State of the System – Summer 2024/2025 Outlook Briefing Mteto Nyati Chairman 26th August 2024 Eskom Systemic Issues and associated Interventions Operational Financial Sustainability Systemic Issues • Unreliable plant resulting in poor • Weak balance sheet due to high debt • Outdated vertically integrated business performance burden model • Grid constraints to connect • Tariff not reflective of costs • The need to transition into clean energy additional capacity • Revenue pressure – non-payment & • Prevalent fraud, corruption and • Dysfunctional organizational culture declining sales criminality • Develop and implement Generation • National Treasury debt relief • Drive Legal separation of Eskom – Recovery Plan programme, including municipal debt unbundle Transmission, Distribution Interventions • Curtailment and grid capacity allocation interventions & Generation rules; Transmission Development Plan • Improving revenue collection and cost • Pursue clean energy project pipeline, execution driving cutting initiatives JET – including partnerships • Appoint strong and inspirational leaders • Migrate towards unbundled cost • Enhance governance and controls to (at all levels) reflective tariff structure curb fraud, corruption and • High performance & values driven culture • Stop or minimise loadshedding criminality Footnote: JET – Just Energy Transition 2 State of the System - Summer 2024/25 Outlook Briefing Dan Marokane Group Chief Executive Aug 2024 Our approach to this Summer 24/25 outlook briefing Key takeaways and reflections for the Dan Marokane Summer 24/25 outlook Group Chief Executive Bheki Nxumalo Update on the Generation Recovery Plan Group Executive - Gx Eskom’s direction of travel to achieve long Dan Marokane term success Group Chief Executive 4 Key Takeaways • Since the 2024/25 winter outlook delivered in April 2024, our performance was consistently above expectation – there is a structural shift in the performance of the fleet • 150+ consecutive days of NO loadshedding • Over R10+ billionY-O-Y reduction in diesel utilisation costs • Average unplanned capacity losses of 12.4GW compared to the 15.5GW likely scenario at the time (3.1GW better than expected – 20% improvement) • Positive impact on economic outlook due to the sustained EAF and the growth in RE capacity – Bank of America projects a potential ~2% growth to the South African economy* • Improved staff morale on the back of the performance to date & happier South Africans! • We are institutionalising the interventions of the Generation Recovery Plan - closing out actions from various independent reports remains the priority • Despite supply exceeding demand, load reduction has been necessary to protect the network and people in areas with rampant illegal connections • Given the improved fleet performance, Summer 2024/25 outlook base case planning is premised on: • Unplanned outage scenarios revised – ranging between 13 000MW to 15 000MW (previous summer 2023/24 - 14 500MW to 17 000MW) • No loadshedding expected if unplanned losses remain below 13GW and at worst, stage 2 expected if unplanned losses reach 15 000MW • A sustained EAF improvement (67.02% July MTD) together with an expected ~2500MW of additional capacity by March 2025 will guarantee that loadshedding is implemented only in exceptional circumstances going forward • These positive results allow us to focus on the implementation of our long-term strategy aimed at delivering a competitive and sustainable future- proof Eskom #WeCanEndLoadsheddingTogether • Bank of America - https://www.businesslive.co.za/bd/economy/2024-07-05-bank-of-america-says-gdp-to-grow-2-if-eskom-maintains-momentum • Acronyms: RE – Renewable Energy; EAF – Energy Availability Factor; MTD – Month-to-date; FY – Financial Year Figures as at 7 August 2024: 5 Reflections: Eskom’s performance has improved significantly since April 2024, setting a good base to build on 150+ days R10+ bn ~7GW of NO loadshedding In reduced diesel spend (1 April Reduction in unplanned load –15 Aug 2024 vs same period losses (18GW in May 23 vs last year) 11.3GW in July 24) 67.02% EAF Skills Growth 