MICRO-GRIDS FOR RURAL ELECTRIFICATION “Case Study from Zambia on

the Zengamina Micro-Hydro Power Grid” Presentation by

Energy Regulation Board, Zambia

79th IEC General Assembly Workshop for Industrialising Countries in Belarus, Minsk

14th October 2015

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Presentation Outline 1. Brief about Zambia 2. Power Sector Reforms in Zambia 3. Regulatory Initiatives for Off-grid systems 4. Zengamina Micro-Grid

• Project Overview • Key Project Characteristics • Generator and Distribution Network Characteristics • Demand Situation • Environmental Impact • Key Project Success Factors • Benefits of the Installation • Challenges

5. Conclusion

• Located in South – Central Africa • Population: 14 million • Land Area: 750,000 km2

• Electricity Access: 18% – Urban: 47% – Rural: 3.3% • Major Exports: Copper, Maize

(corn), Cobalt, Tobacco, Cotton, Flowers, Electricity

• Gross Domestic Product (2014): US$ 27.1 billion

• Administrative Regions: Ten (10) • Governance System:

Parliamentary democracy

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Brief About Zambia

Power Sector Reforms in Zambia (1) In 1991, the Zambian Government

embarked on liberalisation and creation of a market economy

In 1994, the first National Energy Policy (NEP) was promulgated.

The NEP set out a number of policy measures which included:

Restructuring of the electricity industry;

Improving access to electricity;

Promoting electrification of productive areas and social institutions; and

Cost effective development of hydro power generating potential.

Main strategy was to open up the power industry to the private sector

Initiated the restructuring of the electricity market through legislative reforms that allowed other players in the market.

The NEP also set the institutional framework under which these policy measures would be implemented.

Sector regulator established -The Energy Regulation Board (ERB).

One of the recommended functions of the ERB in the NEP is to regulate against monopolistic tendencies of energy undertakings

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Power Sector Reforms in Zambia (2)

Before Reforms

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Electricity Supply Industry Structure After Reforms

1. ZESCO Ltd § Generation (2,021 MW), Transmission, Distribution and Supply

2. Copperbelt Energy Corporation § Transmission, Distribution and Supply

3. Lunsemfwa Hydropower Company § Generation (52.5 MW), Distribution and Supply

4. North-Western Energy Corporation § Distribution and Supply

5. Zengamina Power Limited § Generation (0.75 MW), Distribution and Supply

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Power Sector Reforms in Zambia (3) Zambian Electricity Supply Industry Players

Overview of the Power Sector in Zambia

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ZESCO TRANSMISSION

CEC – Sub Transmission MINES

Kariba North Bank

Kafue Gorge

Victoria Falls

§ Lusiwasi§ Chishimba Falls§ Musonda Falls

900MW 990MW

108MW 23MW

§ Mulungushi§ Lunsemfwa

52.5MW

CEC standby generation

80MW

ZESCO DISTRIBUTION

DRC IMPORTS

SAPP IMPORTS/EXPORTS

ZESCO generation

ZESCO small hydro power stations

Lunsemfwa Hydro Power Company

Copperbelt Energy

Corporation

Ndola Energy50 MW

Ndola Energy Company Limited

Zengamina0.75MW

Power Sector Reforms in Zambia (4)

1. ERB has adopted Light Handed Regulation for Off Grid networks

2. 2010 – Developed Off Grid Regulatory Framework § Combined Licence for Generation, Distribution and Supply § Relaxed Reporting Requirements for Quality of Supply and Service

– Voltage Regulation (Based on Number of Verified VR Complaints in a year) – Interruptions (Licensee only report statistics relating to forced – interruptions on a network basis) – Quality of Service ( KPIs on critical elements of Quality Of Service Standards)

§ Relaxed Tariff Methodology – Connection Charge, Fixed monthly charge and a variable kWh charge

§ Currently two licensed entities under the off-grid regulatory framework – 0.75 MW Zengamina Power Limited (Hydro micro-grid) – 60 kW Mpanta solar micro grid

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Regulatory Initiatives for Off-grid systems

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The Zengamina Micro Grid (1) Project Overview

Zengamina Hydro Project

An off-grid micro hydro plant based in Ikelenge district of North-Western Province with installed capacity of 700kW.

“Run of River” Design Project was developed to supply power to

Kalene mission hospital and the surrounding farms, businesses and residential areas.

It consists of a hydro power station and a distribution network system.

