© 2008 eskom. all rights reserved. from strategy to implementation updea – durban march 2009...

© 2008 Eskom. All rights reserved.

From Strategy to Implementation

UPDEA – Durban March 2009

Maboe Maphaka

Energy LossesManagement Programme

© 2008 Eskom. All rights reserved. 2

Agenda

Background

Strategy formulation

Implementation

Results

Concluding Remarks


Challenge

Background to Energy Loss Programme

Distribution experienced higher than expected energy losses over the past few years

Initiated the Energy Losses Management ProgrammeAction

Arrest negative trend Improve current energy loss management practices Introduce new strategies Establish acceptable level at which losses should be managed as an inherent risk of

the business Ensure operational sustainability Leverage other internal business competencies

In support of the Eskom Financial Sustainability Objective

Objective


44

Total Distribution Energy Losses Trend

12 month moving average (MMA)

Total Energy Losses

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

% T

ota

l L

osses 5.34% YTD5.34% YTD

Rising Energy Rising Energy Losses Trend, a Losses Trend, a major concern major concern for the utilityfor the utility


Reasons For Energy Losses Management Initiative

Theft Illegal connections and revenue lost due to theft of electricity is a public domain risk for Eskom

Regulatory Management

In light of Eskom’s impending tariff hikes over the next three years, the public (and NERSA) will potentially criticise Eskom for rate hikes while not managing energy and revenue losses. Eskom would have to demonstrate its serious interventions to address the problem

Reputation Risk Eskom need to show all reasonable attempts to get the SA public to be aware, informed and encouraged to be compliant by addressing behaviour

Revenue Recovery

The considerable revenue loss suffered, necessitates Eskom to explore and employ all possible avenues to recover and prevent these losses

Base Load Electricity theft impacts demand (load) on the grid. LPUs, SPUs and PPUs who are illegally connected, tampering with metres, etc, will have no incentive whatsoever to use electricity efficiently


Agenda

Background


Implementation

Results

Concluding Remarks


7

Strategy Formulation

Strategy Development: Literature reviews

– International best practices– Technology investigations

International consultant input (PA Consulting) International visits (Brazil and Argentina) Conducted national industry workshops Internal workshops with subject matter experts

Strategic Objectives: Arrest the current upwards energy loss trend Manage the trend to an acceptable level Ensure sustainability at an acceptable level


Detailed Losses Management Strategy1. Normalise Losses to an agreed level in the medium term.

2. Build the mechanisms to sustain at that level as part of normal business.

Audit, measure and fix customer

installations


installations

Ringfence electrical networks to balance

energy delivered

Ringfence electrical networks to balance

energy delivered

Implement tested technologies to manage

energy losses

Implement tested technologies to manage

energy lossesEnsure sustainability

through proper resourcing

Ensure sustainability through proper resourcing

Use business intelligence to identify high loss customers

Resource and prioritise customer audits

Co-ordinate customer audits

Measure results nationally

Identify network based boundaries

Install metering to measure energy flows

Audit and clean data per measured area

Balance energy inflows and outflows to determine

anomalies

Investigate all possible options to reduce energy

losses

Pilot and test scalability of identified technologies

Implement and measure benefits of tested

technologies

Determine business RACIs for revenue losses

management activities

Perform detailed environmental analysis

and identify gaps

Implement measures to address identified gaps

Build competence and certify revenue loss

management resources

Measure results and adjust resource strategy

accordingly

Communicate and educate internal and external stakeholders

Improved Data Accuracy critical to processHow?How? How?How? How?How? How?How?


N

on

-Tec

hn

ical

Lo

sses

Tec

hn

ical

Lo

sses

Strategic Objective

Strategies for Managing Energy Losses

Communicate and educate internal and

external stakeholders

Build mechanisms to control losses

Reduce Losses to agreed level (medium term)


installations

Ring fence electrical networks to balance

energy delivered

Implement tested technologies

Ensure sustainabilityActions

1 2 3 4

Strategic Objective

Achieve cost optimised level of technical losses throughout network

Initiated Power Factor correction

project

Reactive Power Compensation

Working Group

Reviewing energy losses criteria during network design and operations

Actions1 2 3


Strategic Objective

Strategies for Managing Technical Losses

Achieve cost optimised level of technical losses throughout network

Initiated Power Factor correction

project

Reactive Power Compensation

Working Group

Reviewing energy losses criteria in

project design and planning

Actions

Focuses on preventing voltage collapse in poor power factor networks

Improves transfer capacity of networks and reduce technical line losses in the short term

Develop guidelines for application to Sub transmission networks

Going forward network planning incorporate principles of reactive compensation and the loss reduction effects thereof

Design and planning of new or refurbished networks in line with energy loss objectives, network standards and related investment criteria's

Detail

1 2 3

Review current technical loss calculation methods & assumptions (clean slate review)Review of technical losses imbedded in terms of long term cost of supplyApproach


