MEDIUM-TERM SYSTEM
ADEQUACY OUTLOOK
2016 to 2021
1
Medium-term System Adequacy Outlook
TABLE OF CONTENT
1.
Précis .............................................................................................................................................. 3
2.
Introduction...................................................................................................................................... 3
3.
MTSAO Methodology and Approach .............................................................................................. 3
4.
Assumptions .................................................................................................................................... 6
4.1
Demand forecast ..................................................................................................................... 6
4.2
Supply Resources ................................................................................................................... 7
4.3
Demand-side Resources ......................................................................................................... 9
4.4
Eskom Plant Performance ...................................................................................................... 9
4.5
New Committed Build Dates ................................................................................................. 10
5.
Study Cases .................................................................................................................................. 11
6.
Results .......................................................................................................................................... 14
7.
Conclusion..................................................................................................................................... 16
8.
Glossary and Abbreviations .......................................................................................................... 17
LIST OF FIGURES
Figure 1: MTSAO methodology ............................................................................................................. 3
Figure 2: Comparison of historical and forecast demand trends ........................................................... 6
Figure 3: Energy demand forecasts ....................................................................................................... 6
Figure 4: Existing plant ........................................................................................................................... 7
Figure 5: Plant under construction ......................................................................................................... 8
Figure 6: Plant nearing contract closure ................................................................................................ 8
Figure 7: Plant performance (percentage EAF) ..................................................................................... 9
Figure 8: REIPPP Bid Window 1, 2 and 3 cumulative capacities ........................................................ 10
Figure 9: Adequacy space ................................................................................................................... 11
Figure 10: Moving to an adequate future ............................................................................................. 12
Figure 11: Cases analysed .................................................................................................................. 12
Figure 12: Blue Path - additional capacity (MW) required ................................................................... 14
Figure 13: Blue Path - additional capacity (MW) required with the plant nearing contract closure
included ................................................................................................................................................. 14
Figure 14: Red Path - additional capacity (MW) required .................................................................... 15
Figure 15: Red Path - additional capacity (MW) required with the plant nearing contract closure
included ................................................................................................................................................. 15
LIST OF TABLES
Table 1: Adequacy Metrics..................................................................................................................... 4
Table 2: Commercial operation dates of Eskom committed build........................................................ 10
Table 3: Assumptions used in the Study Cases .................................................................................. 13
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1. Précis
Eskom System Operator, produced the System Adequacy Outlook for the period 2016 to 2021.
The South African Grid Code: System Operation Code, Version 9.0 requires “on or before 30
October of each year, the SO shall publish a review (called the ‘Medium Term System
Adequacy Outlook’) of the adequacy of the 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 South Africa.
The next Medium-term System Adequacy Outlook (MTSAO) will be published in October 2016
and, thereafter, annually in October.
2. Introduction
The Medium-term System Adequacy Outlook (MTSAO) provides a statement of generation
adequacy to meet the expected electricity demand for the next six years (calendar years 2016
to 2021). The adequacy to transport and distribute electricity does not form part of the
MTSAO.
The MTSAO determines the adequacy of the system to meet the expected demand of the
country. The expected demand is the country’s demand plus exports, and the system to meet
the demand is all generation resources licensed by NERSA plus imports plus demand-side
management resources.
3. MTSAO Methodology and Approach
The methodology is as follows:
Figure 1: MTSAO methodology
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1. 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
adhering to all system requirements (demand and reserves), resource constraints
(capabilities) and the generator or demand response resource owner dispatch regime.
2. The outcome of the hourly dispatch is compared to a set of adequacy metrics (see
Table 1). If ALL the Adequacy Metrics are met, the system can adequately supply the
expected demand. If not, additional resources are required to get to an adequate
situation.
3. Additional resources (mitigation options) are added incrementally, and the process of
hourly dispatch and comparison of the outcome to the adequacy metrics is repeated
until all the adequacy metrics have been met.
Figure 1 shows the MTSAO methodology in a schematic format.
