Eskom Briefing Parliament s Portfolio Committee on Energy. 16 September 2014.

Transcription

1 Eskom Briefing Parliament s Portfolio Committee on Energy 16 September 2014.

2 New Generation Capacity and Transmission Lines Leading and partnering to keep the lights on In development Under construction Return-to-service (RTS) Base load Peaking and renewable Mpumalanga refurbishment Transmission None Nuclear New Build Programme Next Coal (Coal 3) Biomass Majuba Underground Coal Gasification Demo Plant (UCG) Primary Energy projects (Road and Rail) Pilot Concentrated Refurbishment and Solar Power (100 MW) air quality projects Open Cycle Gas Turbine Conversion Project conversion of Ankerlig and Gourikwa OCGT power plants to a Combined Cycle Gas Turbine (CCGT) Photovoltaic (own use) >60 Grid strengthening projects Komati (1 000 MW) Camden (1 520 MW) Grootvlei (1 180 MW) RTS projects complete Medupi (4 764 MW) Kusile (4 800 MW) Ankerlig ( MW) Gourikwa (746 MW) Ingula (1 332 MW) Sere (100 MW) Acacia relocation Solar PV installations: MWP, Lethabo, Kendal (1.62 MW) Arnot capacity increase (300 MW) Matla refurbishment Kriel refurbishment Duvha refurbishment Grootvlei Fabric Filter Plant (FFP) Kriel Retrofit 765kV projects Central projects Northern projects Cape projects MW MW MW 300 MW km Synchronisation of the first units are expected as follows: Medupi in the second half of 2014 Kusile in the first half of 2016 ~ 17.4GW of new capacity (6 137MW installed and commissioned) ~ km of new transmission network ( km installed) ~ MVA of new transmission strengthening (27 655MVA installed) Ingula in the second half of Medupi is the first coal-generating plant in Africa to use supercritical power generation technology 1. Date moved out after the accident at Ingula end October

3 Medupi Power Station Project Description: Supercritical, coal-fired power station Location: Lephalale, Limpopo Capacity: 4,764MW (6 x 794MW) The First Chemical Clean Injection completed 19 Aug

4 Medupi: Executive Summary Industrial Action Impact First Unit Synch Mitigation to achieve First Synch in Dec 2014 Construction progress in critical areas was hindered due to the industrial action of July 2014, with labour attendance of 40% - 70% during the period The workforce is back on site Through risk mitigation plans and re-assignment of available resources, the target for First Unit (Unit 6) synchronization remains December 2014 Boiler Chemical Clean on Unit 6 was completed ahead of schedule on 21 August First Fires are targeted for September 2014 First Unit (Unit 6) Synchronization is targeted for December 2014 Coal has been received on the Coal Stockyard Other activities continue to support the First Unit synchronization date. Additional resources have been mobilised to Unit 6 by both the boiler contractor and control and instrumentation (C&I) contractor to mitigate any resource-driven delays Similarly, additional shifts have been introduced 24 hours a day, 7 days a week to accelerate progress on site Eskom is working with contractors to resolve any issues which could affect the schedule. 4

5 Kusile Power Station Project Description: Supercritical, coal-fired power station Location: Witbank, Mpumalanga Capacity: 4,800MW (6 x 800MW) 5

6 Kusile: Executive Summary Industrial Action Impact First Unit Synch Productivity Challenges In addition to the protected strikes from Metal and Engineering contractors, Eskom experienced unprotected industrial action from Civil contractors during July 2014 Disciplinary action, against Civil contractors whose workers caused disruptions, has been taken Resources were transferred to Project Medupi in order to support Medupi s recovery plan The workforce is back on site Priority areas were defined for 2014 in order to support the First Unit (Unit 1)synchronization target date Stringent tracking process and recovery plans have been established by Eskom, together with contractors, to recover the schedule, where required, and achieve synchronization by January 2016 A commercial strategy has been defined to increase contractors resources and improve their performance The boiler contractor improved boiler construction progress from 0.48%/week (March 2014) to 0.74%/week Further improvement by the boiler contractor is required to achieve the target date and Eskom is addressing this Eskom continues to work with the control and instrumentation (C&I) contractor to ensure the contractor supports the target synchronization date Eskom has also implemented additional measures to mitigate schedule risk associated to C&I. 6

