• Like
  • Save

Southern African Power Pool 2004 annual report

  • 209 views
Uploaded on

Southern African Power Pool 2004 annual report

Southern African Power Pool 2004 annual report

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
209
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. CONTENTS VISION AND OBJECTIVES .................................................................................................................................. 2 ORGANOGRAM AND MEMBERS ...................................................................................................................... 3 ABOUT SAPP ........................................................................................................................................................ 4 ACTIVITY AREAS ............................................................................................................................................ 5 - 7 HIGHLIGHTS .................................................................................................................................................... 5 - 6 SAPP EXECUTIVE COMMITTEE .......................................................................................................................... 7 EXECUTIVE COMMITTEE CHAIRMAN’S REPORT ...................................................................................... 8 - 9 REPORT OF THE MANAGEMENT COMMITTEE .................................................................................... 10 - 12 OPERATING SUB-COMMITTEE REPORT ................................................................................................ 13 - 17 PLANNING SUB-COMMITTEE REPORT .................................................................................................. 18 - 20 ENVIRONMENTAL SUB-COMMITTEE REPORT ...................................................................................... 21 - 22 SAPP CO-ORDINATION CENTRE REPORT .............................................................................................. 23 - 26 STATISTICS .................................................................................................................................................. 27 - 31 REPORT OF THE INDEPENDENT AUDITORS .................................................................................................. 32 STATEMENT OF ACCOUNTING POLICIES ...................................................................................................... 33 INCOME STATEMENT ........................................................................................................................................ 34 BALANCE SHEET ................................................................................................................................................ 35 CASH FLOW STATEMENT .................................................................................................................................. 36 NOTES TO THE FINANCIAL STATEMENTS ............................................................................................ 37 - 39 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 1
  • 2. VISION AND OBJECTIVES Vision The Southern African Power Pool will: • Facilitate the development of a competitive electricity market in the SADC region. • Give the end user a choice of electricity supplier. • Ensure that the southern African region is the region of choice for investment by energy intensive users. • Ensure sustainable energy developments through sound economic, environmental and social practices. Objectives The Southern African Power Pool aims to: • Provide a forum for the development of a world class, robust, safe, efficient, reliable and stable interconnected electrical system in the southern African region. • Co-ordinate and enforce common regional standards of Quality of Supply; measurement and monitoring of systems performance. • Harmonise relationships between member utilities. • Facilitate the development of regional expertise through training programmes and research. • Increase power accessibility in rural communities. • Implement strategies in support of sustainable development priorities. 2 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T
  • 3. ORGANOGRAM AND MEMBERS SADC Directorate of Infrastructure and Services Executive Committee Management Committee Planning Sub-committee Operating Sub-committee Environmental Sub-committee Co-ordination Centre SAPP Membership Full Name of Utility Botswana Power Corporation Electricidade de Mocambique Electricity Supply Corporation of Malawi Empresa Nacional de Electricidade ESKOM Lesotho Electricity Corporation NAMPOWER Societe Nationale d’Electricite Swaziland Electricity Board Tanzania Electricity Supply Company Ltd ZESCO Limited Zimbabwe Electricity Supply Authority OP = Operating Member S O U T H E R N Status OP OP NP NP OP OP OP OP OP NP OP OP Abbreviation Country BPC Botswana EDM Mozambique ESCOM Malawi ENE Angola Eskom South Africa LEC Lesotho NamPower Namibia SNEL Democratic Republic of Congo SEB Swaziland TANESCO Tanzania ZESCO Zambia ZESA Zimbabwe NP = Non-Operating Member A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 3
  • 4. ABOUT SAPP • SAPP was created in August 1995 at the SADC summit held in Kempton Park, South Africa, when member governments of SADC (excluding Mauritius) signed an InterGovernmental Memorandum of Understanding for the formation of an electricity power pool in the region under the name of the Southern African Power Pool. • SAPP is governed by four agreements: the Inter-Governmental Memorandum of Understanding which enabled the establishment of SAPP; the Inter-Utility Memorandum of Understanding, which established SAPP’s basic management and operating principles; the Agreement Between Operating Members which established the specific rules of operation and pricing; and the Operating Guidelines, which provide standards and operating guidelines. 4 S O U T H E R N A F R I C A N P O W E R • SAPP has twelve member countries represented by their respective electric power utilities organised through SADC. • SAPP has three working committees: the Operating Sub-Committee, the Planning SubCommittee and the Environmental SubCommittee under a Management Committee which in turn reports to the Executive Committee. • SAPP coordinate the planning and operation of the electric power system among member utilities. • SAPP provide a forum for regional solutions to electric energy problems. • SAPP has established and is operating the Short-Term Energy Market. P O O L 2 0 0 4 A N N U A L R E P O R T
  • 5. HIGHLIGHTS OF THE SAPP ACTIVITIES In the year under review, the SAPP concentrated on three activity areas, which are expanding energy trading between Members, expansion of the generation capacity and transmission infrastructure, and capacity building. 1. Expansion of energy trading in the SAPP The bulk of the electricity traded in the SAPP is governed by fixed co-operative bilateral agreements. The agreements provide for assurance of security of supply but are not flexible to accommodate varying demand profiles and varying prices. The pricing of electricity depends on the consumption period; peak and off peak. To explore further the benefits thereof, the sourcing and scheduling of electrical energy closer to the time of dispatch was proposed in SAPP and research has shown that competitive bidding is one option for sourcing and securing supplies closer to real time dispatch. The short-term energy market (STEM), administered by the SAPP Coordination Centre, commenced operation in April 2001 and was designed to mimic a real time dispatch. The market permits the participants to trade energy on a day ahead hourly basis. This permits a participant to take advantage of the short-term surplus of the other participants and also to profit from its own short-term surplus. A participant can also use STEM to cover a temporary shortage that it may be experiencing. The SAPP is currently developing a competitive electricity market for the region. When the regional competitive market is established, the market will provide price indicators for investors and other players to participate. This is a better pricing mechanism for electricity in a competitive environment. SAPP believes that the creation of a spot market in the region would optimise the use of regional resources, enable the determination of the correct price of electricity in the pool and will send signals for investments and real time utilization of existing S O U T H E R N A F R I C A N P O W E R assets. The market will also enable the demand side to respond to the supply side price signals. The SAPP managed to secure financial support from NORAD to develop a competitive electricity market for the SADC region. The project started in January 2004 and is expected to be completed in December 2007. 