Termination of Alstom boiler protection software contract at Medupi power station
by Chris Yelland, EE Publishers
EE Publishers has received substantial information that Eskom is currently in the process of terminating the Alstom boiler protection contract at Medupi power station.
The boiler protection software in a coal-fired power station is a critical safely item subject to stringent regulatory controls.
In the light of Eskom's negative experience with Alstom, the utility intends to appoint an alternative contractor (likely to be Siemens) to complete the job.
A change in software supplier by Eskom at this late stage poses further serious risks to the delivery of first power from Medupi, currently scheduled for the second half of 2014.
However, the boiler software has already delayed Eskom's Medupi project a year, and it has become clear to Eskom that subsequent undertakings by Alstom have not and cannot be met, posing still greater risks Eskom's new build programme and South Africa's security of supply.
Eskom first announced in December 2012 that the Alstom boiler protection software for Medupi had failed factory acceptance tests in France.
In February 2013, Eskom called in Alstom's performance bond for failing to meet its contractual performance guarantees.
Subsequently Eskom announced that first power from Medupi would be delayed a by a year due to the Alstom and Hitachi boiler contract problems.
In the meantime the critical Medupi boiler protection software from Alstom has failed Eskom acceptance tests a further three times, and a year later, as of today, the Alstom software has still not passed the acceptance tests. Commitments to Eskom by Alstom have been made and broken, and deadlines have passed.
The full extent of the Alstom contract termination is still not clear. Questions to both Eskom and Alstom on whether the contract termination applies to some or to all of the generation units at Medupi, and to Kusile power station, remain unanswered.
It is also unclear whether the contract termination by Eskom applies only to the boiler protection software, or to the balance of Alstom's control and instrumentation contracts at Medupi and Kusile.
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Integrated Resource Plan for Electricity
IRP 2010-2030 updated
Extract from the executive summary of the 2013 update report
Click here to download the full 2013 update report
Since the promulgation of the Integrated Resource Plan for Electricity IRP 2010-2030 there have been a number of developments in the energy sector in South and Southern Africa. In addition the electricity demand outlook has changed markedly from that expected in 2010.
A revised economic and electricity sector outlook has been developed to inform decisions required in the lead-up to a new iteration of the IRP (which will also be influenced by the approved Integrated Energy Plan) expected in 2014. The demand in 2030 is now projected to be in the range of 345- 416 TWh as opposed to 454 TWh expected in the policy-adjusted IRP.
From a peak demand perspective this means a reduction from 67800 MW to 61200 MW (on the upper end of the range), with the consequence that at least 6600 MW less capacity is required (in terms of reliable generating capacity).
Apart from the uncertainty regarding the future demand there are additional variables in the energy sector, specifically the potential for shale gas, the extent of other gas developments in the region, the global agenda to combat climate change and the resulting mitigation requirements on South Africa, as
well as the uncertainty in the cost of nuclear capacity and future fuel costs (specifically coal and gas), including fuel availability.
All these uncertainties suggest that an alternative to a fixed capacity plan (as espoused in the IRP 2010) is a more flexible approach taking into account the different outcomes based on changing assumptions (and scenarios) and looking at the determinants required in making key investment decisions.
Considering the changes in consumption patterns and technology costs over the past three years it is imperative that the IRP should be updated on a regular basis (possibly even annually), while flexibility in decisions should be the priority to favour decisions of least regret. This would suggest that commitments to long range large-scale investment decisions should be avoided.
Click here to download the full 2013 update report
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