7 Current Target Schedule/Forecast 7

8 Key Challenges Medupi and Kusile Item Description Resolution Welding Defects - Inadequate and/or failed Weld Procedure Qualification Records (WPQRs) and Post Weld Heat Treatment (PWHT) on the boilers - Welds for which there was no evidence of PWHT - Misalignment of the Super-Heater that resulted in design changes - Defective and sub-standard welds needed to be re-treated or redone - Contractors had to revisit and correct their quality data books to ensure compliant and adequate quality control. - All boiler repair work has since been completed. Control and Instrumentati on (C&I) - The contractor was not able to meet some of its contractual requirements relating to C&I - This posed a risk to both Projects Medupi and Kusile and could have delayed the projects further - Eskom has worked- and continues to work with the contractor to resolve identified issues within the required timelines. - However, an alternative supplier was contracted on the Boiler Protection System (BPS) component for the 1 st two units of Medupi and an Early Works Order (EWO) has been placed in parallel to the current C&I work to further mitigate schedule delays Safety Performance - Poor safety performance on sites - Eskom and its contractors have implemented safety interventions, appointed additional resources, removed non-performing resources and changed work methods - Safety performance and behaviour has improved significantly - Eskom and its contractors will continue with efforts to further improve performance 9/12/2014 8

9 To mitigate the schedule risk relating to Control and Instrumentation (C&I), an Early Works Order (EWO) has been placed in parallel to the current C&I contractor work at both Projects Kusile and Medupi 9

10 Ingula: Executive summary October 2013 Fatalities Update First Unit Sync Work in the two Inclined High Pressure Shafts (IHPS) was placed on hold after the 6 fatalities in October 2013 A plan has been established to re-initiate work on the shafts Approval has been received to remove equipment and start equipping the shafts (in progress) The enquiry by the Department of Mineral Resources, relating to the fatal incident of October 2013 is underway at site First Unit Synchronization (Unit 3) is targeted for September 2015 Two critical areas to support the First Unit Synchronization target date have been identified: i) The completion of Upstream Waterways and ii) The completion of Downstream Waterways as well as Surge Chambers Measures in place to mitigate schedule risk include: i) Dedicated teams to fast track review for re-equipping and restarting the work in the Inclined High Pressure Shafts (IHPS). Re-evaluate the remaining durations for the work in the waterways. 10

11 Ingula: Overall Project Progress Forecasted COD for U1 of June 2016 Re-baseline due to ERA revision 11

12 Transmission Projects 12

13 Transmission: On target to meet the Shareholder Compact of Lines Built 350 Transmission / Power Delivery Projects: T-line (Kms) Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Plan Actual YE Proj Technical Achievements inception to date 31-July 2014): 5,629.9 km installed 27,655 MVA installed 13

14 Transmission: On target to meet the Shareholder Compact of MVA installed 90 MVA achieved year to date against a year to date target of 90 MVA. Kusile HV yard (45MVA) No 1 Planned date: May 14 Kusile HV yard (45MVA) No 2 Planned date: Jul 14 Actual date: May 14 Sterrekus (2000MVA) Planned date: March 2015 Actual date: May 14 14

15 Key Lessons Learnt Build Programme Lessons Learnt The development, deployment and adoption of internationally benchmarked project management methodologies, processes and systems The establishment of a suitably capacitated contract management capability due to the complexity and extent of contractor claims Additional owner s oversight to manage fabrication and installation quality issues of international contractors Additional owner s supervisory requirements for local contractors The establishment of suitable levels of monitoring, oversight and assurance across the Build Programme Ensuring an adequate project pipeline to prevent the loss of skills and capabilities and to build on the existing capabilities through continuous improvement Engaging with the international asset creation community to share experiences and lessons 15

16 Summer Plan 2014/15

17 Overview The system outlook shows that the system will remain tight going forward and additional levers are required including OCGTs to ensure security of supply. Maintenance is set to increase from 9.46% to 10% based on the sustainable generation strategy and on the need to clear partial load losses, with few flexible outages May have to cater for higher maintenance in December including half station shutdowns for 3 of our stations. Taking the Generation strategy and predicted challenges into account there will be risks to the system and an effective Demand Reduction Protocol must be in place to manage risks should they materialise. 2014/09/12 17

