Powering the Future Knowledge, Technology, Interaction African Utility Week - CTICC
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Powering the Future
Knowledge, Technology,
Interaction
African Utility Week
Silas Mzingeli Zimu
C.E.O.
Suzlon Wind Energy SA
CTICC
14th May2014
Political Overview
• The society we are striving to build
– Politics of ANC informed by Freedom Charter
– These ideas also informed the Constitution of RSA, Act
108 of 1996
– GDP
– GDS/IDP – building a developmental state
• Developmental state
– Improving life of people
– Improving quality of life
– Building capacity
– Sustainable economic growth
– Massive infrastructure investment
– Aligned resources
– Broad based economic development
– Green technologies/alternative energy
2
ANC Priorities
• Manifesto commitment
• Sustainable jobs creation
• Education and skills development
• Better health care
• Rural development
• Poverty reduction
• Access to basic services, incl electricity (34m with access to electricity;
15m without)
• Energy supply to be more than the demand
• Reduce environmental pollution
• Reduce global warming
• Eliminate theft and vandalism of key national points, such as electricity
infrastructure
3
Global Situation in Recent Years
Energy crisis is a reality. The headlines below show that this is a global challenge.
Spain Hits Record Demand Friday,
Cuts Seen
Government Prepares
To Avoid Blackouts
Next Winter
Italy Braces For Possible More
Blackouts Monday
Adopted from EPRI Presentation – Intl. Demand Response Issues
The global challenge: To sustain growth and prosperity
South Africa 1994-2010 growth
79%
16.7% How do we
keep the lights
on and move to
a cleaner
Real GDP Power capacity future?
(~6 500 MW)
This requires vast investments in power generation capacity; affordable and universal
access to electricity; move to a cleaner future
5
SAPP PLAN: ELECTRICITY GENERATION CAPACITY
Numerous projects (generation & transmission) identified but virtually no
implementation outside of Eskom/RSA
SAPP Generation Projects Capacity Estimated Cost Period
[MW] [US$ Million]
1 In Progress & under development 3 211 1 410 2005 - 2007
2 Rehabilitation 1 048 523 2007 - 2010
3 Short-Term (New build) 4 217 3 830 2005 - 2010
4 Long-Term (New build) 43 542 37 585 2011 - 2020
Total Planned Capacity 52 018 43 348
Completion dates shift annually Estimate needs to be
Plant Country Capacity (MW) Planned New date updated based on
Inga 3 DRC 3,500 2012 2017 current costs
Kafue Lower Zambia 750 2012 2015
Muela 2 Lesotho 110 2012 2015
Medupi South Africa 4,800 2012 2012-2015
Ingula South Africa 1,300 2014 2014
Kusile South Africa 4,800 2013 2013-2017
Medupi and Kusile power stations delays = good for alternative energy
Expected completion dates, as supplied by utilities, are c
unachievable in the absence of a regional body to coord
Source : DBSA Cross Border Financing Study 2009
implementation of both generation projects
6 & interconnRSA NATIONAL TARGETS
• A final energy demand reduction of 12% by 2014.
• For the industry sector 15%
• For the commercial and public sector 15%
• For residential sector 10%
• For the transport sector 9%
7Eskom will invest significantly
to strengthen the energy sector
New build programs Accelerating universal access
• Medupi = R 18.5 bn (2010-15)
• Kusile * Funding still to be found
• Ingula
• Networks
• Gas Support IPPs
• Other
= R 308 bn1
Growth of renewable energy R&D
• Biomass Eskom
• UCG
• Solar2 today = R 0.8 bn
• Wind
• Waste
= R 7.4 bn (2010-15)
Growth related to mining
• Coal mining projects
Support solar geyser program • Water pipeline
= R 3.5 bn (2010-15) Strengthen existing asset base • Road maintenance
• Boilers • Majuba rail link (R 4.9 bl)
• Turbines • Mpumalanga rail development (R
• T&D networks 2.2 bl)
• IT • Waterberg link
• = R 48.4 bn (2010-2015)
8Geo-Political-Techno Issues
– Energy/Climate
• Energy is one of the interesting sectors in the world, it affects everyone
• Energy security
– Energy prices
– Energy supply
• Energy policy
• Climate change
– Developed world will have to reduce emissions drastically
• Huge gap between energy policy and energy projects being implemented
• China and India have confirmed that their next generation capacity
would still be from coal, but they are also introducing alternatives as
high pace
• Business unusual = unprecedented decisionsThe World is at significant crossroads
• Resource adequacy
• Fuel diversity
• Grid reliability
• System operability
System
Reliability
Record high
Advancing Continuing electric prices
technology rate Significant
pressure infrastructure
investment
on horizon
Renewables Regulator
Storage and customer
Grid communications (AMI/ Increasing frustration
BPL)
environmental
Customer networks
pressure Climate change policy
Renewable Portfolio Standards
Significant energy efficiency aspirationsEnergy Challenges • CHALLENGES FOR THE INDUSTRY – Supply v/s demand – Global warming v/s reliance on fossil fuels – Tariffs cost reflectivity v/s affordability – Skills development v/s skills retention – Retirement age v/s skills transfer – CAPEX to renew v/s OPEX to maintain
Energy Challenges
• CHALLENGES FOR THE INDUSTRY
– Women empowerment
– Youth empowerment
– Improve relations with government structures
– Convert government/political policies into technical
projects that would make access to electricity easy
– Drive government/political promises on service
delivery
– Take advantage of the abundance of nature: solar,
wind, hydro etc
– Develop green villagesLeadership challenges
1. What to keep
2. What to change
3. When to change
4. How to make the leap
Are we at a
strategic
inflection
point?
2008-2014
1994-2007
20/05/2014 Page 16The mind of the manager – in three
places at once
Shape the future
(Innovate)
Make the shift to a
new model
(Adapt)
Get results from the
current business
(Execute)What the team needs to know
Where is our “hill”? How will we get there?
20/05/2014 Page 18Our “hill”
To be a world class:
1. Clear standards
2. Proactive
3. Professional
4. Deliver on promises
5. Excellent customer service
20/05/2014 Page 19Constitution and Mandate • Municipalities are service authorities • Municipatilities choose the service providers • Energy Access • “Keeping The Lights On’ • Create employment • Develop skills • Eliminate poverty
Key Challenges and Solutions
(continued)
• Generation Group
• Divide into 5 sub groupings and appoint senior executives for each sub group
• Energy mix to include large scale renewable energy
• Decentralise procurement and let head office guide and monitor
• Transmission Group
• Protect from ISMO
• Energy buyers department to be elevated to EXCO
• Southern African Power Pool
• Self Build PPP
• Modern live line programme
• Inga shorter route and DC not AC
• Distribution Group
• Municipality relations executives – be part of IDP, IDS, Mayoral Council
• Customers are voters
• 20A v/s 60A for metros
• Customer Education
• WIC’s as per NRS 047
• Key Customer Division - +60% revenueKey Challenges and Solutions (contd)
• Payment Levels
• Education Drive
• Incentives and promotional items
• Rebrand operation khanyisa
• Retrofit townships such as Soweto with SWH’s and PV for
lighting, refrigeration, TV, etc
• Involve civic organisations
• Remove illegal connections and arrest “izinyoka” and staff
involved
• Convert all customers to AMR
• Residential prepaid
• Industrial/commercial/agricultural post paidKe Nako! COMMITMENT WILL SEE US THROUGH!
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