Friday, October 23, 2020

Botswana still imports half of her electricity demand

The amount of electricity produced in the country continued its decline in the second quarter of the year, with the state power utility relying on more than half of the supply from outside to augment the inefficient local power plants that operate below capacity and have proven to be unreliable.

Power generated in the country between April and June amounted to 399,903 MW, down by 17 percent from the first quarter of the year. The domestic electricity generation was also 0.9 percent lower than at the same point last year, according to Statistics Botswana’s latest report on electricity generation and distribution for the second quarter.

Botswana Power Corporation’s owned power plants, the 600 MW Morupule B and the 132 MW Morupule A, accounted for the largest share of electricity generation at 52.7 and  44.9 percent. The remaining 1.3 and 1.1 percent were contributed by Matshelagabedi and Orapa emergency power plants. The two Morupule power plants are said to be operating under capacity, with Morupule A’s availability rate estimated at 70 percent while Morupule B’s availability rate is 31 percent.

The nation’s mega power plant Morupule B is currently undergoing remediation process at the contractor’s expense. The coal powered plant was commissioned in 2012, gobbling nearly P10 billion, but has never been fully functional, with only half of the four units functioning most at a time.

The shortage in local power production has been met through imports which have now grown large in size and cost. With Botswana’s average maximum demand of power is 610 MW and peak demand of 702 MW, BPC imported 453,733 MW of power in the second quarter, representing 53.2 percent of the total electricity distributed between April and June, which was 853,636 MWH, down by 15.6 percent from the first quarter.

For the first time in a long time, Nampower was the main source of imported electricity at 42.6 percent of the total electricity imports, outpacing the usual front runner Eskom, which supplied BPC with 32.3 percent while 20.7 percent and 4.4 percent were sourced from the Southern African Power Pool (SAPP) and Cross-border markets.

In the first quarter of the year, the country imported 529, 352 MW of power, representing 52.3 percent of total electricity distributed during the period. Eskom was the main source of imported electricity at 55.9 percent of total electricity imports. Like BPC, Eskom has also come under pressure from its faulty and old power plants and has warned its trading partners of reduced power supply going forward.

Botswana had managed to cut the volume of  imported electricity in the last decade, with annual imports decreasing from 2010’s 3,088,080 MW and levels of imported electricity falling until 1,527,697 MW in 2015. Since then, the volume of imported electricity has steadily increased, with BPC importing 1,746,238 MW in 2019, and is likely to end this year with a greater figure. Just in six months of 2020, BPC has already imported 983,084 MW.

The total cost of imported power in the prior year was P861 million, a growing figure that has put the struggling BPC under pressure to raise electricity tariffs, upsetting consumers who decry the high costs of electricity. The power utility increased electricity costs by 22 percent in April and has already made plans for further increments which have to be approved by Botswana Energy Regulatory Authority (BERA) first.

In pushing for additional increments to tariffs, BPC says its weakened financial position can be traced to the non-cost reflective charges, with other operational losses made worse by the defective Morupule B power station, which has led to high cost of imported electricity. It has proposed to  BERA a 5 percent tariff increase in 2021, then another 4 percent increase in 2022 and a 4 percent increment in 2023. The power supplier says it requires a healthy liquidity position to undertake overdue refurbishment of its transmission and distribution infrastructure.

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