asset management report –oct 2018 - verdigris...• in accordance with the o&m manual the...

Asset Management Report – Oct 2018CPV Power Plant No.1 (RF) (Pty) Ltd

Distributed via E-mail – 19 November 2018

Index

• Executive Summary

• Key Issue Summary

• Operating Summary

• Environmental Summary

• Ownership & Funding Structure

• ED & SED

• Other Matters

• Media

• Contact Details

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Executive Summary• This monthly Asset Management Report provides an analysis of and comments on the current financial and operating status at the CPV 1

Power Plant for the month of October 2018.

• Highlights:

• Plant availability remains at high levels

• Plant production levels tracking 12.5 % lower YTD compared to modelled values. If the forecast is maintained the FY18/19 production

levels will be 6.2 % below budget

• DNI lower than modelled contributing 0.3 % of this value YTD

• Operations and maintenance continue as scheduled

• Health & Safety – no reported incidents in the reporting period

• Environmental compliance at acceptable levels, no fines proposed or issued

• ED & SED fully compliant

• Financial cover ratios remain at high levels

• Key Focus Areas:

• Resolution of open R&O items with BOPI & O&M Contractor – refer slide Key Issue Summary (slide 4, 5, 6)

• Grid Code Compliance - refer slide Key Issue Summary (slide 9)

• All spare parts at site as per the Spare Parts Agreement, full site inventory currently underway. Activity is still not completed, external

contractor to be appointed to complete in summer.

• AFS finalization for 2014 - 2018 in progress - refer slide Key Issue Summary (slide 7, 8)

• Warranty extension for Inverter OEM Inverters currently being reviewed

• Water flow & flooding berm to be constructed at site to minimize the effects of flooding. Tender packs reviewed by AM and submitted to

GIBB for finalization. To be issued to contractors for quoting in the next weeks

• The energy produced since May are below modelled values, the AM team is investigating the underperformance of the plant with GCC

Contractor, O&M Sub-Contractor to identify optimization possibilities

• Bi-annual Oil replacement of Motor Gearboxes - contractual discussions ongoing with regards to responsibility between BOPI & O&M

Contractor and CPV1. Further feedback to be provided once clarified. BOPI & O&M Contractor still in the process of confirming SAPVIA

registration.

• Drive OEM report received for drive failure earlier this year, Drive OEM lab results outstanding to indicate root cause. Steerco with Drive

OEM held on the 13th of November. David Pope to share final report and site visit to be scheduled towards the end of Q1 2019.

• 4QD sensor prototypes units will be tested and monitored for the remainder of the financial year to inform way forward.

• Transformer failure identified, reports received from Transformer OEM and Transformer Consultant RC. Second coil was dismantled and

found defective as per report received from Transformer Consultant RC, Transformer OEM report received indicating no fault of the

transformer. All 6 coils to be replaced for the retrofit considering the failure of the DDP – costing received, R 350k. Transformer will be used

as the spare transformer at site. Further independent tests memo received, ultimate root cause determined to be the transformer. Refer

slide Key Issue Summary (slide 10)

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Key Issue Summary

• BOPI & O&M Contractor

• Bi-weekly progress meetings ongoing to resolve action item list (latest version to be provided on request)

• Overview of key items:

• BOPI Punch List Items:

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Key Issue Summary


• Bi-weekly progress meetings ongoing to resolve action item list (latest version to be provided on request)

• Renewed focus from BOPI & O&M Contractor committed to resolve outstanding punch lists after

correspondence were issued by CPV1 to do so.


• BOPI Punch List Items:

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Key Issue Summary



• R&O Punch List Items –

• PV Boxes – BOPI & O&M Contractor implemented fan solution. Temperature tracking to continue. This will

allow us to independently confirm the temperature of the PV Boxes in relation to the design

documentation & the requirements of the balance of the equipment contained in the PV Box;

• Generator – RTAC Automation. CPV1 completing process with assistance from Transformer Consultant,

works to be kicked off as RETEC tests were completed;

• SCADA – ESA & CPV System Supplier workshop held in the first week of November. Site workshop & debrief

scheduled for the 5-7th of December to determine next steps;

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Key Issue Summary• Annual Financial Statements = CPV1

• Status below, delayed further due to delays from PWC in concluding AFS comments for the 5 years, completion now estimated –

30 November 2018

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Key Issue Summary• Annual Financial Statements – CPV Bond SPV

• During the finalisation of the BOND SPV AFS a VAT issue was identified with the Capital Availability Fee and the Cost of Capital Fee.

