Date 08 October 2013 SC Economic Development: Electrification Programme Ms Ayanda Noah Group Executive Distribution

Content 2 Orientation on the Electricity Value Chain Current Network Status Electrification Backlog Risks and Challenges Planning Principles Progressing Towards Universal Access

3 The Electricity Supply Chain POWER STATIONS Industry, Mining & Large Metros Commercial/Small industry/ Farming/Small Munics High voltage Medium voltage Low voltage

Customer Services Total electricity sales of GWh and 5 million customers (including transmission customers) as at 31 March 2013 Supplies approximately 95% of South Africa’s electricity supply Two main types of customers: Redistributors: Mainly municipalities that sell electricity to end customers. Direct customers: Industrial, commercial, mining, agricultural and residential consumers Key Sales and Customer Service unit deals with customers using ≥100GWh of energy per year As at 31 March 2013, Eskom had 5.0 million customers accounting for electricity revenues of R126.7 billion One customer has a supply contract indexed to commodity prices A member of Southern African Power Pool (“SAPP”) 4 Key figures year end to 31 March 2013 Gross Electricity Revenue Split Total: billion Number of customers Total: 5.0 million Electricity sales by customer for year ended 31 March 2013

Distribution: Division Profile To service the customer through provision of reliable electricity by building, operating and maintaining distribution assets, while also acting in the national interest by actively partnering with the wider industry in resolving distribution industry issues and enhancing stakeholder relations Scope and mandate km of distribution lines km of reticulation power lines 6 960km of underground cables 3 580MVA of new transformer capacity employees Asset base Organisation structure Implemented several safety initiatives, which saw an improvement in most of the safety indicators Sustained improvement of the system average interruption duration index (SAIDI) and the system average interruption frequency index (SAIFI) Electrification connections exceeded target and also created job opportunities Since inception of the electrification programme in 1991, a total of more than 4.3 million (2012: 4.2 million) homes have been electrified Highlights and output Employee and, in particular, contractor safety performance and lost-time injuries High levels of theft of equipment and electricity, including illegal connections, affect network and service performance, increasing Eskom’s costs Ageing networks, making maintenance a challenge Key challenges and priorities 5.0 million customers nationally Nine provincial operating unit Structures are now in place, with fully functional management. 5

Distribution Network Planning Process 6 Comprehensive Network Planning process - Supported by appropriate Network Planning criteria/standards Network Development Plans reviewed every three years (license condition) Distribution Master Plans reviewed every 5 years Ensure integrity of the design base – compliance assessed by Group Technology

Eskom Electrification Planning Principles /09/187

8 Universal Access Workstream

Distribution Network Constraints of a total of 8310 MV feeders fail Network Planning criteria (feeders in Red) February 2013 (as is network) Planning Criteria assessed: -Voltage limits -Thermal limits -Maximum customer numbers -Maximum line lengths Estimated cost to address capacity constrained networks R42.7bn

Distribution Current CAPEX R54 BN BUDGETGrand Total Strengthening 24,506 Refurbishment 12,857 Reliability 2,930 Dx Wires m_report Dec 2012.pt10 R43 Bn BUDGET 1st CUTGrand Total Strengthening 19,317 Refurbishment 9,363 Reliability 2,766 R39 Bn BUDGET 2nd CUTGrand Total Strengthening 16,088 Refurbishment 9,579 Reliability 1.513

11 Electrification Highlights Since Inception Added ~4.3 million households to the grid since 1990 Electricity access has significantly increased from 1994 to-date: – Nationally from 36% to 83% – Rural electrification from 12% to 57% Government’s target of 1.75 million connections between 1994 and 2000 exceeded through a self-funded and managed programme Massive delivery – A connection every 30 seconds – A pole every 10 seconds – 200 metres of cable every minute Eskom and Shell Joint Venture connected around 6,000 solar home systems between mid- 1990s and mid-2000s Nearly 32,000 systems have been installed by Non Grid Service Providers granted concessions by the DoE in 2003 There have also been a limited number of off-grid connections Eskom has made significant strides in connecting South Africans to the grid + SOURCE: Eskom

Electrification Success : Cumulative Connections 2015/09/1812

Stats SA Figures National Electrification Backlog (2012) PROVINCECONNECTION BACKLOG Free State Limpopo Gauteng Western Cape Northern Cape Mpumalanga North West Kwa-Zulu Natal Eastern Cape TOTAL The national backlog, including municipal backlog is 3,3-million households, of which Eskom’s backlog in proclaimed areas is 1,8-million households, including estimated growth in the Western Cape, Gauteng and Free State. Eskom’s backlog in proclaimed and un-proclaimed areas is 2,3- to 2,5-million households (DoE figures). The national backlog, including municipal backlog is 3,3-million households, of which Eskom’s backlog in proclaimed areas is 1,8-million households, including estimated growth in the Western Cape, Gauteng and Free State. Eskom’s backlog in proclaimed and un-proclaimed areas is 2,3- to 2,5-million households (DoE figures). 5% 20% 1.5% 6% 24% 5.5% 21% 6.5% 10.5%

The Household Back Log (Including Sub- letting residents) Operating Unit Households with electricity Households without electricity Sub-letting Free State Limpopo Gauteng Western Cape Northern Cape Mpumalanga North West KwaZuluNatal Eastern Cape TOTALS TOTAL Census 2011/12 Figures Sub-letting refers to units constructed on a property in addition to the main home or primary dwelling and are not on an individual plot or stand in the title scheme/cadastre, and can be located within, attached to, or separate from, the principal dwelling.

Estimated Cost To Eradicate Backlog Per Province Census 2011/12 results15

Challenges To Achieving Universal Access 2015/09/1816  Increase of the cost per connection due to long Medium Voltage line (11 and 22KV )  Project management & design skills shortage;  Sparsely populated rural areas;  Infrastructure projects in support of other implementing agents;  Municipal upgrades for After Diversity Maximum Demand (ADMD)  Constrain due to reduced Eskom Capex expenditure; Refurbishment (Eskom funded) Network Upgrade (Eskom funded) Strengthening projects (Eskom funded) New build (Funded by DoE 70/30 principle applies)

2015/09/1817  Grid & non-grid, Master Plan (DoE & Eskom working on a Master Plan);  Agreed service levels of the non grid to be similar to grid;  Harmonization of government initiatives e.g. electrification and housing programmes  Aligned policies to facilitate implementation process (e.g. un-proclaimed, land usages);  Installation of two meters in double stand dwellers;  Increase fund allocation to cater for infrastructure projects:  Refurbishment of constraint networks related to electrification.  Upgrading of the networks.  70/30 principle in new builds networks to be continued. Some Opportunities To Facilitate UAP Achievement

Single homestead in a mountain (High cost per connection) 2015/09/1818

Cost per connection in Densely populated area is low 2015/09/1819

The burden falls disproportionately on women and girls TThe girl child & her mom are still fetching wood to cook & keep warm Brussels, 18 September September 2015 page 20 The elect. challenge is Real & Material

Universal Access Programme 2015/09/1821 Thank you