System Status and Outlook Briefing Jan Oberholzer: Chief Operating Officer Phillip Dukashe: Group Executive Generation Segomoco Scheppers: Group Executive Transmission Megawatt Park: Franklin Auditorium 27 January 2022 Contents 1 Performance Overview - COO 2 Generation Overview – GE: Generation 3 System Outlook: Jan 2022 – April 2022 – GE: Transmission Overview and summary of Eskom system year-to- date performance (1/3) Eskom has not implemented loadshedding since 19 November 2021. However, we continue to see varied performance by our operating divisions year-to-date, with generally good performance from Transmission and Distribution. Performance from the Generation side (coal fleet) remains unsatisfactory. The Distribution technical performance is positive in terms of duration and frequency of outages, restoration times were negatively impacted by weather patterns. On the Transmission side, positive performance was attained with a low number of interruptions and no major incidents. We continue to strive for improved Transmission system reliability through our Transmission Sustainability Plan, doing sufficient maintenance and focusing on replacement of older assets. Kusile Unit 4 was first synchronised on 23 December 2021 and achieved full load on 11 January 2022, delivering at times 800 MW to the National Grid as commissioning tests continue ahead of commercial operation. Both Koeberg Nuclear Power Station Units continue to operate safely. Unit 2 commenced a refueling and long-term outage in January 2022 during which the reactor vessel head and the three steam generators will also be replaced. Regulator approval received. Overview and summary of Eskom system year-to- date performance (2/3) Our coal stock levels are healthy – average of 46 stock-days, 80 stock-days when including Medupi, which has excess coal. No station below Eskom prescribed levels or grid code. Good progress is made in reducing the rand/ton costs of coal. Rain Readiness plans have held up against high and early summer rainfall and are continuously improved. The Camden ash dam facility is operational. The Majuba Power Station coal tippler facility is slowly scaling up deliveries, with now two trains per day delivering 8 400 tons each day, the equivalent of 247 road truck loads (to gradually increase to 6 trains/day). Environmental matters such as emissions have shown good improvements year-to-date but are not yet at the set targets. Water consumption requires additional focus to contain risks of spillages. The Generation side of the business remains a concern, specifically the availability of the coal power stations. YTD Energy Availability Factor (EAF) at 62.9% is not at the targeted performance level. A key contributor to the low EAF was high levels of planned maintenance over the summer months. The high levels of unplanned outages remain a concern, however, we continue to drive our Reliability Maintenance Recovery Programme to reduce these. Overview and summary of Eskom system year-to- date performance (3/3) The Reliability Maintenance Recovery Programme has continued as a key contributor to addressing the low EAF. More effort is being applied to ensure that the key funding and enabling contracts are in place to support the objectives of this critical programme. Unfortunately, as at 24 January 2022, increasing breakdowns and low plant availability forced Eskom to implement load shedding totaling 51 days (1 213 GWh) since 01 April 2021, compared to 47 days (1 034 GWh) for the 2021 financial year ended 31 March 2021. Due to the system constraints, we have used more that the anticipated levels of diesel for Open Cycle Gas Turbines (OCGTs). Safety is well below the tolerance levels. Regrettably, we have had 3 employee and 2 contractor fatalities financial year-to-date. Following the unfortunate explosion at Unit 4 at the Medupi Power Station, a detailed investigation has been completed. Recovery plans in progress, Targeted return to service is August 2024 Following September 2021 transformer explosion, Kendal Unit 1 returned to service on 3 Jan 2022. Transmission Performance YTD (31 December 2021) 97.6 % Maintenance SM<1 of 2.41 vs YTD target of 2.65 Completion 0 Major Incidents 15 Interruptions vs YTD target of 2 vs YTD target of 26 ▪ System reliability performance: There have been fewer interruptions YTD relative to previous years and