Low power tariffs deter investment
Boitshepo Majube | Friday March 14, 2014 15:33
Minister of Minerals, Energy and Water Resources (MWER), Kitso Mokaila recently told parliament that until national electricity tariffs are cost reflective, government efforts to promote renewable energy would remain a mirage. Electricity tariffs will go up 10% next month as government battles to boost revenue for the loss making Botswana Power Corporation (BPC). Mokaila said the power utility is losing about 50 thebe of each unit of power sold. “This is due to tariffs that are not cost reflective,” he said.
On Tuesday, SAPP Chief Market Analyst, Musara Beta said at a workshop of ‘unconventional gas to power Southern African’ held in Gaborone that weak utility balance sheets are not favourable to anchor projects.
He stated that SAPP plans to strengthen project management capabilities in order to prepare projects to bankability levels.
With 12 countries within the SAPP region, with a population of 280 million people, Beta said installed electricity generation capacity stood at 56 GW, with available generation capacity of 52 GW and a peak demand of 54 GW.
On generation mix and contributions 2013, SAPP highlighted that 74.3% of electricity was generated through coal, 20.1 through hydro, 4.0 nuclear and 1.6 gas/diesel. It points out that South Africa was the highest user of coal at 80.4%, while Mozambique used more hydro at 5.0 percent, Zimbabwe led in nuclear usage at 4.1 percent, and Zambia used more gas/diesel at 3.6 percent.
Beta said SAPP’s vision is to facilitate the development of a competitive electricity market in the SADC Region, give the end user a choice of electricity supply, ensure that SADC Region is the region of choice for investment by energy intensive users and to ensure sustainable energy developments through sound economic, environmental and social practices.
Concerning electricity setting price mechanisms, SAPP states that there are two methodologies namely, centralised mechanisms and market based mechanism.
“Market based mechanism allows the market to determine the price,” Beta said.
Meanwhile, Mokaila said as part of researching and availing renewable and sustainable energy resources, MEWR has decided to undertake a pilot study that will be looking at utilisation of biogas for cooking in schools. He stated that biodegradable waste from the participating schools will be used to produce the biogas which will then be used for cooking in that school.