Presentation on theme: "Presentation to EAZ load-shedding in Zambia: what should be the plan PRESENTED BY C CHITUNDU MANAGING DIRECTOR."— Presentation transcript:
1 presentation to EAZ load-shedding in Zambia: what should be the plan PRESENTED BY C CHITUNDU MANAGING DIRECTOR
2 Presentation Overview 1.0 background2.0 current status3.0 zesco’s plans to end load-shedding3.1 generation projects3.2 transmission projects3.3 distribution projects3.4 other initiatives to reduce load-shedding4.0 conclusion
3 backgroundELECTRICITY IS A KEY DRIVER OF ECONOMIC GROWTH & MAJOR INPUT IN ALL ECONOMIC SECTORS - AGRICULTURE, MINING, MANUFACTURING AND TOURISMZESCO’S ELECTRICITY GENERATING CAPACITY STANDS AT 2.2 GW (99% HYDRO)NET EXPORTS ROUGHLY 5% OF TOTAL GENERATION (MOSTLY TO NAMIBIA, BOTSWANA AND CONGO D.R.)CURRENT PEAK DEMAND FOR ELECTRICITY BARELY MEETS GENERATION CAPACITY ESPECIALLY DURING PEAK TIMES
4 background CONT’DZAMBIA HAS EXPERIENCED A SUSTAINABLE ECONOMIC GROWTH OVER THE LAST FIVE YEARS DESPITE GLOBAL RECESSION, RESULTING IN:INCREASED DEMAND FOR ELECTRICITY FROM ALL SECTORSDEMAND OUTSTRIPPING AVAILABLE CAPACITY DURING PEAK HOURSZESCO MUST INVEST IN NEW INFRASTRUCTURE TO COPE WITH GROWING DEMAND
5 BACKGROUND CONT’DHOWEVER DELAYED INVESTMENT IN GENERATION PLANTS HAS NOT MATCHED THE LOAD GROWTHRESULTING IN DEFICIT IN POWER GENERATION CAPACITYFURTHER, DELAYED INVESTMENTS IN TRANSMISSION & DISTRIBUTION SYSTEMS HAS ALSO LED TO DEPLETING POWER TRANSMISSION & DISTRIBUTION CAPACITYABOVE FACTORS LARGELY CONTRIBUTE TO LOAD-SHEDDINGLOAD-SHEDDING IS DONE TO SAFEGUARD THE ELECTRICITY INFRASTRUCTURE
6 GENERATION STATUS POWER STATION INSTALLED CAPACITY (MW) AVAILABLE CAPACITY (MW)ZESCOKAFUE GORGE PS990960KARIBA NORTH BANK PS720705VICTORIA FALLS PS108103SMALL HYDROS1310KNBE360LUSIWASI125IPPsLUNSEMFWA5020NDOLA HFO PLANT48TOTAL2,3032,211
7 GENERATION STATUS CONT’D THE TOTAL AVAILABLE CAPACITY IS 2,211 AGAINST A MAXIMUM NATIONAL DEMAND OF 1890.ZESCO HAS ADEQUATE CAPACITY TO MEET THE DEMAND AT PRESENT. LOAD-SHEDDING IS THEREFORE DUE TO BOTTLENECKS IN THE TRANSMISSION AND DISTRIBUTION INFRASTRUCTURE.