• Webbers provided an opinion as to whether these fees are subject to value-added tax ("VAT") and, if this is the case, if CPV 1 would

be entitled to claim input tax in respect of any VAT paid to Bond SPV.

• Conclusions:

• Bond SPV should applied for relief under the Voluntary Disclosure Programme ("VDP"), which, if successful, would mean that

Bond SVP would not be liable for any penalties. VDP application submitted, awaiting feedback. VAT registration completed.

• VAT amount – R 14,385,041.

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Key Issue Summary

• Grid Code Compliance

• Exemptions:� Current exemption to the 24th of October 2018. As per the August 2018 Asset Management report, CPV1 and GCC

Contractor presented at the GCAC sitting in September. An exemption was requested for Power Quality for an additional12 month period. No feedback received from RETEC / GCAC. Further requests for feedback was submitted to RETEC on 28September, 1 October, 12 October, 17 October, 23 October and 19 November.

• Remaining Activities:� Power Quality / Emissions Report – only 3 remaining harmonic orders currently exceeded, being harmonic order 5, 7 and

11.� Based on current findings with regards to the 5th, 7th & 11th harmonic orders, the NSP suggested that CPV1

considers load flows on the network to further investigate whether the 5th, 7th & 11th harmonics might relate toloading on the 132 kV network. The data has been requested from the NSP and received, analysis completed. Metyesterday with Dr. Johan Beukes and team. Developed a theory as to why the inverters generate the low orderharmonics as in his opinion the inverters should not be generating harmonics. He confirmed that the R&D teamwould like to try and resolve this problem but requires some assistance in terms of information and access to theplant.

� The plant provided the necessary information, drawings, plant layout, transformer information and TransformerConsultant settings, voltage settings. After review the team will visit site to do some measurements up to inverterlevel, these measurements would be focusing on the voltage level experienced by the inverters vs the DC busvoltage.

� Power factor tests are being run as Dr. Johan Beukes received the information from GCC Contractor in the week ofthe 12th of November.

� The theory is that the network voltage is too high versus the DC bus voltage, this causes the deformation of thewaveform generated by the inverter and accounts for the related harmonic content. If this theory is correct andEskom can lower the network voltage in order to successfully mitigate the generated harmonics the plant can bedeemed fully compliant. If correct, this would be a quick cost effective way to solve the harmonic problems at theplant. Dr. Johan Beukes also indicated the possibility to the plant’s levels increased due to the network issues.Currently awaiting feedback.

� NSP to issue correspondence in support of the extension requested above.� NSP will also be providing a letter to RETEC to strengthen and support our exemption extension request.

� RETEC Site Tests – RETEC site tests witnessing concluded on the 7th of November. Awaiting formal communication indicatingsuccessful testing a documented & witnessed on the day by GCC Contractor, RETEC and the NSP.

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Key Issue Summary

• Transformer Failure

� Considering the long lead time (circa 6-9 months) in procuring a replacement, it is prudent to investigate further, considering anyadditional failures will result in significant loss of production.

� Spare transformer refurbishment will be completed at the end of November and will be shipped to site. Quality session held lastweek.

� Actions:� Discuss the cable fault / transformer fault incident with site personnel to shed more light on the analysis of the sequence of

events – Transformer Consultant in the process of scheduling these works.� Inspect all cable terminations – Transformer Consultant in the process of scheduling these works.� Test all PV Box protection systems as a matter of urgency to determine whether or not they are trip capable – Transformer

Consultant (after RETEC)� Analysis of oil samples by ESKOM lab completed and results reviewed by Transformer Consultant. Only one transformer

indicated the requirement for further tests, with the rest indicating normal operation. This transformer’s oil will be retested theweek of the 25th and feedback provided.

� Second opinion sought due to impact of future transformer failures. Transformer Consultant issued memo for discussion withBOPI & O&M Contractor, Transformer OEM and Transformer Consultant RC, key matters from the memo:� The reports from Transformer OEM & Transformer Consultant RC indicated cable fault as the cause of the transformer failure

was found to be incorrect.

� Based on the review, study of the relay data, field report, pictures Transformer Consultant concluded that the failure occurred

due to an insulation failure of the transformer. There could be a number of reasons for this type of failure, inter alia local hot

spot at a specific position on the winding, weakening the winding insulation at that point or weak insulation material showing

accelerated aging.

� Next steps are to meet with all parties to investigate and identify the root cause of the failure.

� Remaining windings to be unwound on the failed transformer to review and inspect for any signs of insulation deterioration

while the transformer is open.

� Feedback to be provided as the matter is investigated further.

