Overcoming Grid Constraints

Attempts to enhance power trade in southern Africa

The Southern African Power Pool (SAPP) member countries have achieved surplus electricity capacity. However, inadequate transmission infrastructure in the region remains a major constraint in sharing this capacity. It is estimated that, in 2016, about 66 per cent of the electricity that was available for trading in the competitive market in the SAPP grid could not be traded due to transmission bottlenecks.

Over the years, several solutions have been discussed for effective socio-economic transformation of the African continent. However, all these depend on developing sufficient and efficient electricity infrastructure. Building new generation capacity has remained the key focus area of the governments, with little attention being paid to resolving the transmission grid constraints.

According to press reports, at the end of April 2017, the Southern African Development Community member states had a combined installed capacity of about 59.4 GW. The region had an operating capacity of 54.4 GW, against a peak demand of around 53.5 GW. In 2016, the region reportedly exceeded the capacity addition target of 3,757 MW, commissioning 4,180 MW of capacity from new power projects and the rehabilitation of old power plants. This surplus generation capacity comes five years ahead of the SAPP target of attaining electricity self-sufficiency by 2022. SAPP has 12 member countries: Angola, Botswana, the Democratic Republic of Congo (DRC), Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.

South Africa is particularly keen to divert more electricity into the regional pool. The country is currently facing a decline in domestic demand for electricity due to shrinking economic output. At the same time, its newly built Medupi (Units 5 and 6) and Kusile (Unit 1) coal-fired power plants, and several independent power producers have added extra generation capacity to the grid over the past couple of years. While South Africa still has some cross-border electricity interconnections in place to enable it to increase its electricity exports, the additional generation capacity in Angola, Malawi and Tanzania is only available domestically as the three countries are yet to be connected to the rest of the SAPP grid. Expanding transmission infrastructure in the region is imperative for creating a more sustainable and competitive energy market, and ensuring the energy security of SAPP members.

Around 10 key transmission projects have been identified, some of which are under implementation, for building a strong interconnected SAPP grid. According to SAPP presentations, about $6 billion is needed to complete the planned electricity transmission interconnectors by 2024.

One of the key regional interconnection projects being developed currently is the 330/400 kV Zimbabwe-Zambia-Botswana-Namibia (ZiZaBoNa) project. This project aims to ease congestion in the existing north-south transmission corridor from South Africa to Zimbabwe. It is also expected to create a new western transmission corridor in the southern African regional grid.

The $223 million project entails the construction of about 407 km of lines by the respective power utilities of the four involved countries: the Zimbabwe Electricity Supply Authority, the Zambia Electricity Supply Corporation, the Namibia Power Corporation (NamPower) and the Botswana Power Corporation.

The interconnectors under ZiZaBoNa include the 101 km long Hwange (Zimbabwe)-Victoria Falls (Zimbabwe)-Livingstone (Zambia) line, the 231 km long Livingstone (Zambia)-Zambezi (Namibia) line and the 76 km long Victoria Falls (Zimbabwe)-Pandamatenga (Botswana) line. The developers plan to implement the project in a phased manner. In Phase I, Zimbabwe and Zambia will be interconnected, and in Phase II, Namibia and Botswana will be connected to the regional project. The African Development Bank (AfDB) has extended a $35 million loan for the implementation of the project. Financial closure is expected in 2018 and completion by 2021. Fichtner has been appointed to complete the project preparation activities.

Another regional interconnection project is the proposed 330/400 kV Angola-Namibia interconnector. This will be built by NamPower and Rede Nacional de Transporte de Electricidade, and will link the power grid of Angola with that of SAPP. The transmission line will also make provision for the integration of the proposed Baynes hydropower station into the Namibian electricity network. In November 2016, SAPP invited bids for executing advisory services including feasibility and financial closure of the project.

SAPP is currently coordinating two more interconnection projects. In April and May 2017, SAPP invited bids for techno-economic consulting services for the proposed Kolwezi (DRC)-Solwezi (Zambia) interconnector project and the 400 kV Zambia-Mozambique project. In March 2017, AfDB’s NEPAD Infrastructure Project Preparation Facility approved a $3.88 million grant for the governments of DRC, Mozambique and Zambia to finance project preparation studies. The 330/400 kV Kolwezi-Solwezi project received $1.98 million while the Zambia-Mozambique project received $1.9 million. The Zambia-Mozambique project has also received financing worth $0.8 million from the US Trade and Development Agency.