YTD System Minute <1 results are within planned performance limits. ▪ Nil Major Incidents have occurred YTD. ▪ High levels of maintenance completion has been sustained ▪ Asset condition risks require increased asset renewal investment going forward for future operational sustainability ▪ Ongoing theft and vandalism has impacted operations creating risks for interruption incidents Distribution Performance YTD (December 2021) Electrification SAIDI SAIFI 57 978 37.60 12.85 vs. vs. vs. YTD Target of 52 551 38.00 Tolerance 19.60 Tolerance Planned Maintenance Refurbishment Restoration Time Completed Spent 91.29% R210m 90.9% vs. vs. vs. YTD Target of 93% YTD Target of R329m 90% Target ▪ Network performance, measured by SAIDI (duration) and SAIFI (frequency) is sustained. ▪ Planned Maintenance and Refurbishment execution are below target but have not adversely impacted system reliability. Completion of the planned programs remains a key focus area for the business. ▪ Theft, meter tampering and vandalism of network equipment continues to impact operations and system reliability. ▪ Electricity theft continues to manifest as an operational, financial and public safety risk. Criminal damage to network infrastructure • Increasing crime/theft/sabotage and vandalism on the Transmission and Distribution networks have resulted in losses and increased risks for customer interruptions. • Transmission and Distribution lines are vulnerable due to the extensive geographic Hera – Westgate 275kV transmission line areas they cover, the remoteness and the inability to continuously patrol these assets. • Community support and vigilance to report such criminal activities is vital to assist Eskom in its response strategy. Pluto – Bighorn 400kV transmission line Marang – Trident 400kV transmission line Our network comprises of 33 158 km of transmission; 391 784km of distribution lines across the country Group Capital Performance YTD (31 December 2021) Execution of Major Plant 1 594MW YTD Defects Correction vs YTD target of 1 594MW vs plan (Jan 2021 to Dec 2021) Execution of Emissions Execution of Ash Dam Control Projects Projects ▪ Commercial Operation of new units: On 31 July 2021, Medupi Unit 1, the last of six generation units, was successfully commissioned and handed over to Generation. On 29 March 2021, Kusile Unit 3 achieved commercial operation ▪ Kusile Unit 4 first synchronized: On 23 December 2021 and achieved full load on 11 January 2022, delivering 800MW to the National Grid as commissioning tests continue ahead of commercial operation ▪ Major plant defects correction: At Medupi, boiler plant modifications have been implemented on all six units, except for the long lead time milling modifications and the duct erosion modifications on Unit 6. At Kusile Unit 1, the boiler plant modification outage was completed and commenced on Unit 2 in November 2021 (RTS February 2022). ▪ Execution of emissions control projects: Steady progress is achieved on the projects, however, some construction, contractual challenges, including COVID-19 constraints are impacting execution. ▪ Execution of ash dam projects: Significant progress achieved with ashing at Camden and Majuba, however some commercial, construction issues, including inclement weather and COVID-19 constraints are impacting execution. ▪ Other: Tender evaluations for Phase 1 of the Battery Energy Storage Systems (BESS) project is complete (approval obtained to proceed). At Majuba the coal tippler was successfully commissioned (late November 2021) Medupi and Kusile major boiler plant defects correction • Eskom is correcting all the major boiler plant defects (i.e., mills, gas air heaters, fabric filters, air and flue gas ducts, and reheaters) at both Medupi and Kusile. • A defect correction program was established in collaboration with the original boiler contractor, to test, develop and implement technical solutions in all Medupi and Kusile units. • Medupi Unit 3 was used as a pilot for the initial implementation of these solutions, which require extended unit outages to execute. Similar solutions were rolled out to all Medupi units and Kusile Unit 1, with roll-out commencing on Kusile Unit 2 in November 2021. Effective from 2021/2022, this roll-out will be implemented on the remaining Kusile units, as unit planned outages become available. • Medupi Unit 3 running at an average