9 PROJECTED DEMAND CONT’D FROM THE GRAPH IT CAN BE SEEN THAT UNLESS THE PLANNED GENERATION PROJECTS COME ON STREAM, THERE WILL BE A GENERATION DEFICIT IN THE COMING YEARS.daily Connection rate: 300Pending backlog in construction and new connections to date: 20,000
10 PROJECTED GENERATION DEFICITS Year20082010201520202025FORECAST MAXIMUM DEMAND (MW)1,5791,5922,3892,5953,029FORECAST SHORTFALL(MW)5477531,179
11 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING GENERATIONrehabilitation and uprating of the three major hydropower stations, i.e. Kafue Gorge, KNBPS and Victoria FallsVICTORIA FALLS POWER STATION – USD53.7MILLIONKAFUE GORGE POWER STATION - USD 85.5 MILLIONKARIBA NORTH BANK POWER STATION – USD81.4MILLIONThrough the uprating of kariba and kafue gorge 210mw was gainedTOTAL COST OF the UPGRADE– USD 100 MILLIONESTIMATED COST FOR A 210MW new hydro POWER STATION– above us$600MILLION
12 GENERATION PROJECTS POWER REHABILITATION PROJECT (PRP) Scope included rehabilitation and uprating of the three major hydropower stations, i.e. Kafue Gorge, KNBPS and Victoria FallsOther works included reinforcement and rehabilitation of some transmission and distribution infrastructureThe major achievements of the PRP has been the uprating of the Kafue Gorge Power Station from 900 to 990 MW, the reinstating of the Victoria Falls Power Station to its full generating capacity of 108 MW as well as the up-rating of Kariba North Bank power station from 600 MW to 720 MW. The total generation capacity yielded from the PRP is 210 MW
13 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING GENERATIONConstructing & COMISSIONING OF THE 360 MW KARIBA NORTH BANK EXTENSION plant.LOAD-SHEDDING USUALLY DONE AT PEAK TIMES, KNBE CONSTRUCTED AS A PEAKING STATION TO MEET THE PEAK CAPACITY SHORTFALLS
18 New Generation projects-SMALL HYDROS SHIWANG’ANDU 1 MW – USD4.15 MILLION completed in 2012
19 New Generation projects-SMALL HYDROS LUNZUA-15MW-US$52M- COMMISSIONING OF UNIT 1 SCHEDULED FOR END august 2014.
20 LUNZUA PROJECTLUNZUA-15MW-US$52M- COMMISSIONING OF UNIT 1 SCHEDULED FOR END august 2014.
21 New Generation projects-SMALL HYDROS LUSIWASI UPPER -15MW-US$47MAWAITS SITE INVESTIGATIONS, AWARD OF CONTRACT, PROJECT FINANCINGREHABILITATION AND UPRATING OF CHISHIMBA FALLS: MW – US$46MPREPARATION BID DOCUMENTS IN PROGRESS, AWARD OF CONTRACT, PROJECT FINANCINGREHABILITATION AND UPRATING OF MUSONDA FALLS: 5-10MW – US$32MCONTRACT AWARDED, ADVANCE PAYMENT MADE TO EPC CONTRACTOR, PROJECT FINANCING. WORKS TO CONCLUDE IN 2016
22 New Generation projects-SMALL HYDROS MUJILA FALLS 1.4MW-US$25M75% OF PREPARATORY WORKS DONE. PROJECT COMPLETION EXPECTED 2017.LUSIWASI LOWER -86MW-US$164EPC CONTRACT AWARDED but cancelled due to poor performance record
23 New Generation projects Kafue Gorge Lower Hydropower Project (750 MW)OWNER:PPP (ZESCO/SINOHYDRO)COST:USD 2 BILLIONDURATION: 6 YEARSOPERATION: 2019STATUS: PROJECT PREPARATORY ACTIVITIES UNDERWAY. CONSULTANTS ARE BEING HIRED. DISCUSSIONS WITH FINANCIERS UNDERWAY.GRZ HAS ALLOCATED US$ 186 M (ZMK930 TR) FROM THE EURO BOND FOR THE KGL PROJECT AS PARTIAL EQUITY CONTRIBUTION
24 Other SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING GENERATIONCONTRACTING OF THE 50MW FROM NDOLA ENERGY. COMMERCIALLY AVAILABLE.CONTRACTING OF THE 300mw FROM Maamba collieries to be available in 2015
25 NEW GENERATION PROJECTS – POTENTIAL SITES MPATA GORGE – 540 MWDEVIL’S GORGE – 500 MWBATOKA GORGE – 800 MWMUMBOTUTA FALLS MWMAMBILIMA FALLS SITE I – 202 MWMAMBILIMA FALLS SITE I – 124 MWKABWELUME FALLS MWKUNDABWIKA FALLS – 101 MWMUTINONDO MWLUCHENENE – 30 MWMKUSHI – 65 MW
26 TRANSMISSION PROJECTS ongoing CONNECTION OF NORTH WESTERN PROVINCE TO NATIONAL GRIDThe objective is to support the increased access to electricity and improved quality of service by displacing the expensive diesel generatorsCost: appx. USD150 millionFunding: Secured from Nordea Bank (Sweden)Status: Contract awarded to EL TEL, now mobilizing to site. Design works in progress.Construction period 24 months. Commissioning April 2016
27 TRANSMISSION PROJECTS ongoing KARIBA NORTH BANK EXTENSION POWER EVACUATION PROJECTThe objective is to increase transmission capacity from KNBPS to the grid for the evacuation of power from KNBE projectCost: USD62 millionStatus: EPC contractor is Sinohydro, tower erection and conductor stringing are in progress.Construction Period: 18 months, project has however been delayed.
