Public Enterprises PortfolioCommittee Briefing

Jacob Maroga31 May 2006

Objectives

Update from previous briefings

Provide a progress update on Cape Recovery activities

Outline winter plans and risks for 2006

Progress on Capex Programme

Western Cape Network – Load and Capacity

Eskom Peaking Generation400 MW Palmiet

Note: The above excludes The City of Cape Town’sgeneration

LoadWinter Max : 4250 MWSummer Max : 3900 MW

Transmission Capacity2400 -2800

Koeberg Generation1800 MW

Predicted Weekly Shortfall

Shortfall Risk: 300 to 400 MW during morning and evening peaks

Week Ending

Load Forecast

Tx Limit Koeberg Palmiet Customer

Interruptability

Predicted shortfall

before savings 1-May-06 4043 2694 606 400 200 -143 8-May-06 4094 2736 564 400 200 -194 15-May-06 4223 2778 522 400 200 -323 22-May-06 4202 2820 480 400 200 -302 29-May-06 4103 2400 900 400 200 -203 5-Jun-06 4276 2400 900 400 200 -376 12-Jun-06 4267 2400 900 400 200 -367 19-Jun-06 4207 2400 900 400 200 -307 26-Jun-06 4261 2400 900 400 200 -361 3-Jul-06 4191 2400 900 400 200 -291 10-Jul-06 4128 2400 900 400 200 -228 17-Jul-06 4261 2400 900 400 200 -361 24-Jul-06 4130 2400 1800 400 200 670 31-Jul-06 4151 2400 1800 400 200 649 07-Aug-06 4156 2400 1800 400 200 644 14-Aug-06 4201 2400 1800 400 200 599 21-Aug-06 4204 2400 1800 400 200 596 28-Aug-06 4146 2400 1800 400 200 654 4-Sep-06 4174 2400 1800 400 200 626 11-Sep-06 4067 2400 1800 400 200 733 18-Sep-06 4056 2400 1800 400 200 744 25-Sep-06 3948 2400 1800 400 200 852

Un

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This week

Key Recovery Activities

Supply / Capacity Recovery Activities Koeberg Generation Transmission Grid Leased-in Generation

Demand / Load Reduction Activities Energy Saving programmes

Demand Side Management Demand Market Participation

Load Shedding When demand exceeds supply

Progress – Koeberg repairs on track

Area Activity or Milestone Target Completion Date

Status

Unit 1 Rebuilding of Stator 4th Week April 2006 Completed

Arrival of Rotor 4th Week April 2006 Completed

Ready for Commissioning 2nd Week May 2006 Completed

Synchronisation 3rd Week May 2006 Completed

Full Load 4th Week May 2006 On track (80%)

Unit 2 Commence Power reduction 4th Week May 2006 On track

Refuelling outage 4th Week May 2006 On track

Synchronisation 3rd Week July 2006

Full Load 4th Week July 2006

Progress – Transmission on track

Activity or Milestone Target Completion Date

Status

Substation Insulation 3rd Week March 2006 Completed

Compensation Equipment 4th Week May 2006 96%

Line Re-insulation Emergency re-insulation between

Muldersvlei and Elandskloof Mountains complete

Spraywashing on hold due to bad weather

4th Week July 2006 30%

Protection 4th Week May 2006 80%

Spares 5th Week May 2006 70%

Progress – Energy Savings to date

PROGRAMME AREA TARGET(1 June target)

ACHIEVED TO DATE

EXPECTED TO DATE

PROGRESS

Efficient lighting 155 MW (100 MW)

65MW 100MW Implementation in progress. 2.1m bulbs replaced to date

(471k replaced in last week).

Customer self generation 50 MW

(50 MW)

52MW 45MW Letter of Agreement/Contacts signed for 52 MW in evening

peak and 51 MW in morning peak

Industrial and commercial efficiency including HWLC

40 MW(20 MW)

(6.75)

3MW 3.25MW 40 MW of identified opportunities (inclusive of HWLC) First MW savings recorded Upgrades of HWLC systems for 6.5 MW expected by 1 June

Subsidy of energy efficient appliances and devices through retailers and suppliers

25 MW(2 MW)

0.36MW 2.83MW Appliances currently supported:

1.) 4,200 geyser blankets installations completed.

2.) 600 low flow shower heads to be installed

3.) Funding for solar water heaters under investigation

Voluntary Conservation campaign

80 MW to 160 MW

(180 MW)

5MW 0MW Interactive control centre in advance stages of development

(150MW) Voluntary load shedding commitments for 5MW to date

Gas Conversion 50 MW(5 MW)

0.52MW 3.86MW 1,000 double plate hotplates, 20 gas hobs, 40 gas

standalone ovens and 35 gas heaters distributed to date

Total DSM plan 400 MW 127 MW 155 MW

Demand Market Participation

- 102 MW - Confirmed DMP contracts placed for 102MW (operational

from 1 May) with further 24MW availability during morning peak.