of > 93% EAF for ~8 weeks from inspection outage in November 2021 • Similarly, defect correction on the milling plants are done during planned mill refurbishment outages and as modified spares become available. • Eskom is also developing enhanced boiler plant solutions, independently and in liaison with the boiler contractor and other parties. These modifications will be rolled out during standard planned unit maintenance outages starting in 2022. Status of GCD New Build Programme (inception to date): Focus is on bringing new capacity online and driving plant defect corrections ✓ Achieved CO on or Target schedule earlier than target Latest Eskom Board Approved Completed Units Target Dates FY 2015 – FY 2022 FY 2022 – FY 2025 Sere Wind Ingula Ingula Medupi Kusile Kusile Medupi Kusile Kusile Farm Unit 4 Unit 2 Unit 5 Unit 1 Unit 2 Unit 1 Unit 4 Unit 6 Mar-17 May-17 Mar-18 May-18 Jan-21 ✓ Jul-21 ✓ July-22 May-24 Mar-15 ✓ Jun-16 ✓ Aug-16 ✓ Apr-17✓ Aug 17 ✓ Oct-20 Jul-21 100 333 333 794 800 800 794 800 800 794 333 333 794 794 794 800 800 Medupi Ingula Ingula Medupi Medupi Medupi Kusile Kusile Unit 6 Unit 1 Unit 3 Unit 4 Unit 3 Unit 2 Unit 3 Unit 5 Jun-15 ✓ Jul-17 ✓ Jan-17 ✓ Jun-19✓ Dec-19 ✓ Mar-21✓ Aug-15 Aug-16 Jan-17 Jul-18 Nov-17 ✓ Jul-19 Nov-19 Mar-21 Dec-23 … 2 400 MW to be 8 596 MW installed since 2015 & installed over the next 4 14 733 MW installed since 2005 …. years Generation Performance YTD (December 2021) 532 UAGS Trips vs. 294 62.9% for Q3 target for FY22 Availability vs. 70% target for FY22 24.6% 4 723MW Unplanned load losses vs. 16.9% Q3 target for FY22 Partial load Losses vs. 3547 MW YTD target for FY22 9.8% R4.98bn* Planned maintenance vs. Open Cycle gas 9.8% Q3 target FY22 turbines cost vs projection of R4,98 bn * Eskom OCGTs only as at 11 Jan 2022 Figures as at end December 2021 The FY2021 EAF performance was lower overall compared to the FY2020 performance. The FY2022 performance continues to be lower than the aspiration resulting in intermittent load shedding. Generation monthly and YTD performance Contributing factors Percentage (%) OCLF UCLF PCLF EAF • Camden’s ash constraint contribute about 36% to total YTD OCLF of 2.66%, with 2 5 4 4 4 2 2 3 4 4 4 3 4 2 4 2 3 2 3 3 3 2 3 December 2021 being the first month with zero ash dam 17 19 20 18 18 19 20 19 20 22 20 23 25 22 21 22 25 constraints. 25 24 26 27 27 28 • Slips, trips, boiler tube 7 5 failures, partial and full load 15 7 11 14 14 16 8 11 12 11 6 12 losses all contributed to the 18 14 7 10 13 12 12 11 11 high UCLF. • Gx fleet YTD EAF at 62.9% is below the YE SHC target of 74%. • During the year, a delicate 72 balance was required to giving 71 69 67 65 66 65 65 64 64 64 67 66 the plants opportunity for 64 60 63 63 58 57 59 58 58 58 planned maintenance and the having the plants available to support the system. The ratio of short-term to long-term is about 1:2 Apr’20 May’20 Jul’20 Apr’21 May’21 Jul’21 Oct’20 Oct’21 Jun’20 Jan’21 Jun’21 Aug’20 Sep’20 Aug’21 Sep’21 FY22 YTD Nov’20 Feb’21 Mar’21 FY21 YE Nov’21 Dec’20 Dec’21 YTD Figures as at end Dec 2021 Long Term maintenance decreased from mid May to end June 2021, which is typical for the winter period, and increased for the summer months 8000 Short term YTD PCLF: 3.30% 80 Long term YTD PCLF: 6.75% 7000 70 6000 60 5000 50 4000 40 3000 30 2000 20 1000 10 0 0 01-Apr-21 01-May-21 01-Jun-21 01-Jul-21 01-Aug-21 01-Sep-21 01-Oct-21 01-Nov-21 01-Dec-21 LT PCLF ST PCLF EAF % EAF Trendline Overview The maintenance is still showing seasonal trend which is typical for planned outages, reducing in the winter and increasing in the summer period. However short term is fluctuating depending on the space available in the system. Updated as at end December 2021 for Commercial Units Nuclear – Koeberg Performance YTD (Dec 2021) 2 UAGS Trip vs. target of 1 for FY22 3.04% Forced Loss Rate vs. YTD Target of 3.55% 82.72% 100% EAF Actual YTD vs. LTO Readiness YTD Target of 91.50% vs. Target plan ❑ The lower than planned EAF is primarily due to the delays experienced in returning Unit 1 to service during the refuelling outage during 2021. ❑ The high reliability of Koeberg is reflected in the low forced loss rate, which remains below the target even though there have been two unit trips during FY22. . Koeberg Nuclear Power Station Recent noteworthy items related to Koeberg: ▪ Unit 1 tripped on 24 Oct 2021 due to