Severe maintenance backlog leading to unplanned outages - Tshediso Matona - POLITICS

Media presentation Tshediso Matona Eskom Chief Executive, January 15 2015

Introduction

On December 9 we said the following…

We apologised to the nation for the inconvenience of the past few weeks due to load shedding.

We communicated that for an extended period the power system is extremely constrained and vulnerable.

With the system being tight, any abnormal event pushes us into load shedding.

With the reserve margin being low, we do not have enough capacity to meet demand, necessitating planned, controlled and rotational load shedding, to protect the power system from a total country-wide blackout.

We also said that over the last few months we have seen a significant increase in unplanned maintenance/breakdowns on our plant (between 5000MW to 9000 MW) that has had a compounding negative effect on power system reliability.

We were able to avoid load shedding during the Festive Season

As many businesses and industries reopened last week after the festive season, electricity demand increased. That coupled with the unavailability of some of our generating units meant that we had to go into load shedding on 9th January for the first time this year.

The power system remains vulnerable, meaning that any extra load or faults in the system may necessitate load shedding.

New generating capacity and other levers are needed in order to ease the pressure on the system.

This summer has seen increased use of open cycle gas turbines (OCGTs) and other reserves to balance supply and demand. However there are constrains to the increased use.

Summer is maintenance season at Eskom. We do planned maintenance in summer, when demand is lower, so that maximum capacity is available in winter. Maintenance season is usually from September to around mid-May, but some maintenance is done during winter

On the financial side, the liquidity situation is under pressure not just because of the diesel, but also lower sales, building new capacity and the lack of cost-reflective tariffs

Executive summary (1/2)

Eskom has an elaborate maintenance regime that should maintain the health of our generation fleet

Eskom has a codified maintenance philosophy in place

This philosophy is translated into a detailed plant specific plan (down to turbine, auxiliary etc.)

The required resources are matched with the plan

This results into a maintenance schedule that is asking for 2000MW of diesel capacity and an additional 3000MW more capacity than we have

Our philosophy of keeping the lights on at all costs superseded the maintenance philosophy and has put us into a very difficult position

Keeping the lights on program has avoided load shedding in the last 7 years against all the odds managing an extremely low operating margin

There is a severe maintenance backlog

Increasingly leading to unplanned outages (load losses)

Which accelerates the problem of not being able to recover on the maintenance backlog

Some of our running plants have partial load losses, because parts are worn out, and we do not have an time window to replace/ fix

There is a further risk of enduring load losses on the remaining units

Keep the lights on philosophy has created a culture where proactive maintenance is less important

We have arrived at a point that does not allow us to ignore the health of our plants. Our reserve margin is so thin, that every incident creates a major systems issue and could also have safety implications for the plant. The massive usage of diesel helps to bridge the problem somewhat, but can’t help the systemic healing and a shortage of capacity for the coming 3 years appears to be unavoidable

Eskom is preparing to minimise the effects of load-shedding

Generation will focus on improving 5 KPIs (PCLF, Post Outage liability, UCLF, Slips and Trips)

We will a create a mechanism to transfer the capabilities of our best in class operators (Koeberg and Matimba) across the rest of the fleet

We will use Koeberg and Matimba as a blueprint to develop the required skills at a station level

We will bring our suppliers on board to deliver the required maintenance at the best possible quality

We will create transparency on what additional spend on diesel will do to the country

We will create a load-shedding schedule that supports our people and economy to the best of our ability

We will prepare our customers and our interfaces to deal with load shedding

We will continue to keep the public informed on the progress of our new build program and the implication on our system load

We will continue to pull all possible demand side levers in collaboration with our customers and government

We will develop a health recovery plan and share progress as we go

We will develop together with NERSA and government a diesel burn policy

Eskom has a codified maintenance philosophy in place

A plant specific plan exists

Resource requirements and availabili ty are matched

Maintenance backlog has led to increased breakdowns

The unexpected outages at Majuba, Duvha and the diesel situation creates an unfavorable capacity outlook

We are likely to load shed on most days in the near future

Eskom has kept the lights on over the last 7-years by managing an extremely small reserve margin

Loss of Load Probability (LOLP) Curve

Required reserve margin is directly linked to the system reliability you are trying to achieve for your system, and the various risks implicit in your system

NERSA have recommended a 19% NRM and Eskom’s internal requirements are between 15 and 18% NRM. There have been no expectation set for Expected Energy Not Served (EENS) and Loss of Load Probability (LOLP)

Keeping the lights on has created a backlog of maintenance

Backlog of outages

Which accelerates the problem of not being able to recover on our maintenance backlog

Deferred maintenance causes partial load losses

Some of our running plants have partial load losses because parts have worn out and there is no time to repair

Summary of partial load loss plan (Jan 15 – Mar 15)

Further potential Risk of UCLF Increase on remaining units

Eskom is committed to minimising the effects of necessary load shedding