Medium-term System Adequacy Outlook 2017 to 2021 - 31 July 2017 - Nersa
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Medium-term System
Adequacy Outlook
2017 to 2021
31 July 2017Contents
1. Overview ................................................................................................................ 3
2. Introduction ............................................................................................................ 3
3. Methodology and approach .................................................................................... 3
4. Assumptions ........................................................................................................... 5
4.1 Demand forecast ............................................................................................... 5
4.2 Existing and committed supply resources ......................................................... 7
4.2.1 Eskom installed capacity............................................................................. 7
4.2.2 New build commercial operation dates ....................................................... 8
4.2.3 Non-Eskom capacity without the REIPPP................................................... 9
4.2.4 REIPPP..................................................................................................... 10
4.2.5 Demand-side management....................................................................... 10
4.3 Eskom plant performance ............................................................................... 10
5. Modelling scenarios.............................................................................................. 12
6. Results and conclusion ........................................................................................ 13
7. Glossary and abbreviations .................................................................................. 14
List of figures
Figure 1: MTSAO methodology .................................................................................. 5
Figure 2: Energy demand forecast ............................................................................. 6
Figure 3: Comparison of historical and forecast demand ........................................... 7
Figure 4: Plant performance for July 2017 MTSAO .................................................. 11
Figure 5: April 2016 and July 2017 MTSAO, % EAF Comparison ............................ 11
Figure 6: Scenarios Considered ............................................................................... 12
Figure 7: Forecasted excess capacity (MW) from 2017 to 2021 .............................. 13
List of tables
Table 1: Adequacy metrics ......................................................................................... 4
Table 2: Energy demand forecast comparison in GWh .............................................. 6
Table 3: Eskom installed capacity .............................................................................. 7
Table 4: Medupi Power Station unit commercial operation dates ............................... 8
Table 5: Kusile Power Station unit commercial operation dates ................................. 9
Table 6: Non-Eskom supply sources, including imports (MW) ................................... 9
Table 7: REIPPP committed capacity....................................................................... 10
21. Overview
The South African Grid Code – System Operation Code, Version 9.0, requires “on or
before 30 October of each year, the System Operator shall publish a review (called
the ‘Medium Term System Adequacy Outlook’) of the adequacy of the Interconnected
Power System (IPS) to meet the long term (5 year future) requirements of electricity
consumers”. This review will be limited to the adequacy of the generation system for
the Republic of South Africa.
At the request of NERSA, Eskom System Operator has produced a mid-year view of
the Medium-term System Adequacy Outlook (MTSAO) for the period 2017 to 2021.
This is not a comprehensive study, but only investigated a limited number of future
scenarios. A more comprehensive MTSAO covering the period 2017 to 2022 as per
the Grid Code requirements will be published in October 2017. The October MTSAO
will consider inputs and comments by NERSA and other interested parties.
2. Introduction
The MTSAO provides a statement of generation adequacy to meet the expected
electricity demand for the next five years (calendar years 2017 to 2021). The adequacy
to transmit and distribute electricity does not form part of the MTSAO.
The study determines the adequacy of the system to meet the expected demand of
the country, made up of a combination of local consumption and exports. This demand
is satisfied by a combination of all generation resources licensed by NERSA, imports,
and demand-side management resources.
3. Methodology and approach
The South African IPS is assessed based on the system adequacy metrics, as shown
in Table 1 below. The adequacy metrics are chosen to provide information on the
operational capacity and energy adequacy of the generation system to meet expected
demand. The threshold for each of the metrics is set at the point of least total cost to
the consumer.
The adequacy metrics, as shown in Table 1 below, indicate both capacity and energy
contingencies. Capacity-type contingencies, on the one hand, look at unexpected load
increases, short-duration events (hours), as well as just sufficient capacity to supply
demand, and lead to imbalances between supply and demand. Energy-type
contingencies, on the other hand, look at higher-than-forecast load growth or loss of a
large supply source, longer duration (weeks/months), as well as just sufficient
baseload plant to supply load on a continuous basis, and lead to imbalances between
supply and demand.
3Table 1: Adequacy metrics
The system is deemed adequate only if all system adequacy metrics in Table 1 above
are satisfied. Should any of the adequacy metrics not be met, additional resources are
added, as shown in Figure 1; these resources are quantified in terms of baseload, mid-
merit, and peaking capacity in MW.
