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Energy Situation in Southern Africa

Brian Mureverwi, a tralac Intern, comments on the current energy crisis in southern Africa

Power cuts (or load shedding) have become commonplace in several countries in southern Africa in recent years. Families, in some countries, are now resorting to traditional sources of wood and charcoal for cooking purposes. Industrial parks, in some countries, no longer steam throughout the day, as companies have been ordered to cut power consumption. The economy wide consequences of power cuts do not need emphasis, and important policy questions arise. Chiefly among them is, did the region’s energy experts failed to foresee this energy deficit. If they did, why wasn’t it acted upon? Obviously, the water level in Kariba dam did not fall below normal overnight, but of course of the some years due to on-going climate change. The consequential effects of declining water level on electricity generation were known. Where were the authorities during all this period? With coal contributing over 60% of SADC energy requirements, are there any initiatives to switch to cleaner energy sources in light of climate change. A reading through media reports from the region paints a disconsolate picture.

Zambia is in the middle of a massive power crisis that began in June, and has been getting steadily worse. In Lusaka, the situation is becoming desperate due to eight-hour blackouts every day. Moreover, the electricity goes off just at the time it is most needed – when families come home from work. The entire family is left without electricity for lighting and for cooking the evening meal. So instead it means cooking on the mbaula (a simple charcoal fire) and eating by candlelight. So what has happened? According to the government, which owns the Zambian Electricity Corporation (ZESCO), the shortage is simply a result of the poor rainy season of 2014-15, with rainfall about 50% below average, leaving insufficient water in Kariba dam for the normal electricity generation.

Across the Zambezi River, the government of Zimbabwe has ordered all mining companies and other big industries to reduce their electricity consumption levels by 25% because of current nationwide power shortages. According to newspaper reports in September, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is engaging large users of power such as Mimosa, Unki, Zimplats, Zimasco, Zim Alloys and Afrochine to reduce their power usage. Zimbabwe’s electricity generation outlook appears gloomy after forecasts indicated that the region could receive insufficient rainfall in the coming season, a situation that could plunge the Kariba Power Station into further crisis. The country has already started generating less electricity due to dwindling water supplies for power generation at Kariba Dam, severely constraining economic growth and development.

The lake level at the end of July 2015 was 480.81 metres above sea level. This was five metres below last year’s level, which was 585.91 metres above sea level. Continuing to generate electricity at the current levels would result in the lake falling below the minimum drawdown level of 475.5 metres before the onset of the next rainy season, a situation which might lead to a possible shut down of the power station. Water rationing is meant to conserve the water resources so that generation of electricity from the power stations can continue.

In South Africa, Eskom has been struggling, but managing, to keep the lights on since October, following a period of recurrent load shedding. Now, with heavy industry told to reduce consumption by at least 10 percent, and the country’s growth forecast revised downward, the government is attempting to allay investor jitters and calm public concerns. Eskom began rolling blackouts, or load shedding, in Southern Africa’s most advanced economy in 2008, as its crumbling infrastructure has battled to meet growing demand since the end of apartheid in 1994.

The electricity challenge in the region is contributing to the weaker economic growth prospects of SADC member states. The energy problem in the southern African region, also therefore has implications for SADC’s Industrialisation Strategy. A key focus of the Strategy is the structural transformation of the SADC region by way of industrialization, modernization, upgrading and closer regional integration.

Over the past 15 years sub-Saharan African economies have expanded at an average rate of about 5% a year, enough to have doubled output over the period. The UN’s Economic Commission for Africa (UNECA), which is due to publish a report on industrialisation in Africa in November, reckons that from 1980 to 2013 the African manufacturing sector’s contribution to the continent’s total economy actually declined from 12% to 11%, leaving it with the smallest share of any developing region. Moreover, in most countries in sub-Saharan Africa, manufacturing’s share of output has fallen during the past 25 years. Deindustrialisation appears to be hitting African countries particularly hard. As the result of the current electricity situation in SSA the World Bank has projected that Gross domestic product growth rate in the region will average 4.2 per cent in 2015.

As at 31st March 2014, the Southern African Power Pool (SAPP) had an available capacity of 52,405 MW against a demand of 49,563 MW that includes peak demand, suppressed demand and reserves. This gives a regional capacity shortfall of 4,592 MW. But perhaps, a closer look at the supply/demand situation among the SADC countries on the interconnected SAPP grid can help in understanding the energy situation in SADC.

