Central Region Brief on Load Shedding DRAFT 2 18 Jan 2008 by Hugh McGibbon

1. Central Region Brief on Load SheddingDRAFT 2 18 Jan 2008 by Hugh McGibbon

2. Communicate more on Load Shedding • Customers get angry with load shedding because it affects their lives and impacts their profit • This anger can be softened by: • understanding the situation • communicating when load shedding will occur • Understanding the situation: • the problems causing load shedding • what Eskom is doing to manage the situation • what the customers can do to assist • Eskom staff need to take every opportunity to communicate on this topic by telling friends, family and customers • The more people who understand .. the better we can manage 2

3. Causes of the shortage of Power capacity • Govt policy in the late 1990’s: to attract new entrants into the power supply industry • These did not materialise & government accepts accountability for these mistakes • President Mbeki has made a public apology that the Government should have taken Eskom’s advice to build power stations sooner • Starting to build new capacity too late • It takes 6 years to build a new Coal fired power station. The construction of Medupi was started in 2007 and the first unit is expected to start generating in 2012. • The Economy grew faster than expected • This is a positive challenge facing Eskom as a booming economy is good for the country • Eskom’s plant is aging and break downs are more frequent • Despite maintenance, older equipment fails more often. • Other factors • Extreme wet weather makes coal handling difficult and this slows production. • Extreme cold and hot weather leads to high peak demand. The bottom line is there is insufficient power. We predict this will be with us till at least 2012 so we need to manage it. 3

4. What Eskom does when there is a power shortage • Make use of 2 000 MW interruptible load on contract • Demand Market Participation – customers who we “pay” to switch off 865 MW • Curtailment of supplies to other countries when we are short of power (However it must be stressed that SA is a net importer of electricity) • Run all available plant • Use of load shedding to prevent system collapse • Use of the power alert on national TV that indicates the state of our national power availability and asks customers to reduce load in real time (Demand Side Management). • Send out SMS’s to stakeholders and if possible the affected customers 4

5. Customers can assist by reducing load • Customer’s Demand Side Management (DSM) will be critical in reducing the demand in the next few years. • National awareness of DSM will be increased in the upcoming months • Free Compact Fluorescent Bulbs • Incentives for new Solar Water Heating Installations • Geyser controls • The target for DSM is an average savings of 400 - 800MW per year for the next six years (3000MW cumulative). 5

6. What is load shedding • Proactively switch off load until there is a balance between the available generation and the load • If we did not shed the whole power network would switch off & nobody would have power • We attempt to rotate the areas affected every two hours (with 30 min overlap) • An area may be affected more than once a day with a 2 hour outage • We try and share it across all customers, but attempt to avoid loads that would affect transport as this is one of the most disruptive side effects of no power. • It is impossible to say when and how much Eskom plans to shed. Eskom does not plan for shedding to occur and we have very little warning ourselves due to: • A load increase due to weather • A plant operational problem 6

7. The Load Shed extent in perspective • Eskom’s capacity: 36400 39194 MW • Typical daily statistics (17 Jan 2008) • Load: 32113 • Planned Outages: 3345 • Delayed return of plant: 1115 • Partial Plant Reductions: 1230 • Unplanned Outages: 2652 Total Out: 8342 Shortage: 4055 1261 7

8. Central Region Load Shedding Track Record • In central we shed power on the following days this year: • 18 January 2007 for most of the day • 9 October 2007 300MW between 11am and 9pm • 10 October 2007 500MW between 06:30am and 9pm • In December 2007 for a few days • Starting on 10 Jan 2008 we have had the worst few days of load shedding in Central region, shedding up to 600MW 8

9. Load shedding schedules • These are predetermined set of two hour (with 30 min overlap) schedules that give the time we would shed each town given the extent of the shortage (here we refer to Stage 1,2 or 3) • WHEN we need to shed we try and stick to these schedules • Customers know what to expect is shedding starts • The schedules are on our web site www.eskom.co.za • City Power has the same approach and we publish their schedules on our web site as well • We will be refining these schedules all the time, so please always refer to the latest on the web. • The stage of shedding– national figures (Central Allocation) • Stage 1: up to 1500 MW (405 ) • Stage 2: up to 3000 MW ( 810) • Stage 3: up to 4500 MW (1215 ) 9