Strategic Objective

Strategies for Managing Non-technical Losses

Communicate and educate internal and

external stakeholders

Build mechanisms to control losses

Reduce Losses to agreed level (medium term)


installations

Ring fence electrical networks to balance

energy delivered

Implement tested technologies

Ensure sustainability

Actions

Use business intelligence to identify high loss customers

Resource and prioritise customer audits

Co-ordinate customer audits

Measure results nationally

Identify network based boundaries

Install metering to measure energy flows

Audit and clean data per measured area

Balance energy inflows and outflows to determine anomalies

Investigate all possible options to manage; reduce energy losses

Pilot and test scalability of identified technologies

Implement and measure benefits of tested technologies

Determine business RACIs for revenue losses management activities

Detailed analysis and identify gaps

Build competence and certify revenue loss management resources

Measure results and adjust resource strategy accordingly

Approach

1 2 3 4


ELP Public Communication Initiative Detail

To influence the voluntary behaviour of SA consumers to be legal electricity users by: Reducing the number of illegal electricity consumers Mobilising South Africans to report and prevent illegal connections Building partnerships to deal with illegal electricity consumption

Objective

Through-the-line1 campaign that supports, publicises and drives behaviour-change utilising: Community mobilisation: building compliant behaviour through norms, values, partnerships, etc Amnesty & Reporting line campaign Partnership campaign with Organised business, Civil society & Communities Compliance campaign, Eskom Audit roll-out, Trend analysis Communication: Publicising all the above

Tool

1 Through-the-line: Utilising both Above-the-line (National media such as TV, radio, national press) and Below-the-line (Community media, brochures, etc.) channels

Focus on both LPUs/ Large SPUs and residential SPUs. Two integrated pillars: a Pro-active Integrity-based Program and a Compliance-based

Program Show target audiences the impact & risk of illegal use of electricity Show target audiences the benefits of legal electricity usage Empower target audiences through partnerships, organised structures and mobilisation Tie this campaign in with broader energy efficiency education Aligned with existing Eskom campaigns

Approach

1. Reduce energy losses 2.Improve safety 3.Reduce non-payment 4. Improve availability of supplyBenefits


Agenda

Background


Implementation

Results

Concluding Remarks


Realising Results

In order to realise results, the following has been put in place to assist in the management of energy losses:

Energy Losses Audit Methodology – To enhance the value derived from customer meter audits

Energy Losses Management Scorecard– For measurement and target setting – links to Strategy– Breaks down the weighting per performance measure / KPI

Energy Losses Management RACI– Assigns RACI principles (i.e. who should be accountable, responsible for results, etc) to

various roles and departments

Functional Job Compacting– Proposed ELP Compacting assigns a weighting (% of Functional Compact dedicated to EL)

to each department / role identified in RACI


Programme Plan

Efforts to be integrated

into normal business practice

Pilot and Quantify.

Assign, Resource, Train, Measure

Ongoing Communication Initiatives

Account for energy delivered by balancing energy at feeder level

Identify and resolve structure, process, skills and resource constraints

2006/7 2008 2009 2010

Ongoing communication initiatives to create awareness and understanding of, and change behaviour in managing energy losses (both internal and external)

Prioritise and Measure

Ringfence and Balance

Pilot and Apply

Manage and Resource


installations

Ringfence electrical networks

to balance energy delivered

Implement tested technologies to manage energy

losses

Ensure sustainability

through proper resourcing

Communicate to and educate internal

and external stakeholders

Build governance and capacity to sustain as part of normal business

Proactive identification, auditing, fixing and measurement of customer audits


Build governance and capacity to

sustain as part of normal business


Identify, investigate, pilot and implement tested technologies to

manage energy losses


Measurement and Target SettingHow the Scorecard Supports the Strategy

Key Strategy Component Key Measures

2007/08 Weighting

2008/09 Weighting

2009/10 Weighting

LPU Low / No Consumption, Terminated PODs Advancing, Service Points Without MetersSPU Low / No Consumption, Terminated PODs Advancing, Service Points Without MetersPPU Low / No Consumption, Service Points Without MetersNumber of LPU's AuditedLPU Fix RateNumber of SPU's AuditedSPU Fix RateNumber of PPU's AuditedPPU Fix Rate% of Customers on Balanced Feeders % Unallocated CustomersTotal LossesEBM1 Residential LossesEBM2 % Coverage and Residential Losses

Inp

ut

KP

I's

Ou

tpu

t

KP

I's

Targeted Field Audits

General Methodology Based Audits

Feeder Balancing

Energy Losses Measurement

40% 25% 20%

30% 25% 20%

10% 20% 20%

20% 30% 40%


REC

Regional Project Manager

Regional ELP Task Team

Communication

Regional ELPSponsor

Regional ELP Champion/s

TechnologyNetwork Ring

FenceManage & Resource

Audit, Measure & Fix

Proposed Regional ELP Implementation Structure

Should be a REC Member

Dedicated Regional resource

National PMO

To be chaired by

ELP Sponsor


Agenda

Background


Implementation

Results

Concluding Remarks


1919

Trend of Total Distribution Energy LossesJan 02 – Jan 09

12 month moving average (MMA)Dx wide energy losses initiatives

Total Energy Losses

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

% T

ota

l L

osses 5.34% YTD5.34% YTD

Energy Losses Energy Losses Trend improving Trend improving

after the after the implementation of implementation of the Energy Losses the Energy Losses