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Operating Summary• Energy Production

• The total energy produced for the month of June was 6 328 213 kWh (1st to 31st October 2018)

• as compared to the modelled energy of 7,271,337 kWh (PV-Syst incl. losses & degradation), an underproduction of -943,124

• kWh (12.97 %), deviation explained in summary slide.

• compared to the previous month with 5,339,677 kWh (1st to 30th September), an increase of 988,536 kWh (18.51% month to

month increase).

• compared to the last Year production of 6,710,563 kWh (1st to 31st October), a decrease of 382 350 kWh (5.70 % year on year

decrease).

• Produced vs. modelled energy as monthly sum in [MWh] since COD

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Operating Summary• Energy Production (continued)

• Produced vs. modelled energy for each month [MWh] since COD, annual comparison 2015, 2016, 2017, 2018

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Operating Summary continued

• Reportable Incidents

• The energy produced this month is lower than the modelled energy, this could be due to a number of external factors.

• Recording of water usage is continuing as per BGCMA requirements.

• Constant monitoring of the fibre rings is continuing, this is due to the high failure rates of the RSB20 Switches.

• Communication is being monitored across site. All inverters are currently available to the PPC.

• RETEC site tests took place on the 7th of November.

• Energy production investigation status:

• Board approval received at the end of October;

• Optimization study kicked off by GCC Contractor, data received in September. Awaiting data and access to systems from

the November ESA & CPV System Supplier workshop;

• The SCADA system requires improvement to have DATA displayed with minimum delay (real time), in order for the operators

to respond to faults on the Inverters and Trackers much quicker – in progress with ESA & CPV System Supplier workshop

concluded 3 to 6 November. Debrief and action workshop scheduled for 5 to 7 December;

• The interface on the SCADA needs to allow for a remote resetting of the inverters and clearing of error codes. This will

drastically reduce down time on the inverters – in progress with Inverter OEM, Modbus details required as requested again

on the 19th of November;

• Tracker Performance and other equipment performance study to be kicked off, as noted in point above;

• Production ratio investigation to be kicked off as part of optimization activities;

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Operating Summary continued• Production Ratio - Actuals

• Summarizing the performance since COD, below the comparison of the Production ratio, year on year – month of October 96.37

%.

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Operating Summary continued• Production Ratio – Contractual Measurement

• Comparison between actual Production Ratio and the contractual guaranteed %, incentive energy % and the rolling

consecutive 2-year period measurement after 2 years of production.

• Year 2015 requirement shortfall shall be measured at 50 % due to the shorter calculation period, the 2016 year the average is

calculated for the 2015 and 2016 period.

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• Meteorology• The Temperatures in October peaked at

37.50 °C with an average of 26.45 °C

during production hours. The averaged

DNI was 535.49 W/m² and the averaged

peak DNI was 991.46 W/m².

• The total DNI energy received for the

month of October was 224.84 kWh/m²

(1st to 31st October)


• compared to the value of the Typical Meteorological Year (TMY) of 234.97 kWh/m² the irradiation was below average of 10.13 kWh/m² (-4.31%);

• compared to the previous month Irradiation of 194.39 kWh/m² (1st to 30th September), an increase of 30.45 kWh/m² (15.67% Month to month increase);

• compared to the last year DNI Energy received of 239.60 kWh/m² (1st to 31st October 2017), a decrease of 14.76 kWh/m² (-6.16% year to year decrease).

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• Meteorology (continued)• The rainfall in October was in total 2 mm and it rained over total amount of 1 days.

• The average rainfall for October as per http://www.worldweatheronline.com [average from 2002 – 2012] should be 12 mm

over 3.5 days. Thus the rainfall received in October was below the average rainfall for this Month (Refer average graph

below, no actual data).

• The plant went into Storm Mode, due to high wind speeds in excess of 12 m/s on 17 occasions during the hours of production

for the total duration of 33h36 min.

• Preventative Maintenance• In accordance with the O&M Manual the Pyrheliometer sensors are cleaned on a weekly basis. The complete plant was

washed over the six weeks period ending on 31 October. The washing will continue as per contractual requirement stated in

Annexure C.

• The regular inspections of the substation and the field equipment has continued as scheduled.

• The regular monthly maintenance on the Substation and Generators was done in the first week of October.

• Preventive Maintenance on trackers is complete for the year. Tracker optimization was completed on the 19th of October.

The tracker team can focus on additional work and monitoring in the coming months.

• Preventive Maintenance on Balance of Plant equipment is going forward as planned. BOPI & O&M Contractor an additional

AC breaker for the PV Boxes was delivered to site. Yearly maintenance of PV boxes was completed this month. Inverter

maintenance is planned for next month.


