Quarterly System Status Briefing - eskom.co.za · Overview of Eskom’s electricity value chain Industry, commercial and farming Mining, Metros and large industry Generation • Stable,

Quarterly System Status Briefing

Matshela Koko

Interim Group Chief Executive

24 January 2017

4 Distribution overview

5 Transmission

6 New build update

Contents

3 Generation performance

7 Conclusion

2 Operational highlights

1 Performance summary

3

Overview of Eskom’s electricity value chain

Industry, commercial

and farming

Mining, Metros and large industry

Generation • Stable, no load

shedding, excess

capacity

Transmission • Stable, no major

incidents

Distribution

• Stable with no

major faults in

Eskom networks

• Failing municipal

distribution

infrastructure

Total

Distribution

Customers

• 5,689 million

Supply to municipalities

and residential

4

Eskom’s performance and new build programme is delivering

results with excess capacity (1/2)

Performance summary

Eskom has significantly improved its operational performance year-to-date

• Energy availability has improved from 70.3 % at the end of Quarter 3 2016 to 77.3 % for the same period this year

• From this improvement, 3 103 MW has been added to the national grid

Since the build programme started, 8 030 MW has been added to the grid

• In the next 6 years, Eskom will add a further 9 103 MW capacity through the new build programme

Peak reduction due to Demand Side Management (DSM) is 123 MW against a target of 100 MW

5

Eskom’s performance and new build programme is delivering

results with excess capacity (2/2)

Performance summary

The country energy demand is 2 252 GWh (1 %) lower than the same period last year

Eskom can meet any increase in demand until 2021 due to operational surplus capacity which currently averages 5 600 MW at peak this financial year

Eskom has increased cross border sales by 25% and aims to further increase domestic and export sales

The availability of operational surplus capacity of 5 600 MW is a game changer

Eskom continues to focus efforts on increasing electricity demand and ensuring sustainable revenue collection

6

Surplus capacity on average every day during the peak for this

financial year is the size of Matla Power Station (3 600 MW)

Surplus capacity over peak (5 600 MW) – operating reserve (2 000 MW) = 3 600 MW

Reserve margin is 19 %

7

Eskom has surplus energy even without Eskom OCGTs

Contents


5 Transmission

6 New build update


7 Conclusion



9

Operational highlights

Description

Transmission

• In the past nine months, Eskom has connected 162 104 new customers to the grid, with 150 747 customers energized and already using electricity

• Smart meter implementation program for Sandton, Midrand and Soweto is ahead of schedule

• Energy Losses were better than the industry benchmark of 8% at 6.5 %

Generation

• Average excess capacity of 5 600 MW during peak demand

Highlights

• Zero major incidents year-to-date

• Low number of interruptions, valued at 21 against a target of 26 year-to-date

• 222 km of new transmission lines have been built year-to-date

Distribution

New Build

• 1 800 MVAs of transformer capacity have been commissioned ahead of schedule on 27 October 2016

• Year-to-date, Ingula Units 4, 2 and 1 have added 999 MW to the grid

• Medupi Unit 5 and Kusile Unit 1 (1 594 MW) were synchronised but are not commercially operational

Generation

Contents


5 Transmission

6 New build update


7 Conclusion



11

Generation sustains excellent performance from April to

December 2016

Description

Plant

performance

• Availability is 77.3 % at the end of Quarter 3, compared to 70.3 % last year for the same period

• This translates to an additional 3 103 MW available on the grid during this period

Maintenance

• Year-to-date planned maintenance is at 12.0 % compared to the target of 10 %

• Year-to-date breakdowns have reduced to 10.7 % from 16.2 % for the same period last year

Highlights

• Eskom currently has an excess of capacity, averaging

5 600 MW1 during peak demand

• Eskom sold 11.7 TWh year-to-date to neighbouring countries compared to 9.4 TWh for the same period last year, which is an increase of 25 %

Excess capacity

1 – Average excess available after meeting peak demand with current commercially operational plant

12

Improvements in fleet performance has a positive impact on

costs

Description

Open Cycle

GasTurbine

usage

• Eskom OCGT load factor is 0.15 % compared to the target of 2 %

• Eskom has not run its OCGTs to meet demand since October 2016

• Savings against budget year-to-date as of end December is just under R 2 billion

Highlights

• Improvement in Generation plant availability has re-enabled Eskom to dispatch the least cost stations ahead of the more expensive stations

• Year end projections is that economic dispatch will result in a cost saving of R 238 million