10.33% Jul MTD - improved from Staff turnover down to 1.5% Planned maintenance, 57% as at April MTD by Staff morale index up from 3.6 to 3.9 compared higher year-on- leveraging Original 2000+ learner pipeline across Eskom, year than the previous two Equipment Manufacturers, 80% technical (artisans, engineers, years People and Processes operators and technicians) Acronyms: NECOM - National Energy Crisis Committee; OCGT- Open Cycle Gas Turbine; MTD – Month-to-date; EAF – Energy Availability Sources: 1: 20240729_REPORT_Daily report; 2: Eskom GPSS Official indicator report extracted 2 Aug 2024; 3: Eskom Media Statement 7 Aug 2024 6 Reflections: Our performance exceeded the winter outlook scenarios – lower unplanned outages, 60% reduction in diesel costs and NO LOADSHEDDING xxx Change to outlook Likely scenario Winter 2024 – 1 April 2024 to 31 August 2024 Base Case: Base Case + 1500MW: Base Case + 3000MW: Scenarios 14 000MW unplanned outages 15 500MW unplanned outages 17 000MW unplanned outages Number of LS days 5 Days 65 0 Days 128 Days Diesel costs R 3.3bn R 8.8bn R3.48bn* R 16.0bn Highest stage of LS Stage 1 Stage 2 Stage 0 Stage 5 Peak Load shedding Max load Load shedding Max Load Load shedding Max Load Month Residual days shedding stage days shedding stage days shedding stage Forecast April 29 354 0 0 15 0 20 25 5 May 31 205 0 0 10 0 10 23 2 June 32 204 2 1 8 0 20 22 5 July 32 182 0 0 19 0 20 31 5 August 31 336 3 1 13 0 20 27 5 The likely scenario accounted for 15.5GW of unplanned losses, however due to success with the Generation Recovery Plan, unplanned losses were on average 12.4GW during the winter period Exceeded planned maintenance of 3677MW, with the actual being 4799MW on average over the winter period LS – Loadshedding *Eskom Diesel spend 1 April – 7 Aug 2024 7 Reflections: There is a consistent decline in unplanned load losses on the back of disciplined execution of maintenance Gx actual performance on unplanned losses1 GW Actual ~ unplanned losses Average month-on-month reduction in unplanned losses -44% 18,0 16,2 16,0 16,5 15,9 15,8 16,2 14,5 13,7 14,6 14,7 14,8 14,2 12,7 11,7 11,3 10,5 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug 24 MTD 2023 Winter outlook period 2023/24 Summer outlook period 2024 Winter outlook period • Downward trend observed in unplanned losses especially at the priority 8 stations (Tutuka, Majuba, Kusile, Kendal, Matla, Duvha, Arnot and Kriel) • Current unplanned losses of 12.5GW are better than anticipated in the Winter outlook, as a result, no loadshedding was experienced over the winter period • Year-on-year overall unit trips are declining, indicating that the fleet is becoming more reliable – 19.2% reduction between FY23 vs. FY24 • Comparing the average load losses in April – Aug 2023 (16.5GW) vs. 2024 (12.5 GW) shows an improvement of approximately 4GW, which further illustrates that the reduction in loadshedding is a result of improved plant performance Source: State of the system outlooks; Eskom Public Data Portal Note 1. UCLF+OCLF; Aug MTD as at 7 Aug 2024. Acronyms: Gx – Generation, UCLF – Unplanned Capability Loss Factor; OCLF – Other Capability Loss Factor; MTD – Month-to-date 8 Reflections: The continued improvement in Generation plant performance has resulted in 150+ days of continued no loadshedding Overview of loadshedding intensity and frequency between Sep 2023 and Jul 2024 # of days at various stages¹ Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 2023/24 Summer outlook period 2024 Winter outlook period 30 30 29 28 6 2 26 8 2 4 20 3 5 4 15 No loadshedding for over 4 months 2 9 4 13 13 13 17 8 12 12 12 7 3 7 2 2 0 0 0 0 0 1 1 1 1 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug 24 MTD ▪ An average 17% month-on-month reduction in unplanned losses during the Summer 2023/24 period, as well as the return of units - as part of Eskom’s recovery plan - resulted in no loadshedding being implemented since April ▪ This performance has been sustained throughout the winter period, with unplanned losses falling to a 12-month low of 11.3GW in July 2024 ▪ Between March and August 2024, Tutuka, Kendal