State of the Power System Current Situation and Future Prognosis

Transcription

1 State of the Power System Current Situation and Future Prognosis Kannan Lakmeeharan 16 th March 2011

2 Table of contents Introduction Reflecting on what we said What Eskom is doing What SA can do to help Conclusion 2

3 Introduction We have said will be tight. Now 2011 is here. Overview The supply-demand margin will remain slim for the next 5-6 years and in particular the next 2 years. Peak gap in 2012 equivalent to 9TWh supply to Cape Town for a year. Plan in place that requires all stakeholders and citizens to work together to keep the lights on. Supply-side Initiatives Demand-side Initiatives Safety nets Call to action Support from Government will ensure Eskom s new build programme is completed. Procurement of 1 025MW renewable generation in the next 3 years. Signing up co-generation and municipal generation on short to medium-term contracts (minimum of 600MW). Eskom will improve its plant performance over the next 3 years. Create an enabling framework to support own generation options. Support Government s million solar water geyser rollout programme by Eskom will execute its planned demand-side management programme and aim to accelerate it by 25% over the next 6 years. Eskom will aim to contract incentivised demand response from its customer base. Call to voluntarily save 10% across the customer base through campaigns. Need safety nets as last resort to prevent disruptive load shedding. Energy Conservation scheme enables mandatory savings from largest 500 customers. Demand response programmes aimed at smaller customers to respond to price and system signals. Running Eskom s open cycle gas turbines harder Switch off if you are not using it. Respond to the Power Alert messages on TV and other campaigns by Government and Eskom. We can meet our resolve to never load shed again if we all work together. It is good for our economy and for our environment 3

4 Keeping the lights on: the next seven years The system will be constrained Annual energy gap for 2010 to 2017 under base case outlook, TWh shortfall 9 TWh is equivalent to ~1000 MW baseload capacity Assumptions Eskom estimate of the IRP2010 moderate load forecast (~260 TWh in 2010); New build (e.g., Medupi, Kusile, Ingula) and RTS at current dates; REFIT as per IRP1 (1GW by FY2018); DSM as per base plan (3.9 GW by FY2018); Planned maintenance allocation increased 4 to ±10%

5 Demand to date Total Energy Sent out (GWh) Peak Demand (MW) Weekly Peak Demand 2011 (Incl non-eskom sales to Eskom) 2011 (Eskom Sent Out) (Incl non-eskom sales to Eskom) 2011 (Eskom Sent Out) Week number Weekly Energy Sentout The peak demand for 2010 was just below MW. The peak demand and total energy sent out for 2010 was very similar to that of and 2009 demand was influenced by the financial recession. The year on year energy growth for 2010 compared to 2009 was just over 4%. The peak forecast for 2011 was initially around MW, but has been reduced to about MW. The expected increase in energy growth is about 2% on Week Number 5

6 Ensuring security of supply in the next 3 years Eskom s generation plant performance and new build programme Ensure critical plant maintenance is done to ensure sustainable plant performance. Target to improve generation output by between 1% and 2%. Energy efficiency initiatives Eskom will need to execute its 4TWh demand-side management programme and do more with its funding and internal energy efficiency programme (target is 1 billion kwh). Enabling the 1 million solar water geyser programme run by Government. Own and co-generation Sign up about 400MW of co-generation and own generation by April Procurement process for 1 025MW of renewable energy technologies, to be commissioned in the next 3 to 4 years, should start as soon as possible. Eskom is ready to connect and pay the IPPs. Investigating mechanisms with NERSA and Government to ensure already commissioned municipality generators produce and further co-generation options are secured. Working with industry and NERSA to finalise a grid access framework to enable wheeling and own generation. 6

7 Putting a safety net in place A safety net is required in case further risks materialise, which would consist of: 1.Energy Conservation Scheme Mandatory and aimed at the largest 500 electricity users Will provide certainty of demand (for at least 7 years from those customers that consume between 50% and 60% of the electricity) Will send strong signals to move to energy efficiency Imposes mandatory savings targets rather than disruptive load shedding. 2.Demand response initiatives Incentive-based demand response programme in place already for our largest customers; achieves about 500MW. Imminent placement of contract with aggregator to obtain nearly 500MW from the larger commercial and smaller industrial customers. This can be ramped up to 2 000MW in the next 3 to 6 years. Investigation into technologies for residential demand response completed. 3.Open cycle gas turbine use The OCGTs in South Africa will have to be run at higher load factors incurring significant cost. 7

8 SA can prevent load shedding by working together There are risks to the successful execution of some of the initiatives identified. In the next two years, there is an energy gap and therefore an immediate focus is needed on implementing the identified actions and establishing a safety net This can only be done through a national effort involving all stakeholders and the people of South Africa Eskom will play its part in leading and partnering Energy gap after all the safety nets and levers Worst case Best Case 8