4Figure 1: MTSAO methodology
Available generation and demand response resources, both existing and new when in
commercial operation, are dispatched to meet expected demand on an hourly basis
for all hours in the study period. The dispatch is done on a least-cost basis and adheres
to all system requirements (demand and reserves), resource constraints (generator
capabilities), and the generator/demand response owner dispatch regime.
4. Assumptions
Key assumptions are based on demand forecast, existing and committed supply
resources, and plant performance.
4.1 Demand forecast
Two country-level demand forecasts were developed internally in Eskom, namely, the
moderate growth demand forecast and the high demand forecast, shown below in
Figure 2 and Table 2. The moderate growth forecast provides the base case, which
has an average growth rate of 2.16%. The high demand forecast has an average
annual growth rate of 2.8%. The South African actual energy demand for the 2016
calendar year was 243.94 TWh, with a growth rate of -0.3% relative to 2015.
5Energy Demand Forecast
275 3.50
270 3.00
2.50
ENERGY GROWTH RATE (%)
265
ENERGY (TWH)
2.00
260
1.50
255
1.00
250
0.50
245 0.00
240 -0.50
2015 2016 2017 2018 2019 2020 2021
CALENDAR YEARS
Moderate Growth Rate High Growth Rate Moderate
High April 2016 MTSAO Forecast
Figure 2: Energy demand forecast
The moderate growth forecast takes account of current economic conditions, and
forecasts increase in demand as a result of Eskom’s drive to increase sales both
locally and across the border.
January 2016
Moderate growth High
MTSAO
2017 246 500 246 500 248 607
2018 250 100 250 200 251 730
2019 256 100 256 500 252 532
2020 263 300 264 200 253 416
2021 269 300 272 100 252 826
Table 2: Energy demand forecast comparison in GWh
The South African electric power system was characterised by load shedding from as
far back as 2008 up to 2015. This was due to a higher plant failure rate amid slippages
in commissioning new committed capacity, which reduced available generation supply
to meet demand.
Figure 3 below shows that actual demand has remained practically the same since
2008 due to system constraints, load shedding, slow economic growth, higher prices,
and energy efficiency measures that have been implemented by the industry since
2008.
6Historical Energy vs Energy Demand Forecast
300 0.08
250 0.06
200 0.04
Growth Rate [%]
Energy [TWh]
150 0.02
100 0
50 -0.02
AAR (1990-2007): 3.09% AAR (2008-2016): -0.49%
0 -0.04
1986
2004
1980
1982
1984
1988
1990
1992
1994
1996
1998
2000
2002
2006
2008
2010
2012
2014
2016
2018
2020
Calendar Years
Actual Energy Growth Rate Moderate Growth Rate High Growth Rate
Actual Energy Moderate Growth High
April 2016 MTSAO Forecast
Figure 3: Comparison of historical and forecast demand
4.2 Existing and committed supply resources
Generation resources and demand-side initiatives are both used to meet the forecast
demand. The capacities of the generation resources are, furthermore, grouped in
terms of Eskom installed capacity, new build commissioning dates, non-Eskom
capacity without the Renewable Energy Independent Power Producer Programme
(REIPPP), and REIPPP capacity.
4.2.1 Eskom installed capacity
Total Eskom installed capacity consists of coal, nuclear, pumped storage, diesel,
hydro, and wind. For the purposes of the MTSAO, a conservative view was taken that
coal-fired power stations would reach the end of their economic live after 50 in line
with the IRP2010. Table 3 depicts the Eskom installed capacity over the study horizon,
but excludes Medupi and Kusile.
72017 2018 2019 2020 2021
Coal 35 795 35 795 35 795 35 238 34 307
Nuclear 1 860 1 860 1 860 1 860 1 860
Pumped storage 2724 2 724 2 724 2 724 2 724
Diesel 2 409 2 409 2 409 2 409 2 409
Hydro 600 600 600 600 600
Wind 100 100 100 100 100
43 488 43 488 43 488 42 931 42 000
Table 3: Eskom installed capacity
4.2.2 New build commercial operation dates
The official commercial operation dates (CoDs) for Medupi and Kusile are a blend of
P50 dates for the first three units and P80 for the last three units. The study also used
the expected CoDs, based on the current construction performance of the New Build
Programme, as a scenario.
The current construction performance of new committed generated capacity has
resulted in full commercial operation of Ingula, earlier than assumed in the previous
MTSAO study, commercial operation of Medupi’s Unit 5, and earlier synchronisation
of Kusile’s first unit, further increasing available supply.