Network Optimisation - 7 MW - 7MW gained by reallocating open point on Hydra line Potential of MW voltage reductions being investigated

Total Energy Savings 236 MW

Update – Energy Savings Highlights

Power Alerts being flighted on SABC 1, 2 and 3 From 18h00 to 21h00 until 31st August Communicate status of energy demand and call people to

reduce energy usage Broadcast educational infomercials on savings tips every 15

minutes Expect to achieve 150 MW demand reduction impact if only a

conservative 20% of the residential consumers react

Update – Load Shedding to date

Load Shedding is required during periods where energy demand exceeds supply capacity Load shedding has taken place on 11 April and 22 May Weekly schedules are published in the newspapers a week in

advance

What could go wrong?

Risk

Koeberg Unit tripping

Late commissioning of Koeberg Unit 2

Transmission lines tripping

Mitigation

Additional capacity assigned to manage risk

Focused project team in place

Monitoring of Fires Replacement of insulators Protection settings have been

reviewed

What could go wrong?

Risk

Cold Weather

Unavailability of Palmiet Pumped Storage

Equipment failure at key substations on the whole network

Mitigation

Demand Side Management

Focus on dam levels Standby transformer on site

Special precautions taken to prevent faults

Strategic spares have been relocated closer to point of use

Overview of the ESKOM Winter 2006 Plan &

Outlook for 2007

Winter 2006 Supply – Demand Balance

Resources Available

MAXMUM CAPABILITY RATING (MW)

Commissioned Plant 1 May to 30 September

Coal Fired Thermal Stations

32 066

Nuclear Power Stations 1 800 Pump Storage Schemes 1 400 Hydro Schemes 600 Gas Turbines 342 Total Eskom 36 208

Cahora Bassa 1 050

TOTAL 37 258

(RTS excluded)

Emergency Resources

Additional assistance

Approximate MW available Approximate period available

DMP (Supplemental

reserve)

435 MW 2 hours per day

Emergency Level 1 ~360 MW Recommended not to exceed 2 hours per day

Interruptible load shedding

2105 MW Approximately 2 hours per week

Classification of Capacity Adequacy for winter 2006

Date Week Forecast Actual Supply Operating Reserve

Deficit(exc emergency))

8-May 19 33569 33202 1900 -2267

15-May 20 34055 33728 1900 -2227

22-May 21 34509 34610 1900 -1799

29-May 22 34443 34663 1900 -1680

5-Jun 23 34951 35422 1900 -1429

12-Jun 24 35450 35532 1900 -1818

19-Jun 25 35277 35532 1900 -1645

26-Jun 26 35151 36090 1900 -961

3-Jul 27 35268 36147 1900 -1021

10-Jul 28 35347 36090 1900 -1157

17-Jul 29 35473 36147 1900 -1226

24-Jul 30 34361 36954 1900 693

31-Jul 31 34122 36249 1900 227

7-Aug 32 33440 36470 1900 1130

14-Aug 33 33699 36130 1900 531

21-Aug 34 33015 34934 1900 19

28-Aug 35 32722 34464 1900 -158

4-Sep 36 33183 34230 1900 -853

11-Sep 37 32330 34090 1900 -140

18-Sep 38 32239 34278 1900 139

25-Sep 39 32249 33170 1900 -979

Risks & Mitigation - Generation

Risk Probability Impact Mitigation Strategy

Production Risks :

Risk 1 – Increase in plant unavailability factor by 1%

Risk 2 – Delay in return to service of Koeberg Unit 1 and 2

Risk 3 – Long term outage of 600 MW unit (catastrophic failure)

Risk 4 – Import reduction from Cahorra Bassa

High

Medium

Medium

High

~300MW

~900MW

~600MW

~240MW

If these risks materialise the response is as follows:

- There will be increased burn at Majuba and Tutuka Power Stations putting pressure on the coal stockpile at these stations. The mitigation of the coal stockpile risk is described below.

- The supply-demand imbalance has to be met through the use of contracted interruptible customers and customers on the DMP product (demand market participants).

Coal Availability, Procurement and Supply

Medium Reduction of stockpiles and

possible reduction of capacity to

manage stockpiles

- Additional emergency coal purchases.

- Continuous stockpile balancing between stations.

- Continuous interactions with mines to understand and manage geological and environmental issues.

