BRIAN MOLEFE Group Chief ExecutiveNew Build Update (1/2) • Eskom has managed to synchronise the first Ingula units (3 & 4) to the national grid, ahead of schedule on 3 March and

CONFIDENTIAL

System Status Briefing (January – March 2016)

BRIAN MOLEFE Group Chief Executive

May 2016

1

3 Outlook

4 New build update

5 Majuba power station silo & Duvha unit 3 updates

Contents

2

Executive summary of performance

6 Conclusion

Maintenance overview

Performance Highlights since October 2015 (1/2)

Increased

availability

• Availability has increased from ~70% in October 2015 to ~76% in April 2016

• This is largely due to a decrease in breakdowns (Unplanned Capacity Loss

factor and other loss factors) from ~18% in October 2015 to ~12% in April 2016

• Additional capacity added to the national grid excluding Medupi through

improvements in EAF from ~70% to ~76% in April is 2 599 MW

• Including Medupi the total capacity added is 3 279 MW

Maintenance

without load

shedding

• No load shedding has been implemented since August 2015

• Average planned maintenance (PCLF) 12.52% since August 2015

• Eskom’s prognosis for FY2016/17 is that there will be no load shedding

Description

Performance Highlights since October 2015 (2/2)

New capacity

• Eskom has managed to synchronise the first two Ingula units (3 & 4) to the

national grid, ahead of schedule on 3 March and 25 March 2016 respectively

• Medupi unit 6 commercially operational since August 2015

Description

Low diesel

usage and

spend

• OCGT energy sent out has decreased from 381GWh in October 2015 to

6GWh April 2016

• This resulting in a decrease in diesel costs from R854m to less than R25m

from October 2015 to April 2016

1 Executive summary of performance

3 Outlook

4 New build update


Contents

2 Maintenance overview

6 Conclusion

6

Eskom has excess capacity of up to 11 000 MW after

evening peak, as a result of improved Eskom performance

Illustration of the summer and winter profiles

20000

21000

22000

23000

24000

25000

26000

27000

28000

29000

30000

31000

32000

33000

34000

35000

00

:00

01

:00

02

:00

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05

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19:0

0

20:0

0

21

:00

22

:00

23

:00

Average System Summer Profile Average System Winter Profile

MW

• After evening peak,

Eskom is required to

drop load of

approximately 11 000

MW, however this

capacity will be required

for the next evening

peak

• Eskom has had to

manage the excess

capacity by either

• operating a unit for two

8 hour shifts instead of

three 8 hour shifts

• switch units off for

longer periods

Insights

11 000 MW

Maintenance overview

• The Tetris maintenance plan has been optimised to ensure no load

shedding

• The optimisation of the Tetris plan has been completed within the

following criteria:

