Consolidated Report on the Audit Findings of the Electricity Generation Industry ... ·...

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Consolidated Report on the Audit Findings of the

Electricity Generation Industry Compliance

Audits Conducted in 2014

Audit year: 2014

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All enquiries and correspondence to be directed to the Head of Department unless

indicated otherwise by means of a formal letter signed by the Head of Department:

Electricity Licensing, Compliance and Dispute Resolution.

Tel : +27 (0)12 401 4794

National Energy Regulator

Kulawula House

526 Madiba Street

Arcadia, Pretoria

0083

PO Box 40343

Arcadia

0007

Tel : +27 (0)12 401 4600

Fax : +27 (0)12 401 4700

Website : www.nersa.org.za

http://www.nersa.org.za/

II

TTAABBLLEE OOFF CCOONNTTEENNTTSS

ABBREVIATIONS ......................................................................................................................................... III

DEFINITIONS ............................................................................................................................................. IV

EXECUTIVE SUMMARY .............................................................................................................................. VI

1. INTRODUCTION .............................................................................................................................. 1

2. AUDIT OBJECTIVES .......................................................................................................................... 1

3. AUDIT PROCESS .............................................................................................................................. 2

4. AUDIT METHODOLOGY ................................................................................................................... 2

5. SCOPE OF WORK ............................................................................................................................. 3

6. CHALLENGES AND AREAS OF CONCERN .......................................................................................... 4

6.1. TSB KOMATI ............................................................................................................................................ 4 6.2. TSB MALELANE ........................................................................................................................................ 4 6.3. SAPPI NGODWANA .................................................................................................................................... 4 6.4. SAPPI SAICCOR ......................................................................................................................................... 4 6.5. SAPPI TUGELA ........................................................................................................................................... 4 6.6. MERINO POWER STATION .......................................................................................................................... 5 6.7. SOL PLAATJE POWER STATION ..................................................................................................................... 5 6.8. LYDENBURG HYDRO ................................................................................................................................... 5

7. FACTS AND FIGURES ....................................................................................................................... 5

8. SUMMARY OF OBSERVATIONS AND AUDIT FINDINGS .................................................................... 5

8.1. COMPLIANCE WITH THE ELECTRICITY GENERATION LICENCE ................................................................................ 6 8.2. COMPLIANCE WITH THE DISTRIBUTION INFORMATION EXCHANGE CODE .............................................................. 7 8.3. COMPLIANCE WITH THE DISTRIBUTION NETWORK CODE ................................................................................... 7 8.4. COMPLIANCE WITH THE TRANSMISSION NETWORK CODE .................................................................................. 8 8.5. COMPLIANCE WITH THE DISTRIBUTION SYSTEM OPERATING CODE ...................................................................... 9 8.6. GENERATION MAINTENANCE STRATEGY ........................................................................................................ 9 8.7. PLANT PERFORMANCE AND KEY PERFORMANCE INDICATORS (KPIS) ................................................................. 10 8.8. OUTAGE MANAGEMENT .......................................................................................................................... 10 8.9. ASSET MANAGEMENT .............................................................................................................................. 10 8.10. REFURBISHMENT AND EXPANSION PLANS ..................................................................................................... 11 8.11. PRIMARY ENERGY ................................................................................................................................... 11

9. PLANT INSPECTION ....................................................................................................................... 11

9.1. SCOPE OF PLANT INSPECTION .................................................................................................................... 11 9.2. ON-SITE OBSERVATIONS ........................................................................................................................... 12

10. CONCLUSION ................................................................................................................................ 15

III

AABBBBRREEVVIIAATTIIOONNSS

GCR Grid Code Requirement

GO General Overhaul

HV High Voltage

LTA Loss Time Availability

MTPPP Medium-Term Power Purchase Programme

MW Mega Watt

NERSA National Energy Regulator

OEM Original Equipment Manufacturer

OTE Overall Time Efficiency

PPA Power Purchase Agreement

SAGC South African Grid Code

SAP System Application and Production

UNIPEDE Union Internationale des Producteurs et Distributeurs dEnergie Electrique

IV

DDEEFFIINNIITTIIOONNSS

Embedded Generator (as defined in the South African Grid Code)

A legal entity that operates a unit, other than a co-generator, that is not connected to

the Transmission System.

Generator (as defined in the South African Grid Code)

A legal entity licensed to engage in the production of electricity through a unit or power

station.

Grid Code (as defined in the South African Grid Code)

The ‘South African Grid Code’, which consists of the following documents, as

approved by NERSA and updated from time to time by the Secretariat.

