System Status Briefing - eskom.co.za

1 System Status Briefing Phakamani Hadebe Group Chief Executive 16 November 2018. Contents 1 Summary of System performance 2 Operational performance 3 Future outlook 4 9 point recovery plan 5 Conclusion While Distribution, Transmission and Koeberg are operating efficiently, the rest of Generation faces operational challenges Summary of Eskom System performance 1 While Distribution, Transmission and Koeberg are operating efficiently, the rest of Generation faces operational challenges Causes: Deterioration of coal fired power stations 10 stations with less than 20 coal stock days, as per grid code requirement While inherent, other challenges happened in our midst Outcome: Increased utilisation of emergency resources (OCGT's1, interruptible load shedding and demand response).

2 Manifestation of the above: EAF FY19 is , is currently inadequate Current System Status is therefore not optimal 3 While we have a recovery plan, load shedding cannot be ruled out for the remainder of 2018. 4 South Africans can support by reducing their usage, especially at peak times Open Cycle Gas Turbine, 2. EAF - Energy Availability Factor . As at end October '18 , 3. Current financial year ends In March 2019. Despite challenges in generation, Eskom has achieved significant milestones in other divisions Division Description Generation Year to date performance: Energy availability (EAF) as at end October financial year planned maintenance (PCLF), forecasted to exceed year-end Generation target of 9%.

3 Unplanned maintenance (UCLF) and Other capacity losses (OCLF). Transmission Overall System performance on track and positive Sustained maintenance execution with 99% of planned work completed Improved customer experience by reducing outage durations ( vs. Distribution target of 38)and frequency of interruptions ( of ). 82 371 New electrification connections Medupi Units 3 and 2 synchronised to the national grid on 8th April and 7th October 2018. New Build Additional 1 500 MW from Medupi Unit 3 and Kusile Unit 2 commercial operation (CO) projected within this financial year 540 MW transformer capacity commissioned and km line build on track Note: Figures not audited The Capacity Outlook is based on planned outages and the Tetris' chart assists in optimising outage schedules Available Capacity Gas units Operating Reserves PCLF UCLF Peak Demand Installed Capacity 50000.

4 45000. Summer UCLF. Summer UCLF. 7000 MW UCLF. 40000 7500 MW. Average planned Maintenance (PCLF). 35000 PCLF 5300 MW. 30000 Operating Reserve Gas 25000 Available Capacity 20000. Nov Dec Jan Feb Mar 2018 2019. To accommodate the anticipated planned maintenance, OCGT's will likely be required for most months up until March 2019. Source: Tetris Plan 15 November 2018. However, Generation availability has deteriorated to below what we aspired to achieve Generation performance for the 2019 financial year Contributing factors Percentage (%) OCLF UCLF PCLF EAF Undesired coal quality Recent strikes Financial and capacity constraints leading to minimal refurbishments and maintenance on ageing fleet Outage execution (overruns).

5 Ops and maintenance skills availability and training Maintenance cost decreased in past five years leading to unsustainability Feb '18. Apr '18. Mar '18. Jul '18. Aug '18. Oct '18. FY19*. Spet '18. Jan '18. May '18. Jun '18. 9 Point Recovery Plan *Year to date figures. FY 2019 Performance data unaudited and subject to change EAF higher in winter due to lower levels of planned maintenance Major incidents, as well as full and partial losses were key contributors to the increase in unplanned losses Build-up of UCLF for FY19 from major contributors Percentage (%) UCLF DV 4 KR 2 GV 2 LT 5.

6 16. 15. 14. 13 12. 5 4 3. 2 1 0 Full load Partial load Outage Slip Boiler tube Total unplanned loss loss leaks losses (UCLF). Key insights Full and partial losses were the highest contributors with a total of of total UCLF for FY19 YTD. Outage slips contributed to the total UCLF. Boiler tube leaks also contributed significantly at of total UCLF. Note: All figures are year to date and unaudited 7 unaudited data). Source: Generation UCLF performance Analysis FY2019 YTD (14 Nov 2018. A 9 point recovery plan has been put in place to address our key operational challenges 1.

7 Fixing new plant 2 6. Fixing full load losses Fixing human capital and trips 3 7. Fixing units on long- Prepare for increased term forced outages OCGT usage 4 8. Partial losses and Prepare for rain Boiler tube leaks 5 9. Fixing outage duration Fixing coal stock piles and slips 1 Fixing new plant To reduce Full load losses from Spending on addressing known design errors Objectives billion Capex investment Established an expert SWAT team to guide recovery State of new units New build units are expected to have initial unreliability.

8 Especially Kusile, unreliability is even higher than expected. Experience from previous new builds (Majuba and Kendal) showed high initial unreliability followed by excellent performance Source: Wikipedia, Bathtub curve 2 Fixing full load losses and trips - To reduce Full load losses from Objective Description Optimize Relinking: a shift from centrally led approach procurement Improve usage of Local Purchase Orders at site level processes to Process enable swifter Actions purchases when required Improve planning, Maintenance Effectiveness Assessments (MEAs) for execution and online and offline works Maintenance effectiveness of Spares management optimisation (Online and maintenance Complete project to improve maintenance strategies and Offline) work packages 10.

9 3 Fixing units on long-term forced outages - To reduce impact of major incidents on UCLF. Description Expected return date High Pressure (HP) steam pipe failure on 10 October 18 Repair time Lethabo Investigation ongoing so required scope on HP pipework not between 6 and 12. Unit 5 yet defined months (600MW) planned outage scope to be executed during repair time Duvha On 23 August 17, turbine tripped on generator stator earth 6 November 2018. Unit 4 fault (600MW) Duration due to long lead-time for major components Auxiliary steam range pipe burst on 26 January 18 24 November Grootvlei Also experience Generator issues 2018.

10 Unit 2. Initial delay due to funding constraints (200 MW). Stator earth fault on 03 May 18 30 April 2019. Kriel Spare generator stator now on site (insurance and Unit 2 commercial process delays). (600MW) Next planned outage being executed during repair time. 11. 4 Fixing partial load losses - To reduce partial losses and boiler tube leaks planned outages for coal fired generating fleet until Nov 19. Key insights: 59 outages are planned for the coal fleet between Sep '18 and Dec 19 to address PLL's and maintain critical plant systems Next 12 months funding plan: R11,5b Capex 12 to 24 months funding plan: Capex Source: GPSS outage schedule for coal fleet (Nov 2018).