1. System Status Update February 2012

2. Overview Review of year to date demand and energy Review of recent system performance Outlook for summer 2012 What is being done to meet the challenges 2

3. Weekly peak demand 3 The peak demand in 2011 was similar to the all time high in 2007, although it should be noted it occurred before the typical winter peak period, indicating the shift in demand from winter. The summer demand in 2011 was generally higher than that previously experienced. There was an increase in the annual “energy sent out” (incl sales to Eskom from non Eskom generation) of about 1.3% (Y-Y)

4. 2012 load growth Initial weeks showed a slightly higher demand than 2011, but initiatives are in place to reduce demand and results have been seen over the last few weeks. There has been about 0.5% energy growth Y-Y compared to the same time last year (including non Eskom sales to Eskom) 4

5. Constrained generation trends – OCGT usage In 2011 we used our OCGTs more to ensure that as much as possible maintenance is done while keeping the lights on. This has been continued in 2012. However there is still a maintenance backlog. 5

6. Reserve utilisation Although a similar number of incidents of usage of emergency and supplemental demand side options occurred, there has been a substantial increase in the volume of OCGT usage to accommodate maintenance. 6

7. Generation availability 7 The full and partial generation load losses are indicated above. There was a peak in November 2011 and January 2012. This has contributed to the increase in OCGT utilisation as well as influenced the availability of opportunity for maintenance.

8. What do we expect in summer 2012 Year to date the system has been extremely tight with frequent use made of emergency reserves. Higher than normal OCGT load factors are an indication of the tightness the system has been operated at to accommodate maintenance. However planned maintenance requirements still exceed the capacity available for maintenance. In addition, generation forced outages have contributed to this, both full units and partial load losses at various stations for a number of reasons. This situation is not expected to ease off as outages that have previously been postponed are now getting to a point where they have to be done, for technical and statutory reasons. 8

9. Expected system status 9 With all gas we should be operating in the green. Our normal planning assumption is 3600MW unplanned with 4 500MW being a risk assessment. It is clear that without deferring maintenance, the system status is more risky. DateMaintenance Excess Capacity available assuming use of 2238MW of OCGT capacity, required 3600MW unplanned allowance, required Operating Reserves and Forecast Excess Capacity available assuming use of 2238MW of OCGT capacity, required 4500MW unplanned allowance, required Operating Reserves and Forecast 13-Jan-12. Fri 678351-849 20-Jan-12. Fri 6286-222-1122 26-Jan-12. Thu 5445-7-907 31-Jan-12. Tue 5357169-731 07-Feb-12. Tue 5480-144-1044 13-Feb-12. Mon 5628-394-1294 20-Feb-12. Mon 5189-133-1033 01-Mar-12. Thu 6047-1241-2141 05-Mar-12. Mon 5847-1506-2406 14-Mar-12. Wed 5962-1724-2624 22-Mar-12. Thu 5367-1256-2156 26-Mar-12. Mon 5737-1409-2309 03-Apr-12. Tue 7845-3292-4192 10-Apr-12. Tue 7834-3480-4380 17-Apr-12. Tue 6671-3187-4087 25-Apr-12. Wed 6481-3088-3988 02-May-12. Wed 6509-3425-4325 07-May-12. Mon 6726-3942-4842 14-May-12. Mon 6446-4048-4948 24-May-12. Thu 5619-4878-5778 28-May-12. Mon 3716-2801-3701 07-Jun-12. Thu 2638-2307-3207 14-Jun-12. Thu 2045-1408-2308 21-Jun-12. Thu 1603-1290-2190 27-Jun-12. Wed 1603-1520-2420 02-Jul-12. Mon 1518-1450-2350 09-Jul-12. Mon 925-1713-2613 18-Jul-12. Wed 765-1033-1933 23-Jul-12. Mon 765-185-1085 30-Jul-12. Mon 1714-942-1842

10. 10 Maintenance outlook Jan - Jul 2012 10 Green : Sufficient capacity to meet demand, reserves and allowance for planned and unplanned maintenance of generation plant. Yellow : 0 to 1000MW short of capacity needed. Orange : 1000 to 2000 MW short of capacity needed. Red : 2000 to 4000MW short of capacity needed. Brown : Greater than 4000MW short of capacity needed For maintenance scheduling, 1300MW of OCGT capacity is considered and the ideal scenario is to operate in the “green” zone. In planning mode, an “orange”, “red” or “brown” status is unacceptable and outages will have to be deferred. Operation within the “green” zone is needed to manage typical risks, such as loss of a large nuclear unit, loss of imports from Cahora Bassa or multiple unit trips at the coal stations.

