Friday, October 30, 2020

Electricity imports dim local power generation

Locally produced electricity accounts for half of the total power distributed as Botswana continues to rely on power imports to meet demand, Statistics Botswana data released recently shows.

The electricity and generation report for 2019 third quarter (Q3 2019) reveals that the index of Electricity Generation – a key indicator of electricity production – stood at 111.3, a decrease of 39.6 percent from 2018’s third quarter. Based on observed long trend, local power generation has been growing steadily over time, and more importantly, a slight increase was recorded during the quarter under review, the data agency said.

Local power generation was 467,974 MWH in the last nine months of 2019, representing a fall from the 774,822 MWH generated in 2018’s corresponding period. However, on a quarterly basis, this reflects an increase of 16 percent from 2019’s second quarter.

The increase has been attributed to improved performance of power generators at the 600 MW Morupule B Power Station – the country’s biggest power generator powered by four units.

With overall domestic power generation down, the country ramped up on power imports. The physical volume of imported electricity in the third quarter was 504,115 MWH, a surge of 120 percent from 2018’s corresponding period under review.  The significant increase was due to the need to augment local generation of electricity during the current quarter. Most of the imported electricity was sourced from South Africa’s struggling Eskom which supplied 58.5 percent of the power, while Electricidade de Mozambique was responsible for 20.8 percent of power imports. About 14.9 percent was sourced from the Southern Africa Power Pool (SAPP), and the rest came from cross boarder markets (4.5 percent), and Nampower (1.4 percent).

Distributed electricity – made up of domestic and imported power – slightly decreased to 972,020 MWH in the third quarter of the year, down by 3.2 percent from 2018’s reference period. Electricity generated locally contributed 48.1 percent to distribution, compared to 77.2  percent recorded for 2018’s third quarter. Based on the past data, Botswana is yet to be fully rely on locally generated electricity. In 2017, the power utility firm revealed that it was constantly upgrading its power generation plants to ensure they operate efficiently and sustainably. BPC’s two main power stations, the 132MW Morupule A and Morupule B have been undergoing remedial works.

The multi-billion-pula Morupule B power plant has been fraught with problems since it was commissioned and yet to operate at full capacity. According to information gleaned from 2019’s third quarter gross domestic production (GDP) data, growth in the water and electricity stumbled, registering at 2.4 percent decrease, slowed down by electricity which registered negative growth of 13.7 percent in the third quarter of the year after local electricity generation plunged largely due to reduced performance of the Morupule B Power Station which was not operating at full capacity, said Statistics Botswana.

Meanwhile, major Japanese conglomerate Marubeni Corporation has pulled out of the proposed 300-megawatt (MW) extension to the Morupule B coal-fired power plant in Botswana, the company said last year October. Marubeni had been in a 50/50 joint venture with POSCO of South Korea to build the Morupule B extension consisting of two 150MW units. The project had previously run into severe headwinds after the Botswana government decided against providing the proponents with a US$800m guarantee to protect them from a future default on power purchase payments.

The lack of available capacity led Botswana Power Corporation to seek to refurbish and reopen the previously shut down Morupule A coal plant.

However, the refurbishment of this plant has reportedly also been mired in issues, both technical and financial. The contractor carrying out the refurbishment is Doosan Heavy Industries and Construction of South Korea – a new IEEFA report finds that Doosan Heavy has its own major financial issues to deal with, caused in part by its high-risk pipeline of fossil fuel projects both in South Korea and in developing markets such as Botswana.

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