• summer maintenance budget 11 500 MW

• winter maintenance budget 8 500 MW

• maximum OCGT load factor of 6%

• Our month to date performance on the 11 May 2016

• 78.1 % - Energy availability

• 9.2% - Break downs1

• 12.7 % - planned outages

• In terms of our existing Generation Sustainability Strategy, our aim is

to achieve 80% plant availability, 10% planned maintenance and 10%

unplanned maintenance over the medium term

1 Includes breakdowns and other non plant losses

8

Plant performance has been improving steadily

since October 2015

Performance over the past seven months

Percentage

Apr-16 Mar-16

76,2%

12,0%

11,8%

74,2%

12,9%

12,9%

Feb-16

74,7%

9,8%

15,6%

Jan-16

71,8%

11,2%

17,0%

Dec-15

69,3%

16,0%

14,7%

Nov-15

70,3%

12,3%

17,4%

Oct-15

70,0%

12,0%

18,1%

May-162

9,2%

12,7%

78,1%

Available energy Planned maintenance Breakdowns1

2 – month to date performance on 11 May 2016

• Available energy has steadily

increased since October 2015

• In December the availability

dropped to 69%, because

Eskom took advantage of the

lower demand to perform more

planned maintenance

• The increase in availability is

also attributed to the decrease

in breakdowns

• Additional capacity added to

the national grid excluding

Medupi through improvements

in EAF from ~70% to ~76% in

April is 2 599 MW

• Including Medupi the total

capacity added is 3 279 MW

Insights

1 - Includes breakdowns and other non plant losses

9

OCGT usage and costs have both decreased as

a result of improved Generation availability

OCGT performance over the past seven months

Insights

• The load factor

has decreased

from ~21.2% to

~0.4%

• The energy sent

out from OCGT’s

has decreased

from 381 GWh to

6 GWh

• The above

mention has

resulted in costs

decreasing from

R854 m to R25 m

6621

100

180

288

381

0

50

100

150

200

250

300

350

400

Apr Mar Jan Feb Dec Nov Oct

21.2 16.6 10.6 5.6 1.3 0.4 0.4 Load

Factor (%)

854 555 278 187 62 25 25 Cost (R’m)

Energy Send Out (GWh)

Today’s performance

Screen shot of Eskom’s Generation Dashboard

Insights

• The maintenance budget was 8 788 MW as of 12 May 2016 at 07h53 (sum of planned

maintenance, forced outages and partial load losses)

• This translates into an EAF of 80%1

Source: Performance data as per GPSS

1 The percentage difference between the available capacity and operational MW.

The surplus at 12:00 will be 4 704 MW


3 Outlook

4 New build update


Contents


6 Conclusion

Outlook

• Our prognosis for winter is that there will be no load shedding

• We will continue with a rigorous program of planned maintenance

without implementing load shedding while also minimising usage of

open cycle gas turbines

• For winter, Eskom is targeting a maintenance budget of 8 500 MW, in

summer we budget 11 500 MW

• Renewable energy will continue to contribute up to Photovoltaic 800

MW and wind 500 MW of the total installed capacity of 2 310 MW of

electricity generated during the day from solar and wind including

Eskom’s Sere wind farm

The Tetris plan indicates no loadshedding for the remainder of the year

Tetris V4.15

Available Capacity

20000

25000

30000

35000

40000

45000

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2016 2017

Available Capacity Operating Reserves Planned Maintenance Plant Breakdowns Peak Demand Installed Capacity

Summer Plant Breakdowns

7000 MW

Winter Plant Breakdowns

6000 MW Plant Breakdowns

Planned Maintenance

Operating Reserve

Installed Capacity is the total generating capacity from Eskom’s combined fleet

Plant Breakdowns: from the available capacity we subtract the anticipated breakdowns

Planned Maintenance: from this we also need to subtract the planned maintenance

Operating Reserve: 2000 MW buffer to cater for sudden Increase in load or if generating units are lost

Available Capacity: the capacity available to meet the demand we now have to superimpose the demand forecast for the year to compare it with the this available capacity.

Peak Demand: the forecasted demand does not exceed the available capacity and we still have the 2000 MW of operating reserve as a buffer. Therefore the prognosis is no loadshedding for the remainder of the year

14

Operating Reserve

Hendrina 7

Kriel 3

Tutuka 3

Camden 2

Komati 3

Lethabo 6

Kendal 5

Arnot 1

Ankerlig 2

Majuba 6

Komati 9

Grootvlei 2

Hendrina 6 Palmiet 1

Grootvlei 1 Gourikwa 1

HCB 1

Ankerlig 4

Kendal 4

Matimba 4

Tutuka 2 Hendrina 1

Matla 2

Ankerlig 3

Drakensberg 4

Komati 5

Grootvlei 5

Tutuka 6

Camden 3 Lethabo 1

Matla 1 Grootvlei 6

Tutuka 1

Kendal 1

Komati 7

Tutuka 4 Komati 6

Available Capacity to do planned maintenance and meet operating reserve

Planned Maintenance – May to August 2016 1

Eskom is targeting a maintenance budget of 8.5 GW for Winter months

The no loadshedding plan allows for available capacity as we seldom dip into the operating reserves Source: Tetris Plan V4.15

