1. Demand Response Products

2. Discussion Points 1.Setting the scene….. 2.Virtual Power Station 3.Reserves deployment order 4.Demand Response Products

3. Setting the scene….. “SUPPLY” is what Eskom can deliver and “DEMAND” is what the consumer needs ENERGY MARKET is the day-head scheduling of “Supply” options to MEET the expected “DEMAND” =

4. Setting the scene….. RESERVE MARKET is on the day “back-up” to ensure stability of the Eskom system/grid = SUPPLY side “RESERVES” DEMAND side “RESERVES” – Demand Response Program

5. DEMAND RESPONSE PRODUCTS Demand Response Programmes Supplemental DR Instantaneous DR Self Generation DR Normal DR Emergency DR Fixed Time DR

6. Virtual Power Station (VPS) KZN WC CENTRAL EC V P S SYSTEM OPERATOR SUPPLYDEMAND CCC CCC CC C CCC x x √ √ 09 00 10 00 14 00 15 00

7. 7 Illustration of typical RESERVE deployment order Emergency RESERVE MARKET Emergency reduction NRS 048-9 Increasing “Tightness” of Supply Stage 4 Load shedding and curtailment ( Stages 1& 2 ) Curtailment ( Stage 0 ) Load shedding and curtailment ( Stage 3 ) Supplemental DR Operating Automatic Gen Control (AGC) Instantaneous DR Instantaneous ENERGY MARKET Interruptible Load Agreements Max cont. rating/Emergency Level 1 Self Generation DR (Hi Rate) Self Generation DR (Low to Medium Rate) Open Cycle Gas Turbines

8. Normal DR

9. Demand Response Products Supplemental DR Supplemental Reserves > 1 MW load ( Minimum 10% of average MW demand between 5h00- 22h00 during weekdays) Minimum 30 minute notification Pre-recorded phone call 30 minute integration metering (MV 90 or pre-approved Meter on Line) 1 x 2 hour event per day 150 on target events per year Reduction measured against average of previous 3 similar days (CBL) Performance linked Capacity Payment for Standby R26.70/11.21 MW / hr Performance linked Energy Payment for load reduction at R1250/ MWh

10. 10 DR - Bidding and Scheduling Customer bid load availability by 9h00 day N-1 VPS consolidate and offer load to System Operator System Operator instruct VPS to schedule or not schedule loads VPS informs Customer by 15h00 of standby instruction

11. Load Reduction and Rates (LR)= sum [(CBL (n) – Actual Load (n)).CBL (m) – Actual Load (m))] n = first Integration Period of the Load Reduction request m = last Integration Period of the Load Reduction request Capacity payment Peak R26,70/MW (May-Aug between 6h00-09h00 & 17h00-20h00) (Sept-April between 9h00-12h00 & 18h00-21h00) Off-peak R11,21/MW (Including Week-ends, public holidays) Energy Payment –R1250/MWh CBL is a daily profile representing the amount of electricity the CUSTOMER would have consumed in each Integration Period for Week Days and Week- end Days Minimum 30 minute notification

12. Event Performance Report Notification Event duration

13. Customer Base Line calculation (CBL) 13

14. Monthly Performance Report Median Monthly performance Total monthly energy

15. Settlement Report

16. Emergency and Fixed Time DR

17. Demand Response Products (continued) Emergency DRFixed Time DR Emergency ReservesOperational Reserves When needed during emergenciesOnly for three Winter months On the day or day ahead e-mail notification Daily SMS reminder notification 30 minute integration metering Number of events, participant’s availability dependent One Event per day Reduction measured against average of previous 3 similar days (CBL) Reduction measured against previous winter weekdays profile Performance measurement over 30 min Performance linked Energy Payment for load reduction at R1250/ MWh

18. SELF GENERATION DR

19. Demand Response Products (continue) Self Generation DR Emergency Reserves 30 minute notification Pre-recorded phone call 30 minute integration metering 1 x 2 hour Event per day (may contract up to 4 or 6 or 16 hours per day) 100 Events per year Generation measured against average of previous 3 similar days (CBL) Ref. point for scaling = 60 minutes before notification Performance measurement over 30 min Performance linked Capacity Payment for standby at: Capacity payment = R18, 75 per MW per hour scheduled Energy Payment for self-generation up to R3000 / MWh

20. Self Generation

21. Event Performance Report Notification Event duration

22. Customer Base Line calculation (CBL) 22

23. Monthly Performance Report Median Monthly performance Total monthly energy

24. Settlement Report

25. DR General Performance needs to be >90% of Scheduled Capacity Reports generated by the Virtual Power Station Event Performance Monthly Performance Settlement/invoice Settlement report to Customer by 10 th work day Invoiced by customer by 15 th work day (Original invoice ) Electronic payment by last business day

26. Thank you Contact details: Ferdi Becker 012 421 3396 083 450 3660 beckerf@eskom.co.za