The strategy for improved electricity distribution maintenance

9 June 2008

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“the main economic impact of the power interruptions, both planned and unplanned, is the loss of output in the industrial sector. In a typical year of power shortages, arising from a deficit in generation capacity, these losses can be as high as US$ 0.66 and US$ 1.08 per kWh of energy loss, respectively. It is also observed that most industries have standby generation facilities to satisfy either, in full or partially, their own power requirements. The serious economic and environmental impacts of power interruptions, both planned and unplanned, underlines the importance of timely implementation of the long term least cost generation expansion plan and proper maintenance of transmission and distribution networks to ensure their high reliability”.

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WHAT IS THE FUSS?

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PRESENTATION OUTLINE

• Energy White Paper Objectives

• Evolution of policy and regulatory focus

• Strategy for improved maintenance

• What is in the pipeline?

• CONCLUSION

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Energy White Paper Objectives (1998)

Ensure electrification targets are met

Provide low-cost electricity

Facilitate better price equality

Improve the financial health of the industry

Improve quality of service and supply

Foster proper co-ordination of operations and investment capital

Attract and retain competent employees

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Electricity ActSocioeconomic

Focus

Big jump in new connections

Maintenance Summit 2003

NER Act for pipelines, gas and electricity

Revenue cap regulationintroduced

Electricity Regulation Act plus

Amendment toCover

municipalities

Independent economic regulation

Quality of supplybecomes critical

1987 1995 2004 2006 -

EVOLUTION OF POLICY AND REGULATORY FOCUS

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STRATEGY FOR IMPROVED MAINTENANCE

RegulationPartnership

Investment Monitoring

Improved Quality of

Supply

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STRATEGY FOR IMPROVED MAINTENANCE

Regulation

Quality of Supply: section 47 of Electricity Regulation Act

Set performance targets relating to interruptions:• duration• frequency

Benchmarks in relation to peers

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STRATEGY FOR IMPROVED MAINTENANCE

Investment

Norms and standards

•typical investment level based on regulated returns

•how to balance costs, power quality, safety, environment

Asset management•Minimize overall life cycle and risk costs

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STRATEGY FOR IMPROVED MAINTENANCE

Monitoring and reporting

• Statutory requirements for certain monitoring equipment on critical infrastructure

• example is SCADA on all key substations

• Accessibility of information

• component indicators e.g. age, maintenance costs

• network indicators e.g. losses, outages per year

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STRATEGY FOR IMPROVED MAINTENANCE

Partnership

• Licensees play central role

• End user activism must be encouraged

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WHAT IS IN THE PIPELINE?

New regulation in terms of Electricity Regulation Act to cover:

•Key performance indicators like voltage deviations, harmonics, flicker•Framework for reports to the regulator including quality of supply interruptions and incidences, compulsory audits, customer relations regarding power quality specifically•Concomitant rules by the regulator

Municipal Fiscal Powers and Functions Act of 2007• defines tariff• regulates surcharge relating to electricity service

Even more focus on institutional reform – EDI reform

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CONCLUSION

• Maintenance Summit 2008 has additional challenges:– The challenge for this gathering is to look at the entire ESI

value chain in making recommendations;– Supply side is receiving attention with the build program– Quality of supply must receive due scrutiny, because

maintenance drives quality of supply

– Equally important is the need for the reform of the entire electricity sector to be conceived as a seamless process if we want to ensure its sustainability;

– A need to institute early warning systems and response structures across the value chain;

– A need to institute responsive monitoring, evaluation and resposive systems.

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CONCLUSION

Symptomatic interruptions confirm poor maintenance and asset life cycle management

Brand South Africa needs to get act together – own end users deserve better, let alone 2010 World Cup