Preamble

Governance Code

Network Code

System Operation Code

Metering Code

Tariff Code

Information Exchange Code

Licensees (in this document)

TSB Sugar RSA (Pty) Ltd;

Sappi Southern Africa (Pty) Ltd;

Bethlehem Hydro (Pty) Ltd; and

Thaba Chweu Local Municipality.

Participant (as defined in the South African Grid Code)

A legal entity registered with or licensed by the NERSA in terms of the Electricity Act,

and as listed in the Governance Code. Participants are defined as the following

entities:

Generators with power stations where the total installed generating capacity is

greater than 50MVA or any unit where the installed generating capacity is greater

than 20 MVA, and who participates in the wholesale electricity market.

Generators with power stations connected to the transmission system.

Generators providing ancillary services for system operation purposes.

Distributors connected to the transmission system.

End-use customers connected to the transmission system, or their respective

distributor acting on their behalf.

A retailer or other wholesale market participant required to contract for the use of

the transmission system.

Transmission network service providers.

The System Operator.

Other participants in the ancillary services market; e.g. persons with interruptible

loads.

The Market Operator.

V

Power Plants and Power Stations

A power generating plant with one or more generation unit.

VI

EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY

The Electricity Regulation Act, 2006 (Act No. 4 of 2006) (‘the Act’), stipulates that the

Regulator must enforce performance, compliance and take appropriate steps in the

case of non-performance.

Pursuant to Section 4(a)(vii) of the Act, all licensed entities are subject to an audit for

compliance with licence conditions imposed by the Energy Regulator. The audit

objectives are to assess compliance with applicable regulatory requirements, validate

evidence of self-reported non-compliances, document the licensees’ compliance level

and plans, and monitor the implementation of corrective action plans.

There are approximately 102 electricity generation licensees and the total number of

power stations includes 86 operational, 10 non-operational and 41 new builds (under

construction). The selection criteria for the representative sample of power stations

audited is based on:

the type of licensee e.g. municipal generators may be audited together so as to

establish common practices and challenges;

information submitted to NERSA through G-forms, production figures or any other

form;

the power contribution or impact of the power station on the national grid;

research or data collected through desktop monitoring or media; and

a mixture of age, type of technology and location.

The Nersa team conducted compliance audits for the licensees listed in Table 1

below.

Table 1: List of licensees audited and audit dates

Licensee

Power Station Name

Status of the

Power Station

Audit Date

TSB Sugar RSA

(Pty) Ltd

TSB Komati Operational 28 July 2014

TSB Malelane Operational 29 July 2014

Thaba Chweu

Local Municipality

Lydenburg Hydro

Power Station

Operational 30 July 2014

Sappi Southern

Africa (Pty) Ltd

Sappi Ngodwana Operational 31 July to 01 August

2014

Sappi Saiccor Operational 11 August 2014

Sappi Tugela Non-operational 13 August 2014

Bethlehem Hydro

(Pty) Ltd

Merino Power Station Operational 03 to 04 November

2014

Sol Plaatje Power

Station

Operational 03 to 04 November

2014

The twofold audit included a compliance assessment and plant inspection. The

audited licensees are in compliance with most of their licence conditions. Table 2a and

2b below represents a snap-shot of the compliance status of the licensees.

VII

Table 2a: A snap-shot of compliances

Compliance requirement Licensees’ compliance status

Compliance with the electricity

generation licence – validity of the

electricity generation licence

All licensees have valid electricity generation

licences.


generation licence – submission of

production figures

All licensees comply with the licence condition and

submit production figures for the Power Plants in a

manner prescribed by NERSA.

Compliance with the Distribution

Network Code

All licensees comply with the minimum protection

requirements of the code.

Table 2b: A snap-shot of non-compliances

Compliance requirement Licensees’ compliance status


generation licence – maintain

separate accounts for generation

business and submit audited

financials.

Three of the audited licensees do not maintain

separate accounts for the generation business and

do not submit the Power Plant(s) audited financials

to NERSA.

Compliance with the Distribution

Information Exchange Code – Data

storage and archiving

Though all licensees have data storage facilities

on-site, store data in hard copies and soft copies

and the storage period is longer than five years;

three of the licensees do not have a data and

archiving procedure in place, data storage and

archiving is only done as an inherent custom.

Compliance with the Transmission

Network Code – Testing and

compliance

The Power Plants do not keep records of

compliance with the requirements of the Network

Code for each of the generation units.

