Load Shedding in Zambia: What Should be the Plan

Report
Load Shedding in
Zambia: What Should
be the Plan
Presentation to the EAZ July 2014 Monthly Discussion Forum
Mulungushi International Conference Centre
24 July 2014
Mushiba Nyamazana (PhD)
Research Fellow
Institute of Economic and Social Research, UNZA
1
Outline
• Introduction
• Demand Projections
• Meeting Demand: Investment Implications
• Public vs. Private Investments
• SAPP Tariff Comparisons
• The Solar Power Option
• Conclusion
2
Introduction
• 1990s SAPP projects SADC power deficit if capacity not
increased.
• SADC Governments take no action – “business as usual”
approach.
• From 2005/6 massive load shedding
• Lots of talk of more investment but load shedding
continues
3
Demand/Power Balance Projections
2014
2015
2020
2025
2030
Total Energy Demand
(GWh)
13388
13734
15666
15954
17176
Maximum Demand (MW)
2065
2119
2417
2450
2650
Total Net Energy
Generation (GWh)
16100
16100
26288
32875
40085
Installed Generation
Capacity (MW)
3045
3045
4992
6035
7240
Energy Balance (GWh)
553
302
8688
22748
21378
Capacity Balance (MW)
647
608
2277
4566
4354
4
Demand/Power Balance Projections II
• 2014 comparison of actual vs. projected capacity = adverse
gap of 76% (i.e., 2,309.5 actual vs. 3,045 MW projected).
• ZESCO/Ministry of Energy not announced remedial measures to
catch up through accelerating generating/transmission/
distribution projects implementation.
• Knock-on effect on rest of forecast period likely.
5
Proposed Investments in Zambian Power
System
To Sumbuwanga
8o
MPULUNGU
MBALA
LUNZUA
MBEYA
KALUNGWISHI
MPOROKOSO
KASHIKISHI
KALUNGWISHI RIVER
CONGO (DR)
NAKONDE
CHISHIMBA FALLS
KASAMA
MAMBILIMA
MUSONDA FALLS
LUWINGU
ISOKA
MANSA
ANGOLA
CHINSALI
MICHELO
WEST LUNGA
RIVER AT MWINILUNGA
(3.5MW)
SAMFYA
MOMBUTUTA
SOLWEZI
LUANO
KANSUSWA
LUSIWASI
KABOMPO RIVER AT
KABOMPO-MANYINGA BRIDGE
(0.10MW)
CHIKATA FALLS
(10MW)
LUNDAZI
MPIKA
KITWE
CHAVUMA
FALLS
(20MW)
SERENJE
PENSULO
MAPOSA
LUFUBU RIVER
AT KASEMPA BRIDGE
(0.23MW)
MFUE
MKUSHI
MPONGWE
ZAMBEZI
KAPIRI
CHIPATA
MSORO
LUNSEMFWA
KABWE
AZELE
KALABO
LUKULU
MULUNGUSHI
MUMBWA
PETAUKE
LUSAKA WEST
KAOMA
33.5o East
MONGU
LEOPARDS HILL
KAFUE TOWN
KAFUE
LOWER
KAFUE WEST
ITEZHI - TEZHI
SENANGA
CHIRUNDU
MOZAMBIQUE
LUANGWA
km
KEY
KAFUE
GORGE
MAZABUKA
KEY
KARIBA NORTH
330 kV
1941
km
348
330 kV
77
717
132 kV
88 kV
66 kV
2791
66 kV
220 kV
(120MW)
MUZUMA
LAKE KARIBA
KARIBA SOUTH
SESHEKE
22o East
132 kV
220 kV
88 kV
POWER STATIONS
VICTORIA
FALLS
NAMIBIA
PROPOSED LINES
PROPOSED POWER STATIONS
SUBSTATIONS
KATIMA
MULILO
18o
BOTSWANA
PROPOSED SUBSTATIONS
ZIMBABWE
DIESEL STATIONS
DIESEL STATIONS
6
Public Vs. Private Investments
Private/IPP
PPP/Shared River Course
• Maamba (Coal) 300 MW 2013
• Kabompo (34 MW)
Kabwelume + Kundabwika
(210 combined MW) 2014
• Lusenfwa/Muchinga 120 MW
2016
• EMCO (Coal) 300 MW 2016
• Muchinondo/Luchenene 70
MW 2017
• Itezhi-tezhi 120 MW 2014
• Kafue Gorge Lower 600 MW
2017
• Mumbotutu + Mambilima I
and II 326 MW 2018-2019
• Devils Gorge 500 MW 2023
• Mpata Gorge 543 MW 2024
7
Public Vs. Private Investments II
• Both IPP and PPP projects implementation depends on
Government
• Single buyer model not efficient to resolve load
shedding/universal electrification:
• Each IPP or PPP wants PPA with ZESCO (including ZESCO SPVs)
• Each wants ZESCO to provide security and pay upfront
• Each wants cost recovery tariff rate but ZESCO average tariffs subeconomic
• Unbundling ESI may unlock private sector investments
• Restricting legacy hydro power + Open Access regime =
increase private sector participation via market creation?
8
Public Vs. Private Investments III
• ESI Governance/institutional capacity weaknesses a binding
constraint to private investment
• Zambia’s evolutionary approach to ESI market reforms not
delivering quickly:
• The steep rise in non-mining tariffs since 2008 not reflected in
significant outcome improvements.
• ZESCO KPIs regime not entirely providing incentive for efficiency.
• Would adopting Finnish Mankala principle to Zambia ESI help?
• Does tariff review that take 2 years to complete help ESI?
9
SAPP Average Electricity Tariff,
US$c/kWh 2012/13
11.5
12
9.8
10
8.7
8
8.6
8.2
7.5
7
6.8
6
5.9
5.7
6
4.8
4
2
0
BPC
EDM
ENE
ESCOM
ESKOM
LEC
NamPower
SEC
SNEL
TANESCO
ZESA
ZESCO
10
Solar Power Option
• Hybrid with hydrocarbons
• Universal/rural electrification – off grid
• Water conservation: solar generation daytime; hydro at night
• Voltage/frequency regulation at end of radio lines
• Serve newly created districts that cannot be served by
national grid
11
Conclusion
• Take another look: is plan for resolving load shedding on
course?
• Work on regulator/utility governance systems.
• Market restructuring/unbundling an imperative
• Limit legacy hydro in bulk supply contracts
• Inject adequate capital in ESI
• “Business as usual” will not help Zambia achieve the 2030
Vision.
12
THE END
THANK YOU
FOR YOUR KIND ATTENTION
13

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