Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015

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Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015
Quarterly System Status Briefing

Winter Status

Brian Molefe
Chief Executive

17 June 2015
Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015
Content

              Introduction

          Half-year performance

             Winter Outlook

            Build Programme

               Conclusion

                                  2
Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015
Contents

  Introduction
  Half-Year Performance
  Winter Outlook
  Build programme
  Conclusion
Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015
Overview

 •   Eskom has continued to supply up to an average of 96% of electricity in the
     country during the first half of 2015 and will continue to do so in Winter

 •   We endeavour to do maintenance with no or minimal load shedding this winter

 •   Notwithstanding, we have an aging and volatile plant :
            - the cold weather increases demand, which pushes our plant to run at
              100% capacity for extended periods, further exacerbating unplanned
              outages
            - maintenance will put an already strained system under further pressure

 •   Up to 5 500 MW of planned maintenance will be performed, three times more than
     previous winters

 •   Every effort is being made to reduce plant breakdowns (unplanned maintenance)
     to allow for planned maintenance

 •   Medupi unit 6 is on track towards commercialisation and supplies up to 800 MW to
     the grid, while still in test (synchronisation) mode

 •   There is no prospect of a blackout in South Africa
                                                                                        4
Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015
Contents

  Introduction
  Half-Year Performance
  Winter Outlook
  Build programme
  Conclusion
Quarterly System Status Briefing Winter Status - Brian Molefe Chief Executive 17 June 2015
Eskom is committed to supplying the country and
minimising the risk of load shedding

• During the first-half of the year, an average of 96% of electricity was supplied
  in the country when load shedding in Stage 2, despite a higher demand during this
  period, compared to last year

• Generating performance was slightly better than expected

• Open cycle gas turbines were used extensively, with the highest usage in May

• Independent Power Producers continue to play an important role, contributing
  about 1 827MW to the grid at a time when the power system is constrained

• Renewable energy contributed about 1 300 MW during the day, of which 800 MW
  was from solar and 500 MW from wind.

• Benefits from the Build Programme contribute to the grid: 100 MW from Sere, and
  up to 800 MW from Medupi during peak periods

                                                                                      6
Despite load shedding on average in Stage 2, Eskom
supplied 96% of electricity during the first half

     100%                                                                                                                            Key insights

         90%

                                                                                                                                       • In the recent
         80%
                                                                                                                                         months, Eskom
                                                                                                         Not                             had to implement
         70%
                                                                                                         Supplied                        regular load
         60%                                                                                                                             shedding due to
Demand

                                                                                                                                         the unavailability
         50%                                                                                                                             of some of the
                                                                                                                                         generation units
         40%

                                                                                                                                       • Eskom supplied
         30%
                                                                                                                                         on average 96%
         20%
                                                                                                                                         of the demand
                                                                                                                                         during the period
         10%

         0%
                                          Jul-14
                                 Jun-14

                                                                                                Jan-15

                                                                                                          Feb-15

                                                                                                                   Mar-15
                                                   Aug-14

                                                            Sep-14

                                                                              Nov-14

                                                                                       Dec-14
                        May-14

                                                                     Oct-14
               Apr-14

                                                                                                                            Apr-15
We had forecast a high probability of load shedding
on most days

                        Jan-15                                          Feb-15
    Sun   Mon    Tue     Wed     Thu    Fri   Sat   Sun    Mon   Tue     Wed     Thu    Fri   Sat
                                  1     2      3     1      2     3      *4      *5     6      7
     4     5      6       7       8     9     10     8      9     10     * 11    12     13    14
    11    12     13       14     15     16    17    * 15   16     17      18     19     20    21
    18    19     20       21     22     23    24    22     23     24      25     26     27    28
    25    * 26   * 27     28     29     30    31

                        Mar-15                                          Apr-15
    Sun   Mon    Tue     Wed     Thu    Fri   Sat   Sun    Mon   Tue     Wed     Thu    Fri   Sat
     1     2      3       4       5     6      7                          1       2      3     4
     8     9      10      11      12    13    14     5      6      7      8       9     10    11
    15     16     17      18      19    20    21    12     13    * 14    * 15    * 16   17    18
    22     23     24      25      26    27    28    19     20     21      22     * 23   24    25
    29     30     31                                26     27     28      29     30