It is privately owned: – 99% by the North West Zambia Development

Trust (NWZDT) – Nominal 1% by the CEO (Authorised Signatory)

Commissioned on 14th July 2007 The total project cost was US$3 million

The Zengamina Micro Grid (2)

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Key Project Characteristics

The Zengamina Micro Grid (3)

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Key Project Characteristics Resource

– Zambezi River (17m drop) – 700 kW Installed Capacity (Potential to go to

1.4 MW) Installation

– Weir (1.5m height) – Canal (1.2m deep x 7.5m wide, 350m long) – Penstock (1.9m diameter x 75m long) – Tailrace (10.5m wide)

Electro-mechanical – Cross-flow turbine – 1 MVA, 400V/33 kV Step-up transformer – 36 km of 33 kV line – 35 km of 400 V lines

Financials Project Cost: US$ 3 million § $2million on hydro civil/ mechanical § $1 million on the distribution

network

Current tariff at US$ c 6.4/kWh ZPL prefer the tariff to be around US$ c

10 – 12/ kWh for the project to be successful

There is Government commitment to raise tariffs in the country to around US$c 10.3/kWh to achieve cost reflectivity and this should help ZPL

In the East African region, for such a project the rates average US$c 24/kWh

The Zengamina Micro Grid (3)

Generator parameters – Permanently attached to the turbine

through a gearbox – Machine is self exciting using permanent

magnets – AVR maintains voltage at set value as

load changes – Current output of 1350A - 750kW at 0.8

p.f Generator Protection

– Reverse Power – Under frequency – Under/ Overvoltage – Negative Phase Sequence Current – Overcurrent

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Generator and Distribution Network Characteristics Distribution Network

– 35km of distribution network at 33kV – 36km of distribution network at 400V – 230V for residential customers – 400V for farms, hospitals and industrial

customers

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The Zengamina Micro Grid (4)

The Zengamina Micro Grid (5)

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Demand Situation

Electrification

– 456 residential customers signed-up – 5 schools – 2 clinics

Additional Capacity

– Potential for day storage upstream – Second turbine at 8 year milestone

Present Demand – 420 kW

5 Year Forecast – 620 kW – Maximum output – 8 years (2016)

Base Load – Hospital, Mission & Boarding

School – Commercial Farm (Irrigation) – Residential customers (Ikelenge

town) – Cell phone towers – Crusher and block making machine

The Zengamina Micro Grid (6)

“Run of a river” design

– Low take-off weir (little impact on the Zambezi river)

Facilities concealed from public view

Facilities blended into local physical environment by use of natural granite masonry

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Environmental Impact

The Zengamina Micro Grid (7)

Prime driver for the Zengamina project was to provide power to Kalene Mission Hospital

The Zengamina project to benefit the whole of the community in Ikelenge and Nyakaseya

Project construction involved mainly local workforce Mainly local materials were used for the civil

construction works Installation of main equipment done by volunteer

electrical engineers from UK & Australia Copperbelt Energy Corporation (CEC) team carried

out commissioning tests on voluntary basis Project was funded by donations from Christians

and charity trusts in the UK

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Key Project Success Factors

The Zengamina Micro Grid (8)

§ Removal of diesel generated power with its high operational costs § 24 hour power supply to the following establishments which were using diesel power – Kalene mission hospital

– Ikelenge mission

– Flight service

– Sakeji school

– Hillwood farm

§ Power to the new Nursing training school

§ Employment provision for local Zambians

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Benefits of the Installation - 1

The Zengamina Micro Grid (9)

§ Economic development in the district including: – Crusher and black making machine

– Hammer Mills

– Welding shops

– One pineapple dehydration factory

– Proposed pineapple canning and pulping factory

– New district hospital

– New district post office

– New police post

– Secondary boarding school

– New district council and Government offices

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Benefits of the Installation - 2

Challenges § High power line maintenance costs due to extreme termite activity; § High incidence of lightning (granite basement geology); § Low tariffs which are not cost reflective; § Relatively few customers and limited scope for increasing tariffs due to low income

levels for the rural customers; § High construction costs due to remote location and poor road infrastructure; § Limited/ No capital to extend the distribution network to all potential customers; § Inability to attract qualified manpower due lack of funds to pay good salaries and

remoteness of the area; and, § Policy considerations on how off grid systems can be integrated into the main grid when

the main grid is extended to areas serviced by off grid systems. § PPA difficulties for future connection to the ZESCO (national utility) national grid

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Conclusion § Successfully connected over 521 customers including Kalene hospital and schools,

which benefits the entire district of over 20,000 people § The impact of the electricity − Schools get power − New operating theatre − People get light in their homes − Shops and businesses can use machinery § Project operated as a marginal business due to low tariff structures but it was initiated

to promote development in the district by the local stakeholders § The project continues in its 8th year with minor subsidy from NWZDT and breakeven

should be achieved when tariffs are raised to regional/ cost reflective levels § Wonderful example of rural electrification – in Africa not just Zambia

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THE END

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