Group Services division

 

Mandate

Provide long-term, sustainable business performance and growing stakeholder confidence through functional leadership and strategic guidance to Eskom in the fields of risk, sustainability (safety, health, environment, climate change and quality), and operational execution in the areas of innovation, corporate social investment, information management and research.

Although operational units are responsible for the execution of risk, safety, health, environmental and quality policies and procedures, the overall group performance is monitored and reported on by Corporate Services.

Highlights   Future priorities  
  • Co-fired gas from the underground coal-gasification (UCG) pilot plant into the Majuba power station
  • Implemented phase 2 of the utility load manager (ULM) project
  • Contributed to the Copenhagen and Cancun climate change negotiations (COP 15/16)
  • Authorised an Eskom combined safety, health, environmental and quality management policy
  • Made grants of R5 million to further education and training college programmes
  • Signed an Emissions Credit Purchase Agreement with BNP Paribas in 2010 – a first for Eskom
  • Became the South African Quality Institute’s first platinum member
  • Successfully managed the risk and security aspects around the 2010 FIFA World Cup™ leading to a very positive reputation for Eskom and the country
  • Ranked third in the Ernst & Young: Excellence in Sustainability Reporting Awards and a category winner for best sustainable reporting in the Chartered Secretaries’ Annual Report Awards for the 2010 integrated report
  • Provided prepaid metering systems training for the Power Institute for East and Southern Africa (PIESA)
  • Entered into a strategic water research partnership with the Water Research Commission (WRC).
  • Make arrangements for COP 17 in Durban: logistics, co-ordination of local and international speakers, support to Durban, participation in the South African delegation and support to government
Challenges  
  • The slow implementation of the security improvement plan across the business
  • The number of employee and contractor fatalities
  • Compliance with environmental regulations and air quality targets. Care and maintenance and closure plans for defunct coal mines and environmental liabilities on cost-plus mines.

Benchmarking

Eskom’s sustainability performance has been benchmarked against that of a selected number of other electricity utilities as set out in the table below. In some cases, their technology mix is not completely aligned with Eskom’s. All information was sourced from the utilities’ annual reports.

    Eskom1 
2011  		 Utility  
1 in  
Europe  		 Utility  
2 in  
Europe2		 Utility  
3 in  
Europe  		 Utility  
in  
China  		 Utility  
1 in  
USA  		 Utility  
2 in  
USA  		 Utility  
in Latin  
America  		 Utility in  
the United  
Kingdom  
  Utility and country                    
  Total electricity produced (TWh)  237   225   288   159   161   187   195   185   32  
  Electricity generation mix:                    
  Coal-fired power stations (%)  92.8   56.0   27.6   44.8   81.0   57.0   66.0   0.4   35.6  
  Renewables (%)  0.8   4.0   32.33 23.3   0.2   4.0   6.0   92.94 15.5  
  Pumped storage and other (%)  1.2   1.0   0.0   0.0   1.2   0.0   0.0   0.3   1.2  
  Gas (%)  0.1   19.0   15.3   5.7   17.6   16.0   22.0   0.0   47.7  
  Nuclear (%)  5.1   20.0   11.9   26.2   0.0   23.0   6.0   6.4   0.0  
  Environmental performance                    
  Water usage [L/kWh SO]   1.35   1.73   0.22   –   –   –   –   –   0.09  
  CO2 [kg/kWh SO]   0.99   0.73   0.74   0.43   0.83   0.65   0.66   0.00   0.49  
  Particulate emissions [g/kWh SO]   0.33   0.02   0.07   0.00   0.04   0.00   0.00   0.00   –  
  SO2 emissions [g/kWh SO]   7.75   0.29   1.12   0.36   0.27   2.54   2.34   0.00   0.32  
  NOx [g/kWh]   4.18   0.58   1.38   0.31   0.27   0.50   0.62   0.00   0.59  
  Social performance:                    
  Employee work-related fatalities   6   25 3   2   0   0   0   0   0  
  Contractor fatalities   18   0   17   1   0   0   3   0   0  
  Employee and contractor fatalities   24   2   20   3   0   0   3   0   0  
  
1. Eskom’s environmental performance figures are calculated using total electricity generated less that used for pumped storage schemes and all power stations excluding Komati power station.
2. Approximately 13% of electricity generated from other sources other than those listed in table.
3. Includes pumped-storage facilities.
4. Hydro-electric.
5. Includes both employee and contractor fatalities.

 

Material issues

The United Nations Climate Change Conference in Cancun, Mexico ended with the adoption of the Cancun Agreement in which countries agreed that they need to work to stay below a 2°C temperature rise by lowering emissions. The agreement also adopted enhanced financial and technological support as well as capacity building for developing countries, both in terms of mitigation and adaptation to climate change.

Details of the Cancun Agreement are set out in the internet version of the report at www.eskom.co.za/annreport11/002.html.

South Africa continued to play an active role in the negotiations. Key national positions were: support for the multilateral process, the continuation of the Kyoto Protocol and advocating a legally binding outcome for the climate negotiations at international level that would bind developed countries to economy-wide, quantified emission reduction commitments.