18 Winter 2014 The winter plan has yielded the desired results thus far. We had a better handle on the system while on the other hand managed to deal with some opportunity maintenance During winter we also managed to achieve the following: Reduced Partial Load Losses from an excess of 3500MW to 1500MW Connected 538MW renewables IPP winter 2014, bringing the total to 1000MW. Total PV installed: 460 MW Total Wind installed: 430 MW Extended STIPP and Aggreko contracts and they have delivered Predictable generation fleet performance still a challenge: UCLF cannot change quickly and can only be reduced by removing/repairing each and every damaged component in a power station Out of 87 coal fired generating units 32 that require major surgery and 4 are in a critical condition We are confident inroads are being made to arrest UCLF. 18

19 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Summer Summer poses a different challenge as the profile looks flat and our planned maintenance (PCLF) increases significantly compared to Winter Constrained all day Summer points to note Table Mountain profile Constrained all day incl. from 6am - 10pm Air-conditioning, geysers & pool pumps primarily impact demand Commercial, agricultural & residential customers can make the biggest difference /09/12 20

20 Base Case Assumptions The following assumptions were used to determine the summer power system outlook Eskom s sales forecast based on a1.3% average growth over this period. Best estimate of generation plant availability of 75.5% for the 2014/15 Financial Year. No additional renewable IPPs in this period OCGT use is limited to the approved Corporate Plan budget Contracted supply levers (STIPPs and Cross Border) are generating at an average of 600MW Maintain current levels of demand levers While Medupi unit 06 will synchronise this year, full power will only be available in winter 2015 In the event of load shedding we will not allow the system to go beyond Stage1 (routine load shedding as it is incredibly disruptive and difficult to manage) 21

21 Projected System Outlook With the maintenance that needs to be done, the system will remain tight The degree of tightness will depend on the UCLF performance as well as the available capacity For a 6000MW UCLF the system will most likely operate in Purple, excluding OCGTs Purple: MW short of meeting demand and reserves. All available resources required most of the day throughout the week ILS will be required during peak periods, high risk that their contract time will be reached. For a 6500MW UCLF the system will most likely operate in Purple and Brown, excluding OCGTs Brown: > 4000MW short of meeting demand and reserves, rotating manual shedding probable. For a 8000MW UCLF the system will most likely operate in Brown, excluding OCGTs 23

22 Summer Risks Variability increases due to the following risks: Increased full and partial load losses: High vacuum load losses, especially at Matimba: ( >1000MW). Deteriorating coal quality impacting on plants ability to reach full load. Wet coal Below minimum coal stock days at Arnot, Kriel UG, Majuba and Tutuka Outage management capability and quality Increased outage durations due to scope creep or outage slip High post outage UCLF Insufficient diesel levels to run OCGTs and fuel oil levels Continuous heavy rain Unreliable availability of supply from HCB Reputational risks of continual load shedding 24

23 Options to Close the Gap Supply Lever Operational Capacity (MW) Potential Capacity (MW) Additional Cost (R m) Comments STIPPs Expires in March Extend by 2years Aggreko Expires in March 2016 Sasol Available for summer Tshwane Available for summer City Power Expires in March Extend by 2years EDM Available for summer Barges Available for winter 2015 ZPC Available for winter 2015 WEPS 50 - REIPP Additional 500MW from CSP,PV and Wind in summer TOTAL 7774 Coal Stock Days Improvement 900 TOTAL

24 Conclusions Constraining the OCGT diesel usage to budget could result in an inability to meet the demand throughout the remainder of FY15. If target EAF is met then low risk of load shedding but this cannot be ruled out due to daily variability If load is shed during summer it is likely to be from 06h00 until 22h00 and as per published schedules To avoid load shedding - costs to mitigate depend on EAF achieved Opportunities to reduce outage duration and improve post outage UCLF exist. Post outage UCLF <10% 26

25 Conclusions cont d Current protocols, NRS048-9, do not allow for planned load reductions due to financial constraints. An alternative protocols and legislative framework is being developed To avoid or limit planned or scheduled load reductions could require additional use for OCGT. Additional REIPPs provide an opportunity to displace the use of OCGT during the day Considering a country perspective, it is preferable to run OCGTs than to perform planned or scheduled load reductions over an extended period 27

