Group Services division
  • Sadly sixRA employees passed away this financial year in comparison to the twoRA in 2010. Two of the fatalities were due to an electrical contact incident, two were struck by moving vehicles, one passed away due to a fall from height and, lastly, an employee was responding to a call-out when his vehicle was washed off a low-water bridge into the mainstream of the river and he drowned.
  • Most unfortunately 18RA contractor employees lost their lives this financial year compared to 15 in 2010. Ten of the fatalities were due to vehicle accidents, four to gunshots, one to an electrical contact incident, one was struck by a moving vehicle, one was struck by a pole, and one passed away as a result of burns.
  • Tragically 43 members of the public died in 2011 (as compared to 41 last year). Vehicle accidents and electrical contacts remain the major causes of death.

Group lost-time incident rate (LTIR)

The safety of Eskom’s people remains fundamental. This is measured by the progressive LTIR, a proportional representation of the occurrence of lost-time injuries over 12 months. The actual lost-time incident rate (LTIR) performance was 0.47RA per 200 000 manhours worked against a target of 0.31 for 2011 (0.54RA reported in 2010 and 0.50RA in 2009). Although the LTIR performance has improved compared to prior years, the target was not met.

In risk-specific terms, the leading causes of injuries were motor vehicle accidents, being caught and struck by objects and falls.

Safety interventions in high-risk areas

Vehicle incidents, electrical contacts and slip, trip and fall incidents are the high-risk areas for employees and contractors. Various initiatives were implemented to address these issues.

Communications to staff highlighted electrical safety, vehicle and driver safety as well as the risk of slips, trips and falls. Work stoppages were held where management discussed the risks and lessons learnt.

Eskom has installed a new vehicle monitoring device (in all company vehicles). Records can be sent to managers or supervisors by the manager’s electronic medium of choice. The system highlights historical replays, driver errors and driver scoring and will be used to change employees’ driving behaviour.

Driver evaluation and advanced driver training are offered to employees. Eskom is using a benchmarking strategy to see what other big corporations are doing to curb vehicle safety incidents.

Contractor management

The health and safety of Eskom contractors and the public has received much attention. Eskom is working with suppliers, customers and contractors to integrate safety, health and environmental issues into their operations. Contractors working under Eskom’s supervision or on company premises are expected to comply with Eskom’s safety, health, environmental and quality policy, and a zero tolerance approach to safety management is applied. Eskom engages with contractors in contractor forums to ensure that the standard of safety management at sites is in line with best practice.

Wide-ranging policies, procedures and standards were implemented to provide guidance on Eskom’s expectations from contractors. Contractors are expected to adhere to Eskom policies and procedures in addition to their own safety systems and programmes. Minimum mandatory generic safety, health, environmental and quality (SHEQ) requirements must be met in the procurement and supply chain management processes for all contractors. Eskom has compiled a standard that defines the SHEQ responsibilities of the Group Commercial division, line management and SHE functionaries, as well as the minimum mandatory generic safety, health and environmental requirements to be met during the commercial processes for all vendors.

Eskom’s chief executive hosted a SHEQ leadership forum on 13 October 2010. The forum reflected the SHEQ challenges facing both Eskom and its suppliers and contractors. Fundamental safety, health, environmental and quality constraints were addressed. Several contractors were acknowledged for their outstanding SHEQ performance and contribution to Eskom.

Public safety

Various initiatives were implemented, such as the Eskom electricity safety week from 16 to 22 August 2010. The highlight of the campaign was the outside broadcast with SABC2 showing the dangers of illegal and unsafe connections. During this campaign schools participated in the public safety school competition where learners were given educational material on electricity safety.

Eskom continues to invest strongly in the research and demonstration of new technologies and solutions. The research is focused on the divisions’ needs and the strategic challenges faced by the organisation. Research outputs are in line with the strategic and operational needs of Eskom. Research underpins the technology vision and direction of Eskom and ensures the sustainability of the business through balanced financial, social and environmental decision making while at the same time building and sustaining Eskom’s skills and core competencies.

Eskom’s investment in research enables the organisation to fully understand emerging technologies and their applicability, so that appropriate management risk and investment decisions can be made. The research process allows Eskom to make the optimum choice of technologies and accelerates their implementation. The most powerful return on this investment in research is optimised asset management, improved performance and a skilled workforce that is equipped to evolve and adapt to the best that technology has to offer.