2. Expansion of Generation and Transmission infrastructure In 2001, the SAPP developed a twenty-year generation and transmission expansion plan, known as the Pool Plan. The plan showed the benefits of coordinated planning and cost reductions that can be achieved over individual utility expansion plans. The SAPP is now in the process of updating the Pool Plan and it is hoped that the plan would be completed by the middle of 2005. Individual members of SAPP have identified priority generation projects in their countries that are now been promoted for regional benefits. These generation projects are meant to help SAPP reverse the diminishing generation surplus capacity that SAPP is currently experiencing. Details of the generation projects are given under SAPP Statistics. SAPP has also identified several transmission projects, which have been classified as priority projects. These include several interconnectors that would improve system reliability and enable the exchange of energy to improve system economy. These projects are at different stages of development and include: • Increasing the transfer capacity of the transmission corridor from Inga hydropower station in the DRC to the border with Zambia. • Connecting Malawi, a non-interconnected country, to the SAPP through Mozambique, • Preparing feasibility studies for the interconnection of Tanzania through Zambia and if proven the construction of the Zambia- P O O L 2 0 0 4 A N N U A L R E P O R T 5
  • 6. HIGHLIGHTS OF THE SAPP ACTIVITIES Tanzania interconnector and the reinforcement of the Tanzanian transmission system, and • • • Preparing feasibility studies for the interconnection of Angola through Namibia. • 3. Capacity Building The SAPP organises various training programmes for members ranging from courses, hands on training, seminars and conferences, workshops and exchange visits. SAPP has been able to fund some of the training programmes, but most of them have been funded by USAID. In the year that has gone by, the following activities, funded by USAID, took place: 3.1 Seminars and Workshops The seminars and workshops included the following: • Developing SAPP through Advanced Electricity Trading, • Workshop on Issues & Options for Rural 6 S O U T H E R N A F R I C A N P O W E R • Electrification in SAPP Member Countries, Rural Electrification Planning in SAPP, Seminar On The Treatment of Ancillary Services for the Southern Africa Power Pool, and A two-day Regional Conference on “Enabling Environment for Private Participation in Rural Energy Service Delivery in the SADC Countries”, and Low Cost Power and HIV/AIDS workshop. 3.2 Exchange visits The SAPP Executive Committee visited the USA and Norway from 13-20 September 2003. The objectives of the visits to the USA and Norway were to gain a better understanding of the U.S. energy sector, discuss the participation of the private sector in the power market, and gain a better understanding of the role of the power pool in the energy sector. P O O L 2 0 0 4 A N N U A L R E P O R T
  • 7. SAPP EXECUTIVE COMMITTEE April 2003 to March 2004 Mr. John Kaluzi BPC Dr. Vicente M. Veloso EDM Dr. Allexon Chiwaya ESCOM (From Jan 2004) Mr. Edward Nelumba ENE Mr. Thulani Gcabashe Eskom Mr. Simon L. Mhaville LEC Dr. Leake Hangala NamPower Mr. Alphonse Muyumba SNEL Mr. Themba Tsela SEB Mr. Rudy Huysen TANESCO Mr. Rodnie P. Sisala ZESCO Dr. Sydney Gata ZESA S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 7
  • 8. EXECUTIVE COMMITTEE CHAIRMAN’S REPORT developed would increase generation capacity in the short and long-term for the region. These projects have received support from the SADC Heads of State. Dr. Leake Hangala Executive Committee Chairman 2003/4 The Southern African Power Pool made great achievements in the reporting period. The following is a highlight of some of the SAPP activities that took place during the year under review. SAPP Electricity Demand Most SAPP utilities recorded a positive growth in electricity demand. The average SAPP demand growth was about 3%. The growth has been attributed to the positive economic growth recorded in most member countries and also to the rural electrification programmes that SAPP members are actively involved in their countries. Concerns on diminishing generation surplus capacity in the SADC region The Executive Committee resolved to approach the SADC Energy Ministers for support and leadership in reversing the diminishing generation surplus capacity in the SADC region. The Committee noted that in the last ten years, the power demand in the SADC region has been increasing at a rate of about three percent per annum. Unfortunately, there has not been a corresponding increment of investment in power generation during the same period. As a result, the generation surplus capacity has been diminishing steadily. The continued diminishing generation surplus capacity in the SADC region would have a negative impact on the economies of the region and potential investors would be frightened. SAPP members have identified generation projects in their countries, which if 8 S O U T H E R N A F R I C A N P O W E R The SAPP Power Market Project The World Bank approved the SAPP Power Market Project in November 2003 and unanimously agreed to two credits of USD177.5 million for the Democratic Republic of Congo (DRC), and USD1.1 million for Zambia. The total IDA financing that was approved was USD178.6 million to SAPP for Phase-I of the SAPP Power Market Project. SAPP also secured NOK35 million (about USD5 million) grant from NORAD for the development of a regional competitive electricity market and a further SEK10 million (about USD1.4 million) from Sida for the development of the Long-Term Pricing policy, implementation of procedures and Ancillary Services Market as part of the Southern Africa Power Market Project. SAPP Interconnectors The SAPP priority Interconnectors; the DRCZambia, the Mozambique-Malawi and the Zambia-Tanzania Interconnectors are now covered under Phase-I of the SAPP power market project. The World Bank grant to the DRC is for the strengthening of the transmission corridor from Inga to SAPP, and the grant to Zambia is for a feasibility study of the transmission line from Zambia to Tanzania. The Mozambique-Malawi interconnector progressed slower than anticipated, but has now reached a stage whereby the line route survey is going to be carried out. This will pave the way for the World Bank funding to construct the interconnector. The Short-Term Energy Market (STEM) There was a modest increase in the volume of P O O L 2 0 0 4 A N N U A L R E P O R T
  • 9. EXECUTIVE COMMITTEE CHAIRMAN’S REPORT - cont. STEM. The market developed from a largely off peak market into a twenty-four hour market where both hydro and thermal sellers offer energy at the appropriate time of day. SAPP Telecommunications project The Executive Committee agreed to implement the SAPP telecommunications project. The project would be funded internally by SAPP through an equal cost sharing method between Operating Members. The project is expected to be implemented before the end of the year 2004. It is hoped that communication between members would improve greatly. Visit to the USA and Norway Acknowledgments The Executive Committee would like to take this opportunity to thank the donor community and particularly the World Bank, USAID, NORAD and Sida for their assistance and support rendered to SAPP at a crucial time when SAPP is transforming herself from a cooperative pool to a competitive pool. I also wish to thank SAPP members for their continued support to me as Chairperson of the Executive Committee. May I take this opportunity and thank you once again for reelecting me Chairperson of the SAPP Executive Committee starting from April 2004. Congratulations also go to Dr. Vicente Veloso who was re-elected Vice Chairperson. SAPP would also want to congratulate Dr. Allexon Chiwaya who was appointed Chief Executive Officer of ESCOM Malawi in December 2003. Dr. Vicente Veloso, Executive Committee ViceChairperson (Team Leader), Mr. Pat Naidoo (Eskom) and Ms. Claire Limbwambwa (ZESCO) in Washington DC during the Executive Committee visit to the USA. The SAPP Executive Committee visited the USA and Norway from the 13-20 September 2003. In the USA, the Committee visited the Federal Energy Regulatory Commission (FERC), Constellation Energy Source and PJM Interconnections. In Norway, the Committee visited Nord Pool. The visits were successful and gave a lot of insight to the Executive Committee on the operations of other power pools in the world. A follow-up to the Executive Committee visit to the USA and Norway was held in form of a workshop in Tanzania in April 2004. S O U T H E R N A F R I C A N P O W E R The focus for the SAPP Executive Committee for the New Year would be to encourage investment in the regional generation projects. This would ensure that SAPP does not run out of generation surplus capacity in the coming years. Dr. Leake Hangala Chairperson, SAPP Executive Committee P O O L 2 0 0 4 A N N U A L R E P O R T 9
