www.sapp.co.zw
Powering Africa – SAPP Strategies
By
Eng. Musara Beta
SAPP Chief Market Analyst
Zimbabwe Mining & Infrastructure Indaba 2014
9 October 2014
Meikles Hotel, Harare, ZIMBABWE
SOUTHERN AFRICAN POWER POOL
CONTENTS
1.
INTRODUCTION TO THE SAPP
2.
POWER SUPPLY CHALLENGES IN THE SAPP
3.
SAPP STRATEGIES TO MEET DEMAND
4.
SAPP COMPETITIVE MARKET
5.
CONCLUSIONS
SOUTHERN AFRICAN POWER POOL
1. INTRODUCTION TO THE SAPP
1.1 Key Facts
 12 Countries
 280 Million people
 Installed Generation
Capacity - 58 GW
 Available Generation
Capacity - 51 GW
 Peak Demand - 54 GW
 Consumption - 400TWh
DR Congo
Tanzania
Angola
Malawi
Zambia
Zimbabwe
Namibia
Botswana
Mozambique
Swaziland
South Africa
Lesotho
SOUTHERN AFRICAN POWER POOL
1.2 SAPP Membership
No
Full Name of National Power Utility
Status
Abbreviation
Country
1
Botswana Power Corporation
OP
BPC
Botswana
2
Electricidade de Mocambique
OP
EDM
Mozambique
3
Electricity Supply Corporation of Malawi
NP
ESCOM
Malawi
4
Empresa Nacional de Electricidade
NP
ENE
Angola
5
ESKOM
OP
Eskom
South Africa
6
Lesotho Electricity Corporation
OP
LEC
Lesotho
7
NAMPOWER
OP
Nam Power
Namibia
8
Societe Nationale d’Electricite
OP
SNEL
DRC
9
Swaziland Electricity Board
OP
SEB
Swaziland
10
Tanzania Electricity Supply Company Ltd
NP
TANESCO
Tanzania
11
12
No
13
14
15
16
ZESCO Limited
OP
ZESCO
Zambia
Zimbabwe Electricity Supply Authority
OP
ZESA
Zimbabwe
Full Name of Private Utility
Copperbelt Energy Corporation
Lunsemfwa Hydro Power Company
Hidro Cahora Bassa
Mozambique Transmission Compamy
Status
ITC
IPP
OB
OB
Abbreviation
CEC
LHPC
HCB
MOTRACO
Country
Zambia
Zambia
Mozambique
Mozambique
OP: Operating
OB: Observer
NP: Non-Operating
ITC: Independent Transmission
Company
SOUTHERN AFRICAN
POWER POOL
IPP: Independent Power Producer
2. POWER SUPPLY CHALLENGES IN SAPP
No
Country
Utility
Installed
Capacity
[MW] As at
Aug 2014
1
Angola
ENE
2,195
2
Botswana
BPC
892
3
DRC
SNEL
2,442
4
Lesotho
LEC
5
Malawi
6
Available
Capacity
[MW]
Aug 2014
Forecast/
Peak
Demand
Capacity
Shortfall
including
reserves,
MW
Calculated
Reserve
Margin, %
1,772
1599
680
610
1,251
1342
72
72
138
ESCOM
351
351
326
Mozambique
EDM /HCB
2308
2,279
850
7
Namibia
NamPower
501
392
635
8
South Africa
Eskom
44,158
41,074
37661
9
Swaziland
SEC
70
70
219
10
Tanzania
TANESCO
1396
1,159
905
11
Zambia
ZESCO / CEC/LHPC
2,128
2,029
2287
12
Zimbabwe
ZESA
2,045
1,540
1961
58,558
52,669
48,533
(2,758)
7.9%
54,616
49,387
45,703
(1,253)
7.5%
TOTAL SAPP
Total Interconnected SAPP
As at Aug 2014, total SAPP installed capacity was 58.6 GW
SOUTHERN AFRICAN POWER POOL
2. POWER SUPPLY CHALLENGES IN SAPP

Demand for power in Southern African has been
increasing at an average rate of 3% per annum.
 In 2007, demand growth for South Africa
was 4.9% and for the whole region 4.6%.