Research expenditure

Actual research expenditure of R199.5 million was 2% higher than last year in line with budgetary allocations and some growth in the size of the research programme. The increased funding for research was motivated throughout the year as other sources of funding became available. Around R93.6 million (46%) of the total spend was on direct costs related to staff, and the remainder was on general expenses, suppliers and contracted services.


The largest portion of research money is invested in renewable energy research and reducing Eskom’s impact on the environment as well as in power systems technologies and solutions to improve the availability and reliability of the Transmission and Distribution grids and intelligent networks. The Generation side of the business also receives significant focus with research into primary energy solutions and alternatives. A six-year budget has been approved that translates into a 20.5% year-on-year growth, culminating in an estimated 0.2% of revenue by 2017 – a significant show of confidence in the need for research in Eskom and a commitment to its future.

The bulk of the capital investment continues to be in concentrating solar power and underground coal-gasification solutions – two projects in particular. The purpose of the demonstration programme is to feed Eskom’s infrastructure expansion programme with researched solutions that improve power quality, reduce cost, increase environmental performance and support the Eskom business model. It also drives and challenges capital expansion technology choices based on the knowledge gained through demonstration, namely to ensure that key technologies that can fundamentally change Eskom’s current technology path and improve performance are well understood and part of the Eskom technology plan.

Structural changes

The research and demonstration programme is under constant review and is changed to align with the changing needs of the organisation. Every annual review begins with an examination of the current portfolio in discussion with internal and external stakeholders. The latest review indicates a need to focus the Eskom researchers into fewer “centres of excellence” that will build specific capacity in a chosen discipline and become a world-class centre for research and development in that field. This approach will be rolled out in 2012.

Demonstration and pilot projects

A demonstration project is a production scale asset that Eskom constructs to allow it to assess technologies for their business and technical risks and their implementation impacts before they are rolled out commercially. Eskom’s pilot and demonstration programme feeds its infrastructure expansion programme with researched technological solutions and expands its capital expansion technology choices.

Eskom invested R306.9 million in the demonstration programme in 2011. The bulk of Eskom’s investment is in concentrating solar power and underground coal-gasification solutions.

Major demonstration and pilot project expenditure  
  Project name   Actual  
expenditure  
R million  
  Plant monitor   13.13  
  Underground coal gasification   248.46  
  Utility Load Manager   27.70  
  Concentrating solar power (CSP)  13.61  
  765kV double-circuit tower development   2.81  
  Friction stir taper-stud welding platform   1.22  
  Total   306.93  

 

  Concentrating solar power – CSP  
   

Concentrating solar plant to be built near Upington in the
Northern Cape.

Concentrating solar power systems use lenses or mirrors and tracking systems to focus a large area of sunlight into a small beam. The concentrated heat is then used as a heat source for a conventional power plant.

Eskom’s concentrating solar power (CSP) project has made significant progress since the awarding of the World Bank loan in April 2010. The required land is now owned by Eskom, water for construction and operations has been secured, and the planning around grid integration has progressed well.

Given the pace of technological developments in CSP and the time taken to finalise funding, Eskom and the World Bank decided that an independent technology assessment was required before concluding the plant specifications. The assessment, conducted by an independent German consultancy, was completed in December 2010. The consultant confirmed Eskom’s internal findings that the central receiver (CR) is the preferred technology choice and is suitable for utility scale application. Eskom finalised the plant specifications as follows:
  • 100MW central receiver demonstration plant with molten salt as a heat transfer fluid
  • Capacity factor greater than 60%
  • Two tank storage systems, with molten salt, designed for optimised, levelised energy costs
  • The plant will be dry cooled or hybrid cooled – designed to optimise water usage
  • All auxiliary power will be sourced from the national grid and backup will be sourced from diesel generators
  • Life of plant will be a minimum of 25 years.

Eskom will appoint an owner’s engineer in the first half of 2011 for the development and execution of the project. The plant is expected to be commissioned in the first half of 2016.

    

 

Utility load manager – ULM

A utility load manager is a system that can control and limit the load available to a home or business when Eskom experiences network and system supply constraints. The system gives households a choice about which appliances to use when, and encourages energy efficiency. Eskom’s system has been designed to ensure quick roll out, with minimal impacts on the network design and for use on all existing reticulation network designs. The pilot project has been hugely successful and is ready to be implemented nationally.