  • 10. REPORT OF THE MANAGEMENT COMMITTEE Mr. Bertholdt Mbuere ua Mbuere Management Committee Chairperson (2002-2004) During the year that has gone by, the SAPP Management Committee was mandated by the Executive Committee to come up with recommendations on SAPP governance, SAPP structure and membership criteria, documentation review and the SAPP reporting protocol to the Integrated Council of Ministers. The Management Committee completed these tasks successfully. The Management Committee went on to refine the SAPP vision and objectives in an attempt to include statements concerning the environment. The other focus for the Management Committee was the formulation and development of the SAPP Business Plan to market the SAPP projects and to unveil business opportunities to investors in the SADC power sector. SAPP Governance, Structure and Membership During the reporting period, the Executive Committee approved the Management Committee’s proposal on SAPP governance and structure. The Management Committee came up with a new governance and structure for SAPP that takes cognisance of the reforms taking place in SAPP member countries and the changes taking place in the region’s Electricity Supply Industry. 10 S O U T H E R N A F R I C A N P O W E R The governance and membership of the Southern African Power Pool was derived from the desire for economic co-operation, equitable sharing of resources and support of one another in times of crisis under the SADC protocol. The environment under which the power pool now operates has significantly changed warranting a review of the SAPP governance and membership. The new SAPP structure proposes to introduce a separate sub-committee, the Markets SubCommittee, to be responsible for the development of the competitive electricity market in the SADC region. The Markets SubCommittee would also report to the SAPP Management Committee just like the other three committees, the Operating, Planning and Environmental Sub-Committees. In the new structure, a Coordination Centre Board would be introduced. The SAPP Coordination Centre would report to the Coordination Centre Board, which in turn would report directly to the Management Committee. The Management Committee will continue to report to the Executive Committee as in the previous structure. Documentation Review The Executive Committee accepted the request by the Management Committee to review the SAPP documents to reflect the proposed changes in the SAPP governance and structure. After the Executive Committee had accepted the new SAPP governance and structure, the Management Committee proceeded to review the Inter-Governmental MOU and the Inter- P O O L 2 0 0 4 A N N U A L R E P O R T
  • 11. REPORT OF THE MANAGEMENT COMMITTEE - cont. Utility MOU. The Executive Committee approved the revised Inter-Governmental MOU and then recommended that the revised InterGovernmental MOU be taken to the Integrated Council of Ministers for consideration. Similarly, another statement was added to the SAPP objectives as follows: SAPP Reporting Protocol to the SADC The review of SAPP governance and structure followed a restructuring in the SADC, which took place earlier. As a result, a new reporting structure now exists in the SADC energy sector. The Committee of Energy Ministers, the Committee of Senior Energy Officers, the Electricity Sub-Committee and the SADC Energy Commission no longer exist. Instead there is now an Integrated Committee of Ministers, a Committee of Senior Officers and the Directorate of Infrastructure and Services (DIS) under which is the Energy Sector. SAPP has been directed to report to the Energy Sector in the DIS. Acknowledgments I would like to thank members of the Management Committee for showing confidence in my leadership by electing me for a second time in office starting from August 2003 to August 2004. “Implement strategies in support of sustainable development priorities.” I would also like to take this opportunity and congratulate the following Management Committee members who were promoted to higher responsibilities in their utilities as follows. Mr. Luke Mswane of Swaziland Electricity Board (SEB) was appointed Executive Manager in the Managing Director’s office in October 2003. The SAPP Business Plan The Management Committee launched a fiveyear SAPP business plan highlighting the detailed activities, generation and transmission projects that needed to be promoted for the benefit of the SAPP. The document would be used as a marketing tool for the SAPP projects. SAPP Vision and Objectives The Management Committee reviewed the SAPP vision and objectives to include statements concerning the environment. The SAPP vision was extended to include the following statement: “Ensure sustainable energy developments through sound economic, environmental and social practices.” S O U T H E R N A F R I C A N P O W E R Mr Luke Mswane Executive Manager in the MD’s Office, SEB Mr. Edward Rugoyi was appointed Managing Director for the newly created Zimbabwe Transmission Power Company. The other two appointed within the same company were, Mr Paddy Claypole as Director for Energy Trading and System Operations and Mr. Stephen Dihwa as Business Development Director. P O O L 2 0 0 4 A N N U A L R E P O R T 11
  • 12. REPORT OF THE MANAGEMENT COMMITTEE - cont. Mr. Edward Rugoyi Managing Director, Zimbabwe Transmission Power Company Lastly, I would like to thank NamPower for appointing me to the position of General Manager (Transmission) in December 2003. 12 S O U T H E R N A F R I C A N P O W E R The focus for the SAPP Management Committee for the New Year would be to manage the development of a competitive electricity market for the SADC region. This would be a challenging task for the SAPP as the member utilities are undergoing a reform process at the same time. Mr. Bertholdt Mbuere ua Mbuere SAPP Management Committee Chairperson P O O L 2 0 0 4 A N N U A L R E P O R T
  • 13. OPERATING SUB-COMMITTEE REPORT A review of the STEM results and operations was carried out at the end of December 2003 and the following observations were noted: Mrs Erica Johnson of Eskom, South Africa Operating Sub-Committee Chairperson (2003/4) The main focus for the SAPP Operating SubCommittee in the year under review were continuous improvement in technical operations, infrastructure development, documentation, trading and capacity building. The current challenge for the committee is how to develop the market beyond the short-term energy market (STEM). The future challenge is the generation reserve capacity that is declining in the region and the transmission transfer limits being reached within utilities. • LEC of Lesotho and SNEL of the DRC are the only SAPP Operating Members not participating in the STEM. • In terms of supply and demand, there was a considerable increase in demand from 2.9TWh in 2002 to 4.2TWh in 2003. The supply responded to the demand and increased from 2.6TWh in 2002 and 3.0TWh in 2003, Figure-1. Supply Demand 4500 4000 3500 3000 2500 2000 In the year under review, the SAPP Operating Sub-Committee made a number of achievements and the notable ones were as follows. 1500 1000 500 0 Year 1 The Short Term Energy Market There was a modest increase in the volume of STEM. The market developed from a largely off peak market into a twenty-four hour market where both hydro and thermal sellers offer energy at the appropriate time of day. The eight participants in the STEM are BPC of Botswana, Eskom of South Africa, HCB and EDM of Mozambique, KNBC of Zambia, NamPower of Namibia, SEB of Swaziland and ZESA of Zimbabwe. S O U T H E R N A F R I C A N P O W E R 2001 2002 2003 Fig.1: Energy supply and demand (2001 to 2003) • In the year 2002, the energy traded on the STEM was 740-GWh at a cost of approximately USD2.9 million. The corresponding figures for the year 2003 were 720-GWh at USD3.6 million, respectively. • The yearly average price of energy increased from 0.39USc/kWh in 2002 to 0.50USc/kWh in 2003. In 2003, the average P O O L 2 0 0 4 A N N U A L R E P O R T 13
