Power Outages in the Western Cape: input from Eskom, Regional Electricity Distributor, Cosatu & Provincial Government

Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
30 January 2005
POWER OUTAGES IN THE WESTERN CAPE: INPUT FROM ESKOM, REGIONAL ELECTRICITY DISTRIBUTOR, COSATU & PROVINCIAL GOVERNMENT

Chairperson: Mr E N Mthethwa (ANC)

Documents handed out
Eskom briefing on Western Cape Power Outages
Contingency Plan for March/April, 2006 possible power shortage by RED1
Western Cape Provincial Government briefing on recent Power Outages

SUMMARY
The Committee heard briefings by delegations from Eskom, the Regional Electricity Distributor called RED1, COSATU and the Western Cape Provincial Government on the recent power outages in Cape Town and the Western Cape. While Eskom’s briefing focussed on an explanation of causes and effects of the recent power outages, RED1's briefing detailed contingency plans for the possible electricity shortage in March/April 2006, when the unit two generator at Koeberg would have to be refuelled. COSATU’s briefing centred mainly on concerns relating to the restructuring of electricity distribution, while the Western Cape Provincial Government put forward proposals on issues relating to using electricity generation, supply and distribution as a springboard for economic development. Members focussed their questions on issues of maintenance, communication, monitoring and regulation and contingency planning.

MINUTES

Briefing by Eskom
Mr Jacob Maroga (Eskom Transmission Managing Director and Acting Chief Executive) explained that the Western Cape’s electricity was supplied by the Koeberg Nuclear Power Station and transmission transfers from the north. The latter carried 50% of the load when both Koeberg units were on-line, while the Gariep and Vanderkloof hydropower stations and the Palmiet Pumped Storage power station catered for peaking generation. During the planned maintenance outage of one of the Koeberg units, the transmission network’s load would increase to 75%. Peaking generation would be increased, while the gas turbines of Acacia, Port Rex and Cape Town (Foreshore) and the Steenbras pumped storage station would supply for emergencies.

The outage on November 11, 2005, was due to mechanical failure on the switchgear during switching operations in the transmission substation at Koeberg. Eskom and the municipalities reconnected most customers within ninety minutes. The outage on November 16 was caused by fire under the Muldersvlei-Droërivier line. The outage on November 23 was due to a controlled shutdown of Koeberg unit two due to concerns over chemical concentrations on a safety system.

After the return to service of unit two, the unit one generator experienced an earth fault on December 25 and was put under controlled shutdown. A foreign bolt was found in the generator. It would take a minimum of three months to repair.

Briefing by RED1
Mr Saleem Mowzer (RED1 Chief Executive Officer) noted that while the unit one generator at Koeberg was under shutdown, the unit two generator was due for refuelling in March/April 2006. This implied the possibility of a power outage during that period and the need for a contingency plan involving RED1, the City of Cape Town and Eskom.

In terms of electricity supply, the extent of the shortage would determine the supply apportionment between Eskom and from the embedded supply of the City. Outage rotation would be planned and executed by experienced system operators who were to be exchanged between RED1 and Eskom. Infrastructure availability would be ensured by determining the serviceability of high voltage equipment and by prioritising scheduled and routine maintenance, as well as demand side expansions and other processes. Staff would also be redeployed to effect speedier responses to equipment failure.

Customer relationships would be managed by better utilisation of the media, ensuring the serviceability of standby plants at critical complexes (such as hospitals) and bringing the Eskom aggregator in direct contact with the City’s largest electricity consumers.

Briefing by COSATU
Mr Mike Louw, Western Cape Regional Organiser, said that COSATU viewed the power outages as a symptom of the poorly delineated restructuring of electricity distribution. COSATU proposed the utilisation of normal legislative and consultation channels for this purpose, mentioning the National Economic Development and Labour Council (NEDLAC) specifically. In addition, COSATU was dismayed at the lack of response to its prior efforts to discuss problems around RED1 and issues such as cross-subsidising to benefit the poor.

COSATU also expressed its concern over the undue work pressure increased power outages exerted on electricity workers. Against this background, a shutdown caused by a foreign bolt in a generator was very serious and the conditions that contributed to this occurrence should be closely scrutinised.