Underground coal gasification – UCG

The underground coal-gasification flarestack with Majuba power
station in the background (blue flame typical for UCG gas).

Underground coal-gasification (UCG) is a clean-coal technology that allows coal to be gasified on site within the coal seam to produce UCG gas that can be used directly as a fuel for power generation. Eskom is demonstrating the co-firing of UCG gas with coal in an existing power station and the use of UCG gas as a fuel for an open-cycle gas-turbine demonstration plant.

On 28 October 2010 at 13:22 Eskom’s UCG demonstration plant started delivering gas to Unit 4 at Majuba power station near Volksrust. The gas is being co-fired with coal, and contributes 3MW to the unit’s current electricity production of approximately 650MW. This is an historic occasion, as it marks the first production of commercial electricity from UCG gas outside the former Soviet Union.

Eskom highlighted the potential of UCG in a conceptual study in 2002; and this led to a site selection and pre-feasibility study in 2003; a site characterisation study in 2005; the successful commissioning of a pilot plant in the Majuba coalfield in January 2007; and the successful testing of the equipment for co-firing of UCG gas in one of the Majuba power station boilers in October 2010.

Further details of the UCG project are set out in www.eskom.co.za/annreport11/006.html

  Innovation circuit  
   

To support one of Eskom’s core values of innovation, the division formed the Innovation Circuit (IC).

The IC encourages and nurtures a culture of innovation within Eskom. It conducts “fun shops” where employees are interactively made aware of the advantages of innovation as a company value. The IC website welcomes employees’ ideas, and more than 6 000 employees have registered on the website and submitted nearly 2 000 ideas.

In 2011, the open innovation pilot project was launched, which aims to prove the value of sharing needs with outside parties to accelerate the discovery and implementation of innovative solutions. Eskom will collaborate with energy stakeholders and members of the public.

Some 2011 successes
  • Several business process ideas were integrated into the Back2Basics project
  • A manageable and cost-saving print environment was established
  • An ongoing recycling project was established.
    • Key ongoing innovation research projects
    • Safer operating conditions near power lines and low-hanging conductors
    • Alternative energy sources
    • Innovative ways to conduct line inspections
    • Energy efficiency initiatives, including heat recovery, geyser control, and energy-saving incentives.
    

The Forensic and Anti-Corruption department assists Eskom with good corporate governance and prevents, mitigates, detects and responds to fraud, corruption and other forms of economic crime or dishonesty. This is in support of Eskom’s commitment as a signatory to the United Nations global compact.

The South African National Anti-Corruption Campaign

Eskom is strengthening its commitment to the national anti-corruption campaign. Eskom has entered into a three-year partnership with the Special Investigation Unit (SIU). The partnership will help Eskom to remain ethical, with appropriate fraud detection and prevention measures in place.

2011 has been a year of transformation for IT in Eskom. Major changes in the structure and management of Eskom’s IT have contributed to aligning IT resources with Eskom’s new business priorities, while maximising the value Eskom derives from IT.

These changes have already had a significant business impact on Eskom. There is greater flexibility and Eskom is able to standardise, simplify and optimise business processes across the organisation through the Back2Basics programme. Integrated business reporting is already enabling executives to make informed decisions based on improved information accuracy, timeliness and availability. The Microsoft platform currently being implemented will enable Eskom to more easily adopt and integrate new and emerging technologies in line with more demanding business requirements. Duplicate processes have been eliminated and consolidated, saving costs.

Increased threats to IT security emerged internationally in 2011. Information security governance has been extended to include Eskom’s operational power station systems.

Eskom has embarked on a quality improvement programme to integrate quality into all activities based on the quality management strategy. The overall quality improvement initiative is in the developmental phase.

As part of its quality management strategy, Eskom adopted the ISO 9001:2008 standard as the framework for business management. To date, the following Eskom divisions and business units have received ISO 9001 certification:
  • Corporate Services division
  • Two coal-fired power stations (Hendrina and Matimba) and all peaking power stations in the Generation division
  • Project development department in the Group Capital division.

The rest of the divisions are developing and implementing ISO 9001-compliant quality management systems. All the divisions and operating units are expected to be ISO 9001 compliant by 31 March 2013.

Eskom’s quality improvement programme towards ISO 9001: 2008 certification