Quarterly System Status Briefing - Matshela Koko Interim Group Chief Executive 24 January 2017 - Eskom
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Quarterly System Status Briefing Matshela Koko Interim Group Chief Executive 24 January 2017
Contents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Transmission
6 New build update
7 Conclusion
Overview of Eskom’s electricity value chain
Generation • Stable, no load
shedding, excess
capacity
Transmission • Stable, no major
incidents
• Stable with no
major faults in
Eskom networks
Distribution
Mining, Metros and large • Failing municipal
industry distribution
infrastructure
Total
Distribution • 5,689 million
Customers
Industry, commercial
and farming
Supply to municipalities
and residential
3
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
4Eskom’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
5Surplus 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 %
6Eskom has surplus energy even without Eskom OCGTs
7Contents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Transmission
6 New build update
7 ConclusionOperational highlights
Highlights Description
• Average excess capacity of 5 600 MW during peak demand
Generation
Generation
• Zero major incidents year-to-date
• Low number of interruptions, valued at 21 against a target of 26
Transmission year-to-date
• 222 km of new transmission lines have been built year-to-date
• In the past nine months, Eskom has connected 162 104 new
customers to the grid, with 150 747 customers energized and
already using electricity
Distribution • 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 %
• 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
New Build grid
• Medupi Unit 5 and Kusile Unit 1 (1 594 MW) were synchronised
but are not commercially operational
9Contents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Transmission
6 New build update
7 ConclusionGeneration sustains excellent performance from April to
December 2016
Highlights Description
• Year-to-date planned maintenance is at 12.0 % compared to
the target of 10 %
Maintenance
• Year-to-date breakdowns have reduced to 10.7 % from 16.2 %
for the same period last year
• Eskom currently has an excess of capacity, averaging
5 600 MW1 during peak demand
Excess capacity • 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 %
• Availability is 77.3 % at the end of Quarter 3, compared to
70.3 % last year for the same period
Plant
performance
• This translates to an additional 3 103 MW available on the grid
during this period
1 – Average excess available after meeting peak demand with current commercially operational plant
11Improvements in fleet performance has a positive impact on
costs
Highlights Description
• Eskom OCGT load factor is 0.15 % compared to the target
of 2 %
Open Cycle
GasTurbine • Eskom has not run its OCGTs to meet demand since
October 2016
usage
• Savings against budget year-to-date as of end December is
just under R 2 billion
• Improvement in Generation plant availability has re-enabled
Eskom to dispatch the least cost stations ahead of the
Economic more expensive stations
dispatch
• Year end projections is that economic dispatch will result in a
cost saving of R 238 million
12Eskom’s performance significantly improved resulting in higher
plant availability and surplus capacity Performance
turnaround
EAF performance, December 2000 to December 2016
95
93,4 % in Jul-01 EAF
90
85
EAF (%)
80 77,3 % in Dec-16
75
New leadership
70
70,3 % in Dec-15
65
Jun-11
Dec-11
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Jun-08
Dec-08
Dec-09
Dec-10
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Jun-01
Jun-02
