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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Ageing assets and lack of completion of design-specified maintenance would
result in an increase in insurance costs.
Lack of maintenance would increase the risk of catastrophic plant failure, which
would incur considerable cost.
Lack of maintenance on ageing plants would result in greater use of open-cycle
gas turbines, which are more costly to run in terms of primary energy
expenditure.
It is therefore more cost effective to pay for maintenance in the short and medium term than
to pay for not doing maintenance in the long term.
It is also important to keep up with planned plant maintenance to improve the predictability of
plant performance as measured by the EAF. EAF is a measure of a plant‟s availability to
provide electricity minus external energy losses not under control of plant management and
internal non-engineering constraints.
The capacity projections used in the MYPD 3 application rest on EAF forecasts that have
been confirmed by analysis of stations‟ health by Eskom investigators and engineers from
the German utility RWE, one of Europe‟s top electricity and gas companies. The analysis
recommended that additional maintenance be done to improve or sustain plant integrity. This
maintenance has been added to the EAF forecast.
5.4 Country needs excluded from application
5.4.1 Implementing IRP 2010 capacity
Even though Eskom and IPPs are currently building additional generating capacity, this will
not be enough to address the country‟s long-term security of supply. When Kusile power
station is fully commissioned, Eskom will operate a 43,000MW (43GW) fleet of
predominantly coal-fired power stations. Over the next two decades to 2030, the fleet will
lose 16,000MW (16GW) of capacity, requiring the decommissioning of some plants.
Between 2030 and 2040, a further 21,000MW (21GW) will be lost. By 2040, only 6,000MW
(6GW) of Eskom‟s current fleet will remain.