Economic

dispatch

13

• Generation has turned around its performance from 70.3 % EAF in December 2015 to 77.3 % EAF in

December 2016, resulting in an extra 3103 MW available to the grid

Eskom’s performance significantly improved resulting in higher

plant availability and surplus capacity

EAF performance, December 2000 to December 2016

65

70

75

80

85

90

95

De

c-1

3

Ju

n-1

3

EA

F (

%)

De

c-1

6

Ju

n-1

6

De

c-1

5

70,3 % in Dec-15

Ju

n-1

5

De

c-1

4

Ju

n-1

4

De

c-1

2

Ju

n-1

2

De

c-1

1

Jun-1

1

De

c-1

0

Ju

n-1

0

De

c-0

9

Ju

n-0

9

De

c-0

8

Jun-0

8

De

c-0

7

Ju

n-0

7

De

c-0

6

Ju

n-0

6

De

c-0

5

Ju

n-0

5

De

c-0

4

Ju

n-0

4

De

c-0

3

Ju

n-0

3

De

c-0

2

Ju

n-0

2

De

c-0

1

93,4 % in Jul-01

Ju

n-0

1

De

c-0

0

Performance

turnaround

Key insights

EAF

77,3 % in Dec-16

New leadership

14

Generation improved EAF reaching 77.3 %2 in December YTD

and continues to focus on maintenance

Performance over the past nine months

Percentage (%)

1 - Includes breakdowns and other non plant losses

2 – EAF excluding Duvha 3 is 78.4 %

80,7 78,7

12,9 13,2 9,1 9,7

May-16

11,5

Aug-16

10,0

78,2

9,6 9,8

Apr-16

12,9 10,1

Jul-16 Jun-16

74,2 76,7

11,8

80,7

10,2

Nov-16 Dec-16 Oct-16

13,3 13,8 12,9

75,3

12,6

75,6

11,4

Sep-16

74,5

10,5

Available energy Breakdowns1 Planned maintenance

15

OCGT usage has decreased as a result of improved

Generation availability

OCGT performance

Insights

• Usage of

OCGT’s in July,

September,

November and

December for

commissioning

and testing

purposes only

• In October,

OCGTs were

used to meet

demand before

peak due to a

tight system

• OCGT load

factor for the

Quarter 2 was

0.06% and for

Quarter 3 was

0.11%

0

10

20

30

40

50

60

70

80

90

100

110100,1

Jan-16

0,0

Jul-16 Aug-16

1,7 4,8

Apr-16 Mar-16

6,6

Feb-16

21,2

Jun-16

5,0

May-16

6,3

Dec-16

0,7

Nov-16

2,6

Oct-16

2,2 1,6

Sep-16

Load

Factor

(%) 5.6 1.3 0.4 0.4

Energy Send Out (GWh)

0.3 0.3 0.1 0.0 0.1 0.1 0.2 0.0

Our maintenance planning ensures that the system

remains sustainable and healthy

• Prognosis from the Tetris Maintenance Plan confirms that the

system will remain adequate until 2021

• The Tetris maintenance planning is based on an operating reserve of

2 000 MW and a maintenance budget of 11 500 MW for the rest of

the financial year

• We expect minimal use of Eskom OCGTs to manage the system

for the rest of the financial year

Prognosis from Tetris indicates there will be no load shedding at

least until the end of the financial year

Tetris V4.27

25000

30000

35000

40000

45000

Jan Feb Mar

2017

Available Capacity Operating Reserves PCLF UCLF Peak Demand Installed Capacity

Summer UCLF

6500 MW UCLF

PCLF

Operating Reserve

Available Capacity

Installed Capacity is the total generating capacity from Eskom’s combined fleet Plant Breakdowns: from the available capacity we

subtract the anticipated breakdowns

Planned Maintenance: from this we also need to subtract the planned maintenance

Available Capacity: the capacity available to meet the demand we now have to superimpose the demand forecast for the year to compare it with the this available capacity.