                                                      Adequate generation capacity available to meet
                        May-15
                                                      demand and reserves
    Sun   Mon    Tue     Wed     Thu    Fri   Sat
                                        1      2     Constrained generation capacity with sufficient
     3     4      5       *6     *7     8     *9     supply to meet demand and reserves. Medium
    10    * 11   12       13     * 14   15    16
                                                     probability of load shedding
    17    18     19      20      21     22    23      Insufficient generation capacity unable to meet
    24    25     26      27      28     29    30      demand and reserves. High probability of load
8
                                                      shedding
Actual system status: We performed better than
expected for January - April 2015
    No load shedding            Stage 1         Stage 2           Stage 3   * stage change
                         Jan-15                                                    Feb-15
     Sun   Mon    Tue     Wed     Thu     Fri    Sat       Sun      Mon     Tue     Wed     Thu    Fri   Sat
                                   1      2       3         1        2       3      *4      *5     6      7
      4     5      6       7       8      9      10         8        9      10      * 11    12     13    14
     11     12    13       14      15     16     17        * 15     16      17       18     19     20    21
     18     19    20       21      22     23     24        22        23     24       25     26     27    28
     25    * 26   * 27     28      29     30     31

                         Mar-15                                                    Apr-15
     Sun   Mon    Tue     Wed      Thu    Fri    Sat       Sun      Mon     Tue     Wed     Thu    Fri   Sat
      1     2      3       4        5     6       7                                  1       2      3     4
      8     9      10      11      12     13      14        5        6       7       8       9     10    11
      15    16     17      18      19     20      21       12        13     * 14    * 15    * 16   17    18
      22    23     24      25      26     27      28       19        20     21       22     * 23   24    25
      29    30     31                                      26        27     28       29     30

                         May-15                           Key insights
     Sun   Mon    Tue     Wed     Thu     Fri    Sat      • With the exception of May, the lights were
                                          1       2
                                                            kept on, most days
      3     4      5       *6      *7     8      *9       • Even during load shedding, 96% of the
     10    * 11   12       13     * 14    15     16         country had electricity
     17     18    19      20       21     22     23       • During the month of May, on average, load
     24     25    26       27      28     29     30
                                                            shedding was implemented for only 6 hours
9                                                           in a 24-hour day
Contents

  Introduction
  Half-Year Performance
  Winter Outlook
  Build programme
  Conclusion
Winter outlook:
While the system will be tight, Eskom will only
implement load shedding as a last resort

• Winter 2015 is likely to be colder than last year, with a higher expected
  demand in electricity during the peak periods.

• We anticipate to supply 100% of electricity most days and 96% during peak
  periods from 6am to 10am and 5pm to 10pm.

• Even during the cold front that hit from Wednesday, 3 June, Eskom
  implemented only 5 hours of load shedding on Sunday, 7 June. This after 10
  consecutive days of no load shedding.

• The recent load shedding from Monday, 8 June 2015 to Friday, 12 June 2015
  was the result of an increase in demand and an increase in unplanned
  breakdowns

• Localised power outages in urban areas and illegal connections generally
  increase during winter due to increased levels of customer demand and hence
  cause greater stress on the system.

                                                                                11
Winter outlook: continued
While the system will be tight, Eskom will only
implement load shedding as a last resort

• We will continue with maintenance during winter, three times more than
  previous winters.
• We will continue to use all available resources: Independent Power Producers
  (including renewable energy), Open Cycle Gas Turbines and Demand Market
  Participation.

• To date wind energy contributes between 300 MW to 500 MW during the day
  and solar energy about 800 MW.
• Industrial customers continue to contribute an average of 10% savings
• Coal stock levels are healthy at all but three stations. The average stock level
  days as at 8 June is 50.4 days against an average target of 51.2 days

                                                                                     12
In Winter, more electricity is used during the morning
and evening peak periods

                                                      Insights
Summer and winter load profiles
                                                       • In Winter, the demand/load
                                                         profile increases and peaks
                                                         during the morning and
                                                         evening, as more electricity is
                                  Increase in            used during these periods
                                  demand               • In Summer, the risk of load
                                  from 5pm to 10 pm
                                                         shedding is longer and for
       Increase in
                                                         most of the day
       demand
       from 6am to 10am                                • In Winter, the risk of load
                                                         shedding is for shorter
                                                         periods and only during the
                                                         peaks
                                                       • The generating plant
                                                         generally performs better in
                                                         winter, as the cooler
                                                         temperatures have less
                                                         impact on the equipment
                                                       • As the greatest demand is
                                                         during the peak, 4% of South
                                                         Africans could be impacted
                                                         by load shedding from 06:00-
                                                         10:00 & 17:00-22:00 (as per
                                                         load shedding schedules)
                                                                                        13
How do we do maintenance without load
shedding? Eskom intends to do maintenance with
limited load shedding
       50
                                                                                                              2014 peak demand
                                                                                                               was 35 677 MW
       45             43.5 GW installed (includes Cahora Bassa and excludes Medupi)