Jun-03
Jun-04
Jun-05
Jun-06
Jun-07
Jun-09
Jun-10
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Key insights
• 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
13Generation improved EAF reaching 77.3 %2 in December YTD
and continues to focus on maintenance
Performance over the past nine months
Percentage (%)
Breakdowns1 Planned maintenance Available energy
12,9 9,8 9,6 10,2 10,0 10,1 11,4 12,6 10,5
11,5 9,7 9,1 11,8 13,2
12,9 13,3 12,9 13,8
78,7 80,7 80,7 78,2 76,7 75,3 75,6
74,2 74,5
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
1 - Includes breakdowns and other non plant losses
2 – EAF excluding Duvha 3 is 78.4 % 14OCGT usage has decreased as a result of improved
Generation availability
OCGT performance
Insights
110 Energy Send Out (GWh)
100,1 • Usage of
100
OCGT’s in July,
90 September,
80 November and
December for
70 commissioning
60 and testing
purposes only
50
• In October,
40 OCGTs were
30 used to meet
21,2 demand before
20
peak due to a
10 6,6 6,3 4,8 5,0 tight system
1,7 0,0 1,6 2,2 2,6 0,7
0 • OCGT load
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 factor for the
Quarter 2 was
Load 0.06% and for
Factor 5.6 1.3 0.4 0.4 0.3 0.3 0.1 0.0 0.1 0.1 0.2 0.0 Quarter 3 was
(%) 0.11%
15Our 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 yearPrognosis from Tetris indicates there will be no load shedding at
least until the end of the financial year
Available Capacity Operating Reserves PCLF UCLF Peak Demand Installed Capacity
45000
Installed Capacity is the total
Summer UCLF generating capacity from Eskom’s
UCLF
6500 MW combined
Plant Breakdowns: fromfleet
the available capacity we
40000 subtract the anticipated breakdowns
PCLF Planned Maintenance: from this we also need to
subtract the planned maintenance
35000
Operating Reserve
30000
Operating Reserve: 2000 MW buffer to
cater for sudden
PeakinDemand:
Increase load or ifthe forecasted
generating demand
units are does
Available Capacity not exceed the available capacity and we still
25000 lost
have the 2000 MW of operating reserve as a
Available Capacity:buffer.
the capacity available
Therefore to meet the
the prognosis is nodemand
load
we now have to superimpose
shedding for the remainder of the year year
the demand forecast for the
to compare it with the this available capacity.
Jan Feb Mar
2017
Tetris V4.27 171 Planned Maintenance – January 2017
Available Capacity = Installed Capacity - Peak Demand - UCLF
9000
8000
HCB
7000
6000 Operating Reserve
5000
Lethabo 5 Ankerlig 2 Komati 2
Kendal 5 Majuba 1
Duvha 4
4000
Kendal 3
Gourikwa 2
Ankerlig 7
3000 Matla 2
Tutuka 4
Matimba 2
2000 Grootvlei 2
Komati 7
Camden 1
Lethabo 6
1000
Kriel 1
Hendrina 10
Drakensberg 2 Komati 3
0
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
Tetris V4.27 182 Planned Maintenance – February to March 2017
Available Capacity = Installed Capacity - Peak Demand - UCLF
9000
8000
7000
Operating Reserve
6000
Tutuka 2
Acacia 2 Acacia 3
Hendrina 8 Gourikwa 3
5000 Kendal 3 Majuba 1
Port Rex 2 Port Rex 3
Gourikwa 2 Arnot 5
Palmiet 1
Ankerlig 7
4000 Majuba 2
Matla 2
Ankerlig 5
Tutuka 4 Matla 6
3000
Palmiet 2
Grootvlei 2
Matimba 2
2000
Camden
Komati 7
1
Lethabo 6
1000
Kriel 1
Hendrina 10
Drakensberg 2
0 Komati 3
09-Feb
01-Feb
03-Feb
05-Feb
07-Feb
11-Feb
13-Feb
15-Feb
17-Feb
19-Feb
21-Feb
23-Feb
25-Feb
27-Feb
09-Mar
01-Mar
03-Mar
05-Mar
07-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
Tetris V4.27 19The average Surplus Capacity from April to December has
been above 5 600 MW
Average monthly surplus Capacity
Surplus Capacity (MW)
40000
35000
Insights
30000
• There is an average of
above 5 600 MW of
25000 surplus capacity
20000
• The average available