COSATU was of the view that Eskom should be more proactive in pursuing alternative sources of electricity generation, and that this general apathy was evident from the fact that the Darling Wind Project was still not operational.

Briefing by the Western Cape Provincial Government
Mr Brandon Roberts (Head of Department: Economic Development in Office of the Premier) stated that extra capacity could be accessed by improving relationships between Eskom and stakeholders such as the Western Cape Provincial Government (WCPG). From the WCPG's side, the lack of access to reliable, up-to-date statistics on energy balances for planning purposes were of particular concern. The loss of electricity (8 to 20 percent) incurred through long distance transmission to the Western Cape made power generation within the province a matter of primary emphasis. Gas and additional nuclear power generating capacity was considered the best alternatives. In this regard a planned off-shore gas mining project by Forest Oil International was mentioned, as it could provide sufficient fuel for a minimum of 450MW for Cape Town and environs within eighteen months to two years, with further capacity resulting within two to three years.

The WCPG viewed greater utilisation of solar water heaters as a major component of its renewable energy generation target (fifteen percent). Given the cost of energy, the WCPG also saw the promotion of energy efficiency as critical. The price, reliability and availability of electricity supply were major criteria for foreign investment attraction. These expectations could perhaps be better met if Eskom gave greater weight to the alignment of its plans with regional and local players; especially insofar as it pertained to opening up the market for electricity generation and supply to independent players.

Discussion
Mr E Mthethwa (ANC) and Mr C Morkel (DA) commented that Eskom and its stakeholders needed to align themselves much better and improve their communication with each other.

Mr Morkel asked whether enough was being done to bolster base load generation as opposed to the utilisation of peak load generation. He asked whether there were any plans for further nuclear generators.

Advocate H Schmidt (DA) expressed his dismay at the lack of planning which he thought should have existed in dealing with the avoidance and occurrence of power outages, generator maintenance and failures and stakeholder alignment and communication. He also lamented the absence of the Department of Minerals and Energy as it was its task to peg target requirements against which current base load and peak load capacity could be measured. Advocate Schmidt also found the explanation of a foreign bolt in unit one of Koeberg suspect, and stated that if it was the case, the individual at fault should be pinpointed and dealt with.

Mr E Lucas (IFP) also probed the origin of the foreign bolt that damaged the unit one generator. He stated that the immediate unavailability of spares to repair the generator was unacceptable and gestured at supplier liability. Mr Lucas emphasised the growing demand for electricity. He wanted to know which form of power generation was most reliable. He endorsed the WCPG's suggestion of promoting solar water heating.

Mr C Molefe (ANC) emphasised the need for proper contingency planning, the growing demand for electricity and stakeholder communication.

Mr Molefe and Mr B Solo (ANC) also called for proper customer relationship management — especially insofar as it affected the poor. Mr Solo felt that lack of proper communication left the field open for negative pronouncements from detractors. He also expressed his concern with the standby supply of important consumers such as hospitals and Parliament.

Professor I Mohamed (ANC) questioned the origin and significance of the "foreign bolt" and the reliability and serviceability of the nuclear plant at Koeberg. He denounced Eskom for the apparent lack of care it showed for the equipment it was running and expressed his concern over the containment of nuclear waste.

Mr L Greyling (ID) asked whether the National Nuclear Regulator (NNR) had been brought in to do an independent investigation into the state of the Koeberg plant and the possibility that the breakdown of the unit one generator could have been caused by sabotage. He also asked whether the Koeberg Public Safety Forum was kept up to date with developments emanating from the events of the last months.

Referring to the Forest Oil International and solar heating proposals of the WCPG, and the wind turbines at Darling, Mr Greyling asked what Eskom’s plans were with regards to diversifying electricity generation. Favouring gas as a transitional fuel for electricity generation, he probed the future of the Athlone coal plant and the feasibility of converting it to a gas plant. Finally, Mr Greyling asked about the implications for the poor of the proposed postponement of new connections and the expected cost of the new repairs to Koeberg.

