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INTEGRATED RESULTS PRESENTATION
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Sustainability

Mandate

The Sustainability division’s mandate is to deliver effective and innovative solutions and decision support to enable sustainable business performance and increased stakeholder confidence, which will contribute to the transformation of Eskom and South Africa.

In order to diversify its energy mix, and in support of its strategic imperative of pursuing a low-carbon growth path, the renewables unit drives Eskom’s renewable generation capacity by developing and operating proven technologies to address government’s environmental commitments and aspirations, as well as to reduce Eskom’s environmental footprint. The division ensures that a holistic sustainable development approach is embedded in all Eskom’s activities.

Operational overview

Eskom continued to actively participate in the government processes to develop carbon budgets, adaptation plans, measurement and evaluation protocols, greenhouse gas reporting procedures and mitigation plans for the country. Eskom was also instrumental in active negotiations supporting the government delegation to the international climate change negotiations at COP 19 during November 2013. Eskom is embarking on the development of a COP 21 strategy to ensure that the organisation is prepared for what is seen as a watershed meeting in the climate change negotiations. The expectation is that COP 21 will deliver commitments, whether legally binding or not, for all countries.

Eskom actively participates in the World Business Council for Sustainable Development (WBCSD). The WBCSD is focused on the Action 2020 project which is developing business solutions for implementation in 2020 to ensure a sustainable planet by 2050. Eskom is co-authoring the solution on remote electrification solutions and is actively engaged in the energy and climate work. The WBCSD also provides a valuable platform for Eskom to benchmark itself against best practice. Eskom is also a member of the Global Sustainable Electricity Partnership (GSEP). Through the GSEP, Eskom successfully hosted two workshops on financing electrification with the Southern African Power Pool (SAPP).

Refer to the “Reducing Eskom’s environmental footprint and pursuing low-carbon growth” section (page 127) in the integrated report for more information.

Occupational hygiene and safety

Eskom’s safety performance remains a concern for the organisation, particularly in light of the number of tragic fatalities and serious injuries suffered by both employees and contractors. To this end, a number of safety improvement initiatives are being implemented, with a view to reducing the number of fatalities and injuries of contractors and employees to zero. The implementation of these safety improvement initiatives is aligned to the strategic elements in the Eskom occupational hygiene and safety strategy. These strategic elements seek to sustainably mitigate the occupational hygiene and safety risks, and in so doing improve safety performance.

Eskom believes that zero fatalities and injuries are possible, and will continue to strive towards its goal of zero harm. Leadership will continue working to embed safety into the hearts and minds of everyone at Eskom.

Detail on the line divisions’ safety performance is included in this report. Also refer to the “Becoming a high-performance organisation – safety” section (pages 85 to 87) in the integrated report for more information.

Research, testing and development

Eskom’s Research, Testing and Development department has focused on enhancing its strengths through the establishment and promotion of centres of expertise in those areas of research that support Eskom’s priorities. This has ensured that it maintains a focus on the organisation’s operational needs and the strategic challenges it currently faces.

Eskom aims to become a highly innovative company recognised for its research and innovation. Focusing the research and development on product delivery is designed to achieve this aim.

Operational overview

The unit has made good progress on its portfolio for the year, especially on the 18 high priority projects. Key amongst these are the online boiler monitor, Waterberg coal suitability analysis and high frequency electrostatic precipitator projects which are all on track. The focus on high impact, high value project identification and delivery will continue. This requires increased focus on project management systems and practices and alignment with the real needs of the business. The need to demonstrate, communicate and measure value-add is critical to future investment in research in the financially difficult times facing Eskom.

Eskom has maintained memberships, collaboration and partnerships with national and international research organisations to ensure that it remains up-to-date with the latest global technologies and trends. Continuing international collaboration includes organisations such as the Electric Power Research Institute, Doble, the International Energy Agency Clean Coal Centre and SolarPACES, and the Welding Institute. A new membership with the National Renewable Energy Laboratory in the United States is developing and has great potential to open up new knowledge sources in the renewable and energy efficiency spheres. A multi-year contract has been concluded with the majority of universities in South Africa for collaborative research. Those without agreed contracts to date will receive attention, especially those categorised as previously disadvantaged.

An amount of R156.2 million was spent on research for the year ending 31 March 2014 (2012/13: R195.3 million). The decline in spending is largely due to the savings measures enforced in the research environment, particularly on expenditure for external contract research work. A breakdown of this expenditure is shown below.

Expenditure per research focus area
Expenditure per research focus area

The figure above indicates that research funding follows a similar pattern to the previous year, with a strong focus on the environment and plant performance.

Demonstration and pilot projects

The demonstration and pilot programme provides for the production of scale assets that are used to assess technologies identified through the research process for its commercial potential for Eskom. The primary aim is to develop a business case for the commercial use of the applicable technology and to ensure that key technologies, that can improve performance and fundamentally change Eskom’s current and future technology path, are effectively appraised and the risks understood.

The capital expenditure on the demonstration and pilot projects was R161 million, the majority of which was invested in the underground coal gasification (UCG) pilot project. The expenditure was curtailed by the delay in obtaining water-use licences for the UCG project and the subsequent reduction in scope.

Some finalists from the Eskom Expo for Young Scientists qualified to participate in the international Intel competition in the United States of America
Some finalists from the Eskom Expo for Young Scientists qualified to participate in the international Intel competition in the United States of America

High frequency electrostatic precipitator (ESP) at Lethabo

The tender has been awarded and the equipment is currently on site. Commissioning is planned for early in the new financial year, but is at risk given that it requires an outage, which must be managed within the current constrained power system. The option of installing these units at Kriel in the very near future is being explored.

Waterberg coal suitability analysis

Eskom is conducting an analysis of Waterberg coal samples to determine their suitability for use in the Mpumalanga power stations. A full suite of laboratory analyses as well as combustion tests are being performed on coal samples provided and conclusions made as to their application in power stations far away from the usual coal supply mines. This is of strategic importance as this knowledge will inform the procurement and transport strategies of primary energy in sourcing coal for Mpumalanga projects. The project is on track and the first samples are undergoing tests. Combustion tests were however delayed by rain and the outage schedule is being adjusted to accommodate other higher priorities.

Underground coal gasification

The underground coal gasification project is currently awaiting environmental and water-use licences to proceed to the next phase, which will focus on increasing gas production volumes to prove energy content of the gas and potential commercial applications. Several meetings have been held with the Department of Environmental Affairs (DEA) and the Department of Water Affairs (DWA) in an attempt to expedite the process.