Operating Reserve: 2000 MW buffer to cater for sudden Increase in load or if generating units are lost

Peak Demand: the forecasted demand does not exceed the available capacity and we still have the 2000 MW of operating reserve as a buffer. Therefore the prognosis is no load shedding for the remainder of the year

17

Planned Maintenance – January 2017

Tetris V4.27 18

1

Available Capacity = Installed Capacity - Peak Demand - UCLF

HCB

Komati 3 Drakensberg 2 Hendrina 10

Kriel 1

Lethabo 6

Komati 7 Camden 1

Matimba 2 Grootvlei 2

Tutuka 4

Matla 2

Ankerlig 7 Gourikwa 2

Majuba 1

Kendal 3

Kendal 5

Ankerlig 2

Duvha 4

Lethabo 5 Komati 2

Operating Reserve

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

11-Jan 12-Jan 13-Jan 14-Jan 15-Jan 16-Jan 17-Jan 18-Jan 19-Jan 20-Jan 21-Jan 22-Jan 23-Jan 24-Jan 25-Jan 26-Jan 27-Jan 28-Jan 29-Jan 30-Jan 31-Jan

Jan

2017

Planned Maintenance – February to March 2017

Tetris V4.27 19

Available Capacity = Installed Capacity - Peak Demand - UCLF

2

Komati 3Drakensberg 2

Hendrina 10Kriel 1

Lethabo 6

Komati 7Camden 1

Matimba 2

Grootvlei 2Palmiet 2

Tutuka 4

Ankerlig 5

Matla 2

Ankerlig 7Palmiet 1

Matla 6

Hendrina 8

Gourikwa 2

Majuba 1Gourikwa 3

Majuba 2

Arnot 5

Kendal 3

Tutuka 2Acacia 2

Port Rex 2 Port Rex 3

Acacia 3

Operating Reserve

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

01

-Fe

b

03

-Fe

b

05

-Fe

b

07

-Fe

b

09

-Fe

b

11

-Fe

b

13

-Fe

b

15

-Fe

b

17

-Fe

b

19

-Fe

b

21

-Fe

b

23

-Fe

b

25

-Fe

b

27

-Fe

b

01

-Mar

03

-Mar

05

-Mar

07

-Mar

09

-Mar

11

-Mar

13

-Mar

15

-Mar

17

-Mar

19

-Mar

21

-Mar

23

-Mar

25

-Mar

27

-Mar

29

-Mar

31

-Mar

Feb Mar

2017

Surplus Capacity (MW)

Average monthly surplus Capacity

The average Surplus Capacity from April to December has

been above 5 600 MW

Surplus Capacity Actual Average Demand

• There is an average of

above 5 600 MW of

surplus capacity

• The average available

surplus capacity is

enough to cover the

capacity supplied by

renewables and the

required reserve margin

Insights

0

5000

10000

15000

20000

25000

30000

35000

40000

20

Insights into YTD sales SAPP Sales (GWh)

Breakdown of Southern African Power Pool (SAPP) Sales per customer

With Eskom’s excess capacity, we have increased our exports

by 25 %

• Eskom’s firm cross border

sales to end-use customers are

stable at ~6600GWh,

increasing by 123GWh

• The firm and non-firm sales to

utilities has increased by ~

2218GWh

• The total cross-border sales

increased by 2341GWh

• Eskom supply is making an

increasing and positive

contribution to support the

economies of SADC and to

offset the impact of the drought

on the Kariba power station

• With progressive additional

capacity coming online in South

Africa Eskom will be reviewing

the exports with a view to

assess future sustainability

0

2000

4000

6000

8000

10000

12000

14000

Dec YTD 2015 Dec YTD 2016

Motraco (Mozambique JV) ZESA (Zimbabwe)

NamPower (Namibia) SEC (Swaziland)

BPC (Botswana) DAM (Day-Ahead Market)

Skorpion (Namibia) ZESCO (Zambia)

CEC (Zambia) ORC (Botswana)

LEC (Lesotho) EDM (Mozambique)

9 369

11 710

21

REIPPs sent out:

Self dispatching

energy from wind,

solar and hydro at

an average price

of 193c/kWh

Country demand:

Electricity required

by the country

0

5

10

15

20

25

30

35

Capacity (

GW

)

Time of Day

00

:00

01

:00

02

:00

03

:00

04

:00

05

:00

06

:00

07

:00

08

:00

09

:00

10

:00

11

:00

12

:00

13

:00

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

Eskom net sent out: Demand

met by Eskom plant at an

average marginal energy cost

of supply of 23c/kWh.