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.
Adequacy Metric
AM1
AM2
Unserved Energy
(UE)
1
OCGT Load Factor
Threshold
< 20 GWh per
annum
< 6% per annum
Detail
The amount of energy in a year that
cannot be supplied due to system
supply shortages.
The combined Load Factor of the
OCGT plant in operation in a year.
AM3
Emergency Level 1
energy
< 133 GWh per
annum
The energy supplied in a year by
generators operating above their
continuous rating under instruction
during supply emergencies.
AM4
Expensive Baseload Stations Load
Factor
< 50% per annum
The combined Load Factor of the
expensive
Coal-fired
Base-load
Stations in a year.
Table 1: Adequacy Metrics
The mitigation options, added to get an adequate system, are quantified in terms of base-load,
mid-merit and peaking capacity in MW. The base-load options represent plant capable of
generating all day, mid-merit represents plant typically generating from before the morning
peak demand to after the evening peak demand, and peaking only operates during the peak
demand or emergency hours.
1
Open-cycle gas turbine
4
The capacity of the mitigation options does not represent the capacity that cannot be supplied
and, thus, the expected load shedding. It is demand supplied at a lower level of certainty than
the rest of the demand following from the stochastic simulation process.
The outcome of the MTSAO aids discussion on additional supply and demand reduction
resources to assist in achieving an adequate system in the short- to medium-term.
The next sections discuss the assumptions, study cases and results. Eskom plant plus
imports and independent power producers (IPPs) contracted to Eskom provide the bulk (about
96%) of the supply capability of the country. The assumptions are then primarily based on
Eskom information.
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4. Assumptions
The data assumptions with the largest impact on system adequacy are the demand forecast,
available resources to meet demand, the performance of the plant and the commercial
operation dates of plant under construction.
4.1
Demand forecast
Five demand forecasts were developed by Eskom and the CSIR. The highest growth demand
forecast exhibits a similar annual growth rate as was experienced between the years 1994
and 2007. The lowest growth demand forecast continues with the virtually zero growth
experienced since 2008.
Figure 2: Comparison of historical and forecast demand trends
CAGR = 3,2%
CAGR = 2,5%
CAGR = 2,2%
CAGR = 1,8%
CAGR = 0,4%
Figure 3: Energy demand forecasts
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The annual growth rates of the Eskom Corporate Plan demand forecast adjusted to the
country demand and the low Eskom demand forecast (CAGR = 0,4%) are similar for the study
period. The base case of the IRP 2016 Revision under development by the Department of
Energy uses the High Growth Low Intensity Sectors demand forecast (CAGR = 2,5%) of the
CSIR.
4.2
Supply Resources
Generation resources and demand-side initiatives are both used to meet the forecast demand.
The capacities of the generation resources are further grouped in terms of existing plant,
plant under construction and plant nearing contract closure (at the time of doing this
study).
The Eskom plant forms the bulk of the existing capacity. Non-Eskom plant is comprised of
imports, plant in operation and licensed by NERSA, and the peaking and renewable IPPs in
commercial service by beginning 2016. The Non-Eskom Other is mostly co-generation plant.
Figure 42: Existing plant
2
Note that the zero of the vertical axis is supressed in
Figure 4.
7
The plant under construction is from Eskom and the IPP programmes. Plant under
construction includes Medupi, Kusile, Ingula, Peaking and Renewable IPPs Bid Windows 1 to
3 not in commercial service at the beginning of 2016. The final Kusile unit is planned for
commercial service in 2022 and is not included in the above capacities.
Figure 5: Plant under construction
The supply options nearing contract closure are primarily guided by the Department of
Energy’s Ministerial Determinations - RE-IPPP Bid Windows 3.5 to 5 (bulk of the Non-Eskom
Renewables), Smalls and Co-generation. Excluded is the Coal-fired Base-load IPP and Gas
IPP procurement programmes, the assumption being that these will enter commercial service
after 2021. Also included in plant nearing contract closure are Kiwano (Eskom renewable),
MTPPP, STPPP and Rooftop PV.