                                          7 GW maintenance window that must
       40
                                          include planned, unplanned & load losses
                                                                                                                  + 1 500 MW
                                                                                         36.5 GW                  operating
       35                                                                                                         reserves
                                                                                        35GW
                                                       34 GW
       30                                             32.5GW

                                                                                          36GW instantaneous
                                                        33GW instantaneous
       25

                                                                                          Maximum demand
                                                        Maximum demand
       20
  Gw

       15

       10

       5

       0
                     Capacity                    Summer Demand                       Winter Demand

            Capacity from independent power producers, including renewables, reflect as a reduction in
                                      demand when the capacity is available                            14
Eskom’s maintenance philosophy consists of
planned and unplanned maintenance

                       Planned                  • Philosophy maintenance
                       maintenance              • Safety maintenance
                                                • Statutory maintenance

  Maintenance
                                                • Risk maintenance
                       Unplanned                • Breakdowns (Total and
                       maintenance               partial load losses)

     Maintenance = Philosophy + safety + statutory + risk + breakdowns

    In the short term, Eskom will prioritise RISK MAINTENANCE in order to reduce
                         the amount of unplanned maintenance
         •   15 of a total of 18 maintenance outages (83%) are on power plants that are classified
             as Risk 1/Risk 2/Risk 3
         •   13 of a total of 18 maintenance outages (80%) is also philosophy maintenance

     On average Eskom has a maintenance budget of 7 000 MW in winter,
               which is dependent on demand requirements
                                                                                                     11
Progress at Majuba Power Station, as all six
units can operate at full load
• An immediate and gap solution is in place, enabling the station to run all six units
  (3 843 MW) at full load.
    -   This provides coal supplies to all six units via mobile equipment and temporary coal
        stock piles.

• A contract was awarded on 2 March 2015 for the interim solution which replaces
  the mobile equipment with conveyor belts running from the permanent stockpiles to
  ensure greater efficiency in the coal handling process.

• Construction is in progress and will be completed by end September 2015.

• A new permanent coal handling plant is expected to be in place at the end of 2016.
    -   Design consultants have been appointed and construction is expected to begin early
        January 2016, once a construction contractor has been appointed.

• The investigation has been concluded and will be presented
  to the Board and Shareholder

                                                                                               16
Duvha unit 3 boiler contract soon to be in
 place

• The over-pressurisation incident at Unit 3 of Duvha power station in
  March 2014 took 575MW unit out of service for repair.
• The incident investigation has been completed and the primary cause
  was noted as a build-up of unburnt fuel within the boiler, which ignited
  in an uncontrolled manner
• A process is under way to address all the recommendations from the
  report, and key learnings have been shared with other power stations.
• Negotiations have started with a boiler supplier and once technical,
  financial and commercial issues have been agreed, repair work
  should begin in July 2015.

                                                                             17
Load shedding stages have been amended to
create less impact for electricity consumers

•   In order to reduce the impact on customers and the complexity of managing
    Stage 3 load shedding, Stage 3 has been adjusted down by 1 000MW.

             Stage            Old schedules            New schedules
            Stage 1              1 000 MW                 1 000 MW
            Stage 2              2 000 MW                 2 000 MW
            Stage 3             4 000 MW                  3 000 MW
Contents

  Introduction
  Half-Year Performance
  Winter Outlook
  Build programme
  Conclusion
Build programme shows progress and contributes
MWs to the grid
                   Medupi Power Station Project (6 x 800MW)
                   ▪ Up to 800 MW contributing to national grid even while unit 6 is still in
                       test phase /synchronisation mode)
                   ▪   1st Unit (unit 6) on track for commercialization - August 2015
                   ▪   Synchronization of second unit expected in 2017.