  • 14. OPERATING SUB-COMMITTEE REPORT - cont. montly maximum prices ranged from 0.50Usc/kWh to 0.75USc/kWh. Energy in GWh Volume in USD ‘OOO 4000 3500 300 2500 2000 1500 1000 2 System Operations 2.1 Inadvertent Energy Management A procedure for the computation and management of inadvertent energy in SAPP was put in place at the Co-ordination Centre during the month of August 2003. Following the approval of the procedure and the computation method, the Co-ordination Centre reconciled all the inadvertent energy up to the end of December 2001. 500 0 Year 2001 2002 2003 Fig.2: Energy & volume traded on STEM (2001-2003) • The STEM monthly sales were lowest in September and October of 2003, but picked up in November of 2003, Figure-3. The months of September and October are usually the hottest months in Southern African and the power consumption during the period is lower than in the other months. The hot weather is reflected as a drop in STEM sales. STEM Monthly Sales for 2003 in MWh 4000 3500 3000 2500 2000 1500 1000 500 0 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Fig.3: STEM Monthly Sales for the year 2003 14 S O U T H E R N A F R I C A N P O W E R A document to explain the inadvertent interchange accounting was developed and has been adopted. Included within the document are the accounting practices that every control area within the SAPP will be expected to follow. These practices provide a method for isolating and eliminating the source(s) of accounting errors. They may also be used as an aid in identifying the poor control performance that contributes to inadvertent accumulations. 2.2 System disturbances During the period from August 2003 to May 2004, there were eleven system disturbances on the SAPP network reported to the Coordination Centre. The staff of the Coordination Centre analyses each disturbance to determine the cause or causes of the event and evaluate various remedial actions that could be possible. The Coordination Centre staff discusses each system disturbance with the utility engineers involved in the event with the objective to develop remedial action that will reduce the probability of future disturbances. This provides an independent review of the system disturbance with the objective to increase the reliability of the region’s power system. P O O L 2 0 0 4 A N N U A L R E P O R T
  • 15. OPERATING SUB-COMMITTEE REPORT - cont. 2.3 Transfer limit of the north-south (ZESABPC-Eskom) Interconnector The congestion on the Insukamini-PhokojeMatimba 400kV line was reduced from November 2003, when BPC declared new transfer limits to the Co-ordination Centre following the commissioning and eventual commercial availability of a third 220/132kV (125 MVA) transformer at the BPC Segoditshane Substation. BPC had evaluated the study reports associated with the changed system configuration and advised that the new transfer limits through BPC would now be 500MW north to south and 650MW south to north. The principles in the tripartite agreement "BPCEskom-ZESA Agreement on the Use of the Phokoje-Insukamini and Phokoje-Matimba 400kV Interconnectors' would apply until a review of the agreement is carried out. As a result of the new transfer limits through the BPC network, energy trading on the STEM is expected to increase. 3 Working Group Reports Markets Development Working Group The first meeting of the Markets Development Working Group (MDWG) took place in Harare on 24 November 2003. The SAPP Operating SubCommittee established the MDWG whose primary function is to produce a Regional Electricity Market Development Plan and subsequently implement it after the approval of the Management Committee. At this meeting, the Terms of Reference for the MDWG were finalised and agreed to by members. The MDWG is also responsible for the supervision of the SAPP consultant, Nord Pool Consulting AS, that has been contracted by SAPP to help S O U T H E R N A F R I C A N P O W E R develop a competitive electricity market for the SADC region. 4 Financial & Technical Cooperation 4.1 The Coordination Centre Budget 2003/4 The Coordination Centre was allocated USD250,000 for the fiscal year starting from April 2003 to March 2004. SAPP members were billed the amount according to the agreed allocation in the Agreement Between Operating Members. 4.2 The World Bank The World Bank has been helping SAPP to mobilise funds for the SAPP Power Market project. SAPP and the World Bank agreed that the SAPP Power Market Project would be developed in three phases. Phase-I of the project comprise: • The upgrade of the facilities at the SAPP Coordination Centre in Harare, • The feasibility study of the transmission line from Zambia to Tanzania, and • The strengthening of the transmission corridor from Inga in the Democratic Republic of Congo (DRC) to SAPP. On 11 November 2003, the Board of Executive Directors at the World Bank approved the SAPP Power Market Project and unanimously agreed to two credits, USD 177.5 Million for the DRC, and USD1.1 million for Zambia. The total IDA financing was USD178.6 million to SAPP for Phase-I of the SAPP Power Market Project. Phase-II will incorporate the MalawiMozambique interconnector. The work in Malawi and Mozambique includes construction P O O L 2 0 0 4 A N N U A L R E P O R T 15
  • 16. OPERATING SUB-COMMITTEE REPORT - cont. of a 220kV transmission line of about 219-km in length from Tete in Mozambique to north of Blantyre (Phombeya) in Malawi, and construction and extension of related substations in the two countries. A modification to the power system Control Centre in Mozambique is also envisaged. The cost of this would be about USD87 million of which IDA would provide USD62 million. NORAD and the two respective project Governments would finance the remainder. Still under Phase-II is the additional strengthening of the transmission corridor from Inga to the SAPP at 330kV. The cost of this would be about USD42 million of which IDA would provide USD40 million and the Zambian Government the remainder. The financing of the part of this transmission corridor in Zambia would be arranged by the national power utility, ZESCO, which has already approached DBSA for support. The total IDA financing for the second phase would be USD104 million. Phase-III will cover the construction of the Zambia-Tanzania interconnector if the feasibility is proven by the study financed in the Phase-I. 4.3 SAPP- NORAD Cooperation NORAD gave SAPP NOK35 million (Thirty Five Million Norwegian Kroner) grant for the development of a competitive electricity market for the SADC region covering the period from January 2004 to December 2007. The project officially started from the 15th of January 2004 The goal of the project is to provide a least cost, environmentally friendly and affordable energy 16 S O U T H E R N A F R I C A N P O W E R to the SADC nationals, and to increase the accessibility for rural areas in Southern Africa through the development of a competitive electricity market. The objectives of the project are to develop a spot market in the SADC region and help to transform the SAPP from a cooperative pool into a competitive pool. The market-clearing price that comes from a competitive electricity market would be used as a reference price for electricity in the region. This would encourage investors and the private sector to invest in the region where the price of electricity can be followed and predicted competitively by the market. 4.4 SAPP-USAID Cooperation USAID continued to support SAPP in training and capacity building activities. USAID sponsored the Executive Committee visit to the USA and Norway and also pledged continued support to SAPP in the following activities: • Sponsorship of the Management Committee to review the SAPP documents and SAPP membership, • Sponsorship of the Operating Sub-Committee to continue to develop the SAPP competitive power market, • Capacity building and training of SAPP members. The SAPP Executive Committee held a workshop in Tanzania on competitive power markets. The workshop was sponsored by USAID. • The installation and implementation of the Quality of Supply database at the Coordination Centre, P O O L 2 0 0 4 A N N U A L R E P O R T