28 TRANSMISSION PROJECTS ongoing KAFUE TOWN MUZUMA VICTORIA FALLS TRANSMISSION LINE UPGRADEThe objective is to increase transmission capacity southwards for export to and from SAPP and provide evacuation path for new generation projectsScope: Upgrade 348 km of 220 kV line to 330 kVCost: USD100 millionStatus: Procurement process almost completeFunding: World Bank and European Investment BankConstruction Period: 18 months
29 Other TRANSMISSION PROJECTS ongoing PENSULO KASAMA AND PENSULO CHIPATA 330 KV PROJECTThe objective is to improve power quality in Eastern, Muchinga, Northern and Luapula provinces and to increase transmission capacity to these areasCost: USD335 millionConstruction Period: 30 months from August 2012
30 TRANSMISSION PROJECTS ongoing ITT MUMBWA LUSAKA WEST TRANSMISSION LINE PROJECTThe objective is to provide power evacuation for the ITT power stationCost: USD133 millionFunding: EIB, AfDB and AFDStatus: EPC procurement process for substation and transmission line complete.Construction period: 18 months
31 TRANSMISSION PROJECTS ongoing SUPPLY TO KALUMBILA MINEThe objective is to supply power to the proposed FQM Kalumbila mineScope: 400km of 330 kV double circuit line and 66 km of 330 kV single circuit line and associated substation at KalumbilaCost: USD300 millionStatus: Transmission line and substation works in progressConstruction period: commissioning is expected end of 2015
32 Other TRANSMISSION PROJECTS ongoing CONNECTION OF LUANGWA DISTRICT TO THE GRIDThe objective is to support the increased access to electricity and improved quality of service by displacing the expensive diesel generatorsCost; USD63millionStatus: Construction works are in progress.Construction period: commissioning is expected December 2014
33 TRANSMISSION PROJECTS ongoing LUSAKA TRANSMISSION & DISTRIBUTION REHABILITATION and upgrading PROJECTThe objective is to increase the transmission capacity of the Lusaka Transmission and Distribution NetworkCost: USD210millionFunding: World Bank, European Investment Bank and ZESCO LimitedStatus: Financing by WB, EIB. going through the process.Construction period: completion expected by 2018
34 future transmission PROJECTS ZIZABONAThe objective is to increase regional trade in power by increasing transmission capacity for north to south and east to west power tradingProject promoted by Zimbabwe, Zambia, Botswana and NamibiaCost: USD230millionFunding: Discussions ongoing with potential financiers. DBSA, AFDB, KfWStatus: technical and market studies completed, project governance documents preparedIUMOU, IGMOU signed. Joint Development Agreement to be signed by BPC. Will lead to signing of Shareholders AgreementConsultant engaged and SPV registration is underwayConstruction period: commissioning is expected by 2017
35 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING transmission projects UPGRADING (RE-CONDUCTORING) OF LUSAKA 132 KV
36 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING MEASURES TO INCREASE TRANSMISSION CAPACITies:INSTALLATION OF A SECOND 125 MVA 330/132 KV TRANSFORMER AT LUSAKA WEST TO SUPPORT 132 KV SYSTEM. (Completed in 2012)UPGRADE OF MAZABUKA SUBSTATION COMPLETED IN 2012INSTALLATION OF COMPENSATION EQUIPMENT IN THE COPPERBELT
37 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING –DISTRIBUTION PROJECTS Distribution projects under increased access to electricity services.sponsored by WB, JICA and other financiers in progress.Project cost us$75million