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11.. IINNTTRROODDUUCCTTIIOONN

The National Energy Regulator (NERSA) derives its mandate to conduct compliance

audits for licensed electricity Generators from the Electricity Regulation Act, 2006 (Act

No. 4 of 2006) ('the Act'). The Act empowers the National Energy Regulator as the

custodian and enforcer of the regulatory requirements.

The Regulator is empowered to execute functions such as to enforce performance and

compliance, and take appropriate steps in the case of non-performance.

There are approximately 102 electricity generation licensees and the total number of

power stations includes 86 operational, 10 non-operational and 41 new builds (under

construction). The selection criteria for the representative sample of power stations

audited is based on:

the type of licensee e.g. municipal generators may be audited together so as to

establish common practices and challenges;

information submitted to NERSA through G-forms, production figures or any other

form;

the power contribution or impact of the power station on the national grid;

research or data collected through desktop monitoring or media; and

a mixture of age, type of technology and location.

In 2014, the NERSA team conducted audits for the electricity generation industry,

specifically the Embedded Generators operated by private entities and one operated

by a municipality. The following licensees (‘the Licensees’) were selected for the audit:

Table 3: audited licensees

Licensee Power Station

TSB Sugar RSA (Pty) Ltd TSB Komati

TSB Malelane

Sappi Southern Africa (Pty) Ltd Sappi Ngodwana

Sappi Saiccor

Sappi Tugela

Bethlehem Hydro (Pty) Ltd Merino Power Station

Sol Plaatje Power Station

Thaba Chweu Local Municipality Lydenburg Hydro

22.. AAUUDDIITT OOBBJJEECCTTIIVVEESS

All licensed entities are subject to an audit for compliance with licence conditions as

imposed by the Energy Regulator. The audit objectives are to:

assess compliance with the requirements of the Electricity Generation Licence

conditions and the applicable South African Grid Code;

validate evidence of self-reported non-compliances;

document the Licensees’ compliance level and plans; and

monitor and enforce the implementation of corrective action plans.

2

33.. AAUUDDIITT PPRROOCCEESSSS

The audit team conducts audits which serve as information gathering processes and

analyses the information together with the evidence that is submitted by the

Licensees. Subsequently, an audit report that details the record of observations,

findings and recommendations is compiled for each Licensee according to the number

of its power stations. The report(s) is/are sent to the Licensees for comments. On

receipt of the comments, a consolidated audit report is prepared for approval by the

Energy Regulator and thereafter, the Licensees are required to develop corrective

action plans to address the findings of the audit. The National Energy Regulator will

then monitor and enforce the implementation of the corrective action plans to assist

the Licensees to comply.

The various stages of the audit process involve the following activities depicted in

Table 4 below:

Table 4: The various stages of the audit process

Stage 1: pre-site visit

activities

Establish an audit team.

Establish communication with the Licensees to be audited.

Prepare audit questionnaire.

Compile audit program, agenda, and presentation.

Prepare audit packages.

Travel logistics.

Stage 2: on-site visit

activities

Make presentations to inform the Licensees about the aim of

the audit and the audit process.

Conduct compliance audits on the Licensees and take notes.

Plant Inspection.

Stage 3: post-site

visit activities

Consolidate Licensees’ responses.

Compile individual audit reports.

Send individual audit reports to the audited Licensees for

comments.

Compile consolidated audit report.

Prepare submissions to the Energy Regulator.

Request Licensees to submit corrective action plans.

Monitor the implementation of the corrective action plans.

44.. AAUUDDIITT MMEETTHHOODDOOLLOOGGYY

A detailed audit questionnaire was the main document used to facilitate the audit and

to determine the level of the Licensees' compliance. It was sent to the Licensees

before the day of the audit for preparation. The following documents formed the basis

for the audit questionnaire:

the Electricity Regulation Act, 2006 (Act No. 4 of 2006);

the Generation Compliance Monitoring Framework;

the Electricity Generation Licences issued to the Licensees; and

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the South African Grid Code (Version 8.0 of July 2010), including the Distribution

Code (version 5.1 of September 2007).

The questionnaire is divided into eleven sections; the five compliance requirement

sections relate to:

the Electricity Generation Licence conditions;

the South African Grid Code – Distribution Information Exchange Code;

the South African Grid Code – Distribution Network Code;

the South African Grid Code – Transmission Network Code; and

the South African Grid Code – Distribution System Operating Code.