9 What is Eskom doing currently? Plant performance: Creating maintenance windows and targeting improved plant performance of 1 to 2% in the next 3 years. Engaging with stakeholders: Eskom will update stakeholders and the country on a quarterly basis over the next two years. Management is fully focused on keeping the lights on and will monitor the state of the system on a daily basis and take action. Tackling the coal challenges: Eskom s coal stockpile levels are healthy (over 40 days). The focus has shifted to improving the coal quality and coal handling at the power stations. Steps taken have already resulted in improvements in the last month in spite of the rain. This is still a significant challenge. Signing up non-eskom generation: Eskom has signed up 373MW through the medium term power purchase programme and aims to sign 376 MW by April Eskom is supporting certain municipalities to run their generation plant. 410 MW has been signed up and 260 MW have been operational in the last month. Integrated Demand Management: Eskom is aggressively rolling out its demand management programme to achieve at least 1000MW over the next 3 years and will work on accelerating the programme to achieve 25% more. Eskom will aim to achieve 1billion kwh in savings through improved plant efficiency and energy efficiency initiatives in its operations over the next six years 9

10 What can SA do to help? In the next two years, there is an energy gap and therefore an immediate focus is needed on energy efficiency This can only be done through a national effort involving all stakeholders and the people of South Africa A voluntary, incentive-based demand response programme is in place for our largest customers If needed, a mandatory Energy Conservation scheme aimed at the largest 500 customers may be implemented Eskom will play its part in leading and partnering 10

11 Good for the environment and good for the economy A 10% saving in consumption could save up to 20 million tons of CO 2 emissions per annum. The demand forecast caters for the projected growth in GDP output and therefore any improvement in energy efficiency provides an increased reserve to support this growth. Energy efficiency enables customers to save money and assists in shifting to a more competitive economy. Compared to other countries with a similar per capita GDP (15% variance), SA is more electricity intensive by a factor of 30-85% This includes countries like Argentina & Botswana. This is influenced by the current structure of the economy 11

12 Energy intensity - based on World Energy Outlook 2010 new policy projections Energy intensity for selected countries and regions toe per thousand Intl. dollars of PPP GDP (IMF 2010) South Africa has a higher energy intensity as well compared to the BRIC countries and Africa and higher the world average. This is influenced by the current structure of the economy. Brazil Russia India China South Africa Africa World Source: 1) Calculations based on IMF World Economic Outlook, BP Energy Statistics and IEA World Energy Outlook 2010 policy projections. 2) South Africa projection based on trend growth for period since IEA WEO 2010 does not provide policy projection. 12

13 Action needed from households If you re not using it, switch it off. Geyser: Switch off geysers between 06:00 and 22:00, reduce thermostat to 60 degrees, insulate geyser and water pipes and replace geysers with solar water heaters using Eskom s rebate programme Lighting: Replace incandescent light bulbs with energy savers, and switch off lights in unoccupied rooms Bathing: Shower rather than bath as less hot water is used, and install an energy efficient shower head Climate control: Minimise use of air conditioners by first opening windows to allow cool air to circulate When using an air-conditioner keep the temperature setting between degrees C Insulate ceilings to keep home cool in summer and warm in winter Pool pumps: Reduce the operating time to limit water circulation to twice a day and set the pool pump to operate between 24:00 and 05:00 Vampire appliance usage - Don t leave appliances in standby mode. Unplug cellphone charger Participate in the Power Alert programme on national TV (SABC and etv) 13

14 Action needed from commercial offices If you re not using it, switch it off. Standby electricity: At the end of the day, don t leave your computer, copier, printers and fax machines on standby mode Lighting: Replace inefficient systems - Eskom incentives available Motion sensors for meeting rooms and security lighting, Reduce lighting levels in parking areas to the minimum legal requirement during the day, and turn it off at night after the building lights have been turned off Climate control: Replace inefficient systems - Eskom incentives available Maintain a difference of not more than 10 degrees Celsius between inside and outside a building, Extraction fans can be turned on at around 04:00 to draw cold outside air through the building to cool down the structure, Close window blinds to shade your rooms from direct sunlight, allow your workers to wear light, comfortable clothing during hot weather. Appoint an Energy Manager for each building to monitor usage and identify savings opportunities 14

15 Action needed from industry Electricity usage optimisation needs to be driven by top management Participate in a voluntary 10% energy reduction programme some SA companies have already reduced by 10% Identify opportunities for improved energy utilisation Process optimisation Technology improvements Shift usage to off-peak periods Participate in Eskom s demand saving programme Incentives available for energy savings projects Approval lead times improved considerably Participation in Demand Market Participation Programme Incentives for hourly load reduction when constrained system conditions prevail 15

16 National Power Alert Impacts Evening Peak Impacts MW Power Alert impact during the World Cup period (11 June to 11 July 2010) 1 Average MW saved Worst day MW impact Worst day indicates the highest daily savings on a red alert. The energy savings during the World Cup in terms of the public reacting to Power Alert on national television is showing that working together, South Africans can make a difference 16

17 Conclusion The supply/demand balance will be tight for the period The summer of 2011 has seen risks to the system increase Eskom is on alert and its leadership is taking action to keep the lights on We cannot do it alone we seek to partner with stakeholders We will communicate with our stakeholders and the public every quarter on the state of the system 17

18 Insert image here Thank you