the spurious run-back of a steam feedwater pump which was being brought back to service after a statutory overspeed test. Unit 1 has since been on-line for 91 days (as at 26 Jan 2022) since returning to service on 27 Oct 2021. ▪ Koeberg Nuclear Power Station continues to be one of the most reliable power stations on the Eskom network, with the cheapest primary energy costs, essentially with capital fully depreciated. Before being taken offline on 17 Jan 2022, Unit 2 had been on-line for an uninterrupted 454 days since completing its last refuelling outage in October 2020. ▪ Koeberg Long-Term Operation (LTO) ▪ The LTO activities to enable Koeberg to operate for another 20 years beyond 2024/25 continue as scheduled. The formal application to extend the operating license has been submitted to the National Nuclear Regulator and accepted for further processing. ▪ Eskom will by June 2022 submit the required supporting submissions to the NNR for their evaluation, The required studies and reports remain on track and as expected no safety concerns have been identified that would preclude long-term operation. ▪ As part of the internal Eskom process, a team from the IAEA will perform a review of the aging analysis that has been performed. ▪ Steam Generator Replacement (SGR) and long-term outage on Unit 2 have commenced, during which the three steam generators and the reactor vessel head will be replaced. Regulator approval obtained January 2022 Conclusion - COO • We see a continuation of the strong performances from our Transmission and Distribution businesses, • Koeberg Nuclear Power Station continues to be one of the most reliable power stations on the Eskom Summary network. As an of Eskom assetperformance system that is fully depreciated, and has the lowest primary energy cost, the business case to extend its life is compelling, • Our Generation business performance (coal fleet) is not satisfactory. Specifically unplanned outage levels are too high, and this requires high volumes of diesel to run the Open Cycle Gas Turbines • We continue to drive our planned maintenance programme, with a focus on the effectiveness of outages. This will contribute to the risk of load shedding during times of capacity constraints. • Our Group Capital division is making steady progress on the new build programme, with Kusile Unit 4 now during certain times, adding up to 800 MW of additional capacity to the grid during testing prior to commissioning, • The process to address the design defects of Medupi and Kusile is progressing well, and we are looking at additional enhancements, • We are doing our utmost to limit load shedding, but not at the cost of doing effective planned maintenance, • We need additional capacity of between 4 000MW and 6 000MW. We hope to see a positive impact from government’s emergency capacity procurement programme. • Please continue to use electricity sparingly. Use Electricity Sparingly : Together we can make a difference Minimise workplace energy use with these six super savings tips • Don’t leave machines and equipment in standby mode; switch off at the power button. • Use natural light where possible • Use efficient light bulbs. Replace failed light bulbs with energy efficient lights / LEDs. • When you leave the facility or building, remember to switch off the lights, printers and air- conditioners. • Set air-conditioners’ average temperature in summer to around 23ºC • Encourage staff to rather use the cold water taps to reduce the energy consumption by geysers Please Use Only What You Need Contents 1 Performance Overview - COO 2 Generation Overview – GE: Generation 3 System Outlook: January 2022 – April 2022 GE: Transmission FY2022 System Performance (Commercial) EAF, % FY2021 FY2022 System Performance Commercial System EAF -5,7 -6,5 -1,3 70,7 72,1 -0,3 -2,3 -2,7 • Current financial year Jan 2022 -1,4 -6,0 68,9 67,6 -4,0 MTD is 58.0% which similar 66,4 66,4 66,2 65,3 64,5 64,2 64,6 -1,3 +0,4 65,2 (actual: 57.6%) compared to last 63,1 63,0 62,9 62,5 financial year January actual. 58,6 58,9 58,9 57,6 57,6 58,0 • Current financial year YTD Jan 2022 is 62.5% which is about three percentage points (actual: Apr May Jun Jul Aug Sep Oct Nov Dec Jan YTD 65.2%) lower than last financial year YTD figures. +596 Eskom OCGTs Eskom OCGTs, GWh 1 477 • MTD: Jan 2022 is 0.7 GWh (0.1% load factor) compared to 185 GWh actual for Jan 2021. 