Eskom's State of the System

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Quarterly System Status Briefing

Winter Status

Brian Molefe

Acting Chief Executive

17 June 2015



Content

2

Introduction

Half-year performance

Winter Outlook

Build Programme

Conclusion



Contents

Introduction

Half-Year Performance

Winter Outlook

Build programme

Conclusion



Overview

4

• 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



Contents

Introduction


Winter Outlook

Build programme

Conclusion



Eskom is committed to supplying the country andminimising the risk of load shedding

6

• During the first-half of the year, an average of 96% of electricity was suppliedin 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



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

electricity supplied

electricity demand

• In the recent

months, Eskom

had to implement

regular loadshedding due to

the unavailability

of some of the

generation units

• Eskom supplied

on average 96%of the demand

during the period

Key insights

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

A p r - 1 4

M a

y - 1 4

J u

n - 1 4

J

u l - 1 4

A u

g - 1 4

S e

p - 1 4

O

c t - 1 4

N o

v - 1 4

D e

c - 1 4

J a

n - 1 5

F e

b - 1 5

M a r - 1 5

A p r - 1 5

D e m a n d

NotSupplied



We had forecast a high probability of load sheddingon most days

8

Adequate generation capacity available to meet

demand and reserves

Jan-15

Sun Mon Tue Wed Thu Fri Sat

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 * 26 * 27 28 29 30 31

Feb-15


* 5 6 7

8 9 10 * 11 12 13 14

* 15 16 17 18 19 20 21

22 23 24 25 26 27 28

1 2 3 * 4

Mar-15


5 6 7

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

1 2 3 4

29 30 31

Apr-15

Sun Mon Tue Wed Thu Fri Sat2 3 4

5 6 7 8 9 10 11

12 13 * 14 * 15 * 16 17 18

19 20 21 22 * 23 24 25

26 27 28 29 30

1

May-15

Sun Mon Tue Wed Thu Fri Sat1 2

3 4 5 * 6 * 7 8 * 9

10 * 11 12 13 * 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

Constrained generation capacity with sufficient

supply to meet demand and reserves. Medium

probability of load shedding

Insufficient generation capacity unable to meet

demand and reserves. High probability of loadshedding



Actual system status: We performed better thanexpected for January - April 2015

9

No load shedding Stage 1 Stage 2 Stage 3 * stage change

Jan-15


1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 * 26 * 27 28 29 30 31

Feb-15


* 5 6 7

8 9 10 * 11 12 13 14

* 15 16 17 18 19 20 21

22 23 24 25 26 27 28

1 2 3 * 4

Mar-15


5 6 7

8 9 10 11 12 13 14

15 16 17 18 19 20 21

22 23 24 25 26 27 28

1 2 3 4

29 30 31

Apr-15

Sun Mon Tue Wed Thu Fri Sat2 3 4

5 6 7 8 9 10 11

12 13 * 14 * 15 * 16 17 18

19 20 21 22 * 23 24 25

26 27 28 29 30

1

May-15

Sun Mon Tue Wed Thu Fri Sat1 2

3 4 5 * 6 * 7 8 * 9

10 * 11 12 13 * 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

• With the exception of May, the lights were

kept on, most days

• Even during load shedding, 96% of the

country had electricity

• During the month of May, on average, load

shedding was implemented for only 6 hoursin a 24-hour day

Key insights



Contents

Introduction


Winter Outlook

Build programme

Conclusion

Wi t tl k



Winter outlook:While the system will be tight, Eskom will onlyimplement load shedding as a last resort

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

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

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

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

breakdowns

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

11

Wi t tl k ti d



Winter outlook: continuedWhile the system will be tight, Eskom will onlyimplement 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 dayand 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



Summer and winter load profiles

In Winter, more electricity is used during the morningand evening peak periods

13

Insights• In Winter, the demand/load

profile increases and peaks

during the morning and

evening, as more electricity is

used during these periods

• In Summer, the risk of load

shedding is longer and for

most of the day

• 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)