15000 surplus capacity is
enough to cover the
capacity supplied by
10000
renewables and the
required reserve margin
5000
0
Surplus Capacity Actual Average Demand
20With Eskom’s excess capacity, we have increased our exports
by 25 %
Breakdown of Southern African Power Pool (SAPP) Sales per customer
SAPP Sales (GWh)
Insights into YTD sales
14000
11 710 • Eskom’s firm cross border
12000 sales to end-use customers are
stable at ~6600GWh,
10000 9 369
increasing by 123GWh
8000 • The firm and non-firm sales to
utilities has increased by ~
6000 2218GWh
• The total cross-border sales
4000 increased by 2341GWh
• Eskom supply is making an
2000
increasing and positive
contribution to support the
0
Dec YTD 2015 Dec YTD 2016
economies of SADC and to
offset the impact of the drought
Motraco (Mozambique JV) ZESA (Zimbabwe) on the Kariba power station
NamPower (Namibia) SEC (Swaziland) • With progressive additional
BPC (Botswana) DAM (Day-Ahead Market) capacity coming online in South
Africa Eskom will be reviewing
Skorpion (Namibia) ZESCO (Zambia)
the exports with a view to
CEC (Zambia) ORC (Botswana) assess future sustainability
LEC (Lesotho) EDM (Mozambique)
21Eskom’s surplus capacity is a game changer until 2021
ILLUSTRATION
BASED ON 31
AUGUST 2016
Country demand (MW) Solar and wind IPPs Eskom demand Eskom net sent out
35 Country demand:
Electricity required
30
by the country
25
Eskom’s demand: REIPPs sent out:
Demand electricity Self dispatching
Eskom net sent out: Resulting
Capacity (GW)
20 Solar and wind availability
energy from wind,
met by Eskom plant atneeds
an to be met by
Eskom’s decrease during peak
solar and period
hydro at
average marginal energy cost plant
15 resulting inan
Eskom plant
average ramping
price
of supply of 23c/kWh.
up to meetofdemand
193c/kWh
Wholesale price is 77 c/kWh
10
5
0
07:00
13:00
00:00
01:00
02:00
03:00
04:00
05:00
06:00
08:00
09:00
10:00
11:00
12:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
Time of Day
22Simulation: Eskom is able to meet demand cheaply by
dispatching its own stations ILLUSTRATION
BASED ON 31
AUGUST 2016
Total Generated Eskom Generated International Imports Nuclear Coal station Pumped Storage
Hydro Other IPP Diesel
30
Other IPPs
Hydro
Pumped storage
25
Arnot
Tutuka
Average marginal cost: 23 c/kWh
Camden
20 Grootvlei
Matla
Komati
Capacity (GW)
Majuba
15
Kriel
Kendal
10 Medupi
Duvha
Matimba
5 Hendrina
Lethabo
Koeberg
0 Cahora Bassa
02:00
09:00
19:00
00:00
01:00
03:00
04:00
05:00
06:00
07:00
08:00
10:00
11:00
12:00
13:00
14:00
18:00
15:00
16:00
20:00
17:00
21:00
22:00
23:00
Time of Day
23Actual data: Renewable IPPs are self dispatching and
displace cheaper Eskom plant ILLUSTRATION
BASED ON 31
AUGUST 2016
Total Generated Eskom Generated International Imports Nuclear Coal station Pumped Storage
Cost: 193 c/kWh
Hydro Other IPP Diesel
Wind
30 CSP
Solar
Other IPPs
Hydro
Pumped storage
25
Renewable IPPs: Arnot
This displaced the coal Tutuka
Average marginal cost: 23 c/kWh
stations at an additional cost Camden
20 of R 52m for the day Grootvlei
Matla
Komati
Capacity (GW)
Majuba
15
Kriel
Kendal
10 Medupi
Duvha
Matimba
5 Hendrina
Lethabo
Koeberg
0 Cahora Bassa
02:00
09:00
19:00
00:00
01:00
03:00
04:00
05:00
06:00
07:00
08:00
10:00
11:00
12:00
13:00
14:00
18:00
15:00
16:00
20:00
17:00
21:00
22:00
23:00
Time of Day
Eskom wholesale price is 77 c/ kWh (wholesale price including renewable pass through cost is 83 c/kWh)Contents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Transmission
6 New build update
7 ConclusionDistribution continues to exhibit sound technical performance
Highlights Description
• Six provinces achieved their Quarter 3 targets.