38 IAES –projects status Project Name Project Description Project Cost (USD)Project StatusKanyama SubstationZESCO/IAES/W/002/ 12Design, Supply & Installation of Kanyama 2 x 16/25MVA 33/11kV S/S in Lusaka3,406,018.75.Overall Progress 98%Livingstone’s Lusaka Rd SubstationZESCO/IAES/W/001/ 12Design, Supply & Installation of Lusaka Rd 2 X 15/20MVA 33/11kV S/S in Livingstone4,020,411.00 Grid Reinforcement - IAES Procurement of and Works to Install Reinforcement Transformers at Roma 132/11kV; Figtree132(88)/33kV; Chibombo 132(88)/33kV Substations12,637,654.52Overall Progress 20%Garden, Kanyama, Misisi Township Electrification (Integrated Approach) Integrated Approach to Electrification in Garden, Kanyama & Misisi Townships1,824,940.00Progress 40%.Intensification Works in the Copperbelt Region ZESCO/IAES/002/ 12 Construction of Total 32km of 11kV of lines, 39x200kVA,11/0.4kV Tx’s ; 45km of 400V lines and service connection (Intensification Works) in the Copperbelt Region ( ie Kabushi,Chipulukusu,New Kawama & Chibolya)2,781,965.6675% progressGrid Extension Works in the Northern Region ZESCO/IAES/001/ 12Construction of Total of 30km x 11kV and 8x200kVA,11/0.4kV Tx’s; 37km of 33kV Lines, 23x50kVA,33/0,4kV Tx’s and service connection (Grid Extension Works) in the Northern Region (ie Lukulu,Ipusukilo mission & Lukulu farm block)2,315,061.76Construction of lines is underway, with 80% progressNew Distribution Lines ZESCO/IAES/JICA/001/11Construction of Distribution Lines in KapiriMposhi & Mumbwa; Azele1 & Lundazi; Mbereshi 1&2; Isoka1 & Luwingu; Vic Falls & Mazabuka; Senanga & Mongu; Mujila Falls Lower P/S12,781,965Grid Extension Works in the Central RegionZESCO/IAES/W/008/12Construction of Grid Extension lines in Central Region covering Mukonchi and Mangango8,111,772.84Line Surveys, Bush-clearing and pole pegging completed, in readiness for construction.
39 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING NEW KANYAMA SUBSTATION
40 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING WAYLEAVE ENCROACHMENT -NEW KANYAMA SUBSTATIONINCOMPLETE LINE
41 SHORT TERM MEASURES TAKEN TO REDUCE LOAD-SHEDDING EUROBOND PROJECTS IN LUSAKA, KITWE AND NDOLA – COMMISSIONING TO START BY AUGUST 2014Project cost USD 69 millionOver 60% of funds already committed
42 DERP PROJECTS STATUS Name of the project Scope of Work Project Status ProgressExpected CommissioningNew Chalala 33/11kV SubstationChalala 33/11kV new Substation with two 33/11kV 26 MVA TXsCivil works completed. Installation in progress98%August , 2014Rehabilitation of Water Works 33kV busbarCivil works for half busbar completed & electrical works in progress for half busbar.50%Rehabilitation of 33kV waterworks bay 1 at Woodland SubCivil works completed & electro-mechanical workssnaggingcompleted33kV OHL, 18kM & 11kV OHL, 5kMErection and stringing work in progress95%August, 2014New Bonaventure 33/11kV SubstationBonaventure 33/11 KV new Substation with two 33/11 kV 26 MVA T/Fs94%Rehabilitation of Chilanga 33kV busbarCivil & installation works in progress80%33kV OHL, 25kM and 11kV OHL, 5kMJuly, 2014Upgrade 33kV switchgear at Lusaka West Subnew 33kV outdoor Switching StationCivil & electrical works in progress.93% & 86%September, 2014Chongwe 88/33kV Sub