882 • YTD: Jan 2022 is currently at +335 1477 GWh compared to 882 +188 +151 +251 GWh YTD actuals for last +131 -84 -184 -72 -94 -27 340 financial year. 216 211 164 251 198 185 145 28 60 92 160 66 68 41 115 • FY2022 YE budget is 211 GWh 14 5 0 1 Apr May Jun Jul Aug Sep Oct Nov Dec Jan YTD (1% load factor) versus 1477 20 GWh YTD (8.9% load factor). Lower Generation performance is largely driven by high UCLF Build-up of Unplanned Losses for FY2022 January YTD from major contributors Other Losses ME OCLF 30 0.8 0.9 25 1.0 20 10,5 15 3.6 27,3 2,8 0,8 24,6 10 2,5 5.7 2,3 5 3,4 0 2.3 FLLs BTLs Trips Outage PLLs Total Camden Coal Other Total Slip UCLF Ash OCLF OCLF Unplanned Constraints Key insights • Plant performance is unpredictable with multiple failures experienced continuously • Partial Load Losses (PLLs) continues to be the biggest contributor to UCLF for FY2022 • Resolving the issues sustainably requires extensive maintenance Outages and implementation of refurbishment projects 21 YTD Figures as at end Dec 2021 Station Contribution to Total UCLF F2022 Dec YTD – 24.6% Average MW loss YTD end Dec 2021 Other 2,400 Fleet Impact 2243 Auxiliary System Boiler 2,200 7% Ash Plant 3% 18% 2,000 46% 4% 1791 1,800 Electrical 5% 1,600 1,400 92% Gas Cleaning 6% 1,200 1067 975 17% 1,000 805 775 7% 800 721 Feed Water Turbine 589 600 463 458 400 8% 298 292 229 217 14% 200 124 Mills 22 22 10% 0 Draught Plant TT KD DV MD MJ KR AR ML HN MT LT KS KB CD GV PK KM Generator Key Insights • Tutuka, Kendal and Duvha contributed about 46% of the total UCLF YTD. • Boiler, Turbine, Draught and Generator were the main contributors (58% contribution) for the period of December FY2022 YTD. YTD Figures as at end Dec 2021 The Generation Improvement Plan focus areas and initiatives Improve Energy Availability 9-Point plan and Address PLL’s Coal Quality Fill critical vacancies Outage preparation Reduce trips MTTR actions through the improvement drive in Leadership, Ops, improvement through Power Station established through regular maintenance, Implement identification of root Improvement Plans recovery teams mine interactions engineering and maintenance causes and outages effectiveness initiatives Furthermore Leadership and Culture Skills and resourcing Key priorities • Enhance knowledge at a senior level • Clear leadership expectations • Augment specialised skills • Drive technical focus • Drive capability building • Improve housekeeping – Project R and PCM training • Active risk management – Engineering Practitioners training • Power station assessment drive – OEM training • Restore pride in employees • Develop resourcing strategies – technical roles The biggest opportunity to fix the plant is during Outages – hence the importance of the RMR Programme Reliability Maintenance Recovery (RMR) Programme Status at 19 January 2022 84 ▪ Impacted negatively by funding and capacity 33 constraints, as well as execution challenges 9 12 33 28 2 FY2022 Completed Executing Deferred Deferred Remaining Additional Base plan within FY2022 to FY2023 outages Key insights ▪ Status of Reliability Maintenance FY2022: ➢ As at 19 January 2022, of the 84 outages planned for FY2022, 33 have been completed, 9 are in execution, 2 are remaining and 12 have been deferred within the financial year while a further 28 outages have been deferred to FY2023. ➢ These outages include General Overhauls (86 days); Mini General Overhauls (70 days); Interim Repairs (30 – 50 days) and Opportunity Maintenance ▪ The main work impacting plant reliability and predictability is carried out during Mini-Overhauls and General Overhauls. There are on average 20 MGO’s and GO’s per annum for coal fired power stations ▪ There will be a 3-year lag period to have completed MGO’s or GO’s on the coal fleet units 24 Critical Outage Performance Indicators Generation Outage Performance Due Date Performance 100% 80% 75% 75% 75% 80% 66,7% 60% 50,0% 42,9% 40% 22,2% 20% 0% FY21 (Q4) FY22 (Q1) FY22 (Q2) FY22 (Q3) DDP Gx Target Outage Duration Reduction Post-outage UCLF 10% 9% 50% 39,7% 8% 40% 6% 6% 6% 6% 30% 22,3% 22,0% 4% 3,2% 2,8% 14,0% 20% 1,3% 2% 0,8% 10% 16% 15% 15% 15% 0% 0% FY21 (Q4) FY22 (Q1) FY22 (Q2) FY22 (Q3) FY21 (Q4) FY22 (Q1) FY22 (Q2) FY22 (Q3) ODR Gx Target PO-UCLF Gx Tolerance Following the decline from about mid-year all the major assessment categories started to show improvement in the fourth quarter. The longer-term reviews started showing improvement as well, this could be related to the availability of funding. Remaining a concern is the contracts/procurement category, which also forms a large part of the T-03 review. 