Pooling power in East Africa

Sep 25, 2002 02:00 AM

by Neil Ford

The development of the East African Community (EAC) has given encouragement to efforts for improvement of transmission links in the region and the political and economic jealousies of yesteryear are being replaced by healthy competition. In place of grand schemes for industrialisation, the governments of Kenya, Uganda and Tanzania are targeting a step by step approach to development. In the power sector, this new approach is manifested by the realisation that each of the EAC members cannot hope to be self sufficient in power generation in the long term.
While the power pools of West and Southern Africa attract a great deal of publicity, the EAC's East African Power Master Plan (EAPMP) has received far less attention. The plan involves a series of improvements to power connections in the region and demonstrates that the three governments have agreed to the creation of an integrated power pool, at least in theory. Although the region lags behind the development of the Southern African Power Pool (SAPP), it could well be in place before its West African equivalent.

The key to the EAPMP is the 330 kV line planned between the Kenyan capital Nairobi and the EAC “capital” and northern Tanzanian town of Arusha. As a transmission line already exists between Uganda and Kenya, the new connection would enable the transfer of spare power production in one EAC member state to either of the others.
The Nairobi-Arusha line has been mooted for some time but in May this year, Don Rairoh, the Kenyan Ministry of Energy's chief geologist, indicated that the feasibility study had been finalised and so construction work could now begin. According to the Kenyan Ministry, the connection could be in use by the end of 2004.
Beyond the obvious implications for East Africa, this could also tie the three countries into the SAPP, as Tanzania is a member of both projects. Construction work on another 330 kV transmission line, this time from Pensulo in Zambia to Mbeya in south west Tanzania, has already begun.

The 670 km line is expected to cost $ 153 mm and is scheduled for completion in 2004. Although the ability of East Africa to pay for large scale power imports is in some doubt, a transmission grid stretching from Cape Town to Mombasa could be in place by 2005.
However, if even half of the generation plants planned for East Africa over the next few years are actually brought on stream, the region could actually find itself as a power exporter. While this seems a far fetched concept at this stage, such a scenario is not beyond the realms of possibility. Moreover, the diversity of planned generating projects provides some assurance that power sector planners have finally learnt the lesson of over dependency.

At present, 75 % of East Africa's generating capacity is provided by HEP, enabling the devastating droughts of the past five years to have a terrible impact upon power supplies. Throughout the long 1999-2001 drought, levels at a number of dams steadily fell so low that production hadeither to be severely curtailed or, in the case of the Tanzania Electric Supply Company (Tanesco) Mtera plant, shut down entirely. However, because Uganda was not nearly as badly afflicted as the two coastal states, increased HEP capacity around the region could provide part of the solution.
Most parts of East Africa have two rainy seasons, separated by long, dry periods. However, the timing and intensity of the rains vary somewhat, so that increased production capacity in Uganda could be transmitted to Kenya and Tanzania if the circumstances and severity of the 1999-2001 drought were ever to be repeated.

The Ugandan government and Uganda Electricity Board (UEB) have lined up five major generating projects to boost domestic capacity and to provide enough for increased exports. The new Karuma dam plant will contribute up to 200 MW, while the modernisation of the Nalubaale HEP plant should add another 180 MW.
The keynote project, however, is the famed $ 550 mm Bujagali Falls plant. To be built and run by AES Nile Power, the first phase of the project would provide 250 MW, while subsequent expansion could produce a massive 2,000 MW. Environmental and wildlife groups mounted a vigorous campaign to oppose the construction of the plant, arguing that it would affect water flow downstream, disturbing a number of important habitats.

The World Bank was concerned about both these and financial issues. The plant will only be cost effective if the Uganda shilling does not depreciate too rapidly and so the Bank sought reassurances from the Ugandan government about economic policy.
Following the publication of its Inspection Panel report, the World Bank finally gave its go-ahead to the project at the end of June, although it insisted that geothermal alternatives also be investigated. The Kalagala Falls area is also to be set aside as a protected habitat.
Callisto Madavo, the World Bank's Vice President for Africa, said: "Uganda is a country where less than 3 % of the population has access to electricity,and electricity shortages have substantially impeded investment, private sector development and economic growth." Doubts remain about the strain that could be placed upon the state coffers from the government's share of investment costs. However, if as expected most capacity at the plant is not required domestically, excess production can hopefully be exported to the rest of East Africa and even further afield.

While greatly increased HEP capacity in Uganda would make a major contribution to improving power supplies, it will still leave the region vulnerable to widespread drought. A completely separate initiative, however, could help to rectify this problem and diversify power sourcing. The Songo Songo gas project in Tanzania will add a sizeable 112 MW in the short term but could also lead to further capacity in the future.
The $ 183 mm scheme will enable the estimated 1 tcf of gas offshore Songo Songo Island in Kilwa Province to be exploited. The gas will be transported to a gas processing facility onSongo Songo Island itself, before it is transported to the new Ubungo power plant in Dar es Salaam. The plant is to be oil fired until the gas is brought on stream.
After decades of oil and gas exploration in the Indian Ocean off East Africa, this project finally demonstrates that profitable development is possible. Given that 95 % of productive oil or gas wells are drilled within 100 miles of other productive wells, it was always going to be difficult to attract oil and gas companies into the Indian Ocean. Now that production has begun, it makes it much more likely that other production could be brought on stream.

Capacity at the Ubungo plant could be boosted by the addition of the further turbines, but the Tanzanian government must be keeping its fingers crossed that other fields can be opened up and other power plants created. Industrial development in Tanzania has been particularly slow and according to PricewaterhouseCoopers, the unreliability, scarcity and expense of power supplies has been the main cause of this.
The World Bank is confident that Songo Songo can help to tackle all three problems. After that, the government must do all in its power to keep the ball rolling. Industrial investment could feed into further gas and power projects, which in turn could attract new manufacturing schemes.
The World Bank report on the project predicted that the government will earn $ 25 mm a year from taxes and royalties, in addition to cutting its own electricity bills by a quarter. It also estimates that one of Tanzania's largest industrial concerns, the Twiga Cement Plant, will cut its power bills by an average $ 2 mm a year over the next two decades.
Even if the gas was to run out in 20 or 30 years, plants such as Ubungo can be converted to -- albeit more expensive -- oil fired generation and the new transmission connections being set up in the region would enable excess power to be exported, possibly even to regional superpower South Africa.

Kenya is the biggest power consumer in East Africa, consuming 60 % of all production in the region. Although it is expected to increase its power imports over the next few years, other plants are also in the pipeline. Power generator KenGen plans four new diesel power plants at Eldoret, Embakasi, Lanet and Ruaraka, and the capacity of the Masinga Reservoir will also be increased. In addition, the company is keen to develop its geothermal technology.
The Olkaria geothermal plant already provides 6 % of Kenyan capacity and according to KenGen managing director, Isaac Boindet, geothermal plants would contribute a 575 MW to the national grid by 2017. This is equivalent to 25 % of projected demand.
As with all development projects, it makes far more sense to develop a wide range of power sources rather than to place all your eggs in one basket. Provided that high production from one source can make up for falls elsewhere, this helps to spread risk and to ensure the reliability of supplies -- a vital ingredient for industrial consumers.

Source: African Business
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