Eskom overview and Eskom Business In North West
Eskom overview and Eskom Business In North West Province Group Chief Executive - Eskom Presentation by Brian Molefe | November 2016 CONFIDENTIAL
Contents Content 1. Eskom overview 2. Overview of Eskom Business In North West 3. NWOU OU Performance Highlights 4. Electrification program 5. Capital investment 6. Procurement opportunities 7. Conclusion
479 days without load shedding 30 November 2016 3
Key highlights for the period ended 30 September 2016 Financial performance • EBITDA of R 31. 5 billion, representing an increase of 23% compared to the comparative period • Cost savings of R 8 billion achieved • Cash generated from operating activities increased by 39% to R 31. 9 billion compared to the comparative period • Liquid assets of R 43. 8 billion at 30 September 2016 • 86% of funding for 2016/17 has been secured • 28% of funding for 2017/18 has been secured 4
Key highlights for the period ended 30 September 2016 Operational performance • Generation plant performance improved with EAF of 78. 49% • Medupi Unit 5 synchronised to the grid on 8 September 2016 • Ingula Units 4, 2 and 1 in commercial operation on 10 June, 22 August and 30 August 2016, adding 999 MW peaking capacity • Ingula Unit 3 was synchronised to the grid on 29 October 2016 after repairs were completed • 53 km of lines installed and 1 050 MVA transformers commissioned for Transmission 5
Key highlights for the period ended 30 September 2016 Socio-economic performance • 99 869 additional households were electrified compared to 41 778 households for the comparative period, an increase of 139% • Procurement from B-BBEE compliant suppliers was 65% • Local content contracted more than 80% • R 75 million committed to corporate social investment, impacting 120 246 beneficiaries 6
Bokone Bophirima (North West): The Province North West province, South Africa • North West is known as the Platinum Province for the wealth of the metal it has underground • Potchefstroom and Klerksdorp are the biggest cities in the province; other main towns are Brits and Rustenburg • Most economic activity is concentrated in the southern region between Potchefstroom and Klerksdorp, as well as Rustenburg and the eastern region, where more than 80% of the province's economic activity takes place. • North West has a number of major tourist attractions, including the internationally famous Sun City, the Pilanesberg National Park, the Madikwe Game Reserve and the Rustenburg Nature Reserve. 7
Eskom’s Key Customers In North West • The economy of the North West Province is dominated by the platinum mining sector, followed by finance, services and trade • Electricity is an enabler for the mining industry as 10% -28% of the mine operating cost depend on the operation. • The Key Accounts North West contributes 9% of the total Eskom Sales. • Eskom’s contracted demand for North West Key Accounts is 3215 MVA. • We have planned to sell a total of 16 449, 84 GWh for the financial year 2016/17 • The above generates net revenue of R 12. 430 Billion. • Our Q 2 Sales are sitting at 9620. 70 GWh 8
North West Province Profile Legend Transmission New Main Transmission Substation 66 k. V line 400 k. V Line 275 k. V Line 132 k. V Line 88 k. V Line • Load demand = 3304 MW • Number of MTS = 11+ 1 (Ngwedi) • No & km of EHV lines = 28 & 2197. 6 km Distribution Rustenburg • • Ngwedi MTS Watershed MTS Human Resources North West • Distribution = 1340 • Customer Services = 124 • Transmission = 90 • Other Support Services = 69 Edwardsdam Delareyville Vryburg Area Mookodi MTS Number of substations = 209 Km of network = 34 987 km Customer Services • No. of customers served = 484 407 • No. of Municipalities Serviced = 18 Local Municipalities Mafikeng Vesel Brits/Hennops Klerksdorp Ottosdal Economic activity Schweizer-Reneke • Mining (41%), Industrial (27%), Re-distributors (22%) Commercial (3%), Agricultural (4%) & Residential (3%) Taung Area 9
Key highlights for the period ended 30 October 2016 Technical Performance • Plant Maintenance Health Index – performing at Ceiling • Quality of Supply performance is stable • Planned Overtime is maintained at 0 = for approximately 20 months • Feeder Energy balancing is improving month on month • Defects clearance on feeders completed on the 56 focus feeders 10
Key highlights for the period ended 30 October 2016 Socio-economic performance • Electrification performance is on target – with over 13000 connections achieved YTD, compared to 1693 at the same time last year – translating to 67. 5% of the 2016/17 programme being completed • Procurement from B-BBEE compliant suppliers is at 83% • More future focus on contracting local based contractors • Ngwedi and Mookodi Integration Projects are on track • On Safety – The Operating Unit is driving public safety initiatives • Partnered with Matlosana Local Municipality to rebuild James Motlatsi Stadium in Orkney near Klerksdorp (Project completed in two (2) weeks 11
Ipopeng Village “Switch On” (Oskraal Madibeng) “Re leboga Eskom ka motlakase, re tla kgona go apaya le bana ba balele di exam” these are the words of Ms Msesenyane of Ipopeng near Oskraal in the Madibeng Local Municipality 12