In the last 10 years demand in the SAPP
increased by more than 32% which is equivalent
to 13,000 MW (from 41,000 MW in 2004 to
54,000MW in 2013).

Unfortunately, there has been no corresponding
investments in generation and transmission
infrastructure, (11,469MW generation added
from 2004 to 2013) resulting in the current
supply deficit that the region is experiencing.
SOUTHERN AFRICAN POWER POOL
Why has the SAPP run into supply deficit ?
1.
Economic Growth of more than 5% in most of the
SADC member countries resulting in unprecedented
growth in electricity consumption and demand.
2.
Increase in demand for base metals resulting in high
metal prices on the World Market with new mining
companies being established in the SADC region in the
last few years.
3.
Inadequate Investments in generation and
transmission infrastructure over the last 20-years.
4.
Electrification Programmes have partly contributed to
the increased consumption and demand.
5.
The challenge was identified and communicated but
not adequately mitigated.
SOUTHERN AFRICAN POWER POOL
3. SAPP STRATEGIES TO MEET DEMAND
The SAPP has proposed the following measures:
1.
Demand Management based on others experiences:
 Power Conservation Programme (PCP)
 Study and understand the concept of PCP
 Formulate and adopt PCP for SADC
 Demand Side Management (DSM)
 Mechanism to provide financial support for


development and implementation of DSM in the SADC
Develop local manufacturing capability to support DSM
initiatives.
SADC Policy for efficient use of electrical energy
• Incandescent versus CFLs
• Minimum energy efficiency standards for new
connections
SOUTHERN AFRICAN POWER POOL
DSM- SAPP VIRTUAL POWER STATION – WHERE IS THE SAPP?
Demand Reduction (MW)
CFL
SWH
Commercial Lighting
HWLC
7000
6000
5000
4000
3000
2000
1000
0
2012
2013
2014
2015
2016
2017
2018
4,500 MW saving and Virtual Power Station established
SOUTHERN AFRICAN POWER POOL
Impact of DSM On Load Management[2009 – 2015]
All SAPP Members
Capacity Required
Peak Demand
If no load
management options
implemented, the
deficit could have
been worse
2009 Plan
2015
2014
2013
2012
2011
2010
2009
MW
90000
85000
80000
75000
70000
65000
60000
55000
50000
45000
40000
Year
Capacity Planned
Peak Demand after load reduction
Situation improves
and is better after
load management.
2015
2014
2013
2012
2011
2010
85000
80000
75000
70000
65000
60000
55000
50000
45000
40000
35000
30000
2009
MW
Capacity Required
Year
SOUTHERN AFRICAN POWER POOL
Creating an Enabling Environment
2.
3.
Create an enabling environment for power sector
investment:


Policy and Legal framework
Regulatory framework

SAPP Governance documents revised from 2006 to
accommodate other players such as IPPs, Large Users
etc in the structures of SAPP
Implement cost reflective and time of use tariffs in
SADC member countries.
SOUTHERN AFRICAN POWER POOL
Supply Side Measures
4.
Supply Side Measures

Maximize utilization of all installed supply option
 Re-capitalization of power utilities
Short and Medium-term generation projects
 Ensure projects are properly prepared for financing
 Governments to prioritize funding of power projects
Create an enabling environment for renewable energy
Develop a structure for the implementation of a least-cost
SAPP generating facility