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• Reactive Maintenance

• Various components have failed on the trackers. These were replaced upon failure by the O&M Team. The installation of the

adapter plate has significantly reduced the number of encoder failures due to grease ingress. This will be monitored to ensure

that the failure rates do not increase again.

• The Transformer OEM Transformers are being monitored for signs of new leaks.

• Health & Safety

• The staff complement on site during the month of October was 81, which includes the subcontractors BOPI & O&M

Contractor, Solar O&M Services, Thorburn, GCC Contractor and the Touwsrivier Services Staff. The number of LTI free hours for

is 14 494 compared to the target LTI Free hours for the project of 41 143. There were no Health and Safety incidents in the

month of October.

• Resource Usage

• Resource Usage Summary for the month in review:


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• Availability

• The availability of the plant as per below:

• The values indicated in the table are based on equipment being out of operation for more than one full production day. The

100% availability indicates that all plant equipment was available for the complete duration of September, however, minor

(short outages) are not accounted for.


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• Inventory Management – Spare Parts Used

A summary of the Parts used is given in Table 2 and the update of the spare part stock is given in Table 3. The number of CPV components

replaced during the month are indicated in red in Table 2. Components, having the stock level is below the contractual amount is marked

in red in Table 3.


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• Inventory Management (continued) – Spare Parts Stock on Site


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Environmental Summary• Feedback Environmental Consultant – Environmental Officer October 2018

• Compliance issues• Percentage compliance achieved during the site audit for 25 October 2018 = 96.7 % (Compliance with the EMP is regarded as

unacceptable if it is below 80 %)

• Score obtained 91.8 out of 95

• Non-compliance noted on the following items• Site clearance and bulk earthmoving activities were completed. At the time of the audit only small open excavations for servicing

purposes were present.

Recommendation – Ensure that all spoils left in areas where earthworks have been completed are levelled and the areas arerevegetated to minimise potential erosion and generation of dust.

• At the time of the audit various open containers had been placed inside the bund area. The contents of these containers included

contaminated soils, oil rags, etc. these substances are listed as hazardous materials and should be place either in containers with lids, or

under a roof.

Recommendation – Ensure that the substances listed are placed in drums with lids and appropriately labelled. Ensure it is disposed of atthe appropriate disposal facility and safe disposal certificates are available on site.

• At the time of the site visit hazardous materials present on site were stored inside a bund area or flammable materials store. Some of the

containers stored inside the bund area did not have lids.

• Recommendation – Even though the hazardous materials are stored within the bund area, ensure that all the containers have lids andare clearly marked to indicate the contents and prevent the co-storage of antagonistic chemicals or substances. It had been observed

that some containers with contaminated soil had not been appropriately closed or labelled.

• At the time of the audit alien vegetation had been observed on site that requires removal. These include species e.g. Oldman Saltbush

etc. it had been observed that some of these specimens had been removed.

Recommendation – Ensure alien vegetation is cleared and properly disposed of. This is an ongoing task an need to be handledwhenever new specimens are observed.

• Additional Notes• General housekeeping on site was maintained to a high standard and the area around the store and office construction had improved

significantly.

• The retainer wall at the substation showed signs of cracking and it will be continued to be monitored during each site visit. Widening of

these cracks may pose a safety risk and should be mitigated. Bulging at the foot of the wall had been observed, however without

proper measurements, it was not clear whether this was worse than the previous audit. This is being monitored on a monthly basis and

any changes will be documented.

• The gearbox oil to replace that in the trackers have been delivered and stored on site. Ensure that when the oil is replaced in the field

that a spill containment and cleaning kit is present in the event of wastage or spillage. Provide all staff that will be involved with the

project a refresher course in the oil spill containment and cleaning procedure. Observing the team, it was clear that the required

controls are implemented and all employees involved had the proper training.

• The tractor had been moved into the store area, eliminating the possibility of spills onto the ground from where it had been parked. This

is good environmental practice

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Environmental Summary continued• Additional Notes (continued)

• Ensure that the filling of the washing cart water tankers is monitored to prevent accidental over-filling and water wastage.

• The gearbox oil to replace that in the trackers have been delivered and stored on site. Ensure that when the oil is replaced in the

field that a spill containment and cleaning kit is present in the event of wastage or spillage. Provide all staff that will be involved with

• the project a refresher course in the oil spill containment and cleaning procedure.

• The tractor had been moved into the store area, eliminating the possibility of spills onto the ground from where it had been parked.