Figure 6: Plant nearing contract closure
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4.3
Demand-side Resources
The following are the demand-side resources contributing to the system adequacy:
1. Demand-side Management
The historical demand-side management had a verified impact in 2015 of 11 840 GWh
energy and 4 120 MW demand (aggregated without considering diversity).
The study assumes, as part of existing resources, that the future demand-side
management grows at the same rate as the energy demand. The expected Residential
Mass Roll-out Lighting Programme’s impact is further added.
2. Demand Response (2 950 MW)
Instantaneous Reserve response, Interruptible Load contracts and Power Alert are
included as existing capacity. Peaking Demand Response is considered as a
nearing contract closure option.
4.4
Eskom Plant Performance
Three plant performance scenarios were developed by Eskom for the MTSAO:
 The High EAF scenario is aligned with the Eskom Design-to-cost targets.
 The Low EAF is based on statistical modelling.
 The Medium Plant Performance is based on the Financial Year 2017 Eskom
Shareholder Compact and the Eskom Corporate Plan target.
Figure 7: Plant performance (percentage EAF)
Plant performance of the Non-Eskom generation was derived from data submitted to NERSA
and the performance of equivalent Eskom plant.
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4.5
New Committed Build Dates
The commercial operation dates for the Eskom plant under construction are as per the Eskom
Corporate Plan.
Table 2: Commercial operation dates of Eskom committed build
The commercial service dates of the Renewable IPPs are the contractual dates. The
cumulative capacities - based on plant added at the contractual dates for Bid Windows 1, 2
and 3 - are shown in Figure 8.
Figure 8: REIPPP Bid Window 1, 2 and 3 cumulative capacities
A scenario assuming delays in the commercial operation dates for the Eskom plant under
construction is contemplated in the MTSAO.
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5. Study Cases
The system adequacy situation in recent years - and up to mid-2015 - was characterised by
frequent load shedding caused primarily by deteriorating Eskom plant performance and delays
in the completion of the Eskom plant under construction. This inadequate electricity supply
has contributed to the lack of growth in electricity demand for the past eight years.
The leading interventions to attain system adequacy are improving plant performance,
completion of the build programmes and other resource options that can contribute in the
appropriate timeframes. The realisation of these measures is central to guiding the system to
a desired outcome of:
 an adequate system;
 medium to high demand growth – as per the Integrated Resource Plan 2016 Base
Plan; and
 financial sustainability.
The framework for the combinations of these interventions is set by the Eskom Corporate
Business Plan and the Department of Energy’s Integrated Resource Plan of 2016 currently
under development.
Before developing the study cases, it is necessary to discuss the adequacy space.
Figure 9 illustrates the adequacy space.
Figure 9: Adequacy space
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Figure 9 illustrates moving to an adequate state in the medium-term future.
Figure 10: Moving to an adequate future
The following cases are analysed in the MTSAO:
Figure 11: Cases analysed
The Blue Path is a combination of an initial low demand growth, the Medium Plant
Performance and commercial operation dates for the Eskom plant under construction are as
per the Eskom Corporate Plan.
The Red Path is a combination of the CSIR high demand growth scenario, the Low Plant
Performance and delayed commercial operation dates for the Eskom plant under construction.
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Demand Forecast
Eskom Plant
Performance
Eskom plant
under
construction
Blue Path
Earlier years low growth.
Medium- to high growth in
later years.
Medium
On time
Red Path
High growth
Low
Delayed
Table 3: Assumptions used in the Study Cases
The Yellow Path(s) can be various combination(s) of the demand growth, plant performance
and commercial operation dates for the Eskom plant under construction parameters.
All the study cases have been done with the existing plant and plant under construction
included. These cases have been balanced for adequacy. The plant nearing contract
closure has then also been included in each case and the system again balanced for
adequacy.
The results are shown in terms of the additional capacity required in each year to have an
adequate system.