10. How does Load shedding work practically in Central Region • Our Engineering team draws up the schedules in advance • When national control calls for manual shedding, Central Region Control Centre staff switches substation feeders off & on remotely in accordance with these schedules • If the remote switching fails, we send out technicians to do this manually and in these case we may over-run the scheduled times. (We then communicate via SMS, & press that load shedding is taking place and what stage we are in) 10

11. Load Shedding Information Eskom Provides • Stakeholders: • Eskom Staff • Public Stakeholders (Press, Munic Officials, Councillors, etc) • Customers 2. The information that is needed Eskom staff and Public Stakeholders • Load shed warnings • Load shed events • Exceptions to the schedule Customers • When they are actually being shed -- they just need the time off / time on (this is possible but is not done in most cases yet) 11

12. Load Shedding Information Requirement (Cont.) 3. Mechanism of communication. • The only practical current channel for proactive push info is SMS • The best reactive (query ) channel is interactive voice response which we plan to put in place • The Web is fine as repository but is impracticable for mass communication. 4. Who is responsible to provide the above information • There is a 24hr communications post at the Work Management Centre • Apart from the load shedding information this person also sends out information about major outages 5. How does it work? • The WMC Communications person uses pre set up SMS lists to send out information to the various stakeholders 12

13. CASE STUDY OF EXCELLENT COMMUNICATION ABOUT LOAD SHEDDING28 November 2007 (edited) 13

14. General Load shedding communication • Published on the Eskom website • Flyers in bills (..alternatives for prepaid and municipal customers) • Hold forums (meetings) with all customers • SMS campaigns can be used • Schedules to be available to: • Local radio stations • Regional Chamber of commerce • Metros with whom we integrate our schedules • Call centres briefed access to website information 14

15. What Eskom is doing in the medium term • Mothballed powers stations are being brought back on stream • Gas Turbine Plants are being built. Small and very expensive, but construction period is less than two years. • Facilitating co-generators • Implementation of a Demand Side Management (DSM) program to reduce load. 15

16. What is Eskom doing in the medium term: The following old Power Stations are currently being re-commissioned: Thefollowing new Power Stations are currently under construction: 16

17. Long term Plans • The following Power Stations are currently being planned: 17

18. Future Prediction • The following slides show the weekly outlook for 2008 • The matrix shows the possible unplanned plant under three load scenarios • It assumes all available capacity is available to generate over evening peak • It assumes all gas turbines are generating and that for the evening peak hour all pump storage and hydro generation units available are generating • If this does not occur there is a higher probability of utilising the remaining emergency reserves such as interruptible loads (IL) • Various colours show chance of Shedding: • Green – No additional means are needed to manage the load • Yellow – Possibility of using Open Cycle Gas Turbines (OCGT)s and Demand Market Participants (DMP) and/or Generation above the maximum capability rating (EL1) • Orange – Almost definitely use OCGT and some DMP/EL1 • Red – Use OCGT and most if not all of the IL • Brown - Manual load shedding 18

19. How do we tell the difference between a power fault and load shedding? • During a load shed it is not possible to know if it is a fault or a planned shed except to refer to the published schedules. However if an outage goes on longer than the published time, it should be treated as a fault. • We have the case in Sunninghill where a whole shopping complex was out from 09:00, which coincided with the published load shedding schedule, till midnight because whenever they called the Contact Centre they said the whole area was out and our staff assumed it was load shedding. • Customers must always check the load shedding schedules and any outage not coinciding with these MUST be reported as a fault. Do NOT let the Eskom staff tell you it is load shedding. • Eskom staff must ALWAYS assume it is a fault unless it coincides with confirmed load shedding. 19

20. CONCLUSION • The power system will be tight for the next five years • Load Shedding has started & it is essential to manage the shortage • Our Capital Expansion program is taking shape • The price of electricity will increase in real terms (above CPI) to pay for the new stations but all customers should try not to spend more on electricity – just use less • A spin off is it will encourage the more efficient usage of electricity • We need the co-operation of all stakeholders, so communicating this message is essential 20