The other six sections of the questionnaire are aimed at establishing whether the

Licensees align themselves with industry standard and best practice with regard to the

safe and sustainable operation of the licensed facilities. The sections are as follows:

Generation Maintenance Strategy;

Plant Performance;

Outage Management;

Asset Management;

Refurbishments and Expansion Plans; and

Primary Energy.

55.. SSCCOOPPEE OOFF WWOORRKK

The scope of work involved the activities detailed in Section 3 Audit Process, of this

report. Table 5 below indicates the power stations that were audited:

Table 5: The Power Stations audited

Licensee Power Station Technology Installed

Capacity

Operational

Capacity

TSB Sugar RSA

(Pty) Ltd

TSB Komati Steam turbine:

coal and bagasse

20.00MW 20.00MW

TSB Malelane Steam turbine:

bagasse

32.80MW 32.80MW

Sappi Southern

Africa (Pty) Ltd

Sappi Ngodwana Steam turbine:

spent pulping

liquor and coal

117.60MW 117.60MW

Sappi Saiccor Steam turbine:

spent pulping

liquor and coal

46.00MW 46.00MW

Sappi Tugela Steam turbine:

spent pulping

liquor and coal

20.00MW -

Bethlehem Hydro

(Pty) Ltd

Merino Power Station Hydro 4.00MW 4.00MW

Sol Plaatje Power

Station

Hydro 3.00MW 3.00MW

Thaba Chweu

Local Municipality

Lydenburg Hydro

Power Station

Hydro 3.35MW 3.35MW

4

Licensee Power Station Technology Installed

Capacity

Operational

Capacity

Total capacity 246.75MW 226.75MW

66.. CCHHAALLLLEENNGGEESS AANNDD AARREEAASS OOFF CCOONNCCEERRNN

All Licensees are experiencing challenges; some are common to a number of them

whereas others are unique to a particular licensee or generation station. For example,

the inability to secure long-term coal contracts with suppliers is common among the

plants which use coal, whereas the hydro plants are faced with the issue of scarcity of

water during some seasons of the year or the water pressure drop in some instances.

The subsections below discuss the challenges experienced by each station.

6.1. TSB KOMATI

The Komati Power Plant uses coal and bagasse (a by-product of sugar cane) as its

primary energy. Supply of bagasse is predictable and it is readily available since it is

an in-house by-product. However, the supply of coal is a challenge as the generator

competes for coal with other coal consuming industries and the export market. Most

coal suppliers only offer short-term coal supply contracts, such as one year contracts.

6.2. TSB MALELANE

The Power Plant’s primary energy is 95% bagasse and only 5% coal is used mostly

when the plant is started up. The supply and reserves for bagasse is predictable since

it is supplied within TSB. Similar to TSB Komati, the supply of coal is a challenge as

the generator competes for coal with other coal consuming industries and the export

market. Most coal suppliers only offer short-term coal supply contracts, such as one

year contracts.

6.3. SAPPI NGODWANA

The Power Plant battles to secure long-term coal contracts as it cites competition from

coal consuming industries and the export market as the reason for failure to obtain a

long-term contract.

6.4. SAPPI SAICCOR

There are no challenges identified or reported.

6.5. SAPPI TUGELA

The Power Plant faces the following challenges:

it is 60 years old, therefore most of its components have become obsolete;

5

its cost of generation exceeds the tariff for buying power from the grid, as a result,

the two steam turbine generators were mothballed in 2013 as it became too

expensive to keep them operational;

prior to mothball, the plant used Grade A coal as primary fuel, which is very

expensive; and

it battled to secure long-term coal supply agreements, as most suppliers only offer

one to three-year contracts.

6.6. MERINO POWER STATION

The amount of power generated from Merino depends on the rate of water flow and

the head or pressure of the water. Water is supplied from Lesotho Highlands Water

Scheme; its flow rate and pressure varies from time to time on different seasons.

6.7. SOL PLAATJE POWER STATION

The amount of power generated from Sol Plaatje depends on the amount and

pressure of the water, which varies from time to time.

6.8. LYDENBURG HYDRO

The Power Plant faces the following challenges:

Thaba Chweu Local Municipality, the plant owner, has been financially struggling

to keep Lydenburg Hydro in operation and its account with the operator of the

plant is in arears.

the Municipality does not have reserve funds for plant maintenance.

77.. FFAACCTTSS AANNDD FFIIGGUURREESS

All Power Plants, except for Lydenburg Hydro, are contracted to supply power (in

excess of own consumption) to the national grid at Wholesale Electricity Pricing

System (WEPS) tariff and Short-Term Power Purchase Programme (STPPP) tariff,

except for Lydenburg Hydro, which supplies Thaba Chweu Local Municipality

customers at Municipality rates.