Mr P Hendrickse (NCOP; ANC - Western Cape) asked for an indication of the projected usage of electricity over the next five to ten years, coupled to the projected growth of the economy.

Mr Jacob Maroga (Eskom) assured the Committee that communication between Eskom and the City of Cape Town was ongoing, but acknowledged that there was a need for better communication between Eskom and all relevant stakeholders — particularly the WCPG. Alternative base load capacity in the Western Cape was a priority. With nuclear and gas being the major options, the location of a reliable and cost-effective source for the latter remained the biggest obstacle. Source diversity was also hampered by cost and security of supply, hence the heavy dependence on coal-generated power transmitted from Mpumalanga.

Mr Maroga stated that the recent problems at Koeberg could not be related to a lack of proper maintenance, but rather to attrition and natural causes. The last incident involving the foreign bolt was an exception and was viewed in a serious light — especially since, as a nuclear power station, Koeberg was also subject to international scrutiny. Eskom was a member of the World Association of Nuclear Operators and International Nuclear Power Operators and was subject to a bi-annual peer review process. Eskom has been recognised internationally repeatedly for the standard to which the Koeberg plant was being run.

Spares were kept for repairs, but economics dictated that full rotors and stators, such as were currently needed at Koeberg, could only be kept if they were actually in use. Maintenance projects and smaller parts did not present the same problem. Eskom did collaborate internationally in this regard. The scope of Eskom’s contingency planning was indeed tested by the frequency and nature of the contingencies of the last months, as well as the infrastructure and other limitations under which Eskom operate. Mr Maroga emphasised that the chain of events of the last months had an extremely low probability of reoccurring.

The standby capacity of critical structures was reviewed on an ongoing basis, and efforts in this regard were stepped up since the events of November and December 2005. The worst-case scenario was that winter would come and both units at Koeberg would be out of action. Contingency plans were geared at avoiding such a situation.

Mr Maroga acknowledged the need for consultation around the restructuring of electricity distribution, but denied a link between the restructuring and the events at Koeberg. He indicated that the Department of Minerals and Energy was at the helm of including independent power producers (IPP), and that the first IPP-run plant should be operational by 2009. No plans were currently afoot for additional nuclear plants. The cost of the repairs at Koeberg was currently estimated at R250 million.

Mr Phillip Dukashe (Eskom Nuclear Cluster General Manager) stated that the draft report on the damaged rotor and stator would be ready by the beginning of March, and that a final report would see the light by the end of March.

Mr S Mowzer (RED1) confirmed the existence of a positive relationship between RED1, the City of Cape Town and Eskom. He stated that each of these entities were indeed in communication with their respective customers, and that he and the Eskom CEO has briefed the Premier and the MEC for Local Government and Housing for the Western Cape on the state of affairs.

Mr Mowzer acknowledged the need to increase base load capacity over the medium to long term, but denied any shortages over the short term. He based the latter argument on the fact that capacity met demand even with one generator unit under shut down at Koeberg. He reaffirmed Mr Maroga’s denial of any link between the restructuring of electricity distribution and the power outages. He emphasised that alignment existed between RED1 and Eskom in terms of any contingency plans that were needed to deal with the months ahead, but did not provide any specifics. Interaction with critical structures brought to light that all hospitals in the city had standby generators that kicked in immediately when power outages occurred. RED1 and Eskom was also in contact with Parliament and were satisfied that the latter’s generator would come on-stream as required.

Dr L Rencorte (City of Cape Town Electricity Director) stated that the power outages of the last months caused a worsened environment for the electricity networks to operate under and also for staff members who needed to perform much more switching operations than was normally the case. Existing demand-side management techniques would have to be modified during such periods and this meant that new connections might have to be delayed, but this was seen as a last resort. The existing Athlone Power Station was not a feasible option for increasing base or peak load capacity.

Mr Brandon Roberts (WCPG) stated that the Department of Minerals and Energy was very helpful in promoting dialogue between the various spheres of Government. The WCPG was putting an energy strategy together which should be available at the end of the first quarter. He appealed to the Committee to play some role in taking the solar water heating proposal forward.

Mr Mthethwa again emphasised the need for proper communication between all stakeholders and then adjourned the meeting.