Currently there is no CO2 allocation framework in South Africa. However, Eskom has been active in the international and national climate change policy development process. As such Eskom has aligned its medium- to long-term strategy and plans with South Africa’s national climate change response policy development process. As part of the South African delegation to the international climate change talks, Eskom plays an advisory role to ensure the appropriate development of the future climate change regime taking into consideration growth, security of energy supply and the energy needs of South Africa, the Southern Africa region and Africa as a whole.

Adaptation strategy

In the last year Eskom also started developing its adaptation strategy to prepare for the impacts of climate change and the effects on infrastructure and people. The aim of the strategy is to make recommendations to increase the organisation’s capacity to adapt and increase resilience to the negative impacts of climate change.

Eskom signed its first Emission Credits Purchase Agreement (ECPA) with European-based bank, BNP Paribas in September 2010. This is the outcome of an open enquiry for bids to develop the clean development mechanism (CDM) for Eskom’s compact fluorescent light (CFL) programme. This was the first time that Eskom used the global carbon market to achieve its sustainability objectives, and this will form the basis for similar future agreements. The carbon assets that will be created from this project are certified emissions reductions and voluntary emissions reductions that will be traded with BNPP.

South Africa’s responses to climate change

South Africa will host the next round of climate change negotiations in Durban in December 2011. South Africa has published the Green Paper on National Climate Change Response as well as a discussion paper on reducing greenhouse gas emissions through a carbon tax for public comment in 2011. The green paper encompasses South Africa’s aspirations for sustainable development – prioritising poverty alleviation albeit within the context of sustainable development, with benefits to the climate. The country is also very vulnerable to the adverse effects of climate change and the paper focuses on the adaptation measures and strategies required by various sectors.

Government’s Integrated Resource Plan (IRP) was published by the Department of Energy in 2010. The recommended “revised balanced plan” is geared towards a low carbon future and aligned with South Africa’s long-term mitigation scenarios. It allows greenhouse gas emissions to peak, plateau and decline in line with government’s aspirations.

During the last year Eskom engaged in a review of its climate change activities. Going forward, Eskom is completely committed to reducing its carbon footprint and helping South Africa achieve its aspirations by moving towards a cleaner energy mix. The plan is to increase the share of nuclear and renewables (through allocations from the IRP), continue investigating clean coal technologies and accelerate efforts in energy efficiency and biomass co-firing.

The aim is to reduce Eskom’s total CO2 emissions from a maximum in 2022 to a reduction in relative and absolute terms by 2030.

Eskom’s internal energy efficiency campaign entails implementing energy savings projects within company facilities and educating employees on how to save energy.

  Energy saved  
Measured and verified savings (non-essential consumption):  		 Target   2011       2010       
  Annualised savings (GWh)  Annual target  
of 24  		 26.2RA1
(annualised)     		 –     
  Projects started in the current year (GWh)    2.9RA2 –       
  Savings for the financial year even if they were implemented historically (GWh)    12.7RA2 9.6LA2  
  All projects implemented from inception to date (GWh)3   n/a   60.6       46.7LA   
  Measured and verified energy savings from inception to date (including employee roll-out programmes) (GWh)  1 000GWh  
(1 billion kWh)  
by end 2012/2013  		 109.53       75.33      
  
RA – Reasonable assurance provided by the independent assurance provider (Refer here).
LA – Limited assurance provided by the independent assurance provider (Refer here).
1. Projects started in 2011 in terms of the shareholder compact target.
2. Figure was reported in 2010 in the absence of an annual target and will not be reported in future years due to the subsequent development of annual targets. 
3. Energy savings for all projects – measured and verified savings for the financial year even if they were implemented historically.

 

Educating employees on how to save energy

Employee programmes focused on hot water management such as solar water heaters, heat pumps, geyser blankets, reducing conventional geyser temperatures to 60°C, and using low-flow showerheads. Engagement methods included industrial theatre, informative presentations and interactive competitions.

 

 

Initiatives during the year

  • Committed to internal energy efficiency through the shareholder compact
  • Achieved annual energy savings 26.2GWhRA (target of 24.0GWh) for building-related energy efficiency improvements by implementing various building projects – mainly lighting improvements
  • Started a pilot project at one of the power stations to improve net thermal efficiency.

A key challenge is the installation of metering at all key facilities which has delayed the development of the Eskom baseline, as metered data is required to improve the credibility of an overall Eskom baseline and verified savings against the 15% national energy efficiency strategy target.

Eskom will now focus on

  • Completion of the Eskom energy baseline
  • Identification of additional opportunities for energy savings and the implementation of associated projects
  • Monitoring and managing key sites’ consumption through the building monitoring system
  • Continued communication, education and awareness on internal energy efficiency.

Details of Eskom’s adherence to the World Business Council for Sustainable Development Buildings Manifesto are set out in the internet version at www.eskom.co.za/annreport11/003.html