Eskom Presentation
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Presentation to Portfolio Committee on Energy 15 March 2011 Eskom Holdings Ltd Update of Eskom’s Capital Expansion Programme Paul O’Flaherty Finance Director 2 1. Business overview 2. South Africa requirements and the capital expansion programme 3. Alignment with SA macro-economic principles 4. Costs and funding 5. Conclusion 3 Eskom at a glance • Strategic 100% state-owned electricity utility, strongly Eskom power grid(1) supported by the government • Vertically integrated across generation, transmission and distribution • Supplies approximately 95% of South Africa’s electricity (45% of the total electricity consumed in Africa) • 40 887 employees as at 31 December 2010 • Serves 3 000 industrial, 1 000 mining, 48 000 commercial, 84 000 agricultural and more than 4 million residential customers • 27 (including 1 nuclear) operational power stations with a Existing grid system Thermal power station Possible future grid system Future interconnection substation net maximum capacity of 40.87GW as at 31 March 2010 Future hydroelectric power station Nuclear power station Future thermal power station Future gas station Hydroelectric power station Gas power station • Total electricity sales of 218 591GWh and total revenues of Interconnection substation Town R71.21bn for the year ended 31 March 2010 (R71,6bn for 9 months ended 31 December 2010) Eskom’s net capacity mix – 31 March 2010 • Infrastructure includes 390,338km of power lines and Total: 40.87GW cables (all voltages) as at 31 March 2010 • Committed to build 17GW new generation capacity expected by 31 March 2018. This includes 5,032MW already commissioned as at 31 December 2010 (1) The map indicates the South African power network and interconnections with neighbouring countries 4 Generation • Operates Eskom’s generation plants Key figures • 27 power stations: 13 coal, 4 gas / liquid fuel turbines, Financial Year 2009 Financial Year 2010 6 hydro electric, 2 pump storage, 1 nuclear and 1 wind Net Capacity (MW) 40,506 40,870 • Total net capacity of 40,870MW as at 31 March 2010 Capacity from Coal (MW) 34,294 34,658 • Approximately 85% of net capacity is coal-fired Coal Share in Total Capacity 84.7% 84.8% Capacity from Nuclear (MW) 1,800 1,800 • Koeberg nuclear power plant Nuclear Share in Total Capacity 4.4% 4.4% Total Output (TWh) 229 233 • 1 800MW net capacity Production from Coal (TWh) 212 216 Coal Share in Total Output 92.6% 92.8% • 12 806GWh electricity produced from nuclear in Production from Nuclear (TWh) 13.0 12.8 year ended 31 March 2010 Nuclear Share in Total Output 5.7% 5.5% • 17 000MW of new capacity plans committed expected by 31 March 2018 (including already commissioned since 2005) Reserve margins • 10 896MW of new capacity to come from three projects 15% international norm • Medupi: 4 764MW coal-fired; first unit expected to be commissioned in 2012 and Eskom target • Kusile: 4 800MW coal-fired; first unit expected to be commissioned in 2014 • Ingula: 1 332MW pumped storage; expected to be commissioned in 2014 • Reserve margin of 15,1% for the nine months to31 December 2010, up from 5,6% as at 31 March 2008 and above international norms and Eskom’s target of 15% • No load shedding since April 2008 5 Transmission and Distribution Key Figures – 31 March 2010 • Total electricity sales of 218,591GWh and more than 4,46 million customers (including transmission 2010 Gross Electricity customers) as at 31 March 2010 2010 Sales Split Revenue Split Customers Total: 218,591GWh Total: R69,942m Total: 4.46 million • Directly provides electricity to 45% of all end users in South Africa • Country split into six regional distribution areas • Two main types of customers: • Redistributors: Mainly municipalities that sell electricity to residential customers. Eskom bills the municipality; the municipalities are responsible for billing and collecting their own tariffs • Direct customers: Industrial, commercial, mining, agricultural and residential consumers Energy Losses • Key Sales and Customer Service unit (‘KSACS’) NERSA 2010 deals with customers using more than 100GWh of 2008 2009 2010 Target energy per year Distribution losses 5.47% 5.46% 5.87% <=6.00% • At 31 December 2010, KSACS had approximately 130 customers accounting for Transmission losses 3.13% 3.08% 3.25% <=3.30% 38.6% of total revenues Total Eskom losses 8.00% 7.94% 8.45% <=8.76% • A member of Southern African Power Pool (“SAPP”) • Overall energy losses of 8,45% in FY2010, within the regulator’s (NERSA) allowed target of 8.76% 6 1. Business overview 2. South Africa requirements and the capital expansion programme 3. Alignment with SA macro-economic principles 4. Costs and Funding 5. Conclusion 7 IRP 2010 – balanced scenario 8 The future • South Africa needs to create ~40 800MW of new electricity capacity by 2030 – more than doubling the current requirements • This assumes decommissioning of 10 000MW of existing capacity • There will be two periods in the next 20 years when