Available Capacity = Installed Capacity - Peak Demand - UCLF

Planned Maintenance – September to December 2016 2


1

5

Operating Reserve

Hendrina 1 Grootvlei 2

Hendrina 10 Camden 1

Matla 2 Drakensberg 2

Komati 7 Kriel 4

Koeberg 1 Lethabo 5

Ankerlig 7 Ankerlig 1

Hendrina 7 Gourikwa 2

Medupi 6

Matimba 6

Majuba 3

Matla 1

Ankerlig 3

Tutuka 4

Gourikwa 3 Komati 6

Majuba 2

Hendrina 3

Komati 4

Kendal 5

Majuba 4

Lethabo 3

Gourikwa 1 Ankerlig 4

Kendal 1

Vanderkloof 1

Gariep 4

Drakensberg 1

Kriel 1

Matla 3

Grootvlei 1

HCB 1

Duvha 6

Hendrina 2

Komati 5

Duvha 2

Majuba 5

Hendrina 4

Matimba 4

Lethabo 4

Tutuka 5

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

01

-Sep

04

-Sep

07

-Sep

10

-Sep

13

-Sep

16

-Sep

19

-Sep

22

-Sep

25

-Sep

28

-Sep

01

-Oct

04

-Oct

07

-Oct

10

-Oct

13

-Oct

16

-Oct

19

-Oct

22

-Oct

25

-Oct

28

-Oct

31

-Oct

03

-No

v

06

-No

v

09

-No

v

12

-No

v

15

-No

v

18

-No

v

21

-No

v

24

-No

v

27

-No

v

30

-No

v

03

-Dec

06

-Dec

09

-Dec

12

-Dec

15

-Dec

18

-Dec

21

-Dec

24

-Dec

27

-Dec

30

-Dec

2016

Camden 2

Eskom is targeting a maintenance budget of 11.5 GW for summer months

The no loadshedding plan allows for available capacity as we seldom dip into the operating reserves

1

6

Planned Maintenance – January 2017 to March 2017 3


Source: Tetris Plan V4.15

Eskom is targeting a maintenance budget of 11.5 GW for summer months

The no loadshedding plan allows for available capacity as we seldom dip into the operating reserves


4 New build update

3 Outlook


Contents


6 Conclusion

New Build Update (1/2)

• Eskom has managed to synchronise the first Ingula units (3 & 4) to the

national grid, ahead of schedule on 3 March and 25 March 2016 respectively

• Medupi Unit 6 was commissioned on 23 August 2015, adding 794 MW to

South Africa’s electricity grid

• Medupi Unit 5 draught group run and dry fires were completed in March

2016, followed by the completion of the chemical cleaning of the unit in April

2016, which are important milestones towards first oil- and coal fires, leading

to boiler blow through and ultimately commercial operation of the unit

• Medupi Unit 5 is expected to be commercially operational in March 2018

(P80)

New Build Update (2/2)

• Kusile power station continues to achieve set milestones on the path for Unit

1 commercial operation

• Kusile Unit 1 is expected to be commercially operational in July 2018 (P80)

• The construction of Transmission lines and the commissioning of

transformers have exceeded the targets for the 2015/16 financial year.

