Quarterly System Status Briefing: Summer Status

Brian Molefe

Group Chief Executive

16 November 2015

Content

2

Introduction

Winter performance

Summer outlook

Recovery and build

programme

Conclusion

Overview

3

• Eskom continues to supply 100% electricity for the

most part, while performing maintenance

• To date, we have had 99 days with only 2 hours and

and 20 minutes of load-shedding.

• The recent introduction of a new maintenance methodology called Tetris

enables effective management of maintenance with no load shedding

• The performance of our generation fleet has stabilised with unplanned

outages (UCLF) below target of 7 000MW

• The New Build programme delivered 720MW to the grid with the

commercial operation of Medupi Unit 6 on 23 August 2015

• Our focus is on fast tracking the capacity build programme

• Summer projections is that no load shedding is expected.

Content

4

Introduction

Winter performance

Summer outlook

Recovery and build

programme

Conclusion

Since Winter 2015 was warmer than last year, more maintenance was performed while still supplying 96% electricity

5

• Eskom performed three times

more maintenance this past winter

than ever before

• Typically the winter demand for

electricity increases along with

localised power outages and

illegal connections putting

additional strain on the power

system

• While load shedding was

implemented this winter, Eskom

continued to supply up to 96% of

electricity during this period

• Renewable energy contributed up

to 1 300MW during the day, of

which 800MW was from solar and

500MW from wind, including

Eskom’s Sere wind farm

• All available levers were used to

contain the level of load shedding:

- Independent Power Producers

- Open Cycle Gas Turbines

- Demand Market Participation

• Coal stock levels were at healthy

levels throughout the winter with an

average of 51 days

6

Introduction

Winter performance

Summer outlook

Recovery and build

programme

Conclusion

In summer, the system is tight all day up to 10pm, showing a

flat “Table Mountain” profile

7

Typical Winter Day Typical Summer Day

36 000

34 000

32 000

30 000

28 000

26 000

24 000

22 000

20 000

Summer and winter typical daily load profiles

MW

“Table mountain” profile

23:00 02:00 05:00 08:00 11:00 14:00 17:00 20:00 23:00 02:00

Eskom will continue to execute maintenance without load

shedding throughout the summer period (1/2)

8

• While the system remains tight, Eskom will

continue with maintenance with no or

limited load shedding

• Summer is likely to be hotter than last

year, with a higher expected demand in

electricity throughout the day as

consumers switch on air conditioners and

pool pumps

• We plan to meet demand for electricity 100% of the time and implement

stage 1 load shedding only when demand increases beyond available

capacity

• The 2hr 20min of stage 1 load shedding that took place on 14 September

was an extreme incident as there was a loss of a number of generating

units in quick succession

• Key industrial customers experienced stage 2 load curtailment only once

in the last 99 days on 9 October 2015 for 5 hr 30 min

Eskom will continue to execute maintenance without load

shedding throughout the summer period (2/2)

9

• The development of a new methodology, called

Tetris has resulted in better predictability

e.g. Medupi unit 6 remained on planned

outage from 21 October until 9 November with no load shedding

• Tetris enables us to perform maintenance within our maintenance budget of

4 500 MW

• During the severe heat wave experienced in early October, Eskom was able

to perform maintenance without load shedding

• Eskom has connected an additional 43 Independent Power Producers

(IPP) projects with a total capacity of 2 147 MW of which 2 021 MW is in

commercial operation

• An additional 334MW from the Department of Energy’s Dedisa IPP

project

• Coal stock is sustained at healthy levels of 58.2 days on average

• Dam levels are currently at 58%

Capacity outlook until August 2016

10

MW

Capacity outlook from November 2015 to August 2016

Source: Tetris V4.03

Additional capacity from IPPs (500MW)

Available Capacity Operating Reserves PCLF UCLF Peak Demand Installed Capacity

Available Capacity

20000

25000

30000

35000

40000

45000

Nov Dec Jan Feb Mar Apr May Jun Jul Aug

2015 2016

PCLF

Operating Reserves

Summer UCLF 7000 MW

Winter UCLF 6000 MW UCLF

1

1

Tetris: Overview of planned maintenance from November

to December 2015

11

1

Source: Tetris V4.03

MW

Available Capacity = Installed Capacity - Peak Demand - UCLF Capacity outlook from November to December 2015

Tetris: Overview of planned maintenance from January to

April 2016 2

12 Source: Tetris V4.03

MW

Capacity outlook from January to April 2016 Available Capacity = Installed Capacity - Peak Demand - UCLF

Tetris: Overview of planned maintenance from May to

August 2016 3

13 Source: Tetris V4.03

MW

Capacity outlook from May to August 2016 Available Capacity = Installed Capacity - Peak Demand - UCLF

14

• Despite recent statements in the

media, electricity demand profile

has remained relatively similar

over the Aug – Oct over the last 3

years

• Stable electricity supply has also

led to the increase in

manufacturing output:

‒ Output rose 0.9% year on year

compared to a revised -0.3% in

August

‒ Factory production jumped

2.2% and was up 1.4% in the

three months to Sep 2015

On average the demand has been the same between August and October when compared to 2013, 2014 and 2015

Insights

“Not a bad manufacturing print at all. It

may be that both the more competitive

rand and stabilisation of power,

helped” – Razia Khan (head of Africa

research at Standard Chartered”

