Transcript CHALLENGES AND INVESTMENT OPPORUNITIES: THE CASE OF ZESA

CHALLENGES AND INVESTMENT
OPPORUNITIES: THE CASE OF ZESA
By Mr Ikhupuleng Dube, System Development
Manager – Zimbabwe Electricity and Transmission
Company (ZETDC), a subsidiary of ZESA Holdings
(Pvt) Ltd
Presented at the Worldbank CCS Workshop
Johannesburg
31st May– 1st June 2011
Presentation Content
• Electricity Sector Policy, Governance Structure
and Players
• Importance of Electricity in Promoting Economic
Growth
• Current Challenges
 Security of Supplies
 Reliability of Supplies
• Investment Opportunities
 Generation
 Grid
 Other
Electricity Sector Policies
• Ensure availability and accessibility of
electricity to all consumers (current and
future) at competitive prices; and
• Facilitate electricity investments and access
by Independent Power Producers (IPPs),
Public Private Partnerships (PPPs), Private
Public Associations (PPAs) and other forms
of joint ventures into the sector.
Electricity Subsector Structure
Off-Grid
Customers
Other
Investors
ZPC
Off-Grid
Renewables
Small
Thermals
HPS
KSPS
IPP's
Small Grid Suppliers
(Cogen + Small Hydros)
SAPP
(Imports/ Exports)
ZETDC
Functions:
Transmission Grid Operation
System Operator
Distribution System Operation
Supply
ZERA
Rural Electrification
Fund
Other Customers (Urban + Rural)
( retail commercial, domestic,
agricultural and industrial
customers)
LEGEND
Facilitation of Connections
ZERA oversight through licensing and regulations
Flow of electricity
Large Customers
(Sables, Zimasco, Zimalloys, SMM,etc. )Supplied directly from the Transmission
Grid
ZESA Holdings
 Holds shares of the successor
companies on behalf of the Government
Have four subsidiaries
Zimbabwe Power Company (ZPC)
Zimbabwe Electricity Transmission and
Distribution Company (ZETDC)
Powertel
ZESA Enterprises
ZESA Main Mandate
• To supply all sectors of the economy
with adequate, safe, reliable
environmental friendly and least cost
electrical energy.
– Strong linkages between electricity
supply and economic growth.
Linkages between Electricity and Economic
Growth
15.00
10.00
5.00
-10.00
-15.00
GDP Growth Rate (%)
Electricity Grwoth Rate (%)
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
-5.00
1989
0.00
Linkages between Electricity Supplies and Productivity
Sector
Agriculture
Construction
Mining
Unit
[kWh/US$]
[kWh/US$]
[kWh/US$]
US$ per unserved unit of
electricity
0.689
0.070
4.643
Manufacturing
[kWh/US$]
0.656
-
[kWh/US$]
0.498
-
[kWh/US$]
[kWh/US$]
1.371
1.506
-
[kWh/US$]
1.937
-
-
of basic materials
of machinery and
equipment.
non-durable goods
of miscellaneous
goods.
Proposed
Tariff
(US$/kWh)
0.13
0.12
0.079
0.084
Main challenges
• Lack of investment in generation leading to demand
outstripping supply
• Vandalism of infrastructure
• Ageing equipment limited maintenance and refurbishment
challenges
• Reliability of supply and customer connection challenges
• Power wheeling challenges
• Power quality challenges (need for compensation
equipment)
• Low tariffs, revenue collection and financing challenges
• Inefficient usage of electricity
• Access to electricity challenges
Domestic Supply and Demand Challenges
(MW)
Installed capacity
Hwange
Kariba
Small thermal plants
Total
Dependable capacity
Hwange
Kariba
Small thermal plants
Total
Available capacity
Hwange
Kariba
Small thermal plants
Total
As % of installed capacity
Peak demand
Supply deficit
Source: ZETDC
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
920
694
290
1,904
920
722
290
1,932
920
736
290
1,946
920
750
290
1,960
920
750
290
1,960
920
750
290
1,960
920
750
290
1,960
920
750
290
1,960
920
750
290
1,960
920
750
290
1,960
780
694
245
1,719
780
722
245
1,747
780
736
245
1,761
780
750
245
1,775
780
750
245
1,775
780
750
245
1,775
780
750
245
1,775
780
750
245
1,775
780
750
245
1,775
780
750
245
1,775
496
511
133
1,140
59.9
1,986
(846)
716
531
105
1,352
70.0
2,013
(661)
659
588
101
1,348
69.3
2,028
(680)
498
701
43
1,242
63.4
2,007
(765)
583
723
110
1,416
72.2
2,069
(653)
579
725
42
1,346
68.7
2,066
(720)
435
711
26
1,172
59.8
1,904
(732)
421
727
26
1,174
59.9
1,758
(584)
388
747
34
1,169
59.6
1,743
(574)
287
746
13
1,046
53.4
1,800
(754)
Supply and Demand Challenges – Summer Day
Item 1
Kariba
750 MW
Item 2
Hwange
500 MW
Item 3
Item 4
Item 5 Total 1 to 4
STP
Imports
Total Generation Available
