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Purpose

• On 10 December 2014, Cabinet endorsed a Five Point

Plan

• The purpose of the presentation is to brief the PCE on

the following:

– War Room Institutional Framework and its resourcing

– Update on the load shedding prospects – Eskom emergency

measures

– Funding of the interventions

– Progress on the development of detailed implementation plans

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Problem statement

• The country is facing a real risk of load shedding daily.

• Approximately 14,000MW or about one-third of total Eskom generation capacity on average is offline. Of this 14,000MW, over 8,000MW is due to unplanned (breakdown) maintenance.

• To reverse this trend, Eskom needs space to execute preventative (philosophy based) maintenance instead of the reactive maintenance. What’s required?– In the immediate, the focus will be on sustained maintenance

and operational efficiency to reduce the level of this unpredictable breakdowns, and

– In the medium to long term, the focus will be to bring in new generation capacity to alleviate the constrained system and accommodate demand growth

• The key objective is to improve plant performance while limiting load shedding

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Key milestones achieved since adoption of the Five Point Plan

• The War Room has been set up and the participating

Departments have nominated representatives

• The Coal IPP RFP was issued

• The RFI for the Demand Management Interventions was

issued

• MOU has been signed between Eskom, CEF (Petro SA),

Strategic Fuel Fund and Transnet (TNPA) regarding

diesel supply

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War Room Institutional Framework

Inter-Ministerial

Committee on Energy

Deputy President

War Room on Electricity

(DPE, DoE, COGTA, NT, EDD, Eskom)

5 Point Plan Workstreams

Gas to power

and related

infrastructure

Energy

Efficiency

and DSM

Generation

Expansion:

Coal IPP

Eskom

Emergency

Measures

Financing Expansion of

capacity

through Co-

gen

Communicati

on

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Principles for prioritising actions

• The key objective of the War Room is to facilitate the

creation of space to effect the maintenance to improve

plant performance.

• The interventions are prioritised based on the following:

– How quickly can the intervention/s deliver or save the additional

megawatt to the grid

– The scale or capacity load factor

– The cost/KW

• Based on the above, the Eskom’s emergency measures

and funding work streams have been prioritised

• More work to be undertaken on other areas to deliver

additional capacity in the medium to long term

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Prioritised Interventions: Eskom Emergency Measures

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Key initiatives in the short term • Sourcing funding to support financial sustainability and

diesel costs

• UCLF reduction to 7 GW through structured planned

maintenance

• Reduce partial load losses

• Reduce outage slips

• Technical skills capacity to do maintenance, plans to

address shortage of skills

• Majuba recovery interim (full coal supply) solution for full

load

• First synchronisation of Medupi unit 6

• Integrated Demand Management

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UCLF reduction to 7 GW through structured planned maintenance, Reduction of partial load losses and outage slips• Reducing partial load losses greater than 7 days down to

1000 MW through;

• Targeting of sustained partial losses in scopes of

philosophy outages as well as prioritising additional

short term corrective outages on the capacity

• Reducing generating planned unit outage backlog

through;

• Executing the GX sustainability outage programme

• Reduce Outage Slip (UCLF) through;

• Improve performance management of contractors

during execution of outages to ensure both quality

and productivity (part of the turn-around strategy)

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First synchronisation of Medupi unit 6

• Commercial Operation of Medupi Unit 6 through;

• By the synchronisation of the unit to the

network during the first quarter of 2015

• The completion of the optimisation and tests

of all sub systems for commercial operation

during the second quarter of 2015

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1. Co-generation initiatives

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Key interventions

Existing agreements for

renewal Key focus • Short Term (1 – 2 months)

– Conclude PPA with Sasol Secunda which

was previously contracted on the MTPPP –

200MW from 1 January 2015

– Conclude PPA with Tshwane if their plant

is in a position to be operated – 165MW by

1 January 2015

– Short term (0-3 years)– Extend the current MTPPP, STPPP,

cogeneration and municipal generation

agreements for a further three years

• Short to medium term (0-3 years) – Conclude on the DoE IPP Unit’s Request

for Proposals issued on 5 December 2014

and contract all potential suppliers with a

target of 800MW.

– RFP already issued

No decisions required, focus on

execution of the procurement process

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2. Gas imports

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Scope of work

• The Gas will not be able to provide additional

capacity in the immediate term i.e. over the next

3 months

• Focus is on accelerating the conversion of

OCGTs from diesel fuel to gas

• However, through preliminary discussions

between the relevant stakeholders, the scope of

the plan has been expanded to include gas to

power generation options in addition to the diesel

to gas conversions

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3. Coal IPPs

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Coal IPP

Progress

• There is a determination for 2500MW

for Coal IPPs.

• Request For Proposals (RFP) out in

the market since 12 December 2014

– Submission for bids are due on 8 June

2015

– Announcement preferred bidders

August 2015

– Legal close by preferred bidders is

expected by March 2016.

– Financial Close by preferred bidders is

expected around June 2016

– Commissioning (1st MW) by early 2019

• As seen with renewable energy IPPs,

it is possible that the commissioning

can happen earlier than the above

mention date through the fast tracking

of construction by IPPs.

Risks and enablers

• Environmental Impact

Assessment (EIA), grid connection

and water licenses are generally

considered to be enablers that can

impact on the commissioning

timeline.

• Lephalale (Waterberg) has been

identified as an area that needs

some strategic investment to be

able to unlock its potential for coal

for power plants beyond Medupi.

• The water infrastructure

requirements are being addressed

through SIP 1 and the same

needs to be done with regard to

the electricity transmission (grid)

infrastructure.

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4. Demand Side Management

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Demand side management • Most of the supply side interventions are likely to be

realised over the medium to long term

• Demand Side Management (DSM), present a viable

option to ease the pressure on the system

• The focus will be on:

– The costing of the interventions

– Quantify the impact

– Securing funding

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Thank You

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