The total contribution from the audited embedded generators was 158 583MWh and

272 195MWh in 2013 and 2014. The total capacity is 226MW, which makes up a

contribution of 0.4% to national capacity.

88.. SSUUMMMMAARRYY OOFF OOBBSSEERRVVAATTIIOONNSS AANNDD AAUUDDIITT FFIINNDDIINNGGSS

Observations and findings related to compliance with the South African Grid Code, the

licence conditions and best engineering practices were identified and brought to the

attention of the Licensees. Where applicable, possible options for corrective actions

were discussed with the Licensees during the audit process. Furthermore, the

6

individual audit reports present recommendations to address the audit findings or non-

compliances. Each sub-heading below briefly discusses the findings and status of

compliance of the Licensees.

In each compliance requirement section, the total compliance rating equates to 100%,

and the compliance rating is apportioned equally according to the number of

compliance items within the section.

8.1. COMPLIANCE WITH THE ELECTRICITY GENERATION LICENCE

Table 5 below contains a summary of electricity generation compliance requirements

and the Licensees’ compliance status.

Table 5: Licensees’ compliance status with electricity generation licence

Licence condition requirement Compliance

rating (%)

Compliance Status

Compliant Non-

Compliant

Maintain separate accounts and

submit audited financials for the

Power Plant.

16.7

A

B, C, D

Submit production figures in a

manner prescribed by NERSA.

16.7

A, B, C, D

Validity of the electricity generation

licence.

16.7

A, B, C, D

Changes of details of Licensee.

16.7

A, B, C, D

Changes in operational status of the

Power Plant.

16.7

A, C

B, D

Validity of PPA and contracted

capacity in line with Schedule 1 and

2

16.7

A, B, C

D

Total compliance rating

100% (16.7 x 6)

Key to Table 5

A: Bethlehem Hydro (Pty) Ltd

B: Sappi Southern Africa (Pty) Ltd

C: TSB Sugar RSA (Pty) Ltd

D: Thaba Chweu Local Municipality

The Licensees submit production figures on a quarterly basis as prescribed by

NERSA. However, most Power Plants’ finances are not ring-fenced as they are

consolidated together with the finances of other operations of the Licensees.

7

8.2. COMPLIANCE WITH THE DISTRIBUTION INFORMATION EXCHANGE CODE

Table 6 below contains a summary of Distribution Information Exchange Code

compliance requirements and the Licensees’ compliance status.

Table 6: Licensees’ compliance status with the Distribution Information Exchange Code

Distribution Information Exchange

Code requirements

Compliance

rating (%)

Compliance Status

Compliant Non-

Compliant

Procedures to address the requirements of

the Distribution Information Exchange

Code e.g. appointment of designated

person to facilitate communication with the

Distributor or Network operator, method of

communication.

25

A, B, C, D

Operational data storage procedure to

address the provision of a storage facility,

access control and data retention period.

25

B

A, C, D

Submission of information to the

Distributor regarding new or altered

equipment at point of connection.

25

B, C, D

A

Commissioning and notification procedure

in place.

25

A, C

B, D


100% (25 x 4)

Key to Table 5





All Licensees do not have a formal procedure related to data storage and archiving of

operational information, as well as the exchange of information of newly installed

equipment. However, all have established appropriate data storage facilities with

access control features and have been retaining data for more than five years. The

Power Plants established liaison meetings with the Distributor where any changes,

alterations or installation and commissioning of new equipment, as well as

commissioning dates are discussed.

8.3. COMPLIANCE WITH THE DISTRIBUTION NETWORK CODE

The code requires a Power Plant and the network operator to conclude a connection

and supply agreement, whereby the parties agree on the connection conditions and

responsibilities of each party in terms of maintenance and operation of equipment at

the point of connection. The network operator stipulates the protection equipment

requirements for the generators prior to connection to the network. Table 7 below

depicts the compliance status of the Licensees.

8

Table 7: Licensees’ compliance status with the Distribution Network Code

Distribution Network Code

requirements

Compliance rating

(%)

Compliance Status

Compliant Non-

Compliant

Maintenance agreement for

equipment at point of connection.

25

A, B, C, D

Connection and supply agreement

in place.

25

A, B, C, D

Capability to remotely report any

status change of any critical

function that may negatively impact

on the quality of supply on the

Distribution system (telemetry).

25

A, B, C, D

Does the Power Plant dispatch or

synchronise its generators using

appropriate equipment and in line

with the code requirements.