These are 346km of transmission lines constructed and 2 435 MVAs of

substation capacity commissioned

• Since inception in 2005, the capacity expansion programme so far added

7 031 MW of generation capacity, 6 162 km of transmission lines and

32 090 MVA of substation capacity to the national grid

We remain focused on bringing new capacity

online

Post MYPD 3

Mar 2015

Sere Wind Farm

Aug 2015

Medupi Unit 6

May 2017

Ingula Unit 2

Jul 2018

Kusile Unit 1

Jul 2017

Ingula Unit 1

Mar 2015

Majuba recovery

Jan 2017

Ingula Unit 3

Mar 2017

Ingula Unit 4

Mar 2018

Medupi Unit 5

1200

100 794

333 333

333 333

794

800

600

5 620MW

600MW from Unit 3 gap

solution in Feb 2015

600MW from Unit 4 in

Mar 2015

CO in Mar 2015 CO in Aug 2015

CO by Jan 2017 CO by May 2017 CO by Mar 2018 Fully recovered

Project falls outside

MYPD3 window

CO by Mar 2017 CO by Jul 2017 CO by Jul 2018

2019/20

Duvha Unit 3

P80 dates

CO = commercial operation

Additional MW to be added to the South African grid

Installed capacity (MW)

• Eskom is

progressively

adding capacity

over the next

seven years

• Ingula will be fully

commissioned in

2017

• Medupi will be

fully

commissioned by

2020

• Kusile will be fully

commissioned by

2022

Insights

New capacity will fuel the South African economy

894

2021

52,589

43,193

1,332

3,200

51,789

40,000

10,000

5,000

50,000

35,000

45,000

55,000

2020

4,864

43,193

1,332

2,400

4,864

2019

50,195

43,193

1,332 1,600

4,070

2022

53,389

2018

47,807

43,193

1,332 800

2,482

2017

45,419

43,193

1,332

2016

43,193

1,332

4,000

4,864

0

44,087

43,193

894

Current capacity

Ingula

Kusile

Medupi + Sere

40,000


3

4 New build update


Contents


6

Outlook

Conclusion

Majuba Power Station silo & Duvha Unit 3 update

• Construction completion of the

permanent solution for the recovery of

the coal silo at Majuba is on track for

completion by end December 2017

(P80)

• Plans to accelerate completion are in

place and progressing well

Majuba Permanent solution

• The letter of contractor

appointment has been issued

• Finalisation of the contract detail is

in progress

• Contractors to be on site by mid-

year for construction to commence

Duvha unit 3 update


3 Outlook

4 New build update


Contents


6 Conclusion

Reasons for no load shedding

Description

• Alignment in all structures to new leadership’s vision

• Adherence to maintenance plan and discipline execution

• Tetris - outage planning tool to optimise when outages should

be scheduled, with minimal diesel usage

Leadership

involvement

• Medupi Unit 6 in August 2015 – 700 MW

• Dedisa an IPP in October 2015 – 334 MW

• Ingula Unit 4 is available for dispatch – 333 MW

Additional

capacity

already added

• Breakdowns including other capacity loss factors have

decreased from ~18% down to 12% in seven months

• A deliberate focus on ensuring our units run at optimum levels

• Thus increasing the energy availability from 71% to 76%

Improved

plant

performance

• Avon IPP Peaking will be fully commissioned by October 2016

• Ingula will be fully commissioned in 2017

• Medupi will be fully commissioned by 2020

• Kusile will be fully commissioned by 2022

New capacity

to be added

Conclusion

• Eskom has stabilised and we don’t anticipate load shedding

• To date we have not implemented load shedding in 9 months (except for

2 hours and 20 minutes)

• We will continue with planned maintenance and we remain focused on

delivering on our capital expansion programme

• We appreciate the support of all our customers and urge them to

continue to use electricity sparingly at all times

• Once completed in the next five years, our capacity expansion

programme will increase our generation capacity by 17 384MW,

transmission lines by 9 756km and substation capacity by 42 470MVA

• This will enable us to provide security of electricity supply to South

African homes and businesses, powering economic expansion and

extending electricity to millions of households

Thank you

Documents

BRIAN MOLEFE Group Chief ExecutiveNew Build Update (1/2) • Eskom has managed to synchronise the first Ingula units (3 & 4) to the national grid, ahead of schedule on 3 March and