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Fixing Our Power Crisis - EAZ v2 28.10.16
The document summarizes Zambia's power crisis and ZESCO's responses. It defines the crisis as inadequate supply capacity, fluctuating power quality, and low access rates. ZESCO is addressing this through short-term power imports, commissioning new generation and transmission projects, and medium-to-long term projects and partnerships totaling billions. ZESCO is also working to increase access rates from below 30% currently to over 240,000 new connections by 2018, having already connected over 215,000 customers since 2013.
Fixing Our Power Crisis - EAZ v2 28.10.16
- 1. KACHINGA-WANKUNDA PHIRI PRINCIPAL ECONOMIST FIXINGOUR POWER CRISI: POLICIES, PARTNERSHIPS AND INVESTMENTS Date: 28th October 2016
- 2. TABLE OF CONTENTS 1.SECTOR REFORMS 2. INDUSTRY STRUCTURE 3. INSTALLED CAPACITY 4. CONSUMPTION 5. DEFINING THE CRISIS 6. RESPONSES – A UTILITY’S PERSPECTIVE
- 3. SECTOR REFORMS 1970 • ZambiaElectricity Supply Act was passed • Act brought together the electricity undertakings previously managed by the local authorities to form Zambia Electricity Supply Corporation Limited 1991 • Election of a new Party, the MMD • New Government shifts economic focus from central planning to private sector driven leading to privatization and structural reforms 1994 • Promulgation of new electricity Act. • Policy objective was to optimize supply & usage, facilitate economic development & maintain safety and health standards. 1995 • Repeal of the ZESCO Act and promulgation of the Electricity Act • Promulgation of the ERB Act setting up the new sector Regulator 2008 • Promulgation of 2nd Energy Policy with a goal to create conditions that will ensure the availability of adequate supply of energy from various sources, at the lowest economic, financial, social and environmental cost consistent with national development goals
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- 5. NATIONAL INSTALLED CAPACITY •Installed generation capacity of 2.754 GW in 2016 • ZESCO installed capacity of 1.868GW • IPPs account for 0.886GW • ITPC is a JV between ZESCO and TATA Africa • KNBE is a 100% subsidiary of ZESCO Kafue George, 990 Kariba North, 720 Diesels, 7 Victoria Falls, 108 Mini-Hydros, 43 KNBE, 360 ITPC, 120 Maamba, 300 Ndola Energy, 50 LHPC, 56 IPPs, 886 Kafue George Kariba North Diesels Victoria Falls Mini-Hydros KNBE ITPC Maamba Ndola Energy LHPC
- 6. CONSUMPTION AND ENERGYOUTPUT Kafue George, 4,413,730 Kariba North, 2,163,326 KNBE, 455,247 Victoria Falls, 632,470 ITPC, 394,262 Mini-Hydros, 107,917 Diesels, 15,945 Energy (MW) Jan-Sept 2016 Kafue George Kariba North KNBE Victoria Falls ITPC Mini-Hydros Diesels 8,183 GWh 65,881 183,659 48,020 375,549 71,454 5,526 77,925 23,052 395,944 2,729,904 4,414,352 OTHERS AGRICULTURE QUARRIES MANUFACTURING ENERGY AND WATER CONSTUCTION TRADE TRANSPORT FINANCE AND PROPERTY SERVICES MINING - 500,000 1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000 SECTOR CONSUMPTION (MWh), JAN-SPET 2016 SECTOR CONSUMPTION
- 7. Defining the PowerCrisis Supply Capacity Power Demand Inadequate Supply Capacity Supply Quality • Low/fluctuating voltage • Intermittency of power supply Low Access Rates • Current national access rates are below 30% • Urban access are below 50% • Rural rates are below 5%
- 8. Is it anEnergy or Power Crisis? 2016 2017 2018 2019 2020 2021 2022 Supply (GWh) 12,773 14,894 21,018 21,018 22,118 22,118 34,476 Demand (GWh) 16,764 18,314 19,117 19,944 20,721 21,185 22,021 Energy satiation to normalize after 2 good rainy seasons New Energy from KGL, BGHES and LRB 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Energy(GWh) Energy Load Forecast, 2016-2022 2016 2017 2018 2019 2020 2021 2022 Supply (MW) 2,744 2,919 3,366 3,366 3,613 3,613 5,911 Demand (MW) 1,916 2,091 2,182 2,277 2,365 2,418 2,514 Capacity is not the constraint Commissioning of KGL, BGHES and LRB 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Capacity(MW) Capacity Load Forecast, 2016-2022
- 9. ZESCO’S RESPONSE –SUPPLY AND POWER QUALITY CONCERNS
- 10. Short Term –Power Imports and New Projects Power Imports • ZESCO plans to import 3,640GWh of emergency energy from the region in 2016 • Total cost of US$ 470m for emergency power imports. • The average unit cost of these purchases will be USc 12.90/kWh. • The average retail price is Usc 4.98/kWh • Difference of Usc 7.92/kWh is a cost to ZESCO that needs to be covered. Commissioning of Projects • Completed PRP in 2012 at a total cost of US$338 million. Project added 210MW of GX and increased TX and DX capacity • Commissioned 360MW KNBE in 2014 • Commissioned the 330kV Pensulo-Kasama & Pensulo- Chipata TX Lines in 2015 and 2016 • ZESCO commissioned the 120MW Itezhi Tezhi Power Station in February 2016 • Maamba commissioned the 1st 150MW unit from its 300MW Facility in August 2016 • Commissioned the connection of Mwinilunga to the national grid in September 2016
