31 January 2013

Southern Africa: SADC energy plan targets surplus, sets priorities

Southern Africa has suffered a shortage of electricity since 2007 as demand exceeds supply, and the expectation is that this energy gap will be addressed by 2014. However, the implementation of projects can lag behind their planned dates due to a lack of funding and other constraints.

SADC is now taking longer term measures to address the energy deficit and ensure self-sufficiency in energy generation and an end to electricity shortages, through an ambitious Energy Sector Plan that calls for the region to increase power generation by more than 70 percent and invest at least US$170 billion over the next 15 years.

The Energy Sector Plan is part of the SADC Regional Infrastructure Development Master Plan approved by the 32nd Summit of SADC Heads of State and Government in Mozambique in August.

The Energy Sector Plan addresses four key strategic objectives:

Ensuring energy security;

Improving access to modern energy services;

Tapping the abundant energy resources; and,

Achieving financial investment and environmental sustainability.

The Plan identifies "hard" infrastructure projects that include the planned increase in electricity generation and transmission; refineries, storage facilities and pipelines for petroleum and gas; and transport facilities for coal distribution and exports.

The plan for the energy sector has identified 73 power generation projects to increase generation from the current 56,000 megawatts (MW) and ensure that the projected demand of 96,000 MW is surpassed by 2027.

Prioritisation of the various projects was determined using a formula under which projects were rated according to their ability to impact on the regional energy deficit.

Seven generation projects that scored above 50 percent and with capacity greater than 1,000MW each were ranked as top priority.

The seven projects alone are expected to add about 26,000MW to the grid managed by the Southern African Power Pool (SAPP) - 65 percent of new generation capacity planned between 2013 and 2027.

Highest priority is accorded to the Hidroeléctrica de Cahora Bassa (HCB) North Bank hydropower project in Mozambique. The project is expected to add 1,245MW to the regional power grid when completed in 2015.

The other projects include Mphanda Nkuwa in Mozambique, the Batoka Hydro Power Station jointly developed by Zimbabwe and Zambia, and the Inga 3 dam in the Democratic Republic of Congo (DRC).

The Batoka project involves the construction of a dam and a hydropower plant on the Zambezi River with a potential capacity of between 1,600 and 2,000MW of electricity to be shared equally between Zambia and Zimbabwe.

The seven projects are expected to cost a minimum of US$65 billion and a maximum of US$104 billion.

The next priority will be 18 other projects that scored above 50 percent according to the Master Plan formula but have capacity of less than 1,000MW.

These include the extension of the Kariba South Power Station in Zimbabwe that should add 300MW of new power by 2016, the 800MW Kudu Gas Power Station in Namibia to be completed by 2016, and the 800MW Rumakali Hydro Power Station in the United Republic of Tanzania, due for completion in 2018.

The 18 projects are expected to increase southern Africa's power supply by 6,481MW by the end of 2019 at a cost of between US$7 billion and US$18 billion.

Three major interconnecting projects would facilitate the connection of Angola, Malawi and Tanzania to the SAPP grid.

The three are the only SAPP members yet to be linked to the regional power grid. Other SAPP member states are Botswana, DRC, Lesotho, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe.

The island states of Madagascar, Mauritius and Seychelles are not members of SAPP.

The SADC Executive Secretary, Tomaz Augusto Salomão, says in a message accompanying the Regional Infrastructure Master Plan that any meaningful implementation of the plan should accord priority to addressing power shortfalls in the region through the development and commissioning of power generation and transmission infrastructure.

"The interconnection of Angola, Malawi and the United Republic of Tanzania is necessary to enable the migration of these Member States to Operating Members of the Southern African Power Pool."

The grand total of all these projects to be implemented from 2015 to 2027 is estimated to cost in the region between US$93 billion and US$212 billion.

In addition to the "hard" infrastructure projects, the master plan has also identified 16 "soft" infrastructure issues that need to be addressed before the region can achieve self-sufficiency in the electricity sub-sector.

These include harmonised policies and increased cooperation in energy development and trading. Lack of alignment in regulatory policy frameworks and tariff structures can hamper investment and financing, and poor project preparation can cause delays.

The master plan notes that apart from the existence of energy policies and, to some limited extent, renewable energy policy in all SADC Member States, comprehensive renewable energy strategies and action plans exist only in Mauritius and South Africa.

Botswana, Mauritius and South Africa have put renewable energy electrification targets into their energy systems, while only Namibia and South Africa have renewable energy regulatory frameworks.

Five countries have integrated the deployment of renewable energy in their rural energy/electrification agencies. These are Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.

A key challenge to regional planning is to harmonise the fragmented policies and targets set by the Member States.

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