  • 17. OPERATING SUB-COMMITTEE REPORT - cont. • Production of the SAPP Business Plan, and • Marketing of the STEM. The SAPP Co-ordination Centre launched a new website on the 24 October 2003. The site address remained the same "http://www.sapp.co.zw" The cost for the website were met by USAID. 4.6 SAPP- Sida Cooperation Sida gave a grant to SAPP amounting to SEK10 million (Ten Million Swedish Kroner) for the development of the long-Term Transmission pricing policy and implementation procedures, and for the development of the Ancillary Services Market as part of the Southern Africa Power Market Project. This project is expected to start officially on the 1 July 2004. I would like to thank the Operating SubCommittee members for electing me Chairperson of the Committee. I would also like to take this opportunity and thank the outgoing Chairperson, Mr, Pius Gumbi, for the good work he did as Chairperson of the OSC from August 2001 to August 2003. Ms Erica Johnson Chairperson of the Operating Sub-Committee S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 17
  • 18. PLANNING SUB-COMMITTEE REPORT 2003/4 3. Mrs Angela Dava of EDM (Mozambique) Planning Sub-Committee Chairperson SAPP Project Tracking SAPP has carried out a long-term generation and transmission planning study in 2001. The integrated resource planning study revealed that SAPP would run out of capacity in the year 2007. 60000 55000 50000 1. 2. Introduction The PSC continues to play an active role in fulfilling the objectives of SAPP. The PSC nominated Mrs. Angela Dava as the Chairperson becoming the first lady to be Chairperson of the PSC since inception. 45000 40000 35000 30000 2003 0.9000 0.8000 0.7000 0.6000 0.5000 0.4000 0.3000 25 49 73 97 121 145 HOUR POOL BPC ESKOM ESCOM NAMP 2007 2008 2009 2010 2011 2012 2013 Peak Demand after DSM TANESCO 4. Graph 1: SAPP Load diversity (All utilities loads normalised to their annual peak load) 18 2006 New generation projects have to be commissioned to meet the increasing demand and generation projects such as Mepanda Uncua in Mozambique and Grand Inga in DRC are seen under SAPP as being among the priority projects to meet the diminishing of the generation capacity. The graph below shows the anticipated SAPP demand growth and the SAPP capacity plan to meet the required overall reserve requirements. The sharp rise in the demand forecast in the year 2012 is due to the expected export of power from the DRC to countries in the North outside SAPP. This may be realised if the Grand Inga hydropower project in the DRC is commissioned. Table 4 and 5 shows the future generation projects in SAPP countries. PEAK WEEK 1 2005 Graph 2: SAPP Generation vs SAPP Load Forecast Load Diversity Study A load diversity study was carried out by the Generation Planning Working Group for the years 2001 and 2002. Six utilities provided the required chronological hourly load data. The study demonstrated that there is practically no load diversity in SAPP. The graph below shows the hourly load profiles for some countries for the SAPP peak load week of 2002 and the overall SAPP weekly load profile. 1.0000 0.2000 2004 Effective Capacity S O U T H E R N A F R I C A N P O W E R Ancillary Services Market Development The Ancillary Services Working Group produced the first draft report covering the list of ancillary services to be considered P O O L 2 0 0 4 A N N U A L R E P O R T
  • 19. PLANNING SUB-COMMITTEE REPORT 2003/4 - cont. • SAPP Plan 70000 65000 • 60000 55000 • 50000 45000 • 40000 2 x 330 kV line Luano - Karavia (300km) (DRC - Zambia) - approximately 600 MW 400 kV Matimba - Phokoje - Insukamini (Zimbabwe - Botswana - South Africa) approximately 500 MW ZESA - BPC new line (Zimbabwe - Botswana) - up to 650 MW Matambo - Pombeya 400kV - (Mozambique - Malawi) - 100 MW 35000 30000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Capacity Planned Capacity Required Peak Demand after DSM Graph 3: SAPP demand supply balance in SAPP. The definitions, criteria and requirements were prepared. Some of the services identified include: • • • • • • • Scheduling, System Control and Dispatch Reactive Power Supply and Voltage Control Regulation and Load Following Operating Reserves Black Start and Unit Islanding Constrained Generation Energy imbalance (Inadvertent energy) 5. SAPP Dynamic Stability Studies Training The second PSS/E Advanced course took place in Johannesburg, South Africa in June 2003. Fourteen SAPP members attended the course. ESCOM Transmission Planners underwent a skills transfer program at the Coordination Centre on dynamic modeling. 6. • • Transmission Interconnections The SAPP Pool Plan Transmission Projects can be summarised as follows: HVDC Transmission link (DRC - Angola Namibia - Botswana - South Africa) - 3500 MW 2x500kV DC Inga-Kolwezi (DRC) - up to 1,000 MW S O U T H E R N A F R I C A N P O W E R The details of the projects are given under statistics: 6.1 WESTCOR • The governments of Angola, Botswana, DRC, Namibia and South Africa are yet to sign a Memorandum of Understanding. • It was noted that HVDC is the preferred optimum technology and research is being undertaken for 750 – 800 kV HVDC. Up to 3500 MW would be transmitted over a distance of 3000 km. • A Project Office being setup in Gaborone, Botswana • Some preliminary load flow and fault level studies were done. • A workshop on HVDC Technology was held in March 2004 in South Africa. 6.2 DRC – Zambia • Terminal equipment upgrade at Luano in Zambia was completed. This would allow for the increase in transfer capacity from 210 MW to 260 MW. • Other upgrade works to be done to increase the transfer capacity to 320 MW. • The upgrades in the DRC would be funded by the World Bank while the work in Zambia would be funded by the Copperbelt Energy Corporation (CEC) • SNEL negotiated short term and medium term supply agreements with ZESA and ESKOM. P O O L 2 0 0 4 A N N U A L R E P O R T 19
  • 20. PLANNING SUB-COMMITTEE REPORT 2003/4 - cont. 6.3 Mozambique Malawi • Envisages the construction of 220km of 400 kV transmission line and a new substation at Phombeya in Malawi. The line would initially be operated at 220 kV transmission voltage. • The Power Purchase Agreement is at an advanced stage of finalisation between the supplier HCB and the buyer ESCOM. • Invitations for bids were floated for the aerial line route survey. • Some of the project components include upgrade of the SCADA and communication systems, under frequency load shedding systems, engineering services etc. 6.4 Zambia – Tanzania – Kenya • The World Bank awarded USD 1.1 million for the feasibility studies which covers the Zambia – Tanzania portion of the interconnector. • Phase I which covers the engineering and financial studies between Zambia and Tanzania were completed. • • • • 7. Phase II is the finalisation of the Power Purchase Agreement and related documentation The governments of Zambia And Tanzania have already signed the Memorandum of Understanding and are expecting Kenya to sign. A project development plan is already in place for the Pensulo (Zambia) to Singida (Tanzania) for a double circuit 330 kV 450 km transmission line. Tanzania plans to import initially 200 MW of power Restructuring in SAPP The SAPP countries are at different levels of restructuring as shown in the table below. Mrs Angela Dava Chairperson of the Planning Sub-Committee SAPP Member Countries AS IS IS IS Restructuring in SAPP utilities Key: IM, Implemented IP, In progress 20 S O U T H E R N A F R I C A N AS, Advanced stage IS,Initial stage P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T Zimbabwe AS IS Zambia AS IM IP Tanzania AS Swaziland AS IS AS IM IP IP IM IS IS South Africa IM IP IP IM Namibia Malawi IS IM IS IS Mozambique Lesotho DRC Botswana New Legal Framework Unbundling & IPPs Private Sector participation Third Party Access New Regulatory Framework Reorganising of distribution Tariff Reform Utility Commercialisation Angola Power Sector Reform Activities IM IM IP IM IM IS IS IS IP IS IS IS