25 The maintenance backlog remains a substantial risk to performance Maintenance issues cutting across multiple stations (deep dive on next slides) A. Vacuum issues at various power stations B. Late Control and Instrumentation Refurbishment projects C. Maintenance backlog in preventing Boiler Tube Leaks D. Overdue environmental projects E. Water Treatment Plants refurbishment projects A Vacuum issues Vacuum related load losses: Stations affected: Tutuka, Kriel, Matla 4-6 • Matla 4 - 6 150MW • Scaling/fouling affect Condensers and Cooling Towers Fill • Kriel 640MW • Tutuka (4units)150MW • Suspended solids, e.g., ash, in CW accelerate fouling • HP cleaning or chemical cleaning used during outages to clean condenser tubes • Cooling tower fill fouling is irreversible, cannot be cleaned • Result is load losses and unit trips due to vacuum Projects to address poor vacuum: Tutuka: • Investment approval in Feb 2022 • Plan to start construction in 2023 Kriel • Contract awarded • All 4 towers planned to be completed: April 2023 • Risk: Two unit operation on one tower during unit 6 Outage starting 28 Jan 2022 Matla 4-6 • Contract awarded • All 3 cooling towers planned to be done in 2022 27 B Late Control and Instrumentation (C&I) refurbishments Key Insights: ▪ 2013 plans not executed ▪ Cross-lined – not executed yet ▪ Historically – if project is not funded (say at Concept), all development would stop ▪ 2016 – 2021 Peak shifting forward to 2022 – 2027 ▪ Results of non- refurbishment: ‒ Increased unit trips ‒ Unreliable plant ‒ Possible plant damage ‒ Risk of long shutdowns 28 C Boiler Tube Leaks Key Insights: • Maintenance backlog of 28% that resulted in 50 additional BTFs ‒ HD (12), GV (9) & KM (3) contributed 24 BTF’s (~48%) – exempted from BTRF program ‒ Of the remaining 26 preventable BTF’s - MJ (5), KR (6), KD (3) , LT (3), DV (3), CD (3) & AR (2) contributes ~ 48% 29 D Station contribution to emission load losses MW loss November 2021 due to emissions Key Insights • Medupi and Kusile load losses due to design during construction. • Kendal due to strike action in 2018, recovery is in progress but will only be resolved once remaining four units are refurbished, Matla, delay of retrofitting units 1 and 4, Lethabo refurbishment planned from 2022. Duvha High Frequency Power supply delayed, planned for 2022/23. E Demineralised Water Production Plants Status across the fleet: Key Insights Chemical WTP • The majority of Demin Water Demin Spares Indices Demin Refurbishm review Overall availa- availa- Production Plants are in dire (make-up plant PM's ent history Gap rating bility % bility% need of refurbishment. Typical water) analysis KDL 29 60-80% no 0-60% I 5.7 Priority 1 scope includes: DVH 36 60-80% no 0-60% I 5.3 Priority 1 • Ion exchange vessel repairs MDP 2 60-80% no 76-89% I 5.0 Priority 1 • Sump repairs / relining TTK 16 60-80% no 0-60% II 4.7 Priority 2 • Major pump and valve LTB 0 80-100% no 60-80% I 4.3 Priority 2 overhauls / replacement KRL 2 80-100% no 76-89% II 4.3 Priority 2 • Piping replacement / ARN 0 80-100% no 0-60% II 4.3 Priority 2 repairs GVL 18 80-100% no 60-80% I 4.3 Priority 2 MTL 4 80-100% no 60-80% II 4.3 Priority 2 • These systems are being run MJB 0 80-100% no 0-60% II 4.0 Priority 2 to failure and are falling apart. CMD 5 80-100% yes 76-89% III 3.3 Priority 3 • Refurbishment plans have MTB 0 80-100% no 76-89% II 3.3 Priority 3 been developed for each HND 0 80-100% no 80-100% IV 3.0 Priority 4 station. KSL 0 80-100% yes 76-89% III 2.7 Priority 4 • Refurbishment will ensure KMT 0 80-100% yes 76-89% III 2.3 Priority 4 increased availability and reliability of plant and Refurb in past YTD A ct < YTD RB O P M 'S In 10 yrs & Insp in equipment. It will also allow us to 80%-100% SA P ; 90%-100% 90%-100% III-IV Tar P M executed past 5 yrs; no improve the performance of the failures Refurb in past plant, increase demin water RB O P M 'S In YTD A ct >YTD 60%-80% SA P ; 76%-89% 10 yrs OR Insp 76%-89% II production rate, improve demin Tar in past 5 yrs; no P M executed failures water quality, and reduce risk to No RB O P M 'S NO Refurb in past 