and Kriel showed the greatest improvement in reducing load losses ▪ Growth in Renewables – estimated 9.6GW to 11 GW over the last year Aug Month-to-date (MTD) as at 12 Aug 2024 Source: 2023/2024 Load Shedding and Curtailment events Notes: 1: Indicates maximum stage per day 9 Reflections: Despite supply exceeding demand at all times, load reduction has been necessary to protect the network and people in areas with rampant illegal connections Load Shedding Load Reduction Generation Transmission Distribution • When there is insufficient • When the customer demand is generation capacity to meet higher than what the local demand equipment can withstand • Loadshedding implemented to • Load reduction implemented to protect the country from a protect equipment (transformers) black out and people (explosions) Eskom is working together with SALGA and the Ministries to resolve the structural challenges facing the distribution industry WE NEED COMMUNITIES TO HELP US PROTECT OUR EQUIPMENT FROM CRIMINALITY 10 Summer 2024/25 OUTLOOK - No loadshedding expected for unplanned outages below 13 000MW, and for worst case, stage 2 loadshedding should unplanned outages reach 15 000MW Likely scenario Summer 2024/25 – 1 September 2024 to 31 March 2025 (212 days) Base Case: Base Case + 1000MW: Base Case + 2000MW: Scenarios 13 000MW UCLF 14 000MW UCLF 15 000MW UCLF Number of LS days 0 Days 21 Days 115 Days OCGT costs R 3.5bn R 10.3bn R 23.0bn Highest stage of LS - Stage 1 Stage 2 Month Peak Load Max Load Load shedding Max Load Load shedding Max Load Residual shedding shedding stage days shedding stage days shedding stage Forecast days September 29 389 0 0 1 1 16 2 October 28 928 0 0 0 0 16 1 November 28 868 0 0 1 1 13 2 December 28 398 0 0 5 1 17 2 January 28 105 0 0 3 1 16 2 February 28 486 0 0 1 1 16 2 March 28 967 0 0 10 1 21 2 Our Summer 2024/25 base case is revised downwards by 1 500MW relative to the previous summer outlook which ranged from 14 500MW to 17 000MW with loadshedding stages 6 and 7 Summer forecast planned maintenance of ~6700MW (14%) is in line with the levels of maintenance of ~6600MW in the previous period Note: The Capacity Plan 08 August 2024, with an unplanned assumption of 14 000MW until end August 2024 and 13 000MW onwards. Acronyms: UCLF – Unplanned Loss Capability Factor 11 Our approach to this Summer 24/25 outlook briefing Key takeaways and reflections for the Dan Marokane Summer 24/25 outlook Group Chief Executive Bheki Nxumalo Update on the Generation Recovery Plan Group Executive - Gx Eskom’s direction of travel to achieve long Dan Marokane term success Group Chief Executive 12 The focus on the Recovery Plan will ensure sufficient Generation capacity is recovered sustainably Implementation complete Implementation in progress 3 World class performance 70%1 2 Execute excellence 65%1 EAF 1 Set up for success EAF Actions for FY25 onwards Actions for FY24 ▪ Return of Medupi 4 from long term forced ▪ Set up the enabling structures ❑Successful execution of Koeberg 1 outage ▪ Turnaround plans ❑Sustain excellent Medupi performance ▪ Commercial operation of Kusile 5 ▪ Generation recovery office ❑Embed principles of operational ▪ Synchronisation of Kusile 6 excellence ▪ Continuous focus on current and future ▪ Key enablers ▪ Guard performance at current flagship ❑Address internal skills gaps skills stations ❑Prevent outage slips ▪ Ensure successful implementation of Koeberg 2 steam generator and long-term ▪ Medupi, Lethabo, Matimba and Peaking ❑Return of Kusile 1, 2 and 3 operating projects ▪ Focus on the Priority stations ❑Synchronisation of Kusile 5 ▪ Tutuka, Duvha, Majuba, Matla, Kendal, ❑Review plant shutdown dates based on Arnot, Kriel system requirements ▪ Kusile removed from priority list ▪ Execution of Koeberg 1 Outage ▪ Source external specialised skills Continuous execution of Culture transformation and Strategic Levers as per the Generation Recovery Plan Note: 1. MTD for March 2024 and MTD March 2025. Acronyms: EAF – Energy Availability factor; MTD – Month-to-date 13 Significant progress has been made to drive the implementation and close out of actions