In addition, the project to connect Malawi to the SAPP grid is under way. It entails the construction of a 210 km long, 400 kV power transmission line connecting the Matambo substation in Tete, Mozambique to the Phombeya substation in Balaka, Malawi. It also entails the construction of a 220 kV line from Matambo to Nacala in Mozambique, and expansion of the existing Matambo substation. Meanwhile, construction works for the Phombeya substation on the Malawi side are under way with financing from the Millennium Challenge Corporation. It is expected to be completed by end-2017. Tenders are yet to be floated for the other components of the project. The interconnector is expected to commence operations in 2020.

Several initiatives are being taken to connect the SAPP grid to the East African Power Pool through the Zambia-Tanzania interconnector, which will then be linked to the Kenyan grid forming the Zambia-Tanzania-Kenya interconnector. The project will entail the construction of a 1,441 km long, 400 kV line from Iringa in Tanzania to Kabwe in Zambia (via Mbeya in Tanzania and Pensulo in Zambia). It also involves the construction of the second 330 kV Kabwe-Pensulo line, the 330 kV Pensulo-Kasama line, the 243 km, 330 kV Kasama-Nakonde line and the 15 km, 400 kV Nakonde-Tuduma line in Zambia. Further, a 100 km long, 400 kV line from Tuduma (located on the border) to Mbeya in Tanzania will be constructed. A 330/400 kV substation in Nakonde will also be constructed. The Zambia-Tanzania line is being funded by AfDB and the Japan International Cooperation Agency. The 381 km Pensulo-Kasama section was completed in 2015. Feasibility studies for the majority of the line sections have also been completed. The commissioning of the various line sections of the interconnection is expected to begin in 2018, and the entire project will become operational by 2020.

The other interconnector projects that have witnessed some activity in the past couple of years are the Zambia-Malawi, the Tanzania-Malawi and the Tanzania-Mozambique transmission projects. These are all 400 kV projects, for which either an MoU is in place between the concerned governments or multilateral funding agencies have expressed interest.

The Mozambique backbone project is not a cross-border interconnection but is of significance for the SAPP regional grid. It is also referred to as the CESUL (Central-South) project and its main objective is to connect and integrate Mozambique’s two isolated energy systems: the central-north system and the southern system. The project will allow for the evacuation of excess energy generated in the northern region to the country’s southern region.

The project includes the construction of two high voltage transmission lines: one high voltage direct current (DC) line and one high voltage alternating current (AC) line, each spanning around 1,400 km. The two lines will stretch from the province of Tete to the province of Maputo, where the country’s grid is linked to that of South Africa. The project will help in the evacuation of around 3,100 MW of generation capacity proposed to come up on the Zambezi river (the 1,500 MW Mphanda Nkuwa hydroelectric plant) and other locations, thus enabling the development of vast energy resources in the country for both domestic consumption and for export to neighbouring countries.

In 2015, the Mozambique government signed a concession agreement with a consortium comprising the China State Grid Corporation, South Africa’s Eskom and Portugal’s Rede Eléctrica Nacional to implement the project along with the state-owned Electricidade de Moçambique (EDM). This concession agreement has, however, expired. The government is now looking to promote the project together with Hidroeléctrica de CahoraBassa (HCB). The financing structure of the project is expected to comprise EDM (at least 51 per cent share), with the government looking to raise funds from internal and external markets, based on HCB’s assets.

The project is proposed to be implemented in two phases. Under Phase I, the 561 km long Vilanculo-Maputo section of the 400 kV AC line will be constructed along with new substations at Vilanculos, Chibuto and Matalane (in Marracuene). The Maputo substation (in Boane) will be expanded to connect a proposed 400 MW gas-fired power plant near Temane. Meanwhile, Phase II will cover the remaining project (400 kV AC and 550 kV DC line components) to link the Mphanda Nkuwa hydropower plant to the national grid. The environmental and social impact assessment study of Phase I was completed in April 2017. Construction works for Phase I are expected to begin in 2018 and completed by 2022. Meanwhile, the implementation of Phase II will be after the completion of Phase I.

The development of transmission projects in the southern African region has been extremely slow. This has been owing to political, legislative and financing issues, which act as major impediments. However, the completion of the identified transmission projects will help create a more competitive market through the exploitation of regional resources and better pricing. A more competitive market will attract more investment.

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