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

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Overview of Multi-Year Price Determination 2013/14–2017/18 (MYPD 3) Page 30 of 144 5,500MW of IPPs in the window up to 2017/18. This culminates to approximately 9,200MW of IPP capacity in the MYPD3 period (2013/14 to 2017/18). A scenario assuming 100% Eskom build is also provided. The allocations are based on the capacity of 45,637MWs not yet under construction shown in IRP2010.The example assumes a 1.9% compound average growth rate for electricity sales over the MYPD 3 period. Thereafter, sales growth aligns with IRP 2010 projections (2.9% average) up to 2030. Table 9: Migration from the 65% to 100% build scenario The IPP total capacity of 13 791MWs comprises the base IPPs of 9210MWs, DoE peaker of 1020MW, co-generation of 960MW and hydro imports of 2609MW. These capacities cannot be allocated to Eskom. Migration from 65% to 100% scenario Total MWs 65% scenario 28,737 MWs previously built by IPPs 2,700 Total MWs 100% scenario 31,437 1.5.1 Key findings of capacity expansion to 2030 Eskom has approached the long term implication of delivering on the country‟s IRP 2010 capacity plan by compiling two scenarios where the allocations to Eskom‟s build capacity are either 65% or 100% of IRP2010 beyond the MYPD3 period. In compiling these scenarios the following key principles where assumed: Capacity and capital expenditure: Eskom IPPs Capacity expansion until 2030 is based substantially upon the IRP 2010, taking into account timing and capacity deviations based on recent guidance received from government and certain technical assumptions. 16,491 (2,700) 13,791
Price path: Funding: Other: Overview of Multi-Year Price Determination 2013/14–2017/18 (MYPD 3) Eskom supplies its own transmission and distribution infrastructure. Page 31 of 144 The total capital expenditure excludes that related to municipal distribution infrastructure. No replacement capacity beyond 2030 is catered for and hence this impact is excluded from the financial implications in the latter years In the 65% scenario, IPP‟s build capacity of 9210MWs during the MYPD 3 period (as requested by DoE) and the total IPPs equate to approximately 35% of capacity not yet constructed. The remaining 65% capacity is built by Eskom In the 100% scenario Eskom will build all capacity required by IRP 2010 beyond the 9210MWs of renewable IPPs The difference between what Eskom builds beyond the MYPD 3 period in the 100% scenario when compared to the 65%scenario is only 2,700MWs. Hence the financial impact is insignificant and the results are similar for both scenarios. The key results are summarised below The price path assumed over MYPD3 period will allow Eskom to reach standalone investment grade status by 2017/18 and maintain it thereafter. The return on assets (ROA) considered is the lower of the 8.16% as determined by Nersa during the MYPD 2 and the ROA required to maintain investment grade. Sales growth will be 1.9% for the MYPD 3 period, after which it will increase to IRP 2010 targets until 2030, after which it will return to 1.9% per year. Funding of the capacity expansion for the generation and network requirements is provided through debt and tariffs only. Debt capacity is assumed at R60bn per annum in 12/13 real terms. No equity injections are assumed throughout the period to 2030. IPP contracting periods are assumed to be between 15 to 20 year for renewable technologies and 40 years for coal technologies. No carbon taxes will be implemented over the period to 2030.
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Page 3 and 4: Overview of Multi-Year Price Determ
Page 5 and 6: EXECUTIVE SUMMARY Introduction Over
Page 9 and 10: ESKOM PROFILE Overview of Multi-Yea
Page 21 and 22: 1.4.2 Independent power producers O
Page 29: Overview of Multi-Year Price Determ
Page 37 and 38: 2 THE MYPD PROCESS Key points Overv
Page 39 and 40: Electricity Pricing Policy Overview
Page 41 and 42: Accomplishments during MYPD 2 Overv
Page 43 and 44: Base case application Overview of M
Page 59 and 60: Environmental levy Overview of Mult
Page 63 and 64: Table 17: IPP projects (costs and e
Page 67 and 68: Cost of cover Overview of Multi-Yea
Page 69 and 70: Operating efficiencies target Overv
Page 73 and 74: 3.5.2 Carbon tax Overview of Multi-
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Overview of Multi-Year Price Determ
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INVESTMENT GRADE RATIOS CAPACITY AN
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Simplify tariff structures Modify s
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7 CONCLUSION Overview of Multi-Year
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Transmission Overview of Multi-Year
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Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

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