from various independent reports Status of initiatives/findings from independent reviews Q1 action status per area People, Leadership and Human performance # Status 15% 16 End FY24 36% 33% 12 64% 67% 85% 0 Complete On track Overdue or Incomplete People, Plant Process, Leadership and performance Governance Human and Finance Plant performance performance # 42 Status 23 End of Q1 35% 35% FY25 43% 57% 0 65% 65% Complete On track Overdue or Incomplete Complete On track # Process, Governance and Finance Highlights 11 6 ☺ Progress on all 3 dimensions in completing actions – completed actions almost doubled from April to end Q1 0 ☺ Biggest progress made in people and plant performance areas which is evident Complete On track Overdue or incomplete in the OE survey results and the improved recent plant performance (EAF) Acronyms: OE – Organisational Effectiveness; EAF – Energy Availability Factor 14 There has been a steady increase in plant availability and decrease in spend on expensive OCGT generation xx Denotes MTD figures for Eskom Diesel spend Gx overview of monthly and YTD performance Unplanned losses % Planned losses % Availability % Total System Capacity (Average MW) (100%) 24.5 UCLF 29.8 28.1 30.0 30.3 31.3 30.0 26.8 24.6 12 568 +OCLF ← Unplanned 32.6 33.2 losses 9.7 11.8 8.5 4 823 PCLF 11.4 ← Planned 11.2 11.1 11.2 17.0 17.5 16.7 13.7 maintenance 67.0 ← Availability 57.8 58.1 63.0 62.8 29295 EAF 54.8 54.1 53.6 51.2 51.9 54.5 FY25 YTD Apr-24 Sep-23 Jan-24 Feb-24 Jun-24 Oct-23 Mar-24 Dec-23 May-24 Jul-24 Nov-23 2023/24 Summer outlook period Rm * 565 306 1281 197 • Eskom Generation’s plant availability has been trending upwards, since the beginning of FY25, supported by decreasing unplanned losses • The increased availability has resulted in decreasing spend on expensive OCGT generation – OCGT’s are part of the energy mix utilised for meeting peak demand as required by the System Operator • Generation has been able to maintain the unplanned losses below ~14 000MW throughout the winter period (to date) while leveraging the improved performance to conduct additional short-term PCLF • Two (Kendal & Kriel) out of three stations (incl. Tutuka) that have performed well in the last 6 months are led by women • The fleet is in a more stable setting going into the summer period of 2024, compared to the summer of 2023 15 Figures as at 6 Aug 2024. Acronyms: YTD – Year-to-date; MTD – Month-to-date; OCGT – Open Cycle Gas Turbine; EAF – Energy Availability Factor: UCLF – Unplanned Capability Loss Factor, OCLF – Other Capability Loss Factor; PCLF – Planned Capability Loss Factor The additional ~2500 MW capacity expected by the end of the financial year will contribute to security of supply Key insights Units on long term outage - return to service dates xxx Complete Kusile - Kusile U5 synched to the grid on 31 December 2023. Commercial Operation Koeberg U1 Kusile* U1, 2, 3, 5 Tutuka 1,2, 4, 5 Koeberg 2 Kusile 6 1st Sync achieved on 30 June 2024 – Completed Medupi U4 900 MW ~ 2880 MW ~ 1500 MW ~930 MW ~ 800 MW ~794 MW Tutuka RTS dates • Unit 4 planned outage for LP turbine rotor and HPH replacement - Completed • Unit 5 on Major outage - Completed Nov 2023 Dec 2023 May 2024 Dec 2024 Dec 2024 Mar 2025 Despite some delays, three units are still expected to return to service by the end of the financial year: • Units 3, 1 and 2 • Unit 1 completed Kusile U6 sync experiencing some delays due have been on 12 Jan 2024 to material availability and delays in acid clean. returned to the Current forecast for 1st sync date is Dec 2024 grid and are • Unit 2 returned on 27 December Medupi U4 - due to unexpected design issues providing power 2023 related to second hand, RTS should be up to 2160 MW achieved by March 2025 • Unit 5 • Unit 4 returned on 22 April 2024 Koeberg U2 weld defects on the main steam commercial pipes requiring additional inspection and weld operation achieved on 30 • Unit 5 returned on repairs. Revised date to cater for discoverables 7 July 2024 during commissioning June 2024 1. Data as at 12 Aug 2024. Acronyms: U – Unit; RTS – Return to Service 16 Our approach to this Summer 