NWOU 2016/17 ELECTRIFICATION STATUS Category Households Farm Worker Houses Infills Households 2015/16 (Rollovers) TOTAL Q 1 Target TARGET 3 320 ACCUMULATIVE 3 320 ACTUAL (Accumulative) 5 073 YE YTD Target Actuals Connections 11 209 4 946 44 4 4 853 4 984 3 179 3 223 19 285 13 157 Q 2 Target 6 570 9 890 10 767 Q 3 Target 6 765 16 655 13 157 Q 4 Target 2 630 19 285 13
North West Distribution Constrained Network Line minimum voltage Minimum Voltage <=93% < Min V< 95% >95% 14
Distribution Infrastructure Expansion Plan up to 2019 Legend New Main Transmission Substation Existing HV/MV substations to be upgraded DPA/CRA new substation/line projects DRA new substation/line projects Zeerust Chrome Marico minerals Moruleng Manyane Vaalkop Pumps Ledig Mogwase Gopane Mine Bakubung Impofu Ongin Styldrift Ngwedi Boschkopie Lehurutshe Sunrise Silverkraans Lethabong Swartruggens Madibeng Zeerust Munic 400 k. V Line 275 k. V Line 132 k. V Line 88 k. V Line Straatsdrift Vessel Mmabatho main Unit 13 Mafikeng Main Montshiwa Mmabatho Bulk Mahikeng east Lothlakane Sephaku Mokalaka Edwardsdam Heiningvlei Ruighoek Kgetleng river Coligny Tlhabolongang Phahameng Klerksdorp Ganyesa Delareyville Ottosdal Kaalput Kalput Havelock Vryburg Bophirima Schweizer-Reneke Mookodi Lykso Mimosa Magopela Pering Pitsong Norlim Reivilo PLANNED SCOPE HV Line Length (km) New Substation (No. ) Upgrade Substation (No. ) No. of Transformers Installed Capacity (MVA) Do. E funded HV (MVA) NEED 1825 21 46 88 9070 60 15
North West Universal Access Program District municipality 2014/15 2015/16 2016/17 2017/18 2018/19 Actual Gazetted Planned Bojanala Platinum 7231 5463 7800 4703 4344 Ngaka Modiri Molema 8081 5120 3217 4832 7471 Dr. Ruth Segomotsi Mompati 4526 3549 4898 2203 410 Dr. Kenneth Kaunda 1777 697 191 171 3200 Total 23889 14829 16106 11916 15425 Progress on current Electrification program Total number of houses connected between 1 April and 30 October are 13024. Electrification Program to be completed in December 2016 before Christmas for beneficiaries. 16
Provincial Electrification Backlog District municipality Backlog Bojanala Platinum 19656 Dr. Kenneth Kaunda 10846 Dr. Ruth Segomotsi 7004 Ngaka Modiri Molema 9500 Total 47006 • North West province has connected a total of 51742 houses over a 3 year period which never had electricity before. Expenditure and investment plan- electrification FY 2014/15 2015/16 2016/17 Rm R 345, 217. 923 R 369, 839. 640 R 279, 646. 000 2017/18 2018/19 R 304, 694. 000 R 332, 946. 000 17
Distribution North West Capital Expansion Plan Expenditure and investment plan- Core Projects Project Category Direct Customer 2016/17 (Plan) 2016/17 (Actual) 2017/18 2018/19 2019/20 R 146 902 274 R 141 638 645 R 149 481 230 Strengthening R 175 874 000 R 82 559 420 R 198 726 012 R 225 418 230 R 179 746 458 Refurbishment R 140 222 000 R 17 173 309 R 128 776 990 R 124 162 805 R 167 437 120 Total R 246 635 003 R 474 405 276 R 491 219 680 R 496 664 808 R 127 059 178 R 443 155 178 18
North West Province Procurement spend performance Excellent Good Eskom Company – Commercial KPIs Total Measurable Procurement Spend Average FY 17 Targets Poor YTD - Sep 2016 n/a R 529 127 119 n/a B-BBEE attributable spend 80% R 473 918 228 89. 57% BWO attributable spend 12% R 115 416 792. 32 27. 15% BO attributable spend 40% R 253 755 086 47. 96% BYO attributable spend 2% R 16 353 801 3. 09% BPw. D attributable spend 1% R 0. 00% QSE attributable spend 15% R 134 109 001 25. 35% EME attributable spend 15% R 45 462 794 8. 59% R 132 900 875. 63 25. 12% Spend to Non-Compliant suppliers n/a 19
Eskom has excess capacity of up to 8 000 MW after evening peak, as a result of improved Eskom performance Illustration of the demand profile MW 35000 34000 33000 32000 31000 30000 29000 28000 27000 26000 25000 24000 23000 22000 21000 20000 00: 00 01: 00 02: 00 03: 00 04: 00 05: 00 06: 00 07: 00 08: 00 09: 00 10: 00 11: 00 12: 00 13: 00 14: 00 15: 00 16: 00 17: 00 18: 00 19: 00 20: 00 21: 00 22: 00 23: 00 Average Demand Profile
Station Build-up for the Peak Demand day of the week 2020 -11 -03 21
Nuclear Fission U-235 Pu • Each fission of a parent atom produces a different set of fission product atoms Th • The fission products are statistically predictable.
Pressurised Water Nuclear Reactor
Eskom Challenges in North West q Increasing Municipal Debt q Public Incidents q Theft of network assets which also lead to electrical contacts and loss of life q Illegal Connections and Meter Tampering resulting to energy losses, loss of revenue, overloaded networks q Land ownership and un-formalized areas resulting in delays in Infrastructure and Electrification projects 24
Conclusion • Eskom’s turnaround continues to stabilise the organisation: o Improved Generation performance o New build programme delivering to plan o Financial profitability and liquidity restored • Excess capacity currently exists and is projected to grow steadily over the next three years • Eskom calls on customers to increase consumption and to engage with Eskom proactively to take advantage of the excess capacity situation 25
Thank you!!
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