3 900

4 100

4 300

4 500

4 700

4 900

5 100

5 300

38 39 40 41 42 43 44 45 46

Ene

rgy

(GW

h)

Tho

usa

nd

s

Weeks

Incl IPPs 2015 Incl IPPs 2014 Incl IPPs 2013

Weekly Energy Sent out –YOY comparison 2013 - 2015

Source: Eskom Transmission, Reuters, The Witness

15

Introduction

Winter performance

Summer outlook

Recovery and

build programme

Conclusion

Progress at Majuba Power Station (1/2)

16

• Majuba Power Station experienced a

coal storage silo collapse on 1

November 2014

• A short term solution was

implemented with coal being fed

through an elevated mobile boom

feeder

• The power station has been able to

run at full load from February

2015

• An interim solution is currently in

place and has been in operation

from 1 October 2015

• This includes a newly constructed

temporary conveyer belt to ferry

the coal

• The use of trucks to transport coal

has been curtailed from an average

of 1060 trucks before the

implementation of the interim

solution to an average of 90 trucks

Progress at Majuba Power Station (2/2)

17

• Designs for the permanent solution have

been completed

• This includes re-instatement of the

damaged silo and the associated coal

conveyor system

• Two other coal silos will also be reinforced

• A tender enquiry was issued to the market

and closed on 03 November 2015

• Evaluation in progress and anticipated

contract award date is 01 December

2015

• Construction will be complete by 31

December 2017

Permanent solution

Progress at Duvha Power Station

18

• Duvha Power Station experienced an over-

pressurisation incident in March 2014

• The collaborative process undertaken

in conjunction with the Loss

Adjuster is nearing completion

• An indicative settlement offer has been

made by the insurers and the Loss Adjuster

• The boiler needs to be replaced, however,

issues of technology assessment and cost

uncertainty have delayed progress on this

project

• A proposed investment and commercial

process will be submitted to the Eskom

governance committees for a decision on the

way forward

Progress update

Build Programme - current scheduled dates

The Intention is to fast track the build programme

19

Medupi

Unit 6 (794MW)

Unit 5 (794MW)

Unit 4 (794MW)

Unit 3 (794MW)

Unit 2 (794MW)

Unit 1 (794MW)

Commercial operation dates

23 August 2015

March 2018

July 2018

June 2019

December 2019

May 2020

Kusile

Unit 1 (800MW)

Unit 2 (800MW)

Unit 3 (800MW)

Unit 4 (800MW)

Unit 5 (800MW)

Unit 6 (800MW)

Commercial operation dates

July 2018

July 2019

August 2020

March 2021

November 2021

September 2022

Ingula

Unit 3 (333MW)

Unit 4 (333MW)

Unit 2 (333MW)

Unit 1 (333MW)

Commercial operation dates

January 2017

March 2017

May 2017

July 2017

The New Build Programme and Recovery Projects will contribute 5 620 MW to the network over the MYPD3 window

20

xx MW added to

the network

Post MYPD3

Mar 2015

Sere Wind Farm

Jun 2015

Medupi Unit 6

May 2017

Ingula Unit 2

Jul 2018

Kusile 1

Jul 2017

Ingula Unit 1

Mar 2015

Majuba Recovery

Jan 2017

Ingula Unit 3

Mar 2017

Ingula Unit 4

Mar 2018

Medupi 5

1200

100 794

333 333

333 333

794

800

600

• Commissioned in

early Mar 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

• Commissioned Aug

2015

• Additional 794 MW

added to the network

• Ingula Unit 3 first

sync in Oct 2016

• CO by Jan 2017

• Ingula Unit 2 first

sync in Mar 2017

• CO by May 2017

• Ingula Unit 4 first

sync in Jan 2017

• CO by Mar 2017

• Medupi Unit 5 first

sync in Sep 2017

• CO in Mar 2018

• Ingula Unit 1 first

sync in May 2017

• CO in Jul 2017

• Kusile Unit 1 First sync

in Nov 2017

• CO in Jul 2018

• Duvha 3 will be fully

recovered in

2019/2020

• This project falls out

of MYPD3 window

5 620

1 Dates based on P80 Schedule

SOURCE: Team analysis

We will collaborate with our customers to reduce demand- “Less is more − Live Lightly!”

21

Saving electricity reduces pressure on the grid, cuts your electricity

bill and reduces South Africa’s carbon emissions

The power system remains vulnerable all day during summer

1. Use air conditioning efficiently

o Set air conditioning to 23ºC

o Close windows and doors to optimise air conditioning

o Switch off 30 minutes before leaving the office

2. Switch off all geysers and pool pumps (all day until 9pm), and

invest in a timer

3. If you use the pool frequently, limit pool filtering cycles to two

cycles daily, and not between 5pm & 9pm

4. Switch off all non-essential lighting

5. Respond to Power Alert messages by switching off all

appliances that are not being used

“Live

Lightly”

“Know your

number”

Conclusion

22

We endeavour to perform maintenance with no load shedding this summer

To date we have had 99 days with only 2 hours and 20 minutes of load-

shedding.

Key industrial customers experienced stage 2 load curtailment only once in

the last 99 days

Eskom will fast track its build programme to ensure supply in winter

We appreciate the support of all our customers and encourage that we

maintain 10% electricity savings

Eskom will continue to provide regular updates on the state of the power

system through various media platforms

Please also follow us on twitter @Eskom_SA and @Eskom_MediaDesk for

updates

Thank you