24/25 outlook briefing Key takeaways and reflections for the Dan Marokane Summer 24/25 outlook Group Chief Executive Bheki Nxumalo Update on the Generation Recovery Plan Group Executive - Gx Eskom’s direction of travel to achieve long Dan Marokane term success Group Chief Executive 17 The Generation fleet performance improvement allows us to focus on our long-term strategy to deliver a competitive, sustainable and future-proof Eskom Pursue financial and Facilitate a competitive Modernise our power Strive for net zero operational sustainability future energy industry system emissions by 2050 (Fix the current business) (Prepare for competition) (Leverage technology) (Transition responsibly) Obtain unbundled tariffs Accelerate TDP Accelerate Komati, Recover EAF to 70% by approval (Decision taken by execution incl. alternative Grootvlei, Hendrina, March 2025 NERSA) funding models Camden, Arnot, Kriel repowering & Reduce municipal arrear NTCSA trading by 2024, Distribution network repurposing initiatives debt; rebase costs Operationalisation of Dx development incl. smart Improve controls to by April 2026; Gx by meters and microgrids Collaborate with address fraud, corruption FY2026 Q4 government on optimised and criminality Use data analytics to MES compliance Accelerate clean energy create value and Leadership stability, skills project development enhance decision making Participate in DERs and development & entrench an Increase flexibility of drive eMobility (EV, EV ethical high-performance Fine-tune Gx and Dx power system charging infrastructure) culture business models infrastructure Acronyms: EAF – Energy Availability Factor annual average (targeting 70% for March 2025 monthly performance, 65% average for FY25); NTCSA – National Transmission Company South Africa; Gx – Generation; Dx – Distribution; NERSA – National Energy Regulator of South Africa; TDP – Transmission Development Plan; MES – Minimum Emissions Standards; EV – Electric Vehicle; DER – Distributed Energy Resource 18 Key milestones over the next 36 months will be achieved through the systematic implementation of critical initiatives 0-12 Months 12-24 Months 24-36 Months Enabled by: Achieve >800km of Skills enhancement Tx and Dx line Sustainable power build High performance for a better future Finalise business EAF of 70% culture cases and source JET funding Law enforcement Implement clean support energy initiatives Establish NewCo within a 2GW and operationalise Introduce 3 new NECOM pipeline Gx business Dx Products integration Underpinned by Eskom’s values of: Zero Harm Policy alignment Innovation Operationalise Integrity NEDCSA and Localisation and Sinobuntu strengthen Dx Continued focus on industrialisation Customer Satisfaction network Excellence reduction of fraud, corruption and MES indulgence Operationalise criminality EAF of 68% NTCSA and Improve plant accelerate TDP Partnerships and performance 65% in alternative funding Acronyms: NTCSA – National Transmission Company South Africa; NEDCSA – National Electricity Distribution Company of South Africa; FY25 19 JET – Just Energy Transition; EAF – Energy Availability Factor; TDP – Transmission Development Plan; NECOM - National Electricity Crisis Committee; MES – Minimum Emissions Standard; Tx – Transmission; Dx – Distribution; Gx - Generation 19 In Conclusion • We have seen a positive trend in the reduction of unplanned load losses, leading to 150+ consecutive days of no loadshedding • The Summer 2024/25 outlook has been revised (1500MW improvement), indicating no loadshedding to be expected if unplanned losses remain below 13GW. • Through disciplined execution, dedication of our people and support from various stakeholders, our Generation Recovery Plan continues to deliver good results • This performance has laid a good foundation to implement our strategy towards a competitive, sustainable Eskom • Over the coming months, we will be providing updates against the implementation of our strategic initiatives • We would like to thank all stakeholders, especially the Eskom Guardians for their hard work and dedication in moving Eskom towards success 20