April 2016 MTSAO
Station unit Official CoD Expected CoD
CoD
MEDUPI
Unit 6 Commercial Commercial Commercial
Unit 5 Commercial Commercial 2018-March
Unit 4 2017-Dec 2017-Dec 2018-July
Unit 3 2019-Jun 2019-Jun 2019 Jun
Unit 2 2019-Dec 2019-Dec 2019 Dec
Unit 1 2020-May 2020-May 2020-May
Table 4: Medupi Power Station unit commercial operation dates
Table 4 above and Table 5 below show that, relative to the April 2016 MTSAO CoD
submission, Medupi Unit 5 added additional capacity to the grid earlier than projected
in April 2016, and the commercial operation of Kusile Unit 1 was brought forward.
8April 2016 MTSAO
Station unit Official CoD Expected CoD
CoD
KUSILE
Unit 1 2018-Apr 2017-Sept 2018-July
Unit 2 2019-Apr 2019-Apr 2019-July
Unit 3 2020-May 2020-May 2020-Aug
Unit 4 2021-Mar 2021-Mar 2021-Mar
Unit 5 2021-Nov 2021-Nov 2021-Nov
Unit 6 2022-Sep 2022-Sep 2022 Sep
Table 5: Kusile Power Station unit commercial operation dates
4.2.3 Non-Eskom capacity without the REIPPP
Table 6 depicts the non-Eskom and cross-border import capacities assumed in the
study and is based on the latest Eskom and NERSA information.
2017 2018 2019 2020 2021
Kelvin 160 160 0 0 0
Sasol Infrachem coal 125 125 0 0 0
Sasol Synfuel coal 600 600 600 600 600
DoE Peaker 1 005 1 005 1 005 1 005 1 005
Other gas 140 140 140 0 0
Sasol Infrachem gas 175 175 175 175 175
Sasol Synfuel gas 250 250 250 250 250
Cahora Bassa 1 548 1 548 1 548 1 548 1 548
Mondi 144 144 144 144 144
Other cogen 140 140 140 140 140
Other hydro 12 12 12 12 12
Other wind 5 5 5 5 5
Sappi Ngodwana 174 174 174 174 174
Steenbras 180 180 180 180 180
Colley Wobbles 65 65 65 65 65
Table 6: Non-Eskom supply sources, including imports (MW)
94.2.4 REIPPP Table 7: REIPPP committed capacity
Table 7 below shows the installed capacity that is considered committed in this
MTSAO for the REIPPP. The REIPPP capacities considered are from Bid Windows 1
up to 3.5, excluding the 100 MW of CSP not yet signed for Bid Window 3.5.
Installed capacity (MW) 2017 2018 2019
Wind 1 470 1 982 1 982
PV 1 474 1 474 1 474
CSP 200 300 400
Landfill gas 11 13 13
Small hydro 14 14 14
Biomass 0 17 17
3 169 3 800 3 900
Table 7: REIPPP committed capacity
4.2.5 Demand-side management
Only 110 MW of DSM was considered in this study, 48 MW of which is allocated to the
residential savings programme, while 62 MW is allocated to the commercial and
industrial savings programme.
4.3 Eskom plant performance
Since the 2008 electricity supply crisis, Eskom had been able to meet electricity
demand through delaying maintenance of the generation fleet. That led to the
deterioration in performance of the aging fleet, which exacerbated the past crisis, but
also had a longer-term impact on the effectiveness of the fleet to meet future demand.
Consequently, Eskom put in place strategies to arrest the decline in performance and
return the average energy availability factor (EAF) of the current fleet to 80%. The
assumed plant performance for the study builds on the “80:10:10” strategy. This
results in an 80% EAF by FY2020 for the Eskom fleet, which is then maintained
beyond the study period of this MTSAO. The EAF for the year ending 31 March 2017
was 77.3%.
The plant performance that was considered in this study is depicted in Figure 4 and
shows an EAF of 77.99% in calendar year 2018.
10Plant Performance: July 2017 MTSAO
12 80.5
80
11.5
Planned and Unplanned Outages (%)
79.5
11 79
78.5
EAF (%)
10.5
78
10 77.5
77
9.5
76.5
9 76
2017 2018 2019 2020 2021
Calendar Years
Unplanned Outages (%) Planned Outages (%) EAF(%)
Figure 4: Plant performance for July 2017 MTSAO
Figure 5 below compares the EAF in this MTSAO to the EAF assumed in the April
2016 MTSAO and shows an improvement of about 4% in 2017.
82
EAF COMPARISON
80
78
EAF (%)
76
74
72
70
68
2017 2018 2019 2020 2021
April 2016 MTSAO July 2017 MTSAO
Figure 5: April 2016 and July 2017 MTSAO, % EAF Comparison
115. Modelling scenarios
The following scenarios were, therefore, considered in the MTSAO July 2017, as
shown in Figure 6 below.
