Appendix 1: Calculation of the current electricity prices to Hillside Potlines 1, 2 & 3, and Mozal Potlines 1 & 2

by Chris Yelland CEng, EE Publishers

Hillside Potlines 1 & 2

Maximum power = 2 x 450 MW = 900 MW

Load factor LF = 0,98

Power factor PF = 0,99

Average power = 900 MW x LF = 900 x 0,98 = 882 MW = 882 000 kW

Energy consumed per month = 882 000 kW x 24 h per day x 30 d per month = 635 040 000 kWh per month

Maximum demand = 900 MW / PF = 900 / 0,99 = 909 MVA = 909 000 kVA

Current aluminium price = US $2054 per ton

R/US $ exchange rate = 9,1

Energy rate [Rands per kWh]= 6,54 x AL x R/$ x 10-6= 6,54 x 2054 x 9,1 x 10-6 = R0,1222 per kWh

Demand rate [Rands per kVA] = 3237 x AL x R/$ x 10-6 = 3237 x 2054 x 9,1 x 10-6 = R60,5041 per kVA

Energy price per month = 635 040 000 x R0,1222 = R77 601 888 per month

Demand price per month = 909 000 x R60,5041 = R54 998 227 per month

Current total electricity price per month = R77 601 888 + R54 998 227 = R132 600 115 per month

Current total electricity rate per kWh = R132 600 115 / 635 040 000 kWh = R0,2088 per kWh

Mozal Potlines 1 & 2

Maximum power = 2 x 450 MW = 900 MW

Load factor LF = 0,98

Power factor PF = 0,99

Average power = 900 MW x LF = 900 x 0,98 = 882 MW = 882 000 kW

Energy consumed per month = 882 000 kW x 24 h per day x 30 d per month = 635 040 000 kWh per month

Maximum demand = 900 MW / PF = 900 / 0,99 = 909 MVA = 909 000 kVA

Electricity rate in 2010 = R0,245 per kWh

Electricity rate in 2011 = R0,245 x (SA PPIOct 2010/ SA PPIOct 2009 + 0,01) = R0,245 (191,2 / 179,7 + 0,01) = R0,2631 per kWh

Electricity rate in 2012 = R0,2631 x (SA PPIOct 2011/ SA PPIOct 2010 + 0,01) = R0,2631 (211,5 / 191,2 + 0,01) = R0,2937 per kWh

Electricity rate in 2013 = R0,2937 x (SA PPIOct 2012/ SA PPIOct 2011 + 0,01) = R0,2937 (222,5 / 211,5 + 0,01) = R0,3119 per kWh

Current total electricity price per month = 635 040 000 x R0,3119 = R198 068 976

Current wheeling price per month = $1 284 370 x R/$ x US PPIOct 2012/ US PPIOct 2009 = 1 284 370 x 9,1 x 203,5 / 175,2

= R13 575 688 per month

Current wheeling rate per kWh = R13 575 688 / 635 040 000 kWh

= R0,0214 per kWh

Current total electricity and wheeling price per month = R198 068 976 + R13 575 688 = R211 644 664 per month

Current total electricity and wheeling rate per kWh = R211 644 664 / 635 040 000 kWh = R0,3333 per kWh

Hillside Potline 3

Maximum power = 1 x 225 MW = 225 MW

Load factor LF = 0,98

Power factor PF = 0,99

Average power = 225 MW x LF = 225 x 0,98 = 220,5 MW = 220 500 kW

Energy consumed per month = 220 500 kW x 24 h per day x 30 d per month = 158 760 000 kWh per month

Maximum demand = 225 MW / PF = 225 / 0,99 = 227,273 MVA = 227 273 kVA

Exchange rate R / US $ = 9,1

Current energy rate = R0,0726 x SA PPINov 2012/ SA PPINov 2000 = 0,0726 x 223,1 / 103,1 = R0,1571 per kWh

Current demand rate = R40,23 x SA PPINov 2012/ SA PPINov 2000 = 40,23 x 223,1 / 103,1 = R87,0544 per kVA

Energy price per month = 158 760 000 x R0,1571 = R24 941 196 per month

Demand price per month = 227 273x R87,0544= R19 785 115 per month

Current total electricity price per month = R24 941 196 + R19 785 115 = R44726 311 per month

Less 7,13% voltage discount and plus 1% transmission surcharge

Current net total electricity price per month = R44 726 311 x 0,9287 x 1,01 = R41952698 per month

Current net total electricity rate per month = R41 952 698 / 158 760 000 kWh = R0,2643 / kWh

Capital cost per month = R1 706 830 per month

Capital cost per kWh = R1 706 830 / 158 760 000 kWh = R0,0108 per kWh

Upper limit = $0,02 x R/$ x US PPINov 2012/ US PPINov 2000 = 0,02 x 9,1 x 201,8 / 135 = R0,2721 per kWh

Lower limit = $0,008 x R/$ x US PPINov 2012/ US PPINov 2000 = 0,008 x 9,1 x 201,8 / 135 = R0,1088 per kWh

Current total electricity and capital price per month = R41 952 698 + R1 706 830 = R43 659 528per month

Current total electricity and capital rate per kWh = R43 659 528 / 158 760 000 kWh = R 0,2750per kWh

Overall total current prices and rates to BHP Billiton (Hillside and Mozal)

Current total price per month = R132 600 115 + R43 659 528 + R211 644 664 = R387 904 307

Total energy supplied per month = 635 040 000 + 158 760 000 + 635 040 000 = 1 428 840 000 kWh

Current total average rate per kWh to BHP Billiton (Hillside and Mozal) = R387 904 307 / 1 428 840 000 kWh

= R0,2715 per kWh

Disclaimer

The calculations in Appendix 1 represent a best effort by Chris Yelland CEng, based on the information made available to the media by Eskom, and various assumptions detailed in the calculations. No liability is accepted for wrong calculations or assumptions.

If anyone notices any errors or wrong assumptions, please advise Chris Yelland, EE Publishers, Tel 011 543-7000, Email .