It gives tremendous pleasure this morning once more to lead Eskom as we provide our regular State of the System briefings to the nation.
These briefings have become increasingly important given the system challenges as well as the delays we are experiencing with regard to the build programme, both of which have caused all South Africans, particularly those of us directly involved with these programmes and who have a deeper understanding of the extent of the challenge, serious and very genuine concerns.
Eskom remains central in the provision of adequate and reliable electricity to support economic growth and the country’s developmental imperatives.
In fulfilling this national responsibility, the company faces a number of challenges related to plant maintenance, securing the correct quality of coal and delays in the new build programme.
In the previous update, I indicated the uniqueness of this winter in that Eskom would be undertaking a fixed level of long duration maintenance (up to 120 days) due to the technical limits on the plant.
This was necessary given that most of Eskom’s power stations are at a stage wherein plant reliability can no longer be compromised by delaying maintenance as was done to ensure that lights are kept on.
I further advised that the undertaking of this planned maintenance would result in an even more delicate power system given the number of risks that could negatively affect Eskom’s ability to balance supply and demand during winter, and thus requested that the partnership we had forged in the preceding months with all South Africans to keep the lights on be intensified particularly during this period we anticipated would be more delicate.
Having said so, as we had promised that we would be honest with the actual state of the system, I had also promised that we would do whatever we could do, within the full limits of our power, to keep the lights on so that we assist our people to navigate the severe weather that lay ahead.
In this regard, I am happy to announce that as at 31 August 2013, of the nine (9) units Eskom had committed to long duration generation maintenance over winter, five (5) were completed, three (3) are in execution and one (1) is awaiting to be released in the next weeks.
In completing the planned maintenance, Eskom is reassuring the country of reliable electricity generating fleet that will ensure that the lights are kept on as was during winter.
The department will continue to interact with and monitor Eskom’s progress in implementing measures to ensure to reliable electricity supply on a weekly basis to ensure that continuity of the progress made to date is sustained.
I further advised that in responding to the lower tariff and revenue approved in the third multi-year price determination application (MYPD3), I had asked the Eskom Board working with the department to evaluate amongst other things, measures put in place to address the constrained system and current maintenance practices with a view to develop much more rigorous ways to improve on maintenance and ensure power system integrity and system performance.
The benefits of this, which was to be done within the approved price increase, would include improved plant reliability and ensure continuity of electricity supply.
I am glad to announce that the Eskom Board has approved a Generation Sustainability Strategy that aims to improve the technical performance of Generation in the long-term in a sustainable manner, whilst minimising the negative impact on Eskom's ability to 'keep the lights on'.
The strategy will focus on achieving reliable plant availability and increase the number of planned maintenance thereby reducing unplanned maintenance.
The following aspects which are key in executing the strategy will be addressed; that is, people, process and plant.
Firstly, with regard to the People, the focus will be on the safety of Eskom's workforce and remains the top business priority to be embedded in the Eskom organisation, as well as with the staff and management of all contractors.
Furthermore, this will develop the skills and competencies of the workforce with specific focus on training initiatives as well as identifying competent trainers and mentors utilising specialist skills and centres of excellence.
This would be to create a mind-set of a successful sustainability strategy together with personal pride and assist in establishing a constructive relationship with labour towards a common goal.
Secondly, with regard to Process, the focus will be on delivering the group commitment towards predictability and sustainability, by making recommendations to enhance and optimise all Generation Operating Model elements across processes and systems as well as making strategic shifts towards supporting key stakeholder outcomes.
Thirdly, at plant level, the strategy aims to ensure that each unit has a stable and predictable planned maintenance by identifying the main unplanned maintenance reasons and responding with appropriate corrective action plans and ultimately improve plant availability through the return to design-based maintenance.
The above will ensure the sustainability of the fleet to meet the future energy needs of the country and pay back the debt that Eskom has accumulated in executing the new build programme.
However I remain concerned about the delays on Medupi’s coming online which are forecasted in mid-2014.
My department with the Eskom Board and Management are undertaking recovery work in relation to welding faults and control and instrumentation.
We are awaiting the report of the independent consultants which I had announced during the annual financial results of ESKOM.
With the above said; until the maintenance is sustained at appropriate levels and the new power stations come online, the power system will remain tight.
Again, we must make it clear that the summer season, due to sometimes unanticipated severe weather such as heavy rainfalls, both in South Africa and our neighbouring countries, some of which supply us with power, and because the summer season is when we undertake most of our plant maintenance, we are going to monitor the system carefully to ensure we continue to supply the power, keep the lights on and power the economy.
As in the past, the support of big business remains a key lever in ensuring uninterrupted electricity supply, and as the department, we will persist with the dialogue with intensive customer users, including big business, households and other key stakeholders to continue ensuring that everyone is kept abreast of the system performance and progress in addressing the challenges, and most particularly to ensure that each plays their part in this shared responsibility.
During the months of April until July 2013, the electricity system was extremely tight particularly when the winter peaked.
There was a greater need to save more electricity especially over the evening peak periods (between 5pm and 9pm) when the system was at the most constrained.
Just to put this into context, I indicated that within this peak time, South Africa’s electricity demand rises by more than 3000 MW which is larger than all SADC countries combined.
Therefore a significant behavioural change was required by everyone in the country.
We undertook certain initiatives, including with the national broadcaster, to rally South Africans behind this collective effort to save electricity, particularly during the peak period, knowing that the efforts of one, whether positive or negative, could and would affect all others.
I am happy, once more, to report that South Africans responded to our pleas and calls unequivocally, cooperating with our national call and taking acts of responsibility in their workplaces and households.
As a result of our collective efforts, fellow South Africans, we kept the lights on during our most challenging winter season, when the announcement of the Medupi delay could have depressed us and caused us to lose hope.
Once more we proved it that nothing can defeat the collective efforts of South Africans acting and working together to do more!
The winter season is officially over and we look to yet another challenging season of summer rainfalls and plant shut-downs due to intensified maintenance.
The situation in summer is different from winter in that the load profile is flatter and any demand reduction will probably need to be sustained throughout the day.
Eskom has identified supply side and demand side levers to mitigate the risks within the financial resources allocated to Eskom; however key decisions are required by Government and NERSA in order for Eskom to implement these levers.
I will be meeting my counterpart, the Minister of Energy, to discuss some of these levers and further communication in this regard will be done in due course.
These would include pursuing certain targeted and identified regional projects that could help, both in the short and medium term, to alleviate our shortages and supplement our capacity so that we support and power our economy as it continues to embark on its recovery.
The electricity system will be vulnerable with a severe outlook forecasted if OCGTs are not used during summer as Eskom has fixed a huge portion of its maintenance allowing for a small percentage to be flexible to cater for short-term maintenance.
Furthermore, the prevailing poor coal quality resulting in significant load losses at some of the power station and the summer rains heightens the risk reliable supply.
In this regard, as South Africans you are once again called to use electricity sparingly during this summer by switching off geysers, pool pumps and lights not in use as this will help in efforts to implement actions to ensure the integrity of the power supply.
I thank you.