National Average Unsuppressed Summer
Demand
Capacity Committed to Essential Services
Available Capacity after commitment to
Essential Services
Nampower Exports
Available Capacity after Nampower
Commitments
Public Demand Excluding after Exports
and Essential Services
Item 6
Item 7
Item 8
Item 9
Item 10
Item 6-Item 7Item 11 Item 9
Item 12 Item 10 -Item 11 Deficit
60 MW
150 MW
1460 MW
1860 MW
750 MW
710 MW
150 MW
560 MW
960 MW
-400
Supply and Demand Challenges – Winter Day
Item 1
Item 2
Item 3
Kariba
Hwange
STP
750
500
60
Item 4
Imports
150
Item 5
Total 1 to 4
Total Generation Available
Item 6
National Unsuppressed Winter Demand
Item 7
Capacity Committed to Essential Services
Available Capacity after Commitment to
Essential Services
Item 8
Item 9
Nampower Exports
Available Capacity after Nampower
Item 10
Commitments
Item 6-Item 7- Pubilc Demand After Exports and Committed
Item 11 Item 9
Services
Item 12 Item 10 -Item 11 Deficit
1460
22100
750
710
150
560
1200
-640
Reduced availability of Imports Challenges
Historical Trends of Electricity Import by
ZESA (MW)
700
600
500
400
300
200
100
0
2000
2001 2002
2003 2004
2005
2006
2007
2008 2009
Factors Affecting Load Growth
• Suppressed demand due to load shedding (2591GWh in 2008)
• Investment due to large mining customers (almost 800MW in
the medium term)
• Resuscitation of production levels by large users (currently
suppressed demand of 340MW)
• Access to electricity by urban households (estimated at 60MW
yearly for the next 15 years starting in the medium term)
• Rural electrification (total load of 420MW)
• General economic growth (linkages between productivity and
energy consumption)
• Demand due to services such as public lighting, water pumping
etc.
• Resuscitation of production levels in the agricultural sector.
• Increase in demand due to improved consumer lifestyles
Future Demand and Supply Balance
2010 TO 2030 SUPPLY SURPLUS / DEFICIT BAR GRAGH
6000
5000
4000
3000
MW
2000
1000
-2000
-3000
-4000
YEAR
Demand
Supply
Surplus/Deficit
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
-1000
2010
0
Availability Energy Resources to Meet Demand Coal
Coal Reserves
Coal Field
Wankie - Entuba
Lubimbi – Sengwa
- Sessami
Tuli
Mineable In situ Run of Mine
(MT)
(MT)
2 100
1 400
23 800
9 400
120
60
60
30
Sabi
570
300
Total
26 650
11 190
Bubye
Position of Coal Fields
Coal Policy Issues
• To ensure adequate and reliable
supplies of coal in a cost effective and
sustainable manner;
• To ensure environmentally friendly
exploitation methods;
• To explore the techno-economic
feasibility of new coal technologies
such as coal gasification, carbon
capture and coal-to-liquid conversion;
Availability of Energy Resources to Meet Demand Hydro
Site
Capacity (MW)
Batoka Gorge
1600
Devil's Gorge
1240
Mupata Gorge
1000
Small Hydro
300
Other Available Energy Sources
• Coal bed Methane - estimated at more than
600 billion cubic metres (further exploration
to confirm amount of gas).
• Forest residues - almost entirely based on
plantation timber;70,000 tons of this biomass
waste is produced annually.
• Energy Crops - in the next four years 150MW
to be generated from energy crops.
Security of Supplies Investments
Project Name
Capacity MW
Short Term Solutions
Hwange
200
Improvements
Estimated
Indicative timing
Investments Costs
(US$ Million)
US$125
2012
Repowering of Small 200
Thermals
DSM Projects
300
Renewable
Energy 200
Sources
Bridging Imports
400
Medium Term Solutions
US$120
US$9 – US$ 25
TBA
2011-2013
2011- 2015
Kariba
South 300
Extension
Hwange Extension 600
Long Term Solutions
Gokwe
North 1400
Project
Batoka Project
800
US$300
2016
US$1000
2016
US$2240
2017
US$2200
2021
Transmission and Sub-transmission
Investment Requirements
$million
1. 1. Transmission Network (330/420 kV)
1. Power Plant Related Network
2. Wheeling Related Network
3. Substation Upgrade
Sub-total
2. Sub-transmission Network (88/132 kV)
2.1 REA Related Network
2.2 Network Up-rate
2.3 Substation Upgrade
2.4 Control and Communication System
2.5 Spare and Tools
Sub-total
Total
170
258.5
82.9
510.5
106.8
97.1
17.4
59.2
79.4
359.9
870.4
Distribution Refurbishment and
Extension
•
•
•
•
•
Cables and conductors – US$25 mil
Transformers – US$169 mil
Prepaid meters and MCBs – US$64 mil
Tools and Equipment – US$4 mil
Operational Vehicles – US$46 mil