Electricity remains one of the critical building blocks in enabling economic growth. Therefore the supply of adequate and reliable electricity is primary to support economic growth, job creation and industrialisation. Eskom, with the support of government, remains committed to being a strategic economic enabler for the South African government to realise its developmental agenda as contained in the National Development Plan. The company continues to face challenges of maintaining an adequate reserve margin in the absence of significant capacity being brought on line, thus making the power system very tight in the short to medium term.
Over the past summer period Eskom had to carefully balance the much needed maintenance which is critical for improved performance of power plants, against ensuring that plants are available for power generation. With the bulk of the power generation fleet past midlife, compounded with higher load factors at which the plants have been run in recent years, there is a requirement to implement and stick to the maintenance plans.
Further deferment will result in compromising safety and health of Eskom employees and the assets over and above the risk of increasing the unreliability of these plants. We have seen the detrimental effect of deferring maintenance with plant reliability declining and therefore making it difficult to plan for the unknown.
Challenges
We indicated that summer is going to be difficult due to increased maintenance levels. It is in this regard that summer period saw the risk of load shedding materialise with rotational load shedding implemented on 06 March, this year. I want to assure you that the decision to implement load shedding was not taken lightly and was only taken after all available options were explored.
I do however want to thank all customers, in particular the industrial customers who heeded the call to cut back their usage during this period. Even though load shedding was implemented, their contribution minimised the extent. Load shedding remains a measure of last resort but will be implemented when necessary to avoid a complete collapse or black out of the power system.
The challenges and the risks remain, and Eskom continues to balance a tight and vulnerable system this winter – meaning that any major unforeseen incidents on the power system could result in a shortage of supply.
Winter profile
Until new significant generation capacity is added online and plant reliability improved, the threat of Eskom not being able to meet the demand remains. As we head into winter and in order to meet the high demand expected this winter, Eskom will reduce maintenance during this period in an effort to keep the lights on. While Eskom continues to pursue higher levels of maintenance for long-term plant health, a focused maintenance effort over the past 12 months has created space for flexibility during this period.
The winter demand profile is characterised by an evening peak wherein the demand sometimes rises by up to 4000 MW particularly from 5pm to 9pm. The increase is predominantly due to the use of space heating, geysers and cooking that takes place during this time. It is in this period that we will have to actively manage with your support.
There are simple things that we can adopt to “beat this peak” like:
- Using gas heaters for space heating;
- Switching off geysers during this period;
- Switching off pool pumps; and
- Switching off unused lighting, amongst other things.
We will also ensure that Eskom continues to improve on its operations and aggressively pursues the integrated demand management and demand response programmes to support the system.
Build programme update
I am glad to report that we are also seeing progress on the delivery of the new projects that will not only alleviate the pressure on the power system, but will also support Government’s economic growth and developmental objectives. You will recall that my predecessor highlighted that there was focused effort in resolving the technical issues at Medupi power station to ensure delivery of the first power before the end of this calendar year. Progress in this regards is as follows:
Medupi welding issues
All the required qualification documentation and defective boiler welds have been quantified and repaired. The successful hydrostatic testing of the Medupi unit 6 boiler signals that the matters that had caused the delays have now been successfully resolved and the boiler is mechanically complete and ready for the commissioning process.
Medupi Boiler Protection System cControl & instrumentation)
Regarding the control and instrumentation issues, another significant milestone was achieved when the Factory Acceptance Test for the Boiler Protection System was successfully concluded. The Acting Chief Executive will provide details in his address.
The achievement of these two milestones on the critical path signals a positive progress in delivering the build program.
Ingula power station
The high pressure shaft at Ingula power station remains closed for investigation by the Department of Mineral (DMR) resources following the tragic accident in October 2013. Even though this closure will lead to delays in the delivery of this project, we are confident that Eskom, with the support from DMR is doing all that is possible to ensure that the delivery of this program do not come at a cost of any more lives.
Financial sustainability of Eskom
You are all aware that the energy regulator determined a lower tariff than that Eskom what they had applied for which resulted in a R251 billion funding shortfall. This shortfall was further compounded by the lower anticipated than sales volumes as well high usage of open gas cycle turbines (OCGT) which became necessary to assist in balancing the tight system. Since the announcement was made and throughout the 2013/14 financial year, Eskom has been working together with the Department and National Treasury to find sustainable ways to close the funding gap.
This is a long and elaborate process which requires careful balancing of priorities. An announcement will be made in due course once this process is finalised. In the meantime I wish to reassure everyone that Government remains committed to supporting Eskom to complete the build programme which will assist in providing the much needed additional generation capacity to relieve the tight system.
Conclusion
I would again like to urge that electricity be used sparingly. During this winter, the electricity system remains extremely tight particularly during the evening peaks between 5pm and 9pm. We will keep the country updated on a daily basis on the state of the system and when we ask that you assist by switching off non-essentials or appliances that are not in use. We request that you respond accordingly, that way we can keep the lights on. Every little bit counts. Together we can beat the peak.
Thank you