  • 21. ENVIRONMENTAL SUB-COMMITTEE REPORT 1.3 Zambia-Tanzania-Kenya The EIAs were completed in all the three countries. Mr. Lovemore Nyahuma of ZESA Environmental Sub-Committee Chairperson (2003/4) A lot of groundwork was covered during the year under review and the notable achievements are detailed below. 1. Evaluation of Environmental Impacts of SAPP Interconnections 1.1 WESTCOR The overall framework of the Environmental Impact Assessment Study (EIA) was submitted to the Technical Committee. 1.2 DRC-Zambia Construction of the 330kV line commenced in January 2004. The Environmental Management Plan (EMP) was forwarded to the contractor and the environmental coordinator has been appointed to oversee implementation of environmental issues as per EMP. The Environmental Council of Zambia (ECZ) approved the Environmental Impact Assessment study (EIA) for the 220kV line. Construction is to begin in May 2004 when funds are available. Independent consultants through funds provided by the World Bank carried out the EIA study covering the DRC. S O U T H E R N A F R I C A N P O W E R 1.4 Mozambique-Malawi ESCOM of Malawi was awaiting final approval of the EIA study from the Ministry of Environment. EdM of Mozambique expected the EIA study to be completed by the beginning of April 2004. 2. Working Group Activities 2.1 Sustainable Development In keeping with developments the world over the sub-committee made the additions listed below. Addition to the Vision Ensure sustainable energy developments through sound economic, environmental and social practices. Addition to the Objectives Implement strategies in support of sustainable development priorities. 2.2 SAPP Policy on Climate Change The Environmental Sub-Committee adopted the policy paper. It was to be submitted to the Management Committee for approval. 2.3 Negative Impacts on Climate Change The draft report on the negative impacts of climate change was to be submitted to the Environmental Sub-Committee for comments. P O O L 2 0 0 4 A N N U A L R E P O R T 21
  • 22. ENVIRONMENTAL SUB-COMMITTEE REPORT - cont. 2.4 Guidelines on Management of Oil Spills The draft document was completed and was to be commented on after which it was to be submitted to the Management Committee for approval. 2.5 Guidelines on Management of Asbestos The draft document was to be commented on after which it was to be submitted to the Management Committee for approval. animal interaction with electricity infrastructure and the other on Environmental Auditing. Mr. Lovemore Nyahuma Chairman of the Environmental Sub-Committee 2.6 Guidelines on Animal Interactions The guidelines were circulated for comments. 2.7 Training There were two training sessions during the course of the year. The first one was on 22 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T
  • 23. SAPP CO-ORDINATION CENTRE REPORT Dr. Lawrence Musaba The Coordination Centre Manager Mr. Alison Chikova Supervisor, System Studies Mrs. Joyce Mutsau Finance and Administration Officer Mr. Chatwel Ncube IT Specialist Mr. Elisha Mutambudzi STEM Finance Officer Ms. Daisy Mudangwe STEM Finance Officer Mr Misheck Tembo Mr. William Balet SAPP Senior Advisor S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 23
  • 24. SAPP CO-ORDINATION CENTRE REPORT - cont. 1. Introduction The Coordination Centre continues to be the driver and centre of most of the activities in SAPP. In the year under review, the Coordination Centre was responsible for the coordination of the SAPP Power Market Project, SAPP membership and documentation review, competitive electricity market development, ancillary services market development, development of the SAPP Business Plan, and many other activities. 2 Human Resources 2.1 New members of staff During the year, the SAPP Computer Analyst Mr. Frank Chirumbwana left the Coordination Centre and was replaced by Mr. Chatwel Ncube, a holder of Bachelor of Engineering Honours Degree from the National University of Science and Technology (NUST) in Bulawayo, Zimbabwe. Mr. Ncube was employed in August 2003 and started work on 8 September 2003. System Studies Supervisor, Mr. Alison Chikova, attended two modules of the Management Development Program with the Zimbabwe Institute of Management of one-week duration each. 2.3 Organisational Structure The Co-ordination Centre Board approved the new Co-ordination Centre organisation structure. A document describing the job descriptions for each position together with the minimum skills and qualification requirements, were developed by the Coordination Centre Manager and circulated to all Co-ordination Centre Board members. The implementation of the new structure would go through the normal SAPP approval process from the Co-ordination Centre Board via the Management Committee to the Executive Committee. 3. STEM Market Improvements During the year a lot of improvements have been made in automating the STEM process. These improvements have allowed employees to focus on other financial activities. Internet based trading has also been introduced where utilities submit their offers and bids via the website reducing on human intervention from the Coordination Centre thereby reducing errors. Work is still on going to automate the STEM invoicing. 4. The SAPP Business Plan A five-year SAPP business plan was developed by the Coordination Centre with the aim to highlight areas and projects that needed external support and funding. A marketing brochure was also produced for the investors to easily access the information and the details of the projects. USAID provided financial assistance in the development of the brochure. The STEM Finance Officer Ms. Moira Chisvo left the Coordination Centre to further her studies in the USA. Ms. Daisy Mudangwe who is a graduate of NUST replaced Ms. Moira Chisvo. Ms Mudangwe holds a bachelor of Commerce Honours degree in Accounting. Ms. Mudangwe was employed in October 2003 and started work in November 2003. 2.2 Staff Training The Co-ordination Centre continues to promote staff development programs and the staff attended different courses in their areas of specialisation. The Coordination Centre is committed to organisational development. Other members of staff have been doing part-time studies with various institutions within and outside of Zimbabwe. The Co-ordination Centre 24 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T
  • 25. SAPP CO-ORDINATION CENTRE REPORT - cont. 5. Other Activities 5.1 Mediation in the use of the HVDC line The Coordination Centre organised a meeting in Harare on 1 October 2003 between EdM and HCB of Mozambique and Eskom of South Africa. The meeting discussed the use of the HVDC line from Mozambique to South Africa. The following recommendations were made on the use of the HVDC line: (NTPC) of India, in New Delhi, on SAPP and how STEM has introduced market principles and electricity trading into the SADC region. Considerable interest was shown in SAPP and STEM in particular. • HCB and Eskom would need to have the reliability premium issue solved before they could move forward and allow other third parties to use the line as the whole problem revolves around this. • HCB and Eskom should review the bilateral agreement on the use of the line and the metering and billing arrangements. HCB and Eskom should revert to the use of scheduled energy for billing rather than the actual flows. Africa Hydro 2003 Conference The Africa Hydro 2003 Conference was held in Arusha, Tanzania, from 17-19 November 2003. The conference was organised by the International Centre for Hydropower (ICH) of Norway and the Tanzania Electric Supply Company Limited (TANESCO). The SAPP Senior Advisor, Mr. William Balet, again represented the Coordination Centre. 5.2 WAPP Visit to the Coordination Centre The West African Power Pool (WAPP) representatives of the institutional and technical working groups participated in a semi-annual meeting of the SAPP in Gaborone, Botswana, in February 2004. The group then visited the SAPP Co-ordination Centre in Harare, Zimbabwe, to familiarise themselves with the operations of SAPP. ZESCO also shared Southern African transmission practices with the SARI/E Transmission Partnership in New Delhi, India on October 15-17, 2003. Power Generation Africa 2004 Conference A two-days Power Generation Africa 2004 conference was held in Midrand, South Africa, from the 16-17 March 2004. The conference was intended to address the issues on funding and financing of the African power sector, privatisation, infrastructure development and renewable energy sources. The SAPP was also host to Mr. Bruno K. Kalala from the Central African Power Pool (CAPP). Mr. Kalala is the person manning the CAPP offices in Brazzaville, Republic of Congo. Mr. Kalala had the same agenda as officials from WAPP. Dr. L. Musaba, the Coordination Centre Manager and Mr. B. Mbuere, the Management Committee Chairperson represented SAPP. The two together presented a paper entitled, Meeting the Electricity Demands of the Majority of the African Continent via the Inga Site on the Congo River. 5.3 Conferences and Workshops Presentation in India On 1 October 2003, Mr. William Balet, the SAPP Senior Advisor, made a presentation to the National Thermal Power Company Conference on Enabling Environment for Private Participation in Rural Energy Service Delivery A two-days USAID sponsored conference on Regional Conference on Enabling S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 25