10 yrs and plant health. in SA P ; 0%- 0%-60% NO Insp in past 0%-75% I 75% P M 5 yrs; had executed failures 31 Progress regarding Medupi Unit 4 Recovery ▪ Detail Major Event Technical Investigation has been concluded ▪ Human error investigation has been completed ▪ The incident was caused by a hydrogen explosion resulting from mixing of hydrogen and air during the purging process ▪ The incident seems to indicate procedural non-compliance and management failures ▪ Corrective actions has been initiated ▪ Full time recovery manager has been appointed and recruitment of multi-disciplinary team has been initiated. ▪ The Property Damage Assessment phase of the damaged property is underway led by Eskom Rotek Industries (ERI) with Technical Support from the OEM: General Electric (GE). ▪ An insurance claim has been lodged and the Insurers have their appointed technical assessors who are working with Eskom and OEM Engineers to assess the damage ▪ Avenues are being explored to accelerate the recovery of the unit ▪ Twenty three (23) plant systems (non-damaged property) require preservation. Preservation is ongoing on some of the plant systems, however the pressure parts, headers, and feedwater heating systems require special preservation equipment which is currently being procured. ▪ This incident is being used as a case study to improve internal processes going forward 32 Kendal U1: Progress on recovery of Main Generator Transformer fire At 03:36, 11 September 2021, Unit 1 Main Progress Generator Transformer failed and caught fire • Unit 2 and 3 burnt cables repaired and units returned to service on 14 September 2021 after incident • The transformer unexpectedly failed and caught fire resulting in complete damage to the • Unit 1 scope of work was frozen on 14 October 2021 transformer and associated equipment • Opportunity maintenance conducted during this • The burning oil from the transformer flowed into period the Main Cooling (MCW) ducting, burning cables • Kendal unit 1 successfully returned to service on that affected Units 2 and 3. Monday 3rd January 2022 – all tests including the replaced generator transformer were successful Preliminary investigation response: • All requested investigation data captured and sent to Assurance and Forensics (Investigation in progress) • Lessons learned from preliminary investigation have been shared with other power station personnel • Draft investigation report submitted to Kendal Management for review and comment; • Kendal Management providing support for information to be furnished to the Insurance Company to conclude the claim. Enablers required for improved Generation performance Stable Internal focus Additional support required Generation stays committed to drive progress through our improvement plans, however certain areas require more focus to enable improved performance • Capable and knowledgeable contractors • Timeous and adequate outage funding • Space for planned maintenance • Current shortfall of at least 4000MW • Managing change in energy environment • Station shut down plans, JET transition • Reach mutual agreement on environmental statutory compliance requirements • Internal issues • Skilled workforce • Turnaround of critical procurement • Disciplined execution - Planning and execution of routine maintenance and outages • Motivated workforce 34 Contents 1 Performance Overview - COO 2 Generation Overview – GE: Generation 3 System Outlook: Jan 2022 – April 2022 GE: Transmission 35 System Outlook - context ▪ The majority of the coal power stations are operating past the midway (average 42 years) of their operational life, resulting in high levels of breakdowns. ▪ The drive to implement the reliability maintenance and refurbishment projects in order to address the unreliability is under way to get the plant performance back to acceptable levels. ▪ The public is therefore cautioned to expect an elevated risk of loadshedding while the Reliability Maintenance program is being implemented. 