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6. Results
The Blue Path (Base Plan) requires additional capacity in 2016 and 2017 for an adequate
system, as shown in
Figure 12. The system is adequate from 2018 and can then accommodate a medium to high
growth in demand.
Figure 12: Blue Path - additional capacity (MW) required
The situation with the plant nearing contract closure included is shown in Figure 13. The
system is now adequate from 2017, and a high growth in demand can be accommodated from
2017.
Figure 13: Blue Path - additional capacity (MW) required with the plant nearing
contract closure included
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The Red Path (Sensitivity A) requires additional capacity in all years for an adequate system,
as shown in
Figure 14. The system is not adequate in the medium-term, and it is unlikely that this assumed
high growth in demand is sustainable.
Figure 14: Red Path - additional capacity (MW) required
The situation with the plant nearing contract closure included is shown in Figure 15. The
system is now adequate from 2020.
Figure 15: Red Path - additional capacity (MW) required with the plant nearing
contract closure included
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7. Conclusion
Base Plan:
The Blue Path follows the Eskom Corporate Plan:
 The adequacy is restored by 2018 by means of improved plant performance
and additional short-term capacity of 1 000 MW, mostly to be provided by midmerit resources plus some peaking resources.
 With further plant performance improvements plus the coming into service of
(primarily) Medupi and Kusile units, a medium to high demand growth can be
accommodated from 2018.
 Earlier demand growth can be accommodated if more short-term capacity is
contracted.
Sensitivities:
A. The Red Path relies on Non-Eskom resources:
 The Eskom plant performance remains below par (Low EAF scenario), and the
commercial operation of the Eskom committed plant is delayed.
 The additional capacity required to restore the system adequacy plus to allow
a high demand growth is some 5 000 MW for the study period – to be provided
by base-load, mid-merit and peaking resources. The growth in demand will be
delayed due to the lead-times for procuring the additional capacity.
 The situation is improved when the plant nearing contract closure is included.
The system now reaches adequacy in 2020. Some 3 500 MW of additional
capacity (over and above the capacity included for the plant nearing contract
closure) is required to have an adequate system from 2016 to 2019.
B. Alternative paths (Yellow Path) between (combinations of aspects of) the Blue and
Red Paths can be considered.
Eskom System Operator considers the Base Plan (Blue Path) to have a high probability of
successful execution, while it sees Sensitivity A (Red Path) as having a lower probability:
 In order to accommodate demand growth sooner rather than later, short lead-times are
needed for the increase in available capacity. This can be achieved at lower risk when
improving existing plant performance compared to establishing new capacity.
 In the medium-term, the Blue Path will likely cost less and will require less investment.
The MTSAO looks at the next six years. A life-cycle analysis (for example, an
Integrated Resource Plan) is needed to determine the economic ranking of these
alternative plans.
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8. Glossary and Abbreviations
“Adequacy” relates to the existence of sufficient facilities within 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.3
“Adequacy Metrics” are the output parameters analysed to determine “Adequacy”.
“CAGR” means compound annual growth rate.
“CSIR” means Council for Scientific and Industrial Research.
“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. 4
“IPP” means Independent Power Producer
“IPS” means the Interconnected Power System
“Load Factor” or “LF” reflects the ratio of the actual generated energy against the nominal energy (sent
out energy capability) and thus portraits 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.5
“MTPPP” means Medium-term Power Purchase Programme.
“NERSA” means National Energy Regulator of South Africa.
“PV” means Solar Photovoltaic
“RE-IPPP” means Renewable Independent Power Producers Programme.
“SO” means the System Operator.
“STPPP” means Short-term Power Purchase Programme.
3
Reliability Assessment of Electric Power Systems Using Monte Carlo Methods: Roy Billinton, Wenyuan Li
Eskom Generation Plant Performance Reporting Standard GGL 36-48 rev 9, September 2015
5 Eskom Generation Plant Performance Reporting Standard GGL 36-48 rev 9, September 2015
4
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