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Electricity upgrade hits snag

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Malawi government’s efforts to boost power generation have hit a snag following revelations that, at its current capacity of 350 megawatts, the Electricity Supply Corporat ion of Malawi (Escom) grid cannot accommodate power from new investors.

The development means the Independent Power Producers (IPPS) government recently earmarked to supply additional power to what Escom already provides can only start functioning if the capacity of the country’s sole power supplier is adequately boosted.

Currently, the country’s overhead transmission lines are capable of handling 66KVA load of electricity.

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Deputy Director for Energy, Joseph Kalowekamo, could not be reached yesterday for a fresh comment on the matter but confirmed in an earlier email to The Daily Times.

He, however, indicated that government was banking on the Millennium Challenge Account Malawi (MCA-Malawi) to help in upgrading the country’s power supply.

“There is, therefore, need to rehabilitate, upgrade or construct overhead transmission lines to evacuate the power, and this is where MCA-M, with its infrastructure projects, comes into play,” indicated Kalowekamo.

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Commenting on the issue, Escom Deputy Public Relations Off i c e r, George Mituka, conceded that the national power grid needs an upgrade.

“Any desirable or envisioned quantum of power to be added to the grid will depend on the capacity of the grid (transmission and distribution) to absorb that power [from the IPP] in order to remain within acceptable operating limits, including technical losses.

“The system components are rated for specific load carrying capacities at design and their operation is supposed to be within those design parameters,” said Mituka.

Meanwhile, the development has already frustrated the IPPs who are currently discussing with Escom to secure Power Purchase Agreement (PPAs). Some of the IPPs have since indicated that they were prepared to enter the market as early as the first half of 2016.

An official from one of the IPPs confided in The Daily Times that they agreed with Escom to be generating 350 megawatts of electricity and that the firm secured a U$D945 million from an international bank. As such, the delay to finalise the talks on the PPAs and the grid upgrade was proving too costly.

“The money we are investing in this project is a loan and if we do not access it in the defined period of time, it might be allocated elsewhere. We are trying to plead with them to hold on until we get a PPA from Escom,” indicated the source who preferred anonymity.

The source added: “The country is losing out on employment because we have got four sites and our plan is to be employing at least 200 people at each site. We also have lined up some corporate social responsibilities in the health and education sectors.

“If they sign the PPA today, that means they are [saying] they are going to pay whoever they have given authority to supply [power] once they connect to them and, if they fail, then they will have to pay damages,” indicated the source.

Meanwhile, despite the Ministry of Lands allocating 60 hectares of land in Lilongwe in November 2015, Atlas Energies Limited, a Malawian company that teamed up with partners from the United States and Germany to invest in an US$80 million large-scale solar power project to generate 40 to 50 megawatts of electricity, is yet to commence operations.

The company’s chairperson, Konrad Buckle, indicated last year that they intended to commence operations early 2016.

Atlas Energies Limited was scheduled to commence its projects by August 2015, but failed due to land and energy issues.

Buckle told The Daily Times that all required feasibility studies were already done and completed with support from the ministries of Trade, Energy, Finance and Lands.

When contacted for a fresh stand on the matter, Atlas Energy Limited said they will address the press next week on the matter.

However, apart from admitting the need for the upgrade, Kalowekamo said discussions are on-going between the Ministry of Natural Resources, Energy and Mining and the IPPs after signing memorandums of understanding (MoUs).

“Out of the 17 IPPs that had signed the MoUs with government, only one did so in 2011. The rest signed the MoUs in 2015. These are at different stages of project implementation.

“Some of the IPPs have proceeded to conduct prefeasibility and feasibility studies that would inform investment requirements and subsequent PPAs to be entered into with off-takers, including Escom,” said Kalowekamo in an e-mail response.

Ordinary Malawians and companies are currently feeling the pinch of continued blackouts in which are adversely affecting productivity.

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