36 System Performance - Summer 2021/22 Key Insights Unplanned unavailability > 11GW for ~94% of the time during the summer Contributing factors period • Shortage of generation capacity; Loadshedding occurs when: • Increased unplanned unavailability; • High demand periods coincide with high unplanned unavailability • High unplanned unavailability for a prolonged period of time depletes emergency • Increased planned maintenance; generation reserves Total of 51 days of Loadshedding between 1 April 2021 to 24 January • The need to conserve and replenish depleted 2022 compared to 31 days of Loadshedding the previous year. emergency resources; Total of 30 days of Loadshedding since 1 September 2021 • Poor coal quality and compromised emissions performance. UCLF+OCLF has been lower than the Summer Plan assumptions for 6% of the time while it has exceeded the assumptions for 46% of the time so far this summer. 37 Annual Load Shedding and Curtailment events (Calendar years) Key insights • The highest number of loadshedding incidents took place during 2015. These tended to be mostly over evening peak periods, for short duration, due to insufficient peaking generation capacity. • In 2021 there were fewer loadshedding incidents, but the energy (GWh) shed was higher than in 2021 because of OCGT and pumped storage constraints. • Many of the loadshedding incidents were necessary to replenish pumped storage dam levels overnight or over the weekend and ration diesel at the OCGT power stations while additional diesel was being delivered to these sites. • 2021 had the highest number of loadshedding hours (1 150 hours) as well as the highest energy not supplied (1 773 GWh) to customers. • This amounted to 0.78% of the energy required by customers not being supplied. 38 Renewable statistics Current installed capacity (MW) Key insights CSP 500 • The installed capacity of renewable PV 2 212 generation continues to grow as more facilities are commissioned. Wind 3 163 • Most days, renewable generation Total (including other renewable generation) 5 901 contributes more than 3 500 MW to Maximum contribution (MW) the power system at midday. CSP 505 30-Nov-2021 16:00 • The highest peak demand of the day occurs after sunset and is supported PV 2 100 24-Oct-2021 12:00 by wind generation and to a lesser Wind 2 639 15-Dec-2021 17:00 extent by CSP generation that has up to 6 hours of storage capacity. Total 4 785 01-Nov-2021 13:00 • On 1 November 2021, at 13:00, 19% Maximum % contribution towards hourly energy supplied of the country’s demand was Total 19.1% 01-Nov-2022 13:00 supplied by renewable generation. • In 2021, renewable generators Maximum difference in 24 hours (MW) supplied 6.7% of the contracted (evening peak to evening peak) energy in the country. Total 1 744 7 - 8 August 2021 • The variability of renewable generation over a 24-hour period requires conventional generation to be reduced or dispatched to compensate for the change in renewable generation output. • The maximum variation recorded from one evening peak to the next evening peak was 1 744 MW, equivalent to three large coal fired generators. 39 System Operator Capacity Outlook for the next 18 Months (Base Case) System Operator Capacity Outlook (Base Case) MW Available Capacity (Excl Gas) Gas Reserve Requirement Planned Outages 51000 Unplanned Provision Peak Residual Forecast Installed Capacity 49000 47000 45000 Winter UCLF Summer UCLF 11 000 MW Summer UCLF 43000 12 000 MW 12 000 MW 41000 39000 37000 35000 PCLF Operating Reserve 33000 31000 29000 27000 25000 Gas 23000 Available Capacity (Excl Gas) 21000 19000 Jun 2022 Oct 2022 Jan 2022 Apr 2022 Jan 2023 Feb 2022 Mar 2022 Sep 2022 Feb 2023 Mar 2023 Jul 2022 Aug 2022 May 2022 Nov 2022 Dec 2022 Month 40 Outlook to 31 August 2022 Unplanned unavailability Summer: 12 000 MW Summer: 13 000 MW Summer: 14 000 MW Winter: 11 000 MW Winter: 12 000 MW Winter: 13 000 MW Summer 2021/22 (24 January 2022 – 31 March 2022) Number of LS days 0 days 2 days 29 days Highest stage of LS N/A Stage 1 Stage 2 OCGT costs R 0.5bn R 1.7bn R 4.1bn Winter 2022 (1 April 2022 – 31 August 2022) Number of LS days 0 days 5 days 61 days Highest stage of LS N/A Stage 1 Stage 2 OCGT costs R 0.8bn R 1.8bn R 3.4bn Dramatic increase in load shedding days and OCGT cost for only 1 000 MW change in UCLF + OCLF History has shown that it is not possible to use more than about R 1.2bn of diesel in a month due to the physical limitations of moving the diesel to the OCGT stations. Where the Plan shows a diesel usage greater than this, additional stages of load shedding should be expected Summer: 1 September 2021 – 31 March 2022. UCLF+OCLF: 12 000 MW – 14 000 MW Winter: 1 April 2022 – 31 August 2022. UCLF+OCLF: 11 000 MW – 13 000 MW 41 Thank You