Wholesale price is 77 c/kWh

Eskom’s demand:

Resulting electricity

needs to be met by

Eskom’s plant

Country demand (MW) Solar and wind IPPs Eskom demand Eskom net sent out

Eskom’s surplus capacity is a game changer until 2021

Solar and wind availability

decrease during peak period

resulting in Eskom plant ramping

up to meet demand

ILLUSTRATION BASED ON 31 AUGUST 2016

22

Cahora Bassa Koeberg

Lethabo

Hendrina

Matimba

Duvha

Medupi

Kendal

Kriel

Majuba

Komati Matla Grootvlei Camden Tutuka

Arnot

Pumped storage

Other IPPs

Hydro

Coal station International Imports

Other IPP

Nuclear Pumped Storage

Diesel

Total Generated Eskom Generated

Hydro


Simulation: Eskom is able to meet demand cheaply by dispatching its own stations

0

5

10

15

20

25

30

Cap

acity (

GW

)

00

:00

01

:00

02

:00

03

:00

04

:00

05

:00

06

:00

07

:00

08

:00

09

:00

10

:00

11

:00

12

:00

13

:00

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

Time of Day

Ave

rag

e m

arg

ina

l c

ost:

2

3 c

/kW

h

23

Wind

Solar CSP

Actual data: Renewable IPPs are self dispatching and displace cheaper Eskom plant


Renewable IPPs:

This displaced the coal

stations at an additional cost

of R 52m for the day

0

5

10

15

20

25

30

Cap

acity (

GW

)

00

:00

01

:00

02

:00

03

:00

04

:00

05

:00

06

:00

07

:00

08

:00

09

:00

10

:00

11

:00

12

:00

13

:00

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

Time of Day

Coal station International Imports

Other IPP

Nuclear Pumped Storage

Diesel

Total Generated Eskom Generated

Hydro

Cahora Bassa Koeberg

Lethabo

Hendrina

Matimba

Duvha

Medupi

Kendal

Kriel

Majuba

Komati Matla Grootvlei Camden Tutuka

Arnot

Pumped storage

Other IPPs

Hydro

Ave

rag

e m

arg

ina

l c

ost:

2

3 c

/kW

h

Co

st:

1

93

c/k

Wh

Eskom wholesale price is 77 c/ kWh (wholesale price including renewable pass through cost is 83 c/kWh)

Contents


5 Transmission

6 New build update


7 Conclusion



26

Distribution continues to exhibit sound technical performance

Description Highlights

Smart meter

installations

Technical

Performance

Electrification

performance

• Six provinces achieved their Quarter 3 targets.

• Four provinces; the Free State, Gauteng, North West and Northern Cape completed their electrification programmes ahead of schedule.

• We have achieved 162 104 new connections for the Q3 YTD

• We are moving towards our target of 207 332 connections by the end of this financial year (31 March 2017) and committed to achieving Universal Access by 2020

• We have a SAIFI target of 20 and SAIDI target of 39, with our

current performance, we are confident that we will achieve the year end targets

Technical

Performance

• At the end of the third quarter Energy Losses were better than the average industry benchmark of 8% at a performance of 6.5%

Energy Losses

• Exceeded the targeted installation performance for 3rd quarter - actual 17 561 installations versus target of 12 000 installations

Smart meter

installations

• Eskom Distribution accounts for 46% of the South African customer base, whilst the

rest falls within metros and municipalities

• Some of the key challenges facing the industry are:

• Huge under investment in electricity infrastructure - Adam baseline report of

2008 was R 27 billion and it grew to R 68 billion in 2014

• High energy losses as a result of inadequate revenue management system

• A number of distributors are in violation of their distribution license conditions

• Customer experience, in some instances, is so negative that customers refuse

to pay for the service

• Lack of competent skills to lead, manage and maintain the business

• Some utilities consistently default on their negotiated payment arrangements

because of systemic failures

• Effects of these shortcomings is detrimental to the economic growth of the country

• Addressing the above challenges is key to ensuring future financial sustainability

• We wish to acknowledge cooperation with Premiers and MEC’s in helping Eskom in

finding lasting solutions to the Distribution challenges

Distribution sector challenges

27

Over the 2016 financial year, munic debt increased to R10.2bn at the end of November, with Free State, Mpumalanga and North West contributing the most

28

Nov -16

10.2

4.2

Mar-16

6,0

Rbn

Western Cape 0,04

Northern Cape 0,6

0.64

Free State 4,3

Eastern Cape 0,42

North West 1,0

Mpumalanga 2.5

Limpopo 0,51

Kwazulu Natal 0.2

Gauteng

Municipal debt increase in 2016 and its municipal distribution

Free State, Mpumalanga and North West contribute R7.8bn of

the R10.2bn owed to Eskom

• Since the start of the PAJA process in November 2016, Eskom has managed to collect R 979

million from the municipalities

• This is testament of the ability of South Africans to work together during tough times