25

A, B, C, D


100% (25 x 4)

Key to Table 5





8.4. COMPLIANCE WITH THE TRANSMISSION NETWORK CODE

The code defines minimum requirements for the generating units of the participants

that are connected to the Transmission System and other generators defined in the

Governance Code, Section 4, which are required to comply with the Grid Code.

Compliance with a Grid Code Requirement (GCR) shall be applicable to a unit/power

station depending on rated capacity as specified in tables 1(a) and (b) of the

Transmission Network Code. See the Table 8 below for the Licensees’ compliance

status.

Table 8: Licensees’ compliance status with the Transmission Network Code

Compliance rating

(%)

Compliant Non-compliant

GCR1 (Unit protection system) 14.3 A, B,C, D

GCR3 (Excitation system) 14.3 A, B,C, D

GCR6 (Governing system) 14.3 A, B,C, D

GCR9 (External supply withstand

capability)

14.3 A, B,C, D

Testing and Compliance 14.3 A, B,C, D

Unit Modifications 14.3 A, B,C, D

Monitoring of unit performance 14.3 A, D B,C

9

Compliance rating

(%)

Compliant Non-compliant


100% (14.3 x 7)

Key to Table 5





All Licensees comply with all the requirements of the Transmission Network Code.

However, the monitoring of the units to confirm ongoing compliance with the

applicable parts of the code is not performed, nor do the stations communicate

compliance information to the Network Operator.

8.5. COMPLIANCE WITH THE DISTRIBUTION SYSTEM OPERATING CODE

The code sets out the responsibilities and roles of the participants as far as the

operation of the Distribution System is concerned and more specifically, issues such

as economic operation, reliability and security of the Distribution System, operation

under normal and abnormal conditions, maintenance coordination/outage planning

and safety of personnel.

Table 9 below contains a summary of Distribution System Operating Code compliance

requirements and the Licensees’ compliance status.

Table 9: Licensees’ compliance status with the Distribution System Operating Code

Distribution Network Code

requirements

Compliance

rating (%)

Compliance Status

Compliant Non-

Compliant

Procedure for responsibilities of

generator during emergency

generation condition.

33.3 A, B, C, D

Procedure for outage scheduling and

safety co-ordination.

33.3 A, B, C, D

Procedure for fault reporting and

analysis/Incident Investigations.

33.3 A, B, D C


100% (33.3 x 3)

Key to Table 5





8.6. GENERATION MAINTENANCE STRATEGY

The basis for plant maintenance scheduling is Original Equipment Manufacturer

(OEM) recommendations for all Licensees. Some of the Licensees use the System

Application and Production (SAP) maintenance planning system to schedule and keep

records of proactive, preventive and reactive maintenance, whereas others do not

have a maintenance planning system but use Microsoft Office Software. This is in line

10

with international best practice aimed at ensuring that maintenance of equipment is

carried out timeously and in an orderly manner, deriving optimal performance and

preserving the life of equipment.

There is sufficient time to schedule proactive and preventative maintenance as some

of the Power Plants are not operational for the rest of the year. For example,

maintenance for the Power Plants at sugar mills is scheduled to coincide with the mill’s

off crop season.

8.7. PLANT PERFORMANCE AND KEY PERFORMANCE INDICATORS (KPIS)

The Power Plants do not set technical performance targets that are aligned with the

international industry standards such as the Union Internationale des Producteurs et

Distributeurs dEnergie Electrique (UNIPEDE), due to their operating regime and

dispatch philosophy. The plants generate whatever they are capable of generating in

excess of their own consumption. However, the Licensees track the availability of the

Power Plants in terms of generated power as opposed to available power.

TSB Malelane calculates the percentage Loss Time Availability (LTA), that is, the time

that the Power Plant is not generating; and the Overall Time Efficiency (OTE) which

takes into account the planned production time and scrutinizes efficiency and

productivity losses that occur, with the goal of reducing or eliminating these losses.

The production target for selling to the grid is 50MWh per day.

8.8. OUTAGE MANAGEMENT

The Power Plants that are co-generators schedule major outages to coincide with

those of the process plant. For example, a major General Overhaul (GO) for the

Power Plant is scheduled when it is the process plant shutdown period for

maintenance. Every fourth year, a sugar mill and its steam generation equipment is

due for major GO. This is a requirement from the OEM and it is also a statutory

requirement. Minor GOs are scheduled during low demand periods, December to

March.