upgradeRehabilitation of Chongwe 88 / 33kV Substation and install 132/ 88/ 33kV, 52 MVA TXsCivil works completed. Installation in progress.90%Upgrade of 33kV switchgear at Liverpool SubstationNew 33kV indoor GIS SwitchgearCivil & electrical worksConstruction of two new Substations and 66kV transmission linesNew Scaw 66 /11kV Substation with two 66/11 kV 40 MVA TXs97% & 72%New Mwambashi 66 /33kV Substation with two 66/33kV 26 MVA TXs97% & 80%New 14kM 66kV transmission line from Chambishi Copper Smelter Sub to Mwambashi SubCivil & installation works in progress.84%December, 2014New 28kM 66kV transmission line from Mwambashi Sub to New SCAW Sub
43 DERP PROJECTS STATUS CONT’D Reinforce Makeni, Matero, Chelstone, Kabulonga & L85 SubstationsChelstone 33/11kV new Substation with two 33/11kV 26 MVA TXsCivil works, Installation & Testing and Commissioning completed.snaggingcompletedKabulonga 33/11kV new Substation with two 33/11kV 26 MVA TXsCivil, Installation, Testing & Commissioning completed.L85 33/11kV new Substation with two 33/11kV 26 MVA TXsCivil & electrical works in progress.99% & 94%August, 2014Rehabilitation of Makeni and add two 33/11kV 26 MVA TXsCivil works completed. Installation in progress.99% & 98%August , 2014Rehabilitation of Matero and add two 33/11kV 40 MVA TXsReinforcement of supply at Ndeke Village in MufuliraNew 66/11kV Substation with two 66/11kV ,26 MVA TXsCivil & Installation works in progress.95% & 80%September , 2014New 24kM 66kV transmission line from Chambishi Copper Smelter and 10kM of 11kV OHLCivil & installation works in progress.85%December, 2014Reinforcement of supply in Chongwe town33/11 kV new Substation with two 33/11 kV 26 MVA TXsCivil works completed. Installation in progress98%33kV OHL, 25kM , and 11kV OHL, 5 KM33kV & 11kV installation in progress97%July, 2014
46 PLANNED CAPITAL INVESTMENT 2014 ZESCO PLANS TO SPEND ZMK 5,634BN ON ASSETS AND INFRASTRUCTURE development IN 2014 Over 45% already utilized
47 PLANNED CAPITAL INVESTMENT (BREAKDOWN) STRATEGIC BUSINESS UNIT2014CAPITAL EXPENDITURE (ZMK’000)GENERATION1,342,371TRANSMISSION2,913,348DISTRIBUTION1,198,500CORPORATE179,898TOTAL5,634,117
48 TARIFFS IN THE REGION COUNTRY AVERAGE RETAIL TARIFF US$ CENTS/KWH TANZANIA8.2SWAZILAND11.50ZIMBABWE9.80SOUTH AFRICA8.70NAMIBIA8.60MOZAMBIQUE7.50BOTSWANA7.00MALAWI6.80ANGOLA6.00ZAMBIA
49 IPPs AND THEIR CAPACITIES GENERATION SOURCECAPACITY MWENERGY (MWH)KNBE360488,978ITPC120506,289KGL7502,761,905NDOLA ENERGY (HFO)50438,000Maamba Collieries Ltd3002,362,205EMCO2,022,472TOTAL18808,579,849
50 ZESCO REVENUE DEFICITS DUE TO PRICE DIFFERENTIALS ON IPPs DESCRIPTIONUSc/ KWHREVENUE (US$)AVERAGE TARIFF - IPPs12.75883.7MAVERAGE SELLING TARIFF6.02516.5MTARIFF DIFERENTIAL6.73367.2MREVENUE LOSS (US$ )
51 POWER PURCHASE AGREEMENTS WITH independent power producers to ensure load shedding is minimized zesco has contracted power from Ipps at higher cost compared to the prevailing tariffs on the market.Avearge tariff UsC/KwH -6.02Annual loss of 367 million USD
52 REASONS FOR LIMITED INVESTMENTS IN THE ELECTRICITY SECTOR THE ELECTRICITY ENERGY SECTOR IN ZAMBIA HAS SUFFEREED LITTLE OR NO INVESTMENT DESPITE GOVERNMENTS INITIATIVE TO HAVE THE INDUSTRY DEREGULATED DUE TO LARGELY:NON COST REFLECTIVE TARIFFLACK OF WILLINGNESS FROM CUSTOMERS TO PAY COST REFLECTIVE TARIFFSZAMBIA HAS THE LOWEST TARIFFS IN THE REGION.
