Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

Overview of Multi-Year Price Determination
2013/14–2017/18 (MYPD 3)
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uptake on other solutions such as demand-side management particularly among larger
consumers.
Eskom strongly supports ECS as a “safety net” or “insurance policy” to mitigate security of
supply risks. It supports a phased implementation approach, allowing for an initial simulation
phase during which ECS charges will be set at zero.
Given the urgency of the supply-demand situation, preparations need to start immediately.
ECS requires a number of legislative and regulatory measures to be implemented. A number
of operational implementation issues also need to be addressed to ensure success. Eskom
is engaging stakeholders to support it in unlocking these constraints.
ECS is an initiative driven by the DoE. However, Eskom will play an active part in the design
and implementation of the scheme.
5.3 Maintenance
One way in which Eskom has kept the lights on in recent years has been by shifting planned
maintenance work at its power stations, where possible. However, this was not an approach
that could be sustained, because it detracted from the performance of the generation fleet,
increased the possibility of shutdown due to issues such as boiler tube leaks, and added to
safety or environmental concerns. To avoid this outcome, in 2011/12 Eskom put measures in
place that significantly reduced the backlog of essential generation maintenance, from 36
scheduled generation maintenance jobs in May 2011 to 24 in March 2012. Its target is to
eliminate the maintenance backlog by the end of 2013.
The price increase in the MYPD 3 application includes a budget for planned maintenance
(see Sustainability of the industry for a breakdown of projected costs). Failure to address this
maintenance would have financial consequences for Eskom‟s future revenue needs and its
ability to deliver on its mandate. These consequences include:
Planned maintenance costs would be overestimated due to insufficient downtime
to do the maintenance.
Operational efficiency and energy availability would decrease due to lack of
maintenance, with a corresponding increase in unscheduled maintenance costs
due to unforeseen breakdowns.