Country

Utility

Installed Capacity [MW] As at Feb 2014

Available Capacity [MW] Feb 2014

Forecast Demand 2015

Forecast Demand 2016

Average electricity tariff, USc/kHh

Angola

ENE

2 028

1 805

1 653

1 762

6

Botswana

BPC

892

460

711

773

7

DRC

SNEL

2 442

1 268

3 395

3 418

4.8

Lesotho

LEC

72

72

141

148

5.9

Malawi

ESCOM

351

351

340

431

6.8

Mozambique

EDM/HCB

2 308

2 279

714

741

7.5

Namibia

NamPower

501

392

598

643

8.6

South Africa

Eskom

44 170

41 074

40 659

41 755

8.7

Swaziland

SEC

70

70

271

278

11.5

Tanzania

TANESCO

1 380

1 143

1 395

1 704

8.2

Zambia

ZESCO/CEC/LHPC

2 128

2 029

2 738

3 080

5.7

Zimbabwe

ZESA

2 045

1 600

2 535

2 659

9.8

Source: Southern Africa Power Pool

In short, load shedding in the SADC region will persist for the foreseeable future. A regional comparison reveals that high income Organisation for Economic Co-operation and Development (OECD) countries – which include Australia, much of Europe, Canada, the United States (US) and the UK – hardly suffer at all, with less than one outage a month, lasting less than half an hour. Even high income countries outside the OECD only suffer from 1.3 outages a month, for up to an hour.

In an effort to rescue the SADC region from the disastrous ramification of electricity shortages, it is useful to look at the plans to commission new projects that will add 2 269MW to the regional grid from 11 projects by end of 2015. This is a race against time as electricity demand is fast outpacing supply. However, the region will effectively receive 2,089MW additional power as South Africa will decommission a 180 MW from coal powered plant. Of the planned new projects, 1 670MW have already been commissioned, the majority coming from South Africa, adding 1 479 MW to the regional grid as shown below.

Utility

Country

Project

Capacity (MW)

Status

ZESCO

Zambia

Lunzua

15

Commissioned

ZESA

Zimbabwe

Pungwe

15

Commissioned

ESKOM

South Africa

Medupi

722

Commissioned

IPP

South Africa

Renewable Round 3

322

Commissioned

IPP

South Africa

OCGT

335

Commissioned

SNEL

DRC

Inga 1

110

Commissioned

RNT

Angola

Lomaun

50

Commissioned

ESKOM

South Africa

Sere

100

Commissioned

ZESCO

Zambia

Mu-

10

Under construction

ZESCO

Zambia

Itezhi Tezhi

120

Commissioning tests underway

TANESCO

Tanzania

Kinyerezi 1

150

Commissioning tests underway

SNEL

DRC

Inga 2

320

Commissioning tests underway

Total

2 269

South Africa

Decommissioning

-180

Total Additional

2 089

Source: SADC Energy Thematic Group

As southern Africa increases its efforts to address the power crisis, there is need to upscale activities that attract private sector investment and further promote public-private partnerships in the energy complex, in particular to broadening the scope of energy sources. Exploring and developing new energy sources is generally a complex and expensive process, but is nevertheless important for socio-economic development. New thinking about partnerships in energy generation, transmission and distribution essential to ensure an efficient and sustainable mix and supply of energy sources for the region’s development.

References

SADC Energy Thematic Group Bulletin, October 2015, SARDC, Harare

SAPP Annual Report 2014, Harare

Web pages visited on 11/11/2015

http://allafrica.com/stories/201507220795.html

http://www.economist.com/news/middle-east-and-africa/21677633-there-long-road-ahead-africa-emulate-east-asia-more-marathon

https://www.enca.com/money/sa-power-crisis-threatens-countrys-economic-outlook

http://www.fin24.com/Economy/Zim-to-impose-load-shedding-on-major-industries-20151007

http://www.financialgazette.co.zw/zimbabwe-electricity-crisis-to-worsen/

http://sadc-energy.sardc.net/index.php?option=com_content&view=featured&Itemid=115

http://www.theguardian.com/commentisfree/2015/sep/11/zambia-mines-energy-crisis-power

http://www.sapp.co.zw

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TRALAC is supported by USAID/Southern Africa