  • 26. SAPP CO-ORDINATION CENTRE REPORT - cont. Environment for Private Participation in Rural Energy Service Delivery in the SADC Countries was held in Windhoek, Namibia, from the 15-16 April 2004. The conference focused on discussions on the best practices in institutional, business, and financial models for rural energy service delivery and the role various parties can play in developing an enabling environment for private sector participation in both the financing and management of rural energy service delivery. Dr. L. Musaba, the Manager, and Mr. A. Chikova, Supervisor System Studies, represented the Coordination Centre. Dr. Lawrence Musaba SAPP Coordination Centre Manager 26 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T
  • 27. S O U T H E R N A F R I C A N BPC ENE Utility LEC ESCOM EDM NamPower ESKOM SEB TANESCO SNEL ZESCO ZESA Botswana Angola Country Lesotho Malawi P O W E R Mozambique Namibia South Africa Swaziland Tanzania DRC Zambia Zimbabwe P O O L 2 0 0 4 A N N U A L R E P O R T 1,990 1,642 2,442 591 51 42,011 393 177 285 72 132 624 2,007 1,255 991 506 171.5 31,928 371 273 227 90 393 317 MW -1 8.8 0 6.5 7 1 6.6 3 7 1.1 9.2 5.7 % Growth Capacity Demand MW MD Installed Maximum 10,561 7,852 4,381 2,625 831.6 196,980 2,246 1,099 970 316 2150 1,542 GWh Sales 1.02 4.9 0.4 1 13 4.8 5.1 4.1 4 -3.6 10 14,1 % Growth Sales 540,738 310,000 301,478 485,661 45,300 3,505,039 3,265 245,859 135,000 42,390 108,985 119,392 6,020 3,617 5,462 4296 724 28,938 818 2,662 2,400 454 2,086 3,291 Customers Employees 8,799 8,466 5,907 3365 991.2 210,218 1,421 261 1,177 429 936 1,993 GWh Sent Out Number of Number of Generation UTILITY GENERAL INFORMATION APRIL 2003 MARCH 2004 TABLE 1 3,138 - - 53 868.2 8,194 1,045 1,042 N/A 8 1,606 11.16 GWh Imports Net - 206 1,350 - - 9,977 - 245,6 N/A 38 - - GWh Exports Net 11.5 2.8 5.6 22 16.1 8.3 8 20 19 20.8 11.7 26 % losses System 175 149.14 45.3 n/a 46.33 4,782 112 76,2 5.319 18.9 110.9 38 Million US$ Transmission Revenue 70 180 n/a n/a 82 27 34 105 110 38 42.1 45 Days Debtor -23.7 2 n/a n/a 3 10.58 1.21 0.0224 1 -0.06 7.6 n/a % USD Return Rate of -110 16.9 n/a n/a 5.8 487 11 62.08 2.22 -3.8 45.3 n/a Million Income Net STATISTICS 27
  • 28. STATISTICS - cont. MOZAMBIQUE MALAWI LESOTHO DRC BOTSWANA ANGOLA 27,803 292 245 190 69 830 239 209 1998 153 27,813 314 214 185 77 841 256 326 1999 154 29,188 320 231 205 85 895 285 250 2000 159 30,599 335 234 212 88 929 337 291 2001 160 31,621 362 250 236 89 991 362 330 2002 172 31,928 371 258 261 90 994 393 342 2003 174 33,547 507 273 277 100 1,027 402 427 2004 180 34,553 596 292 294 107 1,063 426 468 2005 185 35,590 670 313 311 115 1,070 452 846 2006 TABLE 2 ANNUAL MAXIMUM DEMAND, MW NAMIBIA 145 191 36,657 681 334 330 125 1,100 479 871 2007 196 37,757 692 358 350 130 1,138 507 898 2008 202 38,890 703 383 371 136 1,172 534 924 2009 208 40,057 713 410 394 142 1,207 562 952 2010 215 41,258 724 438 414 148 1,244 591 981 2011 FORECAST SOUTH AFRICA YEAR HISTORIC SWAZILAND 910 1,560 873 1,529 786 1,499 747 1,426 700 1,399 654 1,374 606 1,350 570 1,316 506 1,255 474 1,118 465 1,087 426 1,085 394 1,069 368 1,126 TANZANIA ZAMBIA 48,860 2,682 47,452 51,165 2,624 46,085 49,671 2,567 44,710 48,166 2,506 43,413 46,705 2,447 42,155 45,314 2,387 40,887 43,966 2,320 39,565 42,255 2,219 37,468 40,839 2,007 36,981 38,577 2,028 35,781 38,021 2,013 34,229 36,749 1,986 32,771 35,110 2,034 32,699 33,676 1,950 TOTAL INTERCONNECTED 33,466 ZIMBABWE TOTAL SAPP P O O L 2 0 0 4 A N N U A L R E P O R T P O W E R A F R I C A N S O U T H E R N 28
  • 29. S O U T H E R N 1,543 N/A BOTSWANA DRC 271 1,319 ANGOLA A F R I C A N 1,076 MALAWI * 1,881 185,583 718 2,096 7,868 11,529 210,469 214,907 MOZAMBIQUE 1,023 LESOTHO 1998 YEAR NAMIBIA SOUTH AFRICA P O W E R SWAZILAND TANZANIA * ZAMBIA ZIMBABWE TOTAL INTERCONNECTED TOTAL SAPP 219,319 214,476 12,811 7,656 2,240 760 188,475 1,676 1,186 1,087 267 N/A 1,645 1,516 1999 225,206 220,806 12,090 7,798 2,394 820 194,601 1,978 1,212 902 427 N/A 1,880 1,104 2000 HISTORIC 231,055 225,470 11,972 8,152 2,654 847 198,790 2,016 1,257 1,091 393 N/A 2,043 1,840 2001 242,479 236,771 8,587 8,308 2,708 765 207,233 2136 1,307 1,134 378 5,907 2,150 1,866 2002 253,372 247,150 8,799 8,466 3,052 991 217,286 1,421 1,392 1,177 429 6,084 2,282 1,993 2003 262,553 255,745 12,440 8,186 3,143 923 219,854 3,710 1,489 1,227 458 6,267 2,418 2,438 2004 271,211 263,926 13,006 8,408 3,334 951 226,449 4,038 1,594 1,276 461 6,455 2,564 2,675 2005 TABLE 3 ANNUAL ENERGY SENT OUT, GWh 280,294 272,541 13,385 8,974 3,556 979 233,243 4,400 1,705 1,327 490 6,648 2,717 2,870 2006 288,947 280,695 13,717 9,209 3,782 1,008 240,240 4,456 1,825 1,380 512 6,848 2,880 3,090 2007 297,788 289,008 14,050 9,373 4,025 1,039 247,447 4,512 1,952 1,435 528 7,053 3,054 3,320 2008 FORECAST 306,981 297,586 14,392 9,542 4,238 1,070 254,871 4,567 2,089 1,492 554 7,264 3,237 3,665 2009 316,599 306,407 14,713 9,728 4,820 1,102 262,517 4,623 2,235 1,552 576 7,482 3,431 3,820 2010 326,375 315,805 15,039 10,224 5,021 1,135 270,392 4,679 2,392 1,614 600 7,707 3,637 3,935 2011 STATISTICS - cont. P O O L 2 0 0 4 A N N U A L R E P O R T 29
  • 30. STATISTICS - cont. TABLE 4 Short-Term Generation Projects No. 1 2 3 4 5 6 7 Country Angola Botswana DRC Lesotho Malawi Namibia South Africa 8 9 Swaziland Zambia 10 Zimbabwe Project Name Capanda Morupule Expansion Refurbish Inga-1 & 2 Muela Phase-2 Kaphichira Phase-2 Kudu Mothballed Plants Open Cycle Gas Turbine Maguga Refurbishment Itezhi-Tezhi Kafue Lower Kariba North Kariba South Hwange 7 & 8 Lupani TOTAL Capacity [MW] 260 240 500 110 64 800 3,500 500 20 210 120 600 360 300 660 300 8,544 Type Hydro Coal Hydro Hydro Hydro Gas Coal Gas Hydro Hydro Hydro Hydro Hydro Hydro Thermal Gas Expected Year 2007 2009 2007 2010 2009 2009 2005 to 2010 2008 2007 2006 2007 2009 2009 2007 2008 2009 Capacity [MW] 3,600 3,500 6,000 230 240 260 100 1,300 1,000 40 360 23 4,000 2,500 1,500 2,330 1,000 200 220 800 1,300 30,503 Type Thermal Hydro Hydro Hydro Hydro Hydro Hydro Hydro Coal Hydro Hydro Hydro Coal Coal Gas Hydro Thermal Hydro Hydro Hydro Coal Expected Year 2015 2010 2012 TABLE 5 Long-Term Generation Projects No. 1 2 Country Botswana DRC 3 4 5 Mozambique 6 Namibia 7 South Africa 8 9 Swaziland Zambia 10 30 Lesotho Malawi Zimbabwe Project Name Mmamabula Inga-3 Grand Inga Phase-1 Musanga Kholombizo Mpatamanga Fufu Mepanda Uncua Moatize Massingir Epupa Popa Greenfield Greenfield 2xCGT 2xPumped Storage Lubombo Expansion Kariba North Kalungwishi Batoka Gokwe North TOTAL S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 2018 2020 2012 2010 2014 2015 2015 2013 Beyond 2010 2020 2014-2015 2014 2020
  • 31. REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SOUTHERN AFRICAN POWER POOL We have audited the annual financial statements set out on pages 3 to 9 for the year ended 31 March 2004. Respective responsibilities of the executive committee and auditors The financial statements are the responsibility of the executive committee of the organisation. Our responsibility is to express an opinion on these financial statements based on our audit. Scope We conducted our audit in accordance with approved International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes: - Examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, - Assessing the accounting principles used and significant estimates made by management, and - Evaluating the overall financial statement presentation. Audit opinion In our opinion, the financial statements, in all material respects, give a true and fair view, of the financial position of the organisation at 31 March 2004 and of the results of its operations and cash flows for the year then ended in conformity with International Financial Reporting Standards. CHARTERED ACCOUNTANTS (ZIMBABWE) HARARE 23 June 2004 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 31