Management Management ProgrammeProgramme


Wei

gh

t

Jan

Feb

YT

D (

Feb

)

% o

f T

ota

l Bas

e

Sco

re f

or

Fe

b

64.58

Known Service Points with problems 10.0

% Known LPU Service Points (with problems) Corrected 4.0 62.8% 68.4% 69% 3.01

% Known SPU Service Points (with problems) Corrected 2.0 17.6% 14.9% 15% 0.00

% Known PPU Service Points (with problems) Corrected 1.0 0.0% 0.0% 0% 0.00

Unallocated PPU Meters 3.0 19.1% 18.7% 18.7% 2.13

Number of Service Points Audited 40.0

% Large Power Users Audited - LPU 9.0 137.0% 165.5% 119% 36% 13.75

% LPU Fix Rate (Within 30 days) 9.0 3.0% 0.0% 60% 5.40

% Conventional Residential Audited- SPU 6.0 52.1% 46.1% 45% 12% 0.00

%SPU Fix Rate (Within 60 days) 6.0 2.2% 10.0% 42% 0.00

%Prepaid Residential Audited - PPU 5.0 95.9% 173.4% 88% 16% 4.40

% PPU Fix Rate (Within 60 days) 5.0 32.5% 30.3% 78% 3.90

Energy Balancing 20.0

% Stats Meters Installed at MV feeder level (New / Upgrade) 7.5 200.0% 247.5% 98% 7.35

% MV Feeders Balanced (FBM) 10.0 105.0% 92.0% 92% 9.20

Number of Projects with Losses >30% (EBM1) 2.5 0.0% 0.0% 0% 0.00

Energy Losses KPI's

Total Losses % (12MMA) 15.0 5.39% 5.36% 5.36% 15.44

% Technical Losses (sub-transmission) - 1.6% 1.6% 1.6%

% Non-Techincal Losses - 3.8% 3.7% 3.7%

EBM1 7.5

% Losses (12MMA) 7.5 30.9% 31.7% 31.7% 0.00

EBM2 7.5

% Losses (12MMA) 7.5 33.2% 33.2% 33.2% 0.00

Inp

ut

KP

I'sO

utp

ut

KP

I's

Distribution


17,371

4,658

5,713

4,658

4,761

5,647

5,355

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Total LPUBase

AnnualTarget

YTD Target YTD Actual

Total Dx - LPU Total SP Audited

Current Financial Year

Last Financial Year

943

274

649

9037

0

200

400

600

800

1,000

1,200

1,400

Stuck and FaultyMeters

TamperedMeters

Missing ServicePoints Identified

Total Dx - LPU Problems Identified to Date


Last Financial Year

294

162

0

50

100

150

200

250

300

Problems Fixed Problems Not Fixed

Total Dx - LPU Problems Fixed vs Problems not Fixed

222222

Programme Status – LPU Audits DistributionAudit and Measure Workstream

Up to end January 2009

17,371

10,3719,419

11,002

1,217

73 127

294

162


536,812

139,664

154,621

139,664

125,281

48,790

55,817

0

100,000

200,000

300,000

400,000

500,000

600,000

Total SPUBase

AnnualTarget


Total Dx - SPU Total SP Audited


Last Financial Year

8,321

5,804

3,621

2,956

239593

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Stuck andFaulty Meters

TamperedMeters

MissingService Points

Identified

Total Dx - SPU Problems Identified to Date


Last Financial Year

5,885

13,243

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000


Total Dx - SPU Problems Fixed vs Problems not Fixed

232323

Programme Status – SPU Audits DistributionAudit and Measure Workstream


536,812

294,285264,945

104,125

14,125

6,577

832

5,885

13,243


3,829,911

639,104

740,971

639,104

617,476

612,663

490,451

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

Total PPUBase

AnnualTarget


Total Dx - PPU Total SP Audited


Last Financial Year

14,657

14,758

44,676

33,203

14,654

8,134

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Stuck andFaulty Meters

TamperedMeters

Missing ServicePoints Identified

Total Dx - PPU Problems Identified to Date


Last Financial Year

45,23334,108

0

5,000

10,00015,000

20,000

25,00030,000

35,000

40,00045,000

50,000


Total Dx - PPU Problems Fixed VS Problems not Fixed

242424

Programme Status – PPU Audits DistributionAudit and Measure Workstream


3,829,911

1,380,0751,310580 1,103,114

29,415

77,879

22,788

45,233

34,108


Agenda

Background


Implementation

Results

Concluding Remarks


Lessons learned

Energy theft solution requires joint efforts in different kinds of areas

– Technical

– Commercial

– Governmental A close follow up is necessary to facilitate payments for low income clients Personnel commitment is fundamental for success Isolated actions are not useful Persistent actions are required with close follow up Standard procedures are important KPIs are necessary for objective progress measurement Senior management involvement is highly critical Beware of the enemy within


The End

© 2008 eskom. all rights reserved. from strategy to implementation updea – durban march 2009...

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