26 Key issues to connect IPPS

27 Key Issues 1. Ability to secure a sustainable competitive PPA price for the technology (15 to 20 years) 2. Funding model 3. Knowledge of South Africa (Environment, Labour, Legal, Construction etc.) 4. Proximity and Availability of appropriate infrastructure (Power Lines, Roads etc.) 5. Compliance with Grid Code Requirements 6. The hidden cost of Storage and Back-up being borne by Eskom not the IPP! Driving world class generation performance, with Zero Harm 2014/09/12 29

28 Performance of Renewable IPPs (REIPPs) Makes a contribution in Summer Creates a Problem in Winter The cost of Storage and Back-up being borne by Eskom not the IPP! Driving world class generation performance, with Zero Harm 2014/09/12 30

29 Achievements and challenges Major achievements Grid Access Unit (GAU)established to facilitate grid connection of IPPs GAU has facilitated Self Build procedures at Tx and Dx that IPPs can use for them to build network saving time and cost and hand over network build to Eskom on completion. The Single Buyer Office has been ringfenced (as part of the SMO) within the Tx division Renewable Energy Technical Evaluation Committee comprising of Eskom, NERSA and AMEU engineers has been established and is now on track certifying IPPs for grid code compliance Presence of IPPs is assisting with improving efficiencies in Eskom, projects are being connected on time. Eskom and IPP associations have build good relationships that assist with further process improvement Eskom GAU, SBO and DoE have weekly project progress meetings Major challenges DoE programme fast paced and requires additional resources ; > 1000 applications processed over the entire DoE REIPPP to date. MYPD3 revenue shortfall and resultant capital reprioritization process delays Bid 1 & 2 strengthen projects thus impacting connection timelines. MYPD3 capital reprioritization means Eskom will not have funds for strengthening projects beyond Bid 3 Some Munics require skills and infrastructure assistance; Nelson Mandela Bay Munic did well with grid connection and required little Eskom intervention; Makana munic requires major assistance and problems may result in IPP not complying with grid code and therefore unable to reach full commercial operation Some IPP struggling with grid code compliance and therefore not achieving Commercial Operation status within planned timeframe Low hanging fruit exhausted and strengthening of network is required for more IPP connections (cost and time to connect is impacted).policy now essential for strategic investment to unlock the Tx corridors. System Impact not factored into plans need for back up and minimum generation concerns will become reality as renewables increase 31

30 Flash Report of CEL; 151 CELs were issued by 15 August 2014, bid submission for National Comment IPP/ Generator No. of Programme projects MW 26 projects grid connected and 19 reached full CO with a total of MW (Source: Single Buyer Office) in full CO and one in early Bid ,436 operating stage (80MW) Bid ,054 7 projects grid connected and 3 in full COD (54.4 MW as per SBO) Issuing Budget quotations-13 BQs issued as of 26 August Bid ,475 Outstanding. Two are connecting in Munics. Preferred bidders to be announced in 2014 for 200MW allocation-- all Bid in NC 214 Applications received. 152 CE fees paid and applicable for issue Bid ,740 IPPs was 18 August 2014; DoE RE IPP PP and other IPP PP Preselected bidders, some in municipality (at least 68 confirmed for Eskom) 1-5 MW DoE Cogen Received in anticipation of DoE Coal programme DoE Base Load Received in anticipation of DoE Cogen programme DoE Peakers 2 1,200 At execution in EC and KZN both connecting at Tx level which with scheduled grid connection dates of Dec 2014 and May 2015 respectively and scheduled for commercial operation in August and March

31 Flash Report (cont) IPP/ Generator Programme National No. of projects MW Comment IDM SOP - micro generation 9 1,319 Connecting to Eskom Eskom Various incl (Sere; Upington CSP; Wind 500; etc.) Excludes smaller PV projects e.g. MWP; Ilanga Other Wheeling; self generation; PV roof tops 119 6,070 Illegal small 16 identified mainly through reversed meter readings. Could generation connectio ns 16? be more connections that have not been identified. SMG SteerCom advised all illegal connections to be disconnected. 33

32 Thank you