To mitigate outage risks such as outage slip, the Licensees ensure that a detailed

outage plan is completed months ahead of the start of an outage to ensure that all

resources are identified and made available, whereas, the implementation of bi-weekly

meetings held during the outage period assist in identifying any emerging risks.

One of the tools used by the Licensees to assess the success of the outage work is to

conduct performance tests prior shut-down and after shut-down, and then compare

the test results.

8.9. ASSET MANAGEMENT

The plant equipment in most Power Plants is partially labelled so as to identify the

equipment on the asset register. Some use the SAP system to manage plant assets.

11

The Power Plants use a functional location system to identify equipment and a coding

system for identification of components. Some of the portable plant equipment such as

small motors are regarded as routable spares, and they are coded so that it is possible

to use the code to track the equipment and its maintenance records.

8.10. REFURBISHMENT AND EXPANSION PLANS

The remaining life of equipment, refurbishments and replacements are estimated on

the basis of condition-based monitoring test results, equipment performance and OEM

recommendations.

The Power Plants do not have any future expansion plans, but consider

refurbishments and replacements of some of the plant items to maintain plant

performance.

8.11. PRIMARY ENERGY

Fuel is the major operational expense of the cost of generation for the Power Plants

that use coal. Even though coal is supplemented by the by-product from the process

plant, it makes up a bigger portion of the primary energy fuel. The inability to secure

long-term coal contracts and competition with the export market contributes to the

increasing price of coal.

The coal-fired Power Plants keep some coal stockpile on site, depending on the

capacity of the coal handling facility. The coal handling facilities of the audited Power

Plants can hold up to 30 days of stockpile. However, the coal handling facilities do not

always have stockpile because the coal that is delivered on-site is not always

sufficient.

99.. PPLLAANNTT IINNSSPPEECCTTIIOONN

9.1. SCOPE OF PLANT INSPECTION

The main objective of the plant inspection is to assess the condition of the plant as

well as its safety and environmental aspects.

The plant inspection covered the following aspects:

safety of equipment, for example moving equipment safeguarded;

display of safety signs and emergency evacuation routes;

environmental issues, for example water, steam or oil leaks;

housekeeping e.g. cleanliness; and

plant labelling.

The following areas were inspected, some applicable to the coal-fired plants and

others to the hydro plants:

boiler, mills and associated plant equipment;

12

steam turbine, generator and associated plant equipment;

generator transformers and unit transformers;

switch gear;

upper and lower dam monitoring;

coal handling plant;

ash plant;

fire protection system;

station control room; and

critical spares storage.

9.2. ON-SITE OBSERVATIONS

The Merino and Sol Plaatje Power Plants were recently constructed and

commissioned in 2011 and 2009 respectively. All the equipment is fairly new and its

life span is estimated at 25 years. The plants are in good condition and can operate at

full capacity. A facility for remote reporting, in case of abnormal operation such as

generator trip is installed on both plants. Firefighting and fire protection equipment is

installed in the whole plant and the extinguishers that were inspected were serviced.

Figure 1 below indicates one of the fire extinguishers installed in the control room. The

silica gel glass container on one of the generator step-up transformers needs to be

changed or cleaned as it makes it difficult to see the colour of the silica gel, see Figure

2 below. Equipment labelling is not implemented throughout the plant and in some

areas, emergency evacuation routes are not clearly marked.

Figure 1: Merino control room firefighting equipment Figure 2: Merino generator step-up

transformer

TSB Komati’s generators were installed in 1994 and 1998, whereas Malelane’s

generators were installed in the 1980’s. The steam turbines and generators are in

good physical condition; there are no obvious signs of deterioration and they are

capable of generating up to the full capacity of 32.8MW and 20MW. The Malelane

generator step-up transformers are in good physical condition; there are no oil leaks,

the silica gel is in good condition and the oil is at acceptable levels. However, the

Malelane generator step-up transformers are not labelled with an equipment identifier

code or functional location code, see Figure 3 below.

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Figure 3: Malelane generator step-up transformer Figure 4: Malelane ash plant conveyor belt

The ash plant conveyor belt at Malelane is well guarded as it is covered so that there

is no unwitting physical contact with the moving belt, see Figure 4 above.

Fire protection is implemented at both plants. There is firefighting equipment

throughout most of the power plant. A high pressure water pipeline is installed in most

parts of the plant and it is activated by fire detectors which are installed along the

conveyor belts and other parts of the plant, see Figure 5 below.

Figure 5: TSB Komati bagasse conveyor belt Figure 6: Diffuser discharge magnet

Plant labelling at TSB Komati is partially implemented, as the generator step-up

transformer is not labelled. See Figure 6 above for an example of functional location

plant labelling on the conveyor belt.

