 1 22
Manufacture of cement, lime and plaster 1 0
Manufacture of cement, lime and plaster 3 69
Manufacture of pulp, paper and paperboard 1 2
Mining of Coal and Lignite 9 218
MINING OF COAL AND LIGNITE 1 65
Mining of Diamonds (including Alluvial Diamonds) 1 20
Mining of Gold and Uranium Ore 8 289
Mining of Iron Ore 4 313
Mnfg of basic chemicals, exc fertilizers nitrogen compounds 1 30
Other chemical and fertiliser mineral mining 1 17
Other iron and steel basic industries 1 10
Other metal ore mining, except gold and uranium 1 35
Other minerals and materials n.e.c. 2 28
Other primary non-ferrous, non-precious metals 1 65
Petrol, fuel lube oils greases, prim. from crude oil 3 40
Platinum group metals 20 918
Telecommunications 1 100
Titanium 4 237
Treating and coating of metals 1 3
Grand total 87 3525
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Key messages
Significant Achievements this Winter
Live Lightly this Summer
Continued Progress with New Build and New Connections
Conclusion
24
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Winter update conclusions
• Eskom continues to deliver on its mandate in the face of tough challenges – since 2008
• Eskom has not turned down applications from new customers and continues to power the economy
• Significant achievements over this winter means that Eskom is in better shape to deal with the challenges of summer 2013
• Demand side management is working because our customers are responding magnificently
• Live lightly this summer – there are benefits for all of us in doing so
• Continued progress with the new build programme is encouraging
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Summer outlook conclusions
• South Africa’s power system will be tight for the next few years until the next few units from the build programme comes on-line
• The system will remain tight in Summer, as we have an ‘All day Table Mountain profile’ in the Summer months
• Despite the tight system, South Africans have rallied to the call and have demonstrated that together we can keep the lights on. We thank you, but call on you again in the summer months
• Eskom will continue to drive its maintenance plan and commit to deliver on the build programme
• Commercial and residential customers can make a difference as less is more this summer. The less electricity you use the more there is to go around. Every little bit helps.
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Thank you
Voted as Most Desired Company to Work For (Sunday Times), 2nd in Community
Upliftment (Sunday Times), 2nd top Company that does most to look after the
environment and natural resource (Sunday Times), Star Award for Operation
Khanyisa, 4th most popular brand in South Africa (Finweek), Voted as Top
Engineering Company in South Africa by Engineering Students and second
best by MBA and Professionals (Mail & Guardian), Winner of the Best Integrated
Reporting Award (Nkonki)