- 11. Medium to LongTerm – Projects and Partnerships Projects • Investment of estimated US$ 8.98 billion in new GX, TX and DX capacity going into 2022 • 3,411MW of new capacity at an estimated cost of US$ 6.5 billion • 4,740MVA in new transmission capacity at a total cost of US$ 1.73 billion • Rehabilitation, uprating and development of new distribution capacity at a cost of US$ 746 million Partnerships • New PPA with Ndola Energy for additional 55MW in 2017 • Renewed PPA with LHPC for 56MW • Commissioning of 150MW by MCL in 2016/2017 • PPA for 340MW from EMCO in 2018 • PPA for 100MW from IDC Scaling Solar in 2017 • Negotiating PPA with LPA for 247MW expected in 2020 • Expected off-take of 250MW from REFiT/GETFiT program in 2017/18
- 12. INVESTMENTS – Generation GenerationProjects Capacity MW Planned Project Duration Cost (US$m) Project Status % Of Work Done Lunzua 15 2 years 52 Completed 100% Musonda Falls 10 2 years 42 Implementation phase in progress. 65% Itezhi Tezhi 120 4 years 243 Completed 100% Lusiwasi Upper 15 1.5 years 46 Project about to move to Implementation stage. CPs not yet settled. 0% Lusiwasi Lower 86 2 years 164 Project about to move to Implementation stage. 0% Chishimba Falls 15 TBA 42 Procurement of main consultant underway 0% Kafue Gorge Lower Hydro Scheme 750 4 years 2,000 Implementation phase in progress. 5% Luapula River Hydro scheme 1,200 TBA TBA Project feasibility studies about to commernce 0% Batoka Gorge Hydropower project 2,400 TBA 4,000 Project at feasibility study stage 0% Total 3,411 6,588
- 13. Transmission Projects Planned Project Duration ContractSum (Us$M) % Of Work Done ZIZABONA 330kv Interconnector Tba 59 0% ITT-Mumbwa-Lusaka West 220kv Transmission Line Project 2 Years 133 100% Connection Of Luangwa To The National Grid Tba 63 51% Kafue Town- Muzuma-Livingstone 220kv Transmission Line Upgrade Project 2 Years 100 50% Chipata-Lundazi-Chama 132kv Transmission Line Project -Transmission Lines 1 Year 69 0% Electrification Of Vubwi And Reinforcement Of Supply To Eastern Province Tba Tba 0% Lusaka South MFEZ Transmission Project 2 Years 33 60% Kasama – Nakonde Transmission Project 2 Year 253 1% Connection Of North-western Province To The Grid 3 Years 184 75% Pensulo-Kasama 330kv Transmission Project 3 Years 154 100% Pensulo-Chipata 330kv Transmission Project 3 Years 151 100% Pensulo-Mansa Transmission Project 2 Year 224 0% Improvement Of Power Supply To Mpika District 3 Year 30 3% System Wide Reactive Power Compensation 1 Year 6 0% Mungwi Electrification Project Tba 70 0% Kariba Lake Shore/Bottom Road Electrification Project Tba 65 0% Evacuation Of Power From Ndola Energy Phase Ii 1 Years 3 0% Kabwe-Pensulo 330 kV Transmission Line #2 3 Year 120 0% Msoro and Kabwe Step Down Reactors 1 Year 10 0% Total 1,728 INVESTMENTS – Transmission
- 14. PROJECT DESCRIPTION STATUSTOTAL COST - US$'Million Firming Up/Upgrade of Substations ON-GOING 41.76 Establishment of New Substations ON-GOING 42.53 Overhead Lines and Cables Reinforcement ON-GOING 24.57 Replace Obsolete Switchgear ON-GOING 33.89 Township Reinforcement ON-GOING 10.38 LTDRP - Rehabilitation of the 132kV, 88kV, 33kV and 11kV Lusaka Transmission and Distribution Network PENDING 241.00 EUROBOND Distribution Network Projects ON-GOING 69.19 Distribution Expansion and Reinforcement Projects (DERP) ON-GOING 170.54 Increased Access to Electricity Services Projects (IAES) ON-GOING 69.81 Effect SCADA/DMS/OMS/MWFM/CCIVR/GNIS PENDING 25.00 Improve maintenance work management effectiviness and efficiencies ON-GOING 12.25 Ndola -Transformer Workshop Refurbshment PENDING 5.00 TOTAL 745.92 INVESTMENTS – Distribution
- 15. ZESCO’S RESPONSE –INCREASED ACCESS TO ELECTRICITY
- 16. Efforts to IncreaseAccess Rates • Target 240,000 new customers between 2013 – 2018 • Reduced the cost of connection for low income consumers to K250 from K750 for a standard residential connection. project initially funded by the World Bank • Partnered with REA for grid extensions in rural Zambia • Increased customer base by 215,572 customers from 581,663 in December 2013 to 797,535 as at June 2016 • Expected to surpass target set in Business Plan 2013 2014 2015 2016 Total New Connections 59,757.61 72,653.48 89,596.53 53,321.99 215,572 Target 48,000 48,000 48,000 48,000 144,000 Customer Base 581,663 586,303 648,236 797,535 797,535 - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 - 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 NumberofNewConnections New Customer Connections
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