53 POWER PURCHASE AGREEMENTS WITH independent power producers DUE TO THE UNATTRACTIVE TARIFFS, the ZAMBIAN ELECTRICITY SECTOR IS LARGELY DOMINATED BY ZESCO –SINGLE BUYER MODEL.
54 SOLAR ENERGY OPTIONSolar energy can only be harnessed when it is daytime and sunny.Less efficient and costly equipment (Efficiency for most panels between 17-20%)Reliability Depends On Location, climate, pollution e.t.cEnvironmental Impact of PV Cell ProductionRequires large tracts of land for solar panels and batteriesNo feed-in tariff in place –must be developed by Memwd and ERB
55 SOLAR ENERGY OPTION Cost of solar energy very high Example to PROCURE AND install a 25kwp it costed ZESCO ABOUTusd 300,000
56 Other initiatives to reduce load-shedding Power plants will take time to come on boardTherefore ZESCO Management stepped up DSM activities to accelerate energy efficiency initiativesEnergy saver lamp (CFLs) distributionPower Alert SystemEnergy Audit and Power Factor CorrectionSolar Power TechnologyTime of Use Tariff (TOU)Ripple control of electric geysersPrepayment metering
57 Demand Side Management (DSM) DSM is a utility program aiming to fine tune consumers energy consumption pattern according to utilities energy production and distribution capacityTo reduce load-sheddingTo release system capacityMake available additional power for new connectionsReduced energy bills for customersPromote energy efficiency and save the environment
60 CFL DISTRIBUTIONAn 87mw new power plant will cost not less than us$300million while zesco spent u$4.0million on the procurement and distribution of the cflsConsignmentDistributedSavings (MW)Efficacy (CFL/kW)IAES (1 million)913,0565716ZEM (1 million)595,83229.7920Cumulative1,508,88886.7917
61 POWER ALERT SYSTEMThe Power Alert System is essentially a communication tool that utilizes the television and radio media as the channel to inform electricity consumers on the energy situation in the Power network thereby prompting Customer response.The system therefore triggers voluntary participation of consumers in electricity demand reduction by switching off unnecessary loads in response to the broadcast power alert message.
63 SOLAR POWER305 out of 1,000 Solar Geysers installed mostly in Government Institutions and transit Homes (with 566KW power savings).Remaining solar geysers to be installed in ZESCO Institutional Houses mostly at power stations & Service CampsZESCO HQ office lighting and Parliament Emergency supply already on Solar PowerAt ZESCO HQ 1,850 LEDs retrofitted in fluorescent fittings
64 RIPPLE CONTROL SYSTEM Means of load shaving (instead of load shedding) Mainly targeted at electric geyser loadsInitially targeted at 100,000 Residential Customers in LusakaProjected load of about 135MW to be savedCan be implemented even under system emergenciesTechnical specifications drawn. Financing arrangements underway
66 conclusionZesco limited has embarked on various projects from the production side through to distribution to reduce and ultimately stop load-shedding.Government being the major shareholder has given support through provision of equity and guarantees for debts being contracted to finance the projects.Load-shedding in Zambia, the plan is therefore to ensure cost reflective tariffs in order to attract invest in the generation, transmission and distribution electricity infrastructure.