11. Required Capacity to ensure stable system operation 11 Ideally, 3 000 MW of committed capacity from supply and demand initiatives is needed immediately to keep the lights on and enable maintenance to continue. Reducing this target will require a significant adjustment to the maintenance programme. Between now and end-December 2013, the minimum targets set out in the table below need to be achieved to prevent an emergency. Immediate (within 1 month) (MW) By July 2012 (MW) and sustained to end December 2013 High load factor initiatives to bring certainty to maintenance planning 10002000 Pre-Emergency/ Contingency/Peaking initiatives 20001000

12. Way Forward Eskom has set up a recovery team to: Execute the plan to secure identified and approved demand and supply levers. Step up communications to encourage greater energy efficiency. Be clear about our maintenance philosophy and the governance processes to manage risk and specify operating envelopes for power generation plants. Implement an effective outage strategy, using maintenance windows to reduce the backlog, deal with emerging risks and conduct scheduled, design-based maintenance. Implement a more sustainable maintenance philosophy throughout the generation fleet. The Department of Public Enterprises has established a task team with Eskom to develop the detailed delivery schedule and review progress, coordinate activities that require Government intervention, prepare updates for Cabinet and align communication and stakeholder plans. 12

13. System Status if initiatives materialise 3600MW Unplanned Allowance4500MW Unplanned Allowance DateMaintenance Excess Capacity available assuming use of 2238MW of OCGT capacity, required 3600MW unplanned allowance, required Operating Reserves and Forecast MW risk incl. gas with 1000MW mitigation MW risk incl. gas with 2000MW mitigation MW risk incl. gas with 3000MW mitigation Excess Capacity available assuming use of 2238MW of OCGT capacity, required 4500MW unplanned allowance, required Operating Reserves and Forecast MW risk incl. gas with 1000MW mitigation MW risk incl. gas with 2000MW mitigation MW risk incl. gas with 3000MW mitigation 13-Jan-12. Fri 678351105120513051-84915111512151 20-Jan-12. Fri 6286-22277817782778-1122-1228781878 26-Jan-12. Thu 5445-799319932993-9079310932093 31-Jan-12. Tue 5357169116921693169-73126912692269 07-Feb-12. Tue 5480-14485618562856-1044-449561956 13-Feb-12. Mon 5628-39460616062606-1294-2947061706 20-Feb-12. Mon 5189-13386718672867-1033-339671967 01-Mar-12. Thu 6047-1241-2417591759-2141-1141-141859 05-Mar-12. Mon 5847-1506-5064941494-2406-1406-406594 14-Mar-12. Wed 5962-1724-7242761276-2624-1624-624376 22-Mar-12. Thu 5367-1256-2567441744-2156-1156-156844 26-Mar-12. Mon 5737-1409-4095911591-2309-1309-309691 03-Apr-12. Tue 7845-3292-2292-1292-292-4192-3192-2192-1192 10-Apr-12. Tue 7834-3480-2480-1480-480-4380-3380-2380-1380 17-Apr-12. Tue 6671-3187-2187-1187-187-4087-3087-2087-1087 25-Apr-12. Wed 6481-3088-2088-1088-88-3988-2988-1988-988 02-May-12. Wed 6509-3425-2425-1425-425-4325-3325-2325-1325 07-May-12. Mon 6726-3942-2942-1942-942-4842-3842-2842-1842 14-May-12. Mon 6446-4048-3048-2048-1048-4948-3948-2948-1948 24-May-12. Thu 5619-4878-3878-2878-1878-5778-4778-3778-2778 28-May-12. Mon 3716-2801-1801-801199-3701-2701-1701-701 07-Jun-12. Thu 2638-2307-1307-307693-3207-2207-1207-207 14-Jun-12. Thu 2045-1408-4085921592-2308-1308-308692 21-Jun-12. Thu 1603-1290-2907101710-2190-1190-190810 27-Jun-12. Wed 1603-1520-5204801480-2420-1420-420580 02-Jul-12. Mon 1518-1450-4505501550-2350-1350-350650 09-Jul-12. Mon 925-1713-7132871287-2613-1613-613387 18-Jul-12. Wed 765-1033-339671967-1933-933671067 23-Jul-12. Mon 765-18581518152815-1085-859151915 30-Jul-12. Mon 1714-9425810582058-1842-8421581158 13

14. 14 What has been done Signed power purchase agreements (PPA’s) with the two municipalities to secure baseload generation. Secured available non-Eskom generation from customer base on a short term basis. Signed power buyback agreements, where we were able to remove base demand off the system, while some were deferred to the winter period. Obtained voluntary co-operation over peak periods from large customers (at least 400MW) Additional DMP has been obtained and non Eskom peaking plant is being finalised Demand Response Aggregator Pilot Program (DRAPP) has been initiated and an additional 500 MW of demand response is expected by winter Identified possible cross border generation and engagements are currently taking place.

15. Summing up South Africa’s power system will be tight for the next few years: the next two years are critical. Summer is maintenance season in Eskom. System is being run at higher levels of risk to tackle backlog and keep up with maintenance while at the same time meeting demand. Strategy of shifting maintenance outages can no longer be sustained. We need to save 10% of our current energy demand and remove 3000MW from our demand to ensure that the power system can be operated in a stable mode and that adequate maintenance is done on the generation fleet to provide safe and sustainable performance.

16. Thank You