• The PAJA process triggered in North West, stimulated payment from municipalities where the PAJA

process had not yet been initiated – i.e. R 59 million outside of the PAJA process

Eskom initiated the Promotion of Administrative Justice Act (PAJA) process and recovered R 979 million in debt1

ProvinceKey

Defaulters

PAJA

triggered

PAJA

Suspended

Paja in

Progress

Free State 12 9 7 2

Mpumalanga 11 11 4 7

North West 9 8 6 2

Northern Cape 11 7 5 2

Eastern Cape 6 5 5 0

Limpopo 5 3 2 1

Gauteng 6 0 0 0

Kwa-Zulu Natal 4 1 1 0

Western Cape 1 0 0 0

TOTALS 65 44 30 14

-40 990 099

-2 011 737

-978 971 909

PAJA Process Summary18-Jan-17

-356 377 976

-222 665 699

-31 782 457

-52 115 719

-25 180 930

-175 153 885

Amounts Recovered

-72 693 406

Reduction in debt PAJA in

1 As of 18 January 2017 29

30

Description of high level agreements

Interruption of

supply

• Eskom allows the municipalities time until the 31 January

2017 to clear arrears

– Agreed amounts to be paid

– Payment Arrangements (PA’s) for the balance to be agreed

– Council resolutions for payment of Current Account and PA’s

No debt write off

• No Eskom debt shall be written off, as in contravention of the

PFMA

• All Debts to be paid by all municipalities

• Eskom to look at Interest and payment period policies

Conceive a

mutually beneficial

solution per

municipality

• Eskom and municipalities to jointly investigate solutions that

will be tailored for the needs of each municipality

– Prepaid Meter installations to municipal customers

– Revenue Collection Service to the Municipalities

– Provincial Government to Manage Eskom Overdue Account

– Active Partnering with specific municipalities (Eskom

personnel to assist)

Eskom has engaged municipalities and focuses on 3 main areas going forward

Contents


5 Transmission

6 New build update


7 Conclusion



32

Transmission achieved the following highlights in Quarter 3

F2017

Description

• We have sold more than 3.9 TWh to neighbouring countries for Quarter 3 and more than 11.7 TWh year-to-date

• Demand-side management programme refocused to support sales growth initiatives.

• Peak demand reduction of 123 MW achieved year-to-date against target of 100 MW

System

performance

• Zero Major Incidents have occurred year to date

• Improvement initiatives have successfully been implemented to turnaround challenges experienced with System Minute <1

• Low number of interruptions, valued at 21 versus the limit of 26 year-to-date

Highlights

• High levels of maintenance execution with 98.8% of planned work executed

• Excellent line fault performance has been achieved year-to-date

Plant

Performance

Regional

Trading and

Demand

Management

Contents


5 Transmission

6 New build update


7 Conclusion



Additional MW to be added to the South African grid

Installed capacity (MW)

• Eskom is

progressively

adding capacity

over the next six

years

• Ingula will be fully

commissioned in

2017

• Medupi will be

fully

commissioned by

2020

• Kusile will be fully

commissioned by

2022

Insights

New capacity will fuel the South African economy

800794794

40,000

45,000

50,000

0

55,000

4,764

2021

53,389

43,193

100 1,332

43,193

100

4,800

2022

54,189

1,332

4,000

4,764

2020

51,789

43,193

100 1,332

2,400

4,764

2019

50,195

43,193

100 1,332

1,600

3,970

2018

47,807

43,193

100 1,332

2,382

2017

45,419

43,193

100 1,332

2016

45,086

43,193

100 999

Sere Current capacity Ingula Kusile Medupi

40,000

34 43 193 MW is the current installed capacity excluding Medupi

Contents


5 Tranmission

6 New build update


7 Conclusion



Conclusion

• We are ensuring that power supply remains unconstrained through

our maintenance programme

• Eskom power system has progressed to a position of surplus capacity

which will positively impact the SA economy

• The availability of excess capacity allows Eskom to meet demand more

cheaply than through the purchases of renewable energy

• As a priority, both domestic and export sales must be further increased

• Eskom will continue to focus efforts on increasing growth in demand in

electricity and ensuring sustainable revenue collection

36

Quarterly System Status Briefing - eskom.co.za · Overview of Eskom’s electricity value chain Industry, commercial and farming Mining, Metros and large industry Generation • Stable,

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