The units at Sappi Ngodwana Power Plant were installed in 1985 and 1988

respectively. They have been in operation for at least 28 years. The performance of

the plant is acceptable and within original parameters. Availability of steam is the only

limitation to delivering full capacity from the generators. Plant equipment labelling is

visible and clearly marked. Moving equipment, such as conveyor belts, is well

guarded. However, there are no visible safety and emergency evacuation signs. There

are very minor steam and oil leaks in some parts of the plant. By visual inspection, the

plant is in good condition. Figures 7 and 8 below indicate Sappi Ngodwana’s generator

step up transformer and turbine generator.

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Figure 7: Sappi Ngodwana Generator Step-up Figure 8: Sappi Ngodwana Turbine Generator 2

Transformer 2 nameplate with plant labelling

At Sappi Saiccor Power Plant, equipment labelling is visible and clearly marked.

Moving equipment, such as conveyor belts, is well guarded. Similar to Ngodwana,

there are no visible safety and emergency evacuation signs. There are very minor

steam and oil leaks in some parts of the plant. By visual inspection, the plant is in

good condition.

The Sappi Tugela turbine generators were installed in 1954 and 1959, which means

the oldest turbine generator remained operational for 61 years until it was

decommissioned in the year 2012 whereas the younger one was decommissioned in

2013, after 56 operational years. It has many steam and water leaks in the piping

leading to the boiler. The steam turbine generator set has signs of deterioration.

Figure 9: Tugela steam turbine and generator set Figure 10: Tugela step down transformer with oil

leaks at the bottom of the main tank

Lydenburg Hydro’s first unit was commissioned in 1932 and the last unit was

commissioned in 1983. It is able to generate only up to 2.1MW from its 2.6MW

generator that was commissioned in 1983. The other turbine-generators are in need of

major maintenance and repairs. Equipment labelling is not implemented throughout

the plant and emergency evacuation routes are not clearly marked. Figure 11 and 12

below represents the Lydenburg hydro switchgear and generator with no visible plant

labelling.

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Figure 11: Lydenburg Hydro switchgear Figure 12: Lydenburg generator

1100.. CCOONNCCLLUUSSIIOONN

Detailed findings and recommendations of the audit for each Licensee are presented

in the individual audit reports of the Licensees. From the audit findings, it is evident

that the Licensees have systems in place to implement the requirements of the licence

conditions, however, most do not have systems in place or programme of compliance

with the South African Grid Code. The licensees align their power plant operations

with international standards and codes; therefore, comply with the South African Grid

Code mainly because the code is also aligned with the international standards such as

those published by the National Grid Company of the United Kingdom.

Figure 13 represents the compliance status of the Licensees with the five compliance

requirement items, namely:

(a) Compliance with the Electricity Generation Licence – Table 5;

(b) Compliance with the Distribution Information Exchange Code – Table 6;

(c) Compliance with the Distribution Network Code – Table 7;

(d) Compliance with the Transmission Network Code – Table 8 and

(e) Compliance with the Distribution System Operating Code – Table 9.

From Tables 5 to 9, the Licensee names are denoted as follows:

A: Bethlehem Hydro (Pty) Ltd;

B: Sappi Southern Africa (Pty) Ltd;

C: TSB Sugar RSA (Pty) Ltd; and

D: Thaba Chweu Local Municipality.

In interpreting the graph of Figure 13, the following example is made:

In Table 5, Bethlehem Hydro (Pty) Ltd is compliant with all of its Electricity Generation

Licence compliance requirements, hence, on the graph of Figure 13 its compliance

status is 100% (16.7 x 5) whereas Sappi Southern Africa (Pty) Ltd is compliant with

four of its Electricity Generation Licence compliance requirements and therefore its

compliance status is 67% (16.7 x 4). The aforementioned interpretation method is

applicable to the rest of the Licensees compliance status on the graph.

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Electricity

Generation

Licence

Distribution

Information

Exchange Code

Distribution

NetworkCode

Transmission

NetworkCode

Distribution

SystemOperating Code

A: Bethlehem Hydro (Pty) Ltd 100 50 100 100 100

B: Sappi Southern Africa (Pty) Ltd 67 65 100 86 100

C: TSB Sugar RSA (Pty) Ltd 84 75 100 86 67

D: Thaba Chweu Local Municipality 50 50 100 100 100

0

20

40

60

80

100

120

% C

om

plia

nce

Sta

tus

Figure 13: Licensee compliance status





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