- Contracting additional transport companies

Key Conclusion: Generation Capacity

We have enough available capacity but it very tight We have about 500MW additional emergency DMP and more is being

sourced Key risks

Impact of Koeberg on the national situation Technical problems on the running plants(loading and age) Higher demand than expected( weather and commodity prices)

Shortage of Supply does not mean blackouts! One can predict shortfalls and schedule emergency resources and if that runs

out have controlled load shedding managed by regional control centres. Sudden loss of generation due to faults are managed through the utilisation of

operational reserves and automatic under-frequency load shedding schemes which prevents cascading outages.

Load is then restored in a controlled fashion.

We are focused at avoiding mandatory load shedding at a national level at all costs.

However multiple technical problems can result in load shedding.

Transmission Corridors and Bulk Supply Points

Transmission Network Adequacy

Transmission Corridors supplying a significant geographical area from the Mpumalanga Generation Pool were identified .

The demand in these areas has been forecast and the capacity of these corridors assessed through power system studies.

Classification is as follows: Green : The corridor can supply the peak demand even if a single

credible contingency occurs (N-1). Orange : The corridor can supply the peak demand if no contingency

occurs (N-0) and a contingency plan exists to re-configure the distribution network to supply the load. Interruption of supply could occur based on the nature of the contingency and the load will then be restored.

Red : The corridor cannot supply the peak demand with the existing network and load shedding is required over the peak periods.

Brown : The corridor cannot supply the demand at peak periods as well as at other times of the day and rotational load shedding is required throughout the day.

Corridors

LimpopoPOLOKWANE

Firmness of Supply – Major Cities

LimpopoPOLOKWANE 1

3

4

2

6

7

8

910

5

1. Polokwane2. Rustenberg3. Pretoria4. Johannesburg5. Bloemfontein6. Richards Bay7. Durban8. East London9. Port Elizabeth10. Cape Town

Risks & Mitigation - Transmission

Risk Probability Impact Mitigation Strategy

41 single line contingencies that violate operating criteria and could lead to load shedding

Medium Possible interruptions of supply during contingency

- Purchase of emergency towers (eventually 3 per grid)

- Purchase of 2 permanent towers per grid

- Fire management and prevention programme

- Emergency Preparedness Plans in place to swing load on the distribution networks

35 unfirm transformation sites

Medium Possible interruptions of supply during contingency

- There are contingency plans for all but 3 of the sites. At these sites there is a possibility of load shedding over peak periods if a transformer fails.

- Pre-winter oil checks and on-line condition monitoring

Transmission Corridor firmness

Medium Load shedding over peak periods

- As per single line contingencies.

Credible contingencies at substations

Medium Possible interruptions of supply for short

periods

- Infrared scanning of all substations by end of May 2006.

- Substations EPPs in place.

- Risk analysis of critical outages.

- Manage outages in the nights and weekends.

- Purchase and re-location of key spares to site to reduce restoration times.

Key Conclusion: Transmission Grid

The Cape corridor remains a risk until Koeberg units are back

Risk at the other corridors are considered low Risks of double contingencies are always present

Distribution Network

Risks & Mitigation - Distribution

Risk Probability Impact Mitigation Strategy

Loss of Transmission infeeds

Medium Possible interruptions of supply during contingency

- Emergency Preparedness Plans in place to swing load on the distribution networks.

- Joint planning with Transmission grids on contingency plans and holding exercises to assess readiness

Poor performance of under-frequency load shedding scheme relays and/or the deliberate switching off relays on customer sites

Low Excessive load shed in certain

areas and increased risk of

brown-outs

-Schemes are regularly tested and calibrated (at least once a year).-Plan to monitor relays on SCADA system

- Have been utilised in recent incidents on the grid with satisfactory performance. Audits done after every incident

Slow restoration times due to poor communication with municipalities and metros

Medium Prolonged outages to end customers

-Distribution regions communicate with municipalities and metros to inform on capacity situation and contingency plans.- Implement lessons from Cape incidents

Illegal Connections Medium to High

Overloading of local transformers and reticulation lines causing localised

interruptions

- Awareness campaign on illegal connections- Removal of identified illegal connections

Aging Infrastructure Medium Failure of lines or transformers

causing localised interruptions

-Strategic spares and key spares procured and kept at key sites

- Mobile transformers to be used in remote sites

2007 Outlook and beyond

Capacity outlook for 2007

27500

29500

31500

33500

35500

37500

39500

41500

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18-D

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15-J

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12-M

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MW

PEAK DEMAND FORECAST TOTAL MAINTENANCE GENERATION CONSTRAINTSUCLF Projection +Allowance OPERATING RESERVE MAX CAPACITYNEW OCGT'S DMP (435 MW) INTERRUPTABLES (2105 MW)PEAK DEMAND FORECAST (High) PEAK DEMAND FORECAST (Low)