Zambia’s power sector, being liberalised, is composed of several players who may be classified as independent power producers, vertically integrated utilities, and independent transmission and distribution utilities. The power sector value chain is made up of generation, transmission, distribution and supply, as such, a power company can operate in either one or more of the sectors of the value chain. The sector is supported by the Government through various ministries and agencies that formulate and implement laws and policies required to enable it to properly function.
Each of the players has contributed to the growth and sustained functioning of the country’s energy sector either by bringing on board new generation capacity or extending transmission, distribution and supply infrastructure to meet the growing needs of consumers.
In the past few years, Zambia has experienced a recurring power supply shortfall, one that has tested to the limit the resilience of the country’s power system. At its peak, Zambia’s power supply deficit was estimated at 810MW as recently reported by the national power utility, a situation which triggers load management interventions such as load shifting and load shedding. To remedy the power shortfall, a consolidation of efforts by all sector players through timely investments achieved via smart partnerships, be it private or public sector driven, is required.
Generally, experts have consistently advanced the realisation of an energy mix diversified by source and geographical location as a viable solution to mitigate the vulnerability of the power system arising mainly from dependency on hydro energy which to date makes up 86 percent of the country’s installed generation capacity.
“For instance, a well-balanced combination of other sources such as renewables and hydro has the potential to give an optimum level of generation, capable of enabling the country to withstand the impact of drought,” says Mr. Owen Silavwe, the Managing Director, of the Copperbelt Energy Corporation Plc (CEC).
CEC is Zambia’s oldest power utility and a renowned power generation, transmission, distribution and supply company with its base on the Copperbelt Province. It is the country’s major supplier of electricity to mining companies in the Copperbelt and has partnered with different industry players in its bid to combine own generation with third-party generation sources in expanding its contribution to Zambia’s energy sector.
The Company which owns and operates extensive power transmission and distribution infrastructure traces its power generation footprint to its 80MW thermal generation capacity derived from its Gas Turbine Alternators that are strategically dotted on its network and primarily reserved to provide emergency power supply to its mining customers, particularly during times of national power outages. CEC also owns and operates a 1MW grid connected solar PV plant and has two 2 x 20MW solar projects actively in the development pipeline.
In 2018, CEC entered into a partnership with Dangote Cement Zambia Limited (Dangote) where it would source excess power of up to 22MW from Dangote’s 30MW coal fired power plant which feeds its cement manufacturing plant located in Masaiti District on the Copperbelt. The partnership was cemented with the signing of a Power Purchase Agreement (PPA) between the two companies in the same year.
With the PPA in hand, CEC embarked on building a connection between the Dangote power plant, located approximately 15km from its existing network, and the national grid to enable a two-way flow of power. Now completed and awaiting equipment testing and eventual commissioning, the USD6.6 million project involved, mainly, the construction of a 66kV transmission line, measuring 15.5km, from Ndola Refinery substation to the cement plant; constructing a 66/11kV substation (1 x 22.5/30MVA power transformer) substation complete with incoming line bay, transformer bay, control, protection and communication systems. Further, an 11kV Overhead Line was built between the CEC Dangote Substation connecting into the existing 11kV network at Dangote Cement Power Plant.
Dangote Cement Zambia Limited Country Chief Executive Officer Mr. Agostinho Henriques said the power plant, designed to support the Company’s cement operation as a cost optimisation measure, had added benefit to the Zambian economy through the injection of added generation capacity to the national grid.
“Today, Zambia is suffering from a severe power generation capacity shortfall consequently enduring regular load shedding that is restraining the country’s economic potential. We as Dangote Cement Zambia, want to be part of the solution to Zambia’s economic future,“ said Mr. Henriques.
According to Mr. Henriques, CEC being the main electricity distributor on the Copperbelt with extensive experience in the sector, came as a natural partner of choice, as they saw an opportunity to beneficiate from its experience given that Dangote’s core business is cement production and not electricity.
Reflecting on Dangote’s experience of starting a power generation project in Zambia from scratch, Mr. Henriques said, “Zambia is a landlocked country therefore the main challenge was to bring all the equipment to the Copperbelt. We had to start with building a small village for our technician. Then we had to assemble the equipment with little local support. But we ended up with a modern and efficient 30MW power plant to supply electricity to the cement operation.”
This project is among several that CEC is actively pursuing in line with the strategic goal of diversifying its power sources. The project has enabled CEC to expand its energy sources while enabling Dangote to feed into the national electric grid excess power generated from its power plant. The timing is impeccable coming at a time when more power from diverse sources is needed to meet the country’s growing demand.
During a project site tour, Silavwe noted the project’s strategic importance and expressed his enthusiasm for the two parties to commence power trading once the project is commissioned post COVID-19; which has forced a scale-down of works on the site to protect employees and contractors from possible infection.
“We are proud of this unique opportunity to be part of the project which, once completed, will be the first one of its kind, where CEC will be off taking power directly from a diversified power plant. It is a pleasure to witness its construction progress,” said Mr. Silavwe.
Putting the capacity in context, 22MW can power both the domestic and industrial loads of an entire town such as Luanshya.
The project has brought on board a new independent power producer (IPP) – Dangote, and demonstrates CEC’s support for emerging IPPs, as a bankable off-taker, while complimenting the government’s efforts in achieving adequate and reliable electricity supply.
It is also a practical demonstration of CEC’s commitment to providing transmission links which are a critical enabler of generation projects by facilitating evacuation of power from their usually remote locations to consumers. Historically, CEC, then called Rhodesia Congo Border Power Corporation, played a role in the development of the Kariba power complex and associated transmission lines in the 1950s by the then Central African Power Corporation, whose infrastructure is now a major part of ZESCO’s 330kV transmission backbone, by providing its regional transmission and distribution links to the mines on the Copperbelt which were then, as now, an important market in the Zambian electricity value chain.
Clearly, the partnership between CEC and Dangote has yielded economic benefits not only for the two parties but the country’s energy sector with the addition of an extra 22MW to the national grid from a diversified source which makes the quest for a diversified energy mix by source and geography attainable. Further, the additional generation capacity reduces the national power deficit while sustaining the productivity of key economic sectors.