1. SECRET

2. Purpose On 10 December 2014, Cabinet endorsed a Five Point Plan
The purpose of the presentation is to brief the PCE on the following:
War Room Institutional Framework and its resourcing
Update on the load shedding prospects – Eskom emergency measures
Funding of the interventions
Progress on the development of detailed implementation plans

3. Problem statement
The country is facing a real risk of load shedding daily.
Approximately 14,000MW or about one-third of total Eskom generation capacity on average is offline. Of this 14,000MW, over 8,000MW is due to unplanned (breakdown) maintenance.
To reverse this trend, Eskom needs space to execute preventative (philosophy based) maintenance instead of the reactive maintenance. What’s required?
In the immediate, the focus will be on sustained maintenance and operational efficiency to reduce the level of this unpredictable breakdowns, and
In the medium to long term, the focus will be to bring in new generation capacity to alleviate the constrained system and accommodate demand growth
The key objective is to improve plant performance while limiting load shedding

4. Key milestones achieved since adoption of the Five Point Plan
The War Room has been set up and the participating Departments have nominated representatives
The Coal IPP RFP was issued
The RFI for the Demand Management Interventions was issued
MOU has been signed between Eskom, CEF (Petro SA), Strategic Fuel Fund and Transnet (TNPA) regarding diesel supply

5. War Room Institutional Framework

6. Principles for prioritising actions
The key objective of the War Room is to facilitate the creation of space to effect the maintenance to improve plant performance.
The interventions are prioritised based on the following:
How quickly can the intervention/s deliver or save the additional megawatt to the grid
The scale or capacity load factor
The cost/KW
Based on the above, the Eskom’s emergency measures and funding work streams have been prioritised
More work to be undertaken on other areas to deliver additional capacity in the medium to long term

7. Prioritised Interventions: Eskom Emergency Measures
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8. Key initiatives in the short term
Sourcing funding to support financial sustainability and diesel costs
UCLF reduction to 7 GW through structured planned maintenance
Reduce partial load losses
Reduce outage slips
Technical skills capacity to do maintenance, plans to address shortage of skills
Majuba recovery interim (full coal supply) solution for full load
First synchronisation of Medupi unit 6
Integrated Demand Management

9. UCLF reduction to 7 GW through structured planned maintenance, Reduction of partial load losses and outage slips
Reducing partial load losses greater than 7 days down to 1000 MW through;
Targeting of sustained partial losses in scopes of philosophy outages as well as prioritising additional short term corrective outages on the capacity
Reducing generating planned unit outage backlog through;
Executing the GX sustainability outage programme
Reduce Outage Slip (UCLF) through;
Improve performance management of contractors during execution of outages to ensure both quality and productivity (part of the turn-around strategy)

10. First synchronisation of Medupi unit 6
Commercial Operation of Medupi Unit 6 through;
By the synchronisation of the unit to the network during the first quarter of 2015
The completion of the optimisation and tests of all sub systems for commercial operation during the second quarter of 2015

11. Co-generation initiatives
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12. No decisions required, focus on execution of the procurement process
Key interventions
Existing agreements for renewal
Key focus
Short Term (1 – 2 months)
Conclude PPA with Sasol Secunda which was previously contracted on the MTPPP – 200MW from 1 January 2015
Conclude PPA with Tshwane if their plant is in a position to be operated – 165MW by 1 January 2015
Short term (0-3 years)
Extend the current MTPPP, STPPP, cogeneration and municipal generation agreements for a further three years
Short to medium term (0-3 years)
Conclude on the DoE IPP Unit’s Request for Proposals issued on 5 December 2014 and contract all potential suppliers with a target of 800MW.
RFP already issued
No decisions required, focus on execution of the procurement process

13. 2. Gas imports
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14. Scope of work
The Gas will not be able to provide additional capacity in the immediate term i.e. over the next 3 months
Focus is on accelerating the conversion of OCGTs from diesel fuel to gas
However, through preliminary discussions between the relevant stakeholders, the scope of the plan has been expanded to include gas to power generation options in addition to the diesel to gas conversions

15. 3. Coal IPPs
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16. Coal IPP Progress Risks and enablers
There is a determination for 2500MW for Coal IPPs.
Request For Proposals (RFP) out in the market since 12 December 2014
Submission for bids are due on 8 June 2015
Announcement preferred bidders August 2015
Legal close by preferred bidders is expected by March 2016.
Financial Close by preferred bidders is expected around June 2016
Commissioning (1st MW) by early 2019
As seen with renewable energy IPPs, it is possible that the commissioning can happen earlier than the above mention date through the fast tracking of construction by IPPs.
Environmental Impact Assessment (EIA), grid connection and water licenses are generally considered to be enablers that can impact on the commissioning timeline.
Lephalale (Waterberg) has been identified as an area that needs some strategic investment to be able to unlock its potential for coal for power plants beyond Medupi.
The water infrastructure requirements are being addressed through SIP 1 and the same needs to be done with regard to the electricity transmission (grid) infrastructure.

17. 4. Demand Side Management
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18. Demand side management
Most of the supply side interventions are likely to be realised over the medium to long term
Demand Side Management (DSM), present a viable option to ease the pressure on the system
The focus will be on:
The costing of the interventions
Quantify the impact
Securing funding

19. Thank You