• Four provinces; the Free State, Gauteng, North West and
Northern Cape completed their electrification programmes
Electrification ahead of schedule.
performance • We have achieved 162 104 new connections for the Q3 YTD
Smart meter • We are moving towards our target of 207 332 connections by
installations 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
Technical current performance, we are confident that we will achieve the
Performance year end targets
• At the end of the third quarter Energy Losses were better than
Energy Losses the average industry benchmark of 8% at a performance of
6.5%
Smart meter • Exceeded the targeted installation performance for 3rd
Technical quarter - actual 17 561 installations versus target of 12 000
installations
Performance installations
26Distribution sector challenges
• 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
27Over 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
Municipal debt increase in 2016 and its municipal distribution
Rbn 10.2
Eastern Cape 0,42
4.2 Free State 4,3
Gauteng 0.64
6,0
Kwazulu Natal 0.2
Limpopo 0,51
Mpumalanga 2.5
North West 1,0
Northern Cape 0,6
Western Cape 0,04
Mar-16 Nov -16
Free State, Mpumalanga and North West contribute R7.8bn of
the R10.2bn owed to Eskom
28Eskom initiated the Promotion of Administrative Justice Act
(PAJA) process and recovered
R 979 million in debt1
PAJA Process Summary
18-Jan-17
Key PAJA PAJA Paja in
PAJA in
Province Reduction in debt
Amounts Recovered
Defaulters triggered Suspended Progress
Free State 12 9 7 2 -72 693 406
Mpumalanga 11 11 4 7 -356 377 976
North West 9 8 6 2 -222 665 699
Northern Cape 11 7 5 2 -31 782 457
Eastern Cape 6 5 5 0 -52 115 719
Limpopo 5 3 2 1 -25 180 930
Gauteng 6 0 0 0 -175 153 885
Kwa-Zulu Natal 4 1 1 0 -40 990 099
Western Cape 1 0 0 0 -2 011 737
TOTALS 65 44 30 14 -978 971 909
• 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
29
1 As of 18 January 2017Eskom has engaged municipalities and focuses on 3 main
areas going forward
Description of high level agreements
• Eskom allows the municipalities time until the 31 January
2017 to clear arrears
Interruption of
– Agreed amounts to be paid
supply
– Payment Arrangements (PA’s) for the balance to be agreed
– Council resolutions for payment of Current Account and PA’s
• No Eskom debt shall be written off, as in contravention of the
PFMA
No debt write off
• All Debts to be paid by all municipalities
• Eskom to look at Interest and payment period policies
• Eskom and municipalities to jointly investigate solutions that
will be tailored for the needs of each municipality
Conceive a
– Prepaid Meter installations to municipal customers
mutually beneficial
– Revenue Collection Service to the Municipalities
solution per
– Provincial Government to Manage Eskom Overdue Account
municipality
– Active Partnering with specific municipalities (Eskom
personnel to assist)
30Contents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Transmission
6 New build update
7 ConclusionTransmission achieved the following highlights in Quarter 3
F2017
Highlights Description
• Zero Major Incidents have occurred year to date
System • Improvement initiatives have successfully been implemented
performance to turnaround challenges experienced with System MinuteContents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Transmission
6 New build update
7 ConclusionNew capacity will fuel the South African economy
Medupi Kusile Ingula Sere Current capacity
Additional MW to be added to the South African grid
Installed capacity (MW)
Insights
55,000 54,189
53,389 • Eskom is
51,789 progressively
4,764 adding capacity
50,195 4,764
50,000 over the next six
4,764 years
47,807 3,970
4,800 • Ingula will be fully
2,382 4,000
45,419 2,400
commissioned in
45,086 1,600
45,000 794 794 800 2017
999 1,332 1,332 1,332 1,332 1,332 1,332
100 100 100 100 100 100 100 • Medupi will be
fully
commissioned by
40,000 43,193 43,193 43,193 43,193 43,193 43,193 43,193 2020
40,000
• Kusile will be fully
commissioned by
2022
0
2016 2017 2018 2019 2020 2021 2022
34
43 193 MW is the current installed capacity excluding MedupiContents
1 Performance summary
2 Operational highlights
3 Generation performance
4 Distribution overview
5 Tranmission
6 New build update
7 ConclusionConclusion
• 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
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