                   Kusile Power Station Project (6 x 800MW)

                    The project is making good progress
                    Synchronization of 1st Unit (Unit 1) expected at the end of the first half
                        of 2017

                   Ingula Pumped Storage Scheme Project (4 x 333MW)

                    Synchronization of 1st unit (Unit 3) has been revised to the first half of
                        2016

                   Project Sere (100MW)
                   ▪ Successfully commercialized on time and within budget
                   ▪ 100 MW feeding to the national grid, when the wind blows.
                                                                                                20
Eskom needs to ensure capital is available to ensure
delivery of one Medupi and two Ingula units for FY16                                                                                xx      MW added to
                                                                                                                                            the network

                                                                                                                                            Post MYPD3

  • Commissioned in           • First sync Mar         • Unit 4 to be           • Unit 1 to be                • Kusile 1 will be
    early Feb 2015              2015                     commissioned Apr         commissioned                  commercially
  • Additional 100MW          • Full stable power        2016                     Aug 2016                      operating Aug
    added to the                by Jun 2015                                                                     2017                         2015/16
    network                                                                                                                                 1 466 MW

                                                                                                                                         Medupi x1 unit
     100                             800                     333                      333                            800
                                                                                                                                         Ingula x2 units
  Feb 2015                        Aug 2015                Mar 2016                Jul 2016                        Aug 2017
  Sere Wind Farm                  Medupi Unit 6           Ingula Unit 4           Ingula Unit 1                   Kusile 1                  Total MW
                                                                                                                                              5 532

              Mar 2015                     Jan 2016                  May 2016               Sep 2017                                       2019/2020
              Majuba                       Ingula                    Ingula                 Medupi 5                                       Duvha 3
              Recovery                     Unit 3                    Unit 2                                                                Recovery

                1200                         333                          333                     800                                          500

           • 600MW from unit          • Unit 3 to be           • Unit 2 to be           • Medupi 5                                 • Duvha 3 will be
             3 gap solution in          commissioned             commissioned             commercial                                 fully recovered in
             Feb & 600MW                Jan 2016                 May 2016                 operation date is                          2019/2020
             from Unit 4 in Mar                                                           Sep 2017                                 • This project falls
             2015                                                                                                                    out of MYPD3
                                                                                                                                     window

Source: GCD, Team analysis                                                                                                                             21
Eskom keeps the country informed
• Eskom communicates via the national, regional and local media including social media
  regarding its intention to load shed and during the process.

• Load shedding information and schedules are available on Eskom’s website for Eskom
  customers

• National and regional spokespersons continue to spread the message and share
  additional information to provide information and clarity

• Stakeholders and direct customers are informed predominantly via social media and text
  messages and are able to communicate via Eskom’s customer contact centres

• The Power Alert on SABC and DSTV channels continues to provide real-time information
  on the power system status and encourages customers to switch off.

    - An average of 350MW reduction in demand is observed during this flighting

• Eskom issues Power Alert system bulletins and holds a Quarterly system status media
  briefing to provide regular updates

• Face-to-face stakeholder engagements provide an opportunity for further dialogue on the
  status
       Electricity users are encouraged to follow Eskom on twitter and Facebook and to
          download the free Eskom App ‘Myeskom’ from Android and Apple stores.
We all can help to reduce demand and ‘Beat the
Peak’ this winter
             Saving electricity reduces pressure on the grid, cuts your
             electricity bill and reduces South Africa’s carbon emissions
              1. Use alternatives to electrical space heating
              •   Dress for the weather, to postpone switching on space
                  heaters
              •   Install ceiling insulation - an insulated room requires 51%
                  less energy to heat up
              •   Invest in a thermostatically controlled heater - a fan heater
                  is ideal for quick heat situations, while an oil heater can be
                  considered to keep a room warm for longer periods
              •   Consider gas heaters and hot water bottles to keep warm
              2. Switch off all geysers and pool pumps (all day until
                  9pm), and invest in a timer
              3. Switch off all non-essential lighting and appliances
              4. Respond to Power Alert messages by switching off all
                  appliances that are not being used
                                                                                   23
Contents

  Introduction
  Half-Year Performance
  Winter Outlook
  Build programme
  Conclusion
Conclusion: While the system is tight Eskom
endeavours to keep load shedding to a minimum
• Eskom has continued to supply up to an average of 96% of electricity in the
  country during the first half of 2015 and will continue to do so in Winter

• Unlike in Summer when the load shedding risk is for longer periods throughout
  the day, in Winter, the load shedding risk is for shorter periods and over the
  peak periods of 06:00 to 10:00 and 17:00 to 22:00, as more electricity is used
  during this time.

• As the demand peaks in Winter, we anticipate that 100% electricity supply
  during the day, and a minimum of 96% during the morning and evening peak
  periods

• We will continue with maintenance with the intent to do no or minimal load
  shedding
• We appreciate the support of all our customers and encourage that we maintain
  10% electricity savings.
• We are committed to provide early warning, however at times the system status
  changes rapidly. Please follow us on twitter @Eskom_SA and
  @Eskom_MediaDesk for updates.
                                     25
Thank you
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