the risk of supply interruptions significantly increases in South Africa • from 2011-2013, and then again … • from 2018-2024 • South Africa needs to take urgent action in 2010 in order to ensure security of supply for the country for the next 20 years 9 Eskom Capital Expansion Programme – began in 2005 Mpumalanga Return-to-service (RTS) New Baseload Peaking & Renewables Refurbishment Transmission Komati Medupi Ankerlig Arnot 765 KV projects Camden Kusile Gourikwa Central projects Grootvlei Ingula Northern projects Sere Cape projects 3,720MW 9,564MW 3,516MW 300MW 4,000km Commissions of new stations First Unit Last Unit 17,000MW of new capacity (5,032MW commissioned ) Medupi 2012 2016 Kusile 2014 2018 4,000km of required transmission Ingula 2014 2014 network (3,103km commissioned) Medupi is the first coal-generating plant in Africa to use supercritical power generation technology 10 Progress to date (as at 31 December 2010) • To date, a large amount of construction work has been completed, adding ~5,031.8 MW, ~3,103.40 km of transmission network, and ~15,670 sub-stations . Megawatts 125 MW of capacity 452.5 1,769.9 1,042.6 5,031.8 1,351.8 0 290 Transmission 278.80 Km line 600.30 418.30 480 430 3,103.40 237 659 Substations 3,940 1,630 MVAs 1,375 1,355 1,000 1,090 5,280 15,670 FY FY FY FY FY FY FY Total 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 11 Of the new capacity being installed, baseload coal-fired power stations account for 73%, while the peaking portfolio (OCGT, pumped storage, wind) will contribute the remaining 27% Of the coal-fired power stations, all but Medupi are located in the Mpumalanga province. Medupi is in Lephalale (Limpopo province). Medupi Kusile Arnot Peaking Komati Grootvlei Camden Ingula New coal Return To Service Sere Ankerlig Gourikwa Capacity upgrade 12 Key Transmission projects Medupi integration East Grid 765kV Ingula integration Cape corridor Southern Grid 765kV 13 13 While there is quite some progress already, there is a lot more construction work to be done in this programme The main technical KPIs are on track. Installed to date Not yet installed 29% MW MW installed ~5,031.8 ~12,188.5 ~17 220.3 78% Km Transmission lines installed ~3,103.4 ~896.6 ~4 000 76% MVAs Substation ~15,670 ~4,930 projects ~20 600 14 Focus is now on Medupi, Kusile, and Ingula - the first units will come on line between 2012 and 2014 Construction activities 1st unit commissioned Fully commissioned started December 2012 Mid 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Fully 1st Unit commissioned Construction Construction commissioned 1st unit commissioned Fully commissionedFully commissioned January 2014 activities started activities started September 2014OctoberDecember 207 2014 October 2017 DecemberOctober 207 2018 •Medupi Power Station Kusile Power Station Ingula Power Station •Execution partner: Execution partner: Road works •Coal supply Coal supply Civil works •Boiler Boiler •Turbine Main Civils •Enabling Civils Infrastructure Turbine B&E Quanza •Main Civils Enabling Civils Dam construction Concor -WBHO •Generator transformers -Silver Rock Generator transformers Edwin 15 Build programme overview Medupi Kusile Ingula Project Summary Project Summary Project Summary ► Greenfields Project – Lephalale ► Greenfields Project – Delmas ► Greenfields Project – Ladysmith (Limpopo Province) (Mpumalanga Province) (KwaZulu Natal Province) ► 6 Unit Coal Fired Power Station ► 6 Unit Coal Fired Power Station ► 4 Unit pumped storage power station ► Planned capacity 4,764MW ► Planned capacity 4,800MW ► Planned capacity 1,352MW Financial & Economic Impact Financial & Economic Impact Financial & Economic Impact ► Projected project cost to ► Projected project cost to completion ► Projected project cost to completion ~R98.900 bn (excl. ~R121,000 bn (excl. IDC) completion ~R21.377 bn (excl. IDC) ► Estimated 25% impact on Delmas IDC) ► Estimated 95% impact on town GDP ► Estimated 7% impact on Lephalale town GDP Ladysmith town GDP Project Schedule Project Schedule Project Schedule ► Construction commenced March ► Construction commenced Mid 2008 2007 ► Construction commenced Mid ► First Unit planned to be 2006 ► First Unit planned to be commissioned December 2014 commissioned December 2012 ► First Unit planned to be ► Subsequent Units 2 & 3 at 12 month commissioned January 2014 ► Subsequent Units at 6 to 9 month intervals and Units 4, 5 & 6 at 8 ► Subsequent Units at 3 month intervals thereafter months thereafter intervals thereafter ► Last Unit planned for ► Last Unit planned for ► Last Unit planned for commissioning late 2015, mid commissioning during December commissioning during September 2016 2018 2014 16 Build programme overview Return to Service Transmission Mpumalanga & Other Projects Summary Project Summary Projects Summary - Mpumalanga ► Refurbishment and return to service of ► Transformers – 20 600 MVAs: ► Major refurbishments of existing and previously moth-balled coal fired •765kv (Planned: 12,000 MVAs) operational power stations, i.e.