  • 32. STATEMENT OF ACCOUNTING POLICIES The following principal accounting policies have been consistently applied throughout the period: amount, assets are written down to their recoverable amount. ACCOUNTING CONVENTION The financial statements are prepared under the historical cost convention. No procedures are adopted to reflect the impact on the financial statements of specific price changes or changes in the general level of prices. SPECIAL FUND Funds granted for specific purposes are not included in the income and expenditure account, but are accounted for separately as Special Fund on the balance sheet. They are maintained in a separate bank account and any interest earned on the unused funds is credited to the Special Fund. CURRENCY The financial statements are expressed in United States dollars. Assets and liabilities are translated to the relevant currencies at the exchange rate ruling on the balance sheet date, income and expenditure items are translated at the ruling average monthly rates for the period to which they relate. Realised exchange differences are taken to the income statement in the year in which they arise. Surpluses and deficits on translation are dealt with in the income statement in the determination of net income. DEPRECIATION Fixed assets are depreciated over their expected useful lives on a straight line basis as follows:Computer equipment Office equipment Office furniture and fittings - 3 years - 5 years - 10 years The carrying amounts of fixed assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their receivable amounts and where carrying values exceed this estimated recoverable 32 S O U T H E R N A F R I C A N P O W E R PROVISIONS Provisions are recognised when the Organisation has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amounts of the obligation. RETIREMENT BENEFIT COSTS Retirement benefits are provided for the organisation employees through the National Social Security Authority (NSSA) scheme. Employer's contributions to the NSSA scheme are charged to the income statement when due. REVENUE RECOGNITION Funds Income Income received is based on a set budget agreed upon by all members of the organisation and contributions made by members are based on set percentages and proportions based on electricity usage. The income is brought to account per issued invoice to each of the member countries. Interest Revenue is recognised as the interest accrues. P O O L 2 0 0 4 A N N U A L R E P O R T
  • 33. INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2004 Notes 75 000 75 000 50 000 25 000 25 000 55 672 ________ 305 672 ________ (2 646) (10 699) 16 077 ________ 294 840 ________ OTHER INCOME/EXPENSES Sundry income Foreign exchange (loss)/gain Foreign exchange difference on fixed assets Interest received 2003 US$ 75 000 75 000 50 000 25 000 25 000 42 108 ________ 292 108 ________ INCOME OPERATING INCOME Operating members Imported energy Peak demand Thermal rating Host member Short Term Energy Market 2004 US$ 9 152 (67 497) 30 068 ________ 277 395 ________ 1 481 5 669 262 840 ________ 7 405 ________ EXPENDITURE Westcor Project expenses NORAD Project expenses Administration expenses 2 1 738 215 137 SURPLUS/(DEFICIT) FOR THE YEAR TRANSFERRED TO ACCUMULATED FUND 3 ________ 77 965 ________ S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 33
  • 34. BALANCE SHEET 31 MARCH 2004 Notes 20 362 ________ 889 151 ________ 19 781 ________ 266 889 ________ 40 220 60 190 6 52 964 42 188 25 090 252 251 543 716 ________ 889 151 ________ CURRENT ASSETS Investments Accounts receivable Cash at bank and on hand - Co-ordination centre funds - Special fund - NORAD Grant TOTAL ASSETS 222 108 25 000 5 ASSETS NON-CURRENT ASSETS Property, plant and equipment 275 073 543 716 50 000 4 CURRENT LIABILITIES Accounts payable TOTAL LIABILITIES 2003 US$ 3 FUNDS AND LIABILITIES FUNDS Accumulated funds Special fund - NORAD Grant General reserve 2004 US$ 139 421 ________ 266 889 ________ E JOHNSON CO-ORDINATION CENTRE BOARD CHAIRPERSON L MUSABA CO-ORDINATION CENTRE MANAGER SOUTHERN AFRICAN POWER POOL SENIOR ADVISOR 23 June 2004 34 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T
  • 35. CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2004 Note 2004 US$ 2003 US$ 65 377 (21 289) RETURNS ON INVESTMENTS Interest received Interest paid 16 077 (210) 30 068 (15) INVESTING ACTIVITIES Capital expenditure Purchase of investments Disposal of investment (10 602) 42 188 (21 090) (42 188) - 543 716 ________ 656 546 ________ (58 542) ________ (113 056) ________ 77 965 19 873 10 699 (16 077) 210 (27 874) 2 876 (2 295) ________ 65 377 ________ 7 405 21 072 (30 068) 15 ( 8 828) (7 188) ( 3 697) ________ (21 289) ________ 139 421 795 967 ________ 656 546 ________ 252 47 139 421 ________ (113 056) ________ NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 1 FINANCING ACTIVITIES Grants received Grants utilised/remitted INCREASE/(DECREASE) IN CASH RESOURCES NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES This is arrived at as follows: Surplus for the year Depreciation Exchange difference on fixed assets Interest receivable Interest payable (Increase) in accounts receivable (Decrease)/increase in accounts payable Increase in provisions 1 INCREASE/(DECREASE) IN CASH RESOURCES The increase in cash resources is represented by a movement in balances, as follows: At 1 April 2003 At 31 March 2004 2 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 35
  • 36. NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2004 2004 US$ 2003 US$ 18 16 1 843 541 7 590 1 811 2 500 2 778 19 873 237 953 210 50 2 257 383 4 488 346 105 664 169 2 924 102 1 514 2 861 2 729 25 268 1 239 9 650 17 139 ________ 215 137 ________ 2 567 1 241 104 981 1 280 873 21 072 143 280 15 45 1 335 71 4 510 256 123 902 1 700 26 1 047 2 195 13 940 52 786 425 2 642 6 728 23 659 ________ 262 840 ________ ________ ________ 1 ACTIVITIES The main object of the organisation is to co-ordinate the planning and development of electricity inter-connections between members' respective networks and to expand the Interconnected Power System and electricity trading in the region. 2 ADMINISTRATION Cleaning Audit fee - current year annual audit - STEM review Advertising and promotions Bank charges Computer expenses Consultancy Courier and postage Depreciation Entertainment Insurance Interest paid Magazines and books Printing and stationery Recruitment and relocation Rent paid Repairs and maintenance Salaries and wages Staff expenses Staff training Subscriptions Sundry expenses Telephone and fax Telecommunications Travel and accommodation Withholding tax on interest Reports and periodicals Official opening of Coordination Centre Telecommunications - Visual Satellite Automatic Terminal (VSAT) TOTAL ADMINISTRATION EXPENSES SUNDRY EXPENSES Workshop lunch 36 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T
  • 37. NOTES TO THE FINANCIAL STATEMENTS - cont. 31 MARCH 2004 2004 US$ 3 4 222 108 77 965 (25 000) ________ 275 073 ________ ACCOUNTS PAYABLE Provisions Other creditors 5 PROPERTY, PLANT AND EQUIPMENT 5.1 Summary Computer equipment Cost Aggregate depreciation Net book value Office equipment Cost Aggregate depreciation Net book value Office furniture and fittings Cost Aggregate depreciation Net book value Total Cost Aggregate depreciation Net book value 239 70 7 405 (25 000) ________ 222 108 ________ 11 725 8 637 ________ 20 362 ________ ACCUMULATED FUND At 1 April 2003 Surplus for the year Transfer to General Reserve At 31 March 2004 2003 US$ 14 020 5 761 ________ 19 781 ________ 54 842 42 427 ________ 12 415 ________ 55 354 31 770 ________ 23 584 ________ 20 000 14 273 ________ 5 727 ________ 25 727 10 533 ________ 15 194 ________ 34 536 12 458 ________ 22 078 ________ 109 378 69 158 ________ 40 220 ________ 28 395 6 983 ________ 21 412 ________ 109 476 49 286 ________ 60 190 ________ 5.2 Movements for the year Net book value of total property, plant and equipment at 1 April 2003 ________ 60 190 Capital expenditure - at cost Computer equipment 7 699 Office equipment 93 Office furniture and fittings 2 810 ________ 10 602 ________ Foreign exchange difference (10 699) ________ S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 60 172 ________ 19 040 2 050 ________ 21 090 ________ ________ 37
  • 38. NOTES TO THE FINANCIAL STATEMENTS - cont. 31 MARCH 2004 2004 US$ 10 658 3 741 5 474 ________ 19 873 ________ 5 PROPERTY, PLANT AND EQUIPMENT (continued) 5.2 Movements for the year (continued) Depreciation charge Computer equipment Office equipment Furniture Net book value of total property, plant and equipment at 31 March 2004 The foreign exchange difference arose from conversion of the fixed assets bought over the years from Zimbabwe dollars to United States dollars, due to different exchange rates at the date of acquisition of each asset and the balance sheet date. 6 38 ACCOUNTS RECEIVABLE Trade debtors United States Agency for International Development (USAID) Prepayments Other debtors S O U T H E R N A F R I C A N P O W E R 2003 US$ 14 540 3 967 2 565 ________ 21 072 ________ 40 220 ________ 60 190 ________ 39 581 7 943 4 542 898 ________ 52 964 ________ 1 943 17 130 3 993 2 024 ________ 25 090 ________ P O O L 2 0 0 4 A N N U A L R E P O R T
  • 39. S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T 39
  • 40. 40 S O U T H E R N A F R I C A N P O W E R P O O L 2 0 0 4 A N N U A L R E P O R T