This is good environmental practice

• No repeat non-compliances by CPV1 had been observed during this audit

• No fines recommended

• Water Usage• The CPV1 Solar facility is located within the J12B water management area. This allow the facility to abstract 150m3/ha/annum

multiplied by the size of the property. This is capped at 40000m3/annum. The total abstraction for the year (October 2017 –

September 2018) amounts to 839.00 m3, which is below the volumes allowed for. It should also be noted that no more than 10m3

may be extracted on a single day.

• Status of Water Permit/License• Monitoring of Water Usage – At the time of the audit only a small number of activities were in progress and water usage use was

within the thresholds allowed for in the current General Authorization.• Numbers deviate from O&M Report on slide 16 due to the timing of the meter readings. Eco report measures visit to visit, Operations measure calendar

month.

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Environmental Summary continued

• Photographic Evidence of Environmental Issues

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Ownership & Funding Structure

5.18 Structure Update

PGE ESA & CPV

System Supplier

SA

PIC

PGE CPV

SPV

ESA & CPV

System

Supplier

GMBH

COMMUNITY

TRUST

CPV1BOND SPV

20 % 5 %35 %

100 % 100 %

PIC

CPV1 Equity

40 %

100 %

25

ED SED Summary

SE.ED Programmes Total No. of Beneficiaries

Total 2018 Budget October 2018 Spend Total Spend to date

Experience Works 8 R1,556,750 R64,300 R1,292,816

Experience Works 360 6 R660,000 R41,576 R469,924

Bursary 10 R775,000 R26,100 R546,782

E4SA 5 R550,000 R23,680 R362,837

Starter pack 20 R1,142,600 R100,152 R927,631

Zisize N.A R238,587 R0 R141,219

Community Industrialisation Fund N/A R0 R0 R263,972

KP Management Fee (incl. VAT) N/A R810,654 R68,147 R609,176

Total Spend 49 R5,713,591 R795,503 R4,981,247

Management Summary: October 2018

Highlights for October implementation included:The execution of the Touwsrivier Social Impact Investment Experience event on the 12th and 13th of October 2018. The Touwsrivier

Experience is composed of a graduation ceremony for 2017 programme graduates, Investment Summit, CPV1 powerplant tour for

Touwsrivier matriculants, launch of the Zisize and Hydroponics projects and a programme application day. Overall, the SE.ED

programmes received 34 applications for ED programmes and 116 for SED programmes.

SE.ED Programmes Spend Breakdown

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ED SED Summary

SE.ED Programmes Project status Stage Comment

Experience Works On Track Execution Internship continued. Completion of

company visits.

Experience Works 360 On Track Execution Internship continued.

Bursary On Track Execution Bursary continued. Leadership and

mentorship session conducted.

E4SA On Track Execution Programme continued.

Starter pack On-Track Execution Participants preparing to display

their companies and products at

Touws Ex 2018.

Zisize Complete Project close out Launch of roof top solar panel

solution on the 13th of October 2018

complete.

Community IndustrialisationFund

On Track Execution Launch of hydroponics R&D centre

on the 13th of October 2018

complete.

Touwsrivier Experience Complete Complete Host of Touwsrvier Experience 2018.

Implementation Tracker

27

ED SED Summary

Implementation Tracker

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• The 2018 Touwsrivier Experience was hosted on the 12th and 13th of October 2018. • The purpose of the event is to:

• The event was constituted of:

• Celebrate the successes of previous programme graduates;

• Rally local and regional stakeholders around the development strategy of Touwsrivier;

• Showcase the human capital led, community industrialisation strategy of Touwsrivier that will

contribute to sustainable economic development for the local community.

• CPV 1 tour for Touwsrivier matric students;

• Investment Summit to develop an investment strategy for Touwsrivier;

• Touwsrivier programmes application day; and

• Launch of the Zisize off-grid solution and Hydroponics R&D centre.

Other Matters

• Events of Default – none recorded during reporting period• Lock up - Bondholders implemented a lock-up on all distributions until the AFS matter is

resolved. This issue is expected to be resolved by the end of November 2018.• Legal Claims – none recorded during reporting period. • Dispute with BOPI & O&M Contractor with regards to gearbox oil replacement ongoing.

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– ESA & CPV System Supplier IT & SCADA Workshop, France

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Media

Ziska Mc Gilton

Pele Energy Group

Senior Asset Manager

Mobile: +27 (0) 82 929 8322

[email protected]

Thank you & Contact

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asset management report –oct 2018 - verdigris...• in accordance with the o&m manual the...

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