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Eskom Briefing
Parliament’s Committee on Energy
16 September 2014.
99 days and counting down…
UNIT 6
Source: Eskom 2
Complete
Current milestone in progress
Current focus area
Target
1. Statutory
hydro
15/05
2. Boiler
chemical
cleaning
21/08
3. Turbine on
barring
30/08
4. Draught
group test run
19/09
Actual start
07/09
5. First Oil Fire
29/09
6. Boiler blow
through
06/10
7. Steam to Set
(Turn on
Steam)
01/12
8. 1st
Sync
24/12
Text
Milestone achieved date
*
*
*
*
• ~ 17.4GW of new capacity (6 137MW installed and commissioned) • ~ 9 756 km of new transmission network (5 629.9km installed) • ~ 42 470 MVA of new transmission strengthening (27 655MVA installed)
3
New Generation Capacity and Transmission Lines Leading and partnering to keep the lights on
Un
der
co
nstr
ucti
on
In
dev
elo
pm
en
t
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 Solar Power (100 MW)
• Open Cycle Gas Turbine Conversion Project – conversion of Ankerlig and Gourikwa OCGT power plants to a Combined Cycle Gas Turbine (CCGT)
• Photovoltaic (own use)
• Refurbishment and air quality projects
• >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 (1 338.3MW) • 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
Medupi is the first coal-generating plant in Africa to use supercritical power generation technology
3 700 MW 9 564 MW 3 517.92 MW 300 MW 9 756 km
1. Date moved out after the accident at Ingula end October 2013
Synchronisation of the first units are expected as follows:
• Medupi in the second half of 2014
• Kusile in the first half of 2016
• Ingula in the second half of 20151
Medupi Power Station Project Description: Supercritical, coal-fired power station Location: Lephalale, Limpopo Capacity: 4,764MW (6 x 794MW)
4
The First Chemical Clean Injection
completed – 19 Aug 2014
▪ Boiler Chemical Clean on Unit 6 was completed ahead of schedule on 21 August
2014.
▪ 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.
▪ 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
▪ 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.
Industrial
Action Impact
First Unit
Synch
Mitigation to
achieve First
Synch in Dec
2014
5
Medupi: Executive Summary
Kusile Power Station Project Description: Supercritical, coal-fired power station Location: Witbank, Mpumalanga Capacity: 4,800MW (6 x 800MW)
6
▪ 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.
▪ 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
▪ 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
Industrial
Action Impact
First Unit
Synch
Productivity
Challenges
7
Kusile: Executive Summary
Current Target Schedule/Forecast
8
Key Challenges – Medupi and Kusile
9/18/2014 9
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 1st 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
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
10
▪ 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.
First Unit
Sync
October 2013
Fatalities
Update
11
Ingula: Executive summary
Ingula: Overall Project Progress
12
Re-baseline due to ERA
revision
Forecasted
COD for U1 of
June 2016
Transmission Projects
13
Transmission: On target to meet the Shareholder Compact of Lines Built
14
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 26.7 68.7 110.1 126.1 145.1 171.6 180.7 202.2 208.7 230 272 315.1
Actual 26.8 85 127.4 132.6
YE Proj 315 315 315 315 315 315 315 315 315 315 315 315
0
50
100
150
200
250
300
350 Transmission / Power Delivery Projects: T-line (Kms)
Technical Achievements – inception to date (as @ 31-July 2014):
5,629.9 km installed
27,655 MVA installed
Transmission: On target to meet the Shareholder Compact of MVA installed
15
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
Actual date: May 14
Kusile HV yard
(45MVA) No 2
Planned date: Jul 14
Actual date: May 14
Sterrekus
(2000MVA)
Planned date: March
2015
▪ 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
Lessons
Learnt
16
Key Lessons Learnt – Build Programme
Summer Plan 2014/15
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.
2014/09/18 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.
19
Summer
• Summer poses a different challenge as the profile looks flat and our planned maintenance (PCLF) increases significantly compared to Winter
2014/09/18 21
22000
24000
26000
28000
30000
32000
34000
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02
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03
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04
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05
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06
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07
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10
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11
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:00
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
Constrained all day
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) 22
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: 3000 -4000MW 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
24
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
25
Options to Close the Gap Supply
Lever Operational
Capacity (MW)
Potential
Capacity (MW)
Additional Cost
(R’m)
Comments
STIPPs 300 1643 Expires in March 2015. Extend by 2years
Aggreko 108 - Expires in March 2016
Sasol 200 2310 Available for summer
Tshwane 90 513 Available for summer
City Power 220 1052 Expires in March 2015. Extend by 2years
EDM 80 1421 Available for summer
Barges 42 266 Available for winter 2015
ZPC 47 569 Available for winter 2015
WEPS 50 -
REIPP 700 1200 - Additional 500MW from CSP,PV and Wind
in summer
TOTAL 7774
Coal Stock Days Improvement 900
TOTAL 8674
26
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%
27
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
28
Key issues to connect IPPS
“Driving world class generation performance, with Zero Harm”
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!
2014/09/18 30
“Driving world class generation performance, with Zero Harm”
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!
2014/09/18 31
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
32
Flash Report
33
IPP/ Generator
Programme
National Comment
No. of
projects MW
DoE RE
IPP PP and
other IPP
PP
Bid 1 28 1,436
26 projects grid connected and 19 reached full CO with a total of
863.68 MW (Source: Single Buyer Office) in full CO and one in early
operating stage (80MW)
Bid 2 19 1,054 7 projects grid connected and 3 in full COD (54.4 MW as per SBO)
Bid 3 21 1,475
Issuing Budget quotations-13 BQs issued as of 26 August 2014. 6
Outstanding. Two are connecting in Munics.
Bid 3.5 3 300
Preferred bidders to be announced in 2014 for 200MW allocation-- all
in NC
Bid 4 216 15,740
214 Applications received. 152 CE fees paid and applicable for issue
of CEL; 151 CELs were issued by 15 August 2014, bid submission for
IPPs was 18 August 2014;
1-5 MW 78 350
Preselected bidders, some in municipality (at least 68 confirmed for
Eskom)
DoE Cogen 4 739 Received in anticipation of DoE Coal programme
DoE Base
Load 2 740 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 2016.
Flash Report (cont)
34
IPP/ Generator Programme
National Comment
No. of
projects MW
IDM SOP - micro generation 9 1,319 Connecting to Eskom
Eskom
Various incl (Sere;
Upington CSP; Wind
500; etc.) 4 700 Excludes smaller PV projects e.g. MWP; Ilanga
Other
Wheeling; self
generation; PV roof
tops 119 6,070
Illegal
small
generation
connectio
ns 16 ?
16 identified mainly through reversed meter readings. Could
be more connections that have not been identified. SMG
SteerCom advised all illegal connections to be
disconnected.
Thank you