Increase in

demand

from 5pm to 10 pm

Increase in

demandfrom 6am to 10am

H d d i t ith t l d



14

How do we do maintenance without loadshedding? Eskom intends to do maintenance withlimited load shedding

43.5

32.5GW

35GW

0

5

10

15

20

25

30

35

40

45

50

Capacity Summer Demand Winter Demand

G w

GW installed (includes Cahora Bassa and excludes Medupi)

+ 1 500 MW

operating

reserves

M a x i m u m d e m a n d

3 6 G W i n s t a n t a n e o u s

M a x i m u m d e m a n d

3 3 G W i n s t a n t a n e o u s

7 GW maintenance window that must

include planned, unplanned & load losses

2014 peak demand

was 35 677 MW

36.5 GW

34 GW

Capacity from independent power producers, including renewables, reflect as a reduction indemand when the capacity is available



Eskom’s maintenance philosophy consists ofplanned and unplanned maintenance

Maintenance

Plannedmaintenance

Unplannedmaintenance

• Philosophy maintenance

• Safety maintenance

• Statutory maintenance

• Risk maintenance

• Breakdowns (Total andpartial 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

11

On average Eskom has a maintenance budget of 7 000 MW in winter,

which is dependent on demand requirements



Progress at Majuba Power Station, as all sixunits 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 coalstock 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 inplace

• 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 causewas noted as a build-up of unburnt fuel within the boiler, which ignitedin an uncontrolled manner

• A process is under way to address all the recommendations from thereport, 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 workshould begin in July 2015.

17



Load shedding stages have been amended tocreate less impact for electricity consumers

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

Stage Old schedules New schedules

Stage 1 1 000 MW 1 000 MWStage 2 2 000 MW 2 000 MW

Stage 3 4 000 MW 3 000 MW



Contents

Introduction


Winter Outlook

Build programme

Conclusion



Build programme shows progress and contributesMWs 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 of2016

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 ensuredelivery of one Medupi and two Ingula units for FY16

21Source: GCD, Team analysis

Feb 2015

Sere Wind Farm

Aug 2015

Medupi Unit 6

Mar 2016

Ingula Unit 4

Aug 2017

Kusile 1

Jul 2016

Ingula Unit 1

Mar 2015

Majuba

Recovery

Jan 2016

Ingula

Unit 3

May 2016

Ingula

Unit 2

2019/2020

Duvha 3

Recovery

Sep 2017

Medupi 5

xx MW added to

the network

1200

100 800

333

333

333

333

800

800

500

• Commissioned in

early Feb 2015

• Additional 100MW

added to the

network

• 600MW from unit

3 gap solution in

Feb & 600MW

from Unit 4 in Mar

2015

• First sync Mar

2015

• Full stable power

by Jun 2015

• Unit 3 to be

commissioned

Jan 2016

• Unit 4 to be

commissioned Apr

2016

• Unit 2 to be

commissioned

May 2016

• Medupi 5

commercial

operation date is

Sep 2017

• Unit 1 to be

commissioned

Aug 2016

• Kusile 1 will be

commercially

operating Aug

2017

• Duvha 3 will be

fully recovered in

2019/2020

• This project falls

out of MYPD3

window

Post MYPD3

Total MW

5 532

2015/16

1 466 MW

Medupi x1 unit

Ingula x2 units



Eskom keeps the country informed

• Eskom communicates via the national, regional and local media including social mediaregarding its intention to load shed and during the process.

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

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

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

• The Power Alert on SABC and DSTV channels continues to provide real-time informationon 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 mediabriefing to provide regular updates

• Face-to-face stakeholder engagements provide an opportunity for further dialogue on thestatus

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 thePeak’ 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


Winter Outlook

Build programme

Conclusion

C



Conclusion: While the system is tight Eskomendeavours 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

Eskom's State of the System

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