The country’s energy sector may not be in full robust health at the moment due to several factors, both exogenous and endogenous.
External shocks such as recent Tropical Storm Ana are a menace to the energy sector, and the economy at large.
Picture this: As it stands, about 130 megawatts (MW) of electricity have been removed from the system due to the damage that occurred at Kapichira Hydropower Station as a result of the impact of the storm. This explains the current power rationing or incessant power outages gripping the country.
The electricity installed capacity in the country currently stands at about 522 against the demand of about 520 as projected in the country’s Integrated Resource Plan.
Such an installed capacity includes emergency and peaking diesel generators.
But the sector keeps on reeling from the myraid of other shocks, on one hand, undercurrent positive tides are also simmering and it is just a matter of time before the nation reaps dividends in galore.
In May last year, President Lazarus Chakwera announced an ambitious plan to increase electricity generation from the current capacity to 1000 MW. The target drew mixed reactions with other expressing skepticism while others remained upbeat.
The doubting Thomases resorted that the ambitious and mind-blowing plan to increase electricity generation to 1000MW was just a mere wishful thinking and that the plan would likely be frustrated by bureaucracy in government entities.
But almost a year later, the energy sector is slowly transforming into buoyancy and it is just a matter of time before the country sits on 1000MW-plus electricity, enough to be consumed within the country with some surplus earmarked for export to neighboring country with yawning power deficits.
A good number of recent developments in the energy sector have seen a good number of Independent Power Producers expressing interest to invest in the country.
Minister of Energy Ibrahim Matola explains that his ministry has signed over memorandum of Understandings(MoUs) with potential IPPs from around 2017 to date. This alone gives a flicker of hope about the future of the country’s energy sector.
”I am please to report that three IPPs have already started selling to the single buyer, and these are: Aggreko , with 78MW of emergency and peaking diesel generators; JCM with 60MW of Solar Photovoltaic and Mulanje Hydro Limited with 8.2MW from hydro power,” he says.
Matola says in the coming few days, and tomorrow to be precise, Malawi will see Cedar Energy Limited injecting about 3.2 MW into the country’s national grid.
Clearly, Capital Hill is not just sitting idle but is fast trucking the closing of gap between generation and supply.
Additional 50MW on the cards
Just last week, Egyptian multinational electrical company, Elsewedy Electric, signed a MoU with the Malawi Government for construction of a 50MW solar power plant with battery storage at a site yet to be identified in the Northern Region.
The deal follows negotiations between President Chakwera with Elsewedy Electric President and chief executive officer Ahmed Elsewedy on the sidelines of the Intra African Trade Fair(IATF) held in Durban, South Africa.
The signing of MoU entails that the two parties will collaborate to make sure that a Power Purchase Agreement (PPA) or a commercial agreement is signed within the agreed one-year-span, beyond which the MoU will be rendered null and void, according to Matola.
The new MoU comes barely four months after Chakwera also commissioned a 60 MW solar plant in Salima in November last year originally developed by JCM Power Corporation Matswani, InfraCo Africa and part of the Private Infrastructure Development Group.
FMO, the Dutch development bank, subsequently invested in the construction alongside JCM Power and InfraCo Africa. The companies will now operate and maintain the plant under the terms of a 20-year PPA signed with the Electricity Supply Corporation of Malawi Limited(Escom).
Matola describes the MoU as a milestone towards increasing supply in the country to 1000 MW as envisioned by Chakwera.
Power Market Limited(PML) director of technical services Odala Matupa says the proposed 50MW solar photovoltaic plant comes with the battery will not only contribute significantly towards addressing the countries electricity supply demand balance, but also demonstrate that the country has joined the global trend towards cleaner and sustainable energy sources.
”Power Market Limited commits itself to support governments efforts in facilitating investments in the power sector and in particular, to ensure that the directive of President Chakwera of installing 1000MW is achieved,” said Matupa.
In June 2018, Escom was further unbundled by removing the single buyer function from the utility and assigning it to PML, which started its operations in March 2019.
And Elsewedy himself is all positive. Speaking during the official signing ceremony of the MoU in Lilongwe last week Friday, he said his company was glad to come and invest in Malawi and help address incessant power outages.
He also hinted that the company will later upgrade the 50MW plant to a 100 megawatts facility, but that will be possible within two years after the signing of the MoU.
Currently, the Malawian energy generation mix is dominated by hydro power-about 98% of which is generated on the Shire River in the Southern Region of the country.
But according to energy experts, such a situation brings about the issue of insecurity in power generation and supply in the country.
The National Energy Policy of 2018 vividly calls for the need to diversify away from Shire River and away from hydropower technology which is impacted negatively by climate change issues.
Just like transport sector, which falls under Enabler Six , the economic infrastructure of Malawi 2063, the energy sector is crucial to promoting economic activity and catalyzing foreign direct investments for wealth creation.
In the 2022/23 National budget, the energy sector has been allocated K54 billion which is 0.5 percent of fross domestic product(GDP) and 1.9 percent of the total budget.
In the same financial plan, the Chakwera-led government also promises to continue implementing impactful projects under this sector and some of the projects include the Mpatamanga Hydro Power project, Malawi-Mozambique Inter connector project, Malawi Electricity Access Project, extension of Wovwe Hydropower Plant, solar project in Dwangwa Nkhotakota by Voltalia, and solar PV project in Nkhotakota by Phanes.
Source: The Nation_March 11th 2022-By Dumbani Mzale-Contributor