5.
Provide Investment incentives to all Investors in the
power sector, both local and foreign.


Address policy issues relating to legal & regulatory
frameworks, i.e. enabling environment.
Allow for VAT and tax exemptions for import of power
equipment and machinery for a defined period.
SOUTHERN AFRICAN POWER POOL
Commissioned Generation Capacity
Planned Generation Capacity versus Actual Commissioned for period 2004-2013
Planned Gen. Capacity Actual Commissioned Difference: Planned minus
Year
(MW)
Capacity (MW) Commissioned (MW)
4,000
Planned Gen. Capacity (MW)
3,500
Actual Commissioned Capacity (MW)
3,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Total
260
520
1,041
2,441
2,014
2,400
908
1,751
3,552
1,992
16,879
320
490
375
1,696
1,747
2,187
848
1,230
1,099
1,477
11,469
60
(30)
(666)
(745)
(267)
(213)
(60)
(521)
(2,453)
(515)
(5,410)
2,500
2,000
1,500
1,000
500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
SOUTHERN AFRICAN POWER POOL
Generation Projects Planned for 2014 - 2018
No Country
COMMITTED GENERATION CAPACITY, MW
2014
150
2015
0
2016
1280
2017
2271
1
Angola
2
Botswana
-
-
-
3
DRC
-
430
4
Lesotho
-
5
Malawi
6
Mozambique
7
Namibia
8
RSA
9
2018
TOTAL
0
3,701
-
600
600
150
240
1,620
2,440
-
35
-
-
35
-
-
-
-
74
74
175
-
40
-
600
815
-
-
15
-
1,050
1,065
2,376
2,811
3,464
1,918
2,866
13,435
Swaziland
-
-
-
-
-
10
Tanzania
-
150
500
460
700
1,810
11
Zambia
195
435
15
426
-
1,071
12
Zimbabwe
-
15
-
420
2,400
2,835
2,896
3,841
5,499
5,735
9,910
27,881
TOTAL
-
SOUTHERN AFRICAN POWER POOL
Demand and Supply Situation 2013-2018
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2013
2014
2015
Peak Demand
2016
2017
2018
Capacity Planned
Planned Capacity will exceed peak demand by 2016.
SOUTHERN AFRICAN POWER POOL
Transmission Integration Projects
2015 -2018: ZIZABONA -220/330 kV
DRC
2018: Mozambique Malawi
Tanzania
2018: Zambia - Tanzania - 400 kV
Malawi
Angola
Zambia
2018:DRC - Angola – 400 kV
Zimbabwe
2020: MOZAMBIQUE BACKBONE -RSA
2015-2025: 765 kV Strengthening
Namibia
Mozambique
Botswana
Swaziland
2017: RSA Strengthening
South Africa
Lesotho
2018: Botswana Strengthening
SOUTHERN AFRICAN POWER POOL
4. SAPP COMPETITIVE MARKET


SAPP Developed and started operating the Day Ahead
Market (DAM) IN December 2009
SAPP is currently developing following markets for
operation mid 2015
a) Month Ahead Market (MAM)
 Trading will be done for a month ahead (for delivery in
the next month)
b) Week Ahead Market (WAM)
 Trading will be done a week ahead (for delivery the
following week)
c) Intra Day Market (IDM)
 Trading will be done an hour ahead (for delivery in the
next hour in a day)
SOUTHERN AFRICAN POWER POOL
Trading in the various timeframes after NTP
MW
IDM trading
DAM
TRADING
Weekly forward trading
Monthly Forward trading
Bilateral contracts
Own production
24 hours
SOUTHERN AFRICAN POWER POOL
Market Performance Highlights – Market Share
350000
DAM & PDAM Trades (MWhr)
300000
Non Investment Bilateral Trades (MWhr)
250000
200000
150000
100000
50000
0
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14

Average Competitive Market share was almost 16%

Market share increased significantly from April 2014 through to
August 2014.
SOUTHERN AFRICAN POWER POOL
5. CONCLUSIONS

Projects Packaging is critical for projects to
attract funding and be implemented


SAPP CC plays a critical role in mobilising grant
funding and project coordination
A Master Plan for the regional power market is
vital as it:

Helps to reduce capital costs by implementing leastcost projects for the benefit of the region.

Reduces excess capacity from the pool.
In the SAPP, SAPP Pool Plan noted that a
saving of over US$48 billion could be realized
if projects are implemented in a coordinated
fashion.
SOUTHERN AFRICAN POWER POOL
Thank you for your attention
SOUTHERN AFRICAN POWER POOL
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Beta Powering Africa _SAPP Generation Strategies_Zimbabwe