All the scenarios were based on a 50-year life of plant (LOP) for coal power stations
and the Eskom plant performance discussed in Figure 5 above. Two demand forecasts
were tested, a moderate growth demand forecast and a high growth demand forecast,
as depicted in Figure 2 above. For each forecast, two different CoD scenarios were
tested for the new build commercial operation dates, as shown in Table 4 and Table
5 above.
Existing fleet Demand forecast New build CoD
Official CoD
Moderate
growth
Expected CoD
50-year LOP
Official CoD
High
Expected CoD
Figure 6: Scenarios Considered
The scenario with the moderate growth demand and official commercial operation
dates is considered the base case.
Scenarios not considered include the risks of inadequate coal stock levels at multiple
power stations and drought in the Western Cape, which have been identified in the
short term, since they have treatment plans and are managed.
126. Results and conclusion
This MTSAO study has shown that the system is adequate in the medium term to meet
demand from 2017 to 2021 in all the scenarios studied. This is similar to the October
2016 publication for the MTSAO.
Lower-than-expected demand, improvements in the EAF of Eskom coal-generating
sources, and the earlier commercial operation dates of Eskom’s new build have
contributed to the improved adequacy since the April 2016 study.
The system has excess capacity throughout the study horizon of this MTSAO. Figure
7 below indicates the excess capacity associated with the base case of this MTSAO
study (moderate growth with official CoDs). The excess is based on the average
growth of 2.16%, which is higher than what is currently being observed. The existing
fleet has no mid-merit-type generators, only baseload and peaking. Therefore, the
excess is made up mainly of baseload – therefore, the Eskom coal-fired plant.
Forecast surplus capacity
5000
4000
Capacity [MW]
3000
2000
1000
0
2017 2018 2019 2020 2021
Year
Figure 7: Forecasted excess capacity (MW) from 2017 to 2021
Furthermore, it can be concluded that extending the life of plant beyond 50 years,
further reduction in demand, and additional IPPs beyond Bid Window 3.5 will increase
the excess capacity beyond what is indicated in the base case.
The October 2017 publication will be more comprehensive and will look at additional
scenarios, which may include quantifying the magnitude of excess capacity due to
additional IPPs (beyond Bid Window 3.5), lower demand, and longer life of plant for
the Eskom coal-fired stations. The October 2017 study will also seek to determine the
“meetable” country demand, which is the demand growth that can be adequately
supplied by the country supply system, demand-side management, and demand
response measures.
137. Glossary and abbreviations
“Adequacy” relates to the existence of sufficient facilities in the system to satisfy the
customer load demand or system operational constraints. Adequacy is, therefore,
associated with static conditions, which do not include system dynamic and transient
disturbances.
“Adequacy metrics” are the output parameters analysed to determine “adequacy”.
“Baseload” represents plant capable of generating all day.
“AGR” means annual growth rate.
“CoD” means commercial operation date.
“CSP” means concentrated solar power.
“EAF” means energy availability factor and reflects a unit, plant, or industry’s
availability to produce energy. The energy availability factor is the ratio of available
energy over the nominal energy (sent-out energy capability) and refers to the energy
that could have been produced at available capacity for the reference period over the
nominal energy for the same period.
“Non-Eskom capacity” means generation capacity from external sources.
“IPP” means independent power producer.
“Load factor” reflects the ratio of the actual generated energy against the nominal
energy (sent-out energy capability) and, thus, represents the extent to which the
installed capacity is utilised. The calculation method of this measure is similar to the
term “capacity factor”, which is used in certain electricity generating references.
“LOP” means life of plant.
“Mid-merit” represents plant typically generating from before the morning peak
demand to after the evening peak demand.
“NERSA” means National Energy Regulator of South Africa.
“P50” means a probability of 50% of meeting the target.
“P80” means a probability of 80% of meeting the target.
“Peaking” represents plant generating only during the peak demand or emergency
hours.
“PV” means solar photovoltaic.
“REIPPP(s)” means Renewable Energy Independent Power Producer Programme(s).
“SO” refers to the System Operator who is responsible for dispatch of power.
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