Thursday December 14, 2017

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Dept of Energy

ELECTRICITY SUB-SECTOR

The mission for the Swaziland electricity supply industry is to provide affordable electricity to meet social and economic needs in a financially and environmentally sustainable manner, while optimising the use of national energy and infrastructure resources.

Swaziland’s electricity supply has largely been dependent on imported electricity from neighbouring countries. Although this has been relatively cheap for the country in the past, the situation is expected to change drastically in the near future as the regional excess capacity is expected to diminish and thus increase import prices. Thus the country faces the challenges of security of supply, reliability and quality of supplies since the local industry also experiences power cuts.

The Swaziland Electricity Company (SEC), established by the Swaziland Electricity Company Act (2007), is the major supplier of electricity in the country. Other actors in the supply of electricity in the country are the sugar industries and the wood and paper processing industries. SEC, formerly Swaziland Electricity Board (SEB), has until recently, been enjoying a monopoly in the electricity sub-sector.

The Electricity Supply Industry (ESI) in Swaziland has been undergoing reforms to best meet the goals of the Ministry for the sector, which are in line with the international trends of liberalisation of the energy sector in order to realise efficiency in production and lower tariffs as a result of many players in the market. Liberalisation of the electricity supply industry aimed to allow new players into the sector, to stimulate competition, and to improve economic and operational efficiency in the industry. Key elements of the restructuring are:

•    The conversion of SEB to a public corporation SEC.
•    Ring – fencing of SEC core businesses i.e. generation, transmission and distribution.
•    Preparation for strategic investors/ public listing at the stock exchange.
•    Stimulating public / private partnerships in Generation and Distribution.
•    Establishing a regulator for licensing and customer protection.

The Swaziland Electricity Company Act transformed the Swaziland Electricity Board from a pubic enterprise into a company, the Swaziland Electricity Company (SEC), which is wholly owned by the Government. This development removed the monopoly in the electricity supply industry. The corporatization of the SEB, in conjunction with the internal restructuring ensures a commercialisation of operations and will in the future allow other players to compete on an equal footing. The Energy Regulatory Authority has also been established and Board Members are already in place. 


3.1.1 Swaziland Electricity Company

SEC remains a major actor in the electricity supply sub-sector in Swaziland. It is responsible for generating, supplying and maintaining the distribution of electricity through the national grid.

In preparation for the impending changes in the Electricity Industry Supply (ESI), the Swaziland Electricity Company has embarked on a vigorous programme to improve customer satisfaction and business performance. A number of business performance programmes have been initiated, which dovetail with the utility’s long-term strategies.

A. Generation Capacity Improvement:

Lower Maguduza
A general (reconnaissance) study was conducted during 2008 to identify possible potential sites along the rivers of the country for hydro generation. The study identified some of the sites and came out with Lower Maguduza as the most economically viable site. Estimates from the study show that a peaking station of 20MW can be built at Lower Maguduza.

Ngwempisi
The pre-feasibility study also highlighted that there is foreseeable hydro generation potential on the Ngwempisi River. SEC started work on investigating the extent of the potential at this location.
The output from the study will provide Government and SEC with adequate information on available hydro generation potential which will then be used to develop local generation stations that are required for your country to be self sufficient on electrical energy requirements.
Once built and completed, lower Maguduza and Ngwempisi power stations will provide our country with an estimated additional output of about 140MW of hydro power, which as mentioned in the main report is one of the world’s cleanest source of electrical energy. The running cost of a hydro station is relatively lower as compared to generating stations that use other forms of fuel. This will bring about the advantage of making available a cost effective way of providing peaking energy, which will go a long way in attracting investors thus acting as a catalyst for economic growth. Considering the installed generation capacity presently, Swaziland would then have a total of about 200MW of  hydropower. This combined with the proposed thermal power station, will ensure that the country is self sufficient in terms of power generation to cater for its present energy requirements and also to address some growth in the future.

B. Implementation of Small Holder Irrigation Tariff


Swaziland is characterized by a strong agro-based industry.  It is of particular note that the sugar and pulp industries contribute significantly to the gross domestic product (GDP) of the country.  It is important that smaller industries are also supported by ensuring them favourable costs of production.  The Ministry received concerns from the small sugar cane growers and then requested that SEC conduct a study to ascertain if it were possible to introduce a new tariff class that would take into account costs of production in small holder irrigation systems. The Ministry’s view was that both SEC and the farmers must equally benefit from the proposal.  The Ministry’s intention was to ensure that investments in small holder community based irrigation farms were sustainable.  Government has invested significantly in schemes such as SWADE with a view to alleviate poverty and spur economic development and growth. Through various consultations SEC has been able to model a tariff that is suitable for the small holder irrigation farmers.

Parliament approved the smallholder irrigation tariff which has been implemented and is extended to qualifying farmers according to a maximum load requirement of 100kVA. 

C.    Rural Electrification


In line with its goal of ensuring access to electricity by all the citizens of the country by 2022, the Ministry is pursuing the rural electrification programme. The rural electrification programme prioritises the electrification of public institutions such as: rural schools, health care centres and clinics, Tinkhundla centres (development centres), etc, routing the electricity lines through high density resettled communities. Once these are covered, focus will shift to the non-performing rural electricity group schemes especially the high-density resettled rural communities. Electrification of homesteads is vital to the improvement of the quality of life of the rural population.

Implementation of the Rural Electrification programme has significantly improved the quality of education and general health standards for citizens of the country residing in the beneficiary areas. Through this programme schools situated in the rural areas now can offer an equivalent quality of education as those found in urban areas. Their laboratories are now powered by electricity. Rural clinics and households have electricity. Small / medium entrepreneurship activities are developing thus helping to sustain electricity supply in rural areas. Table… below highlights the magnitude of the beneficiaries.



Table 1: Beneficiaries of the Rural Electrification Programme, 2000-2007

Project Beneficiaries to-date


Phase    House Holds    Beneficiaries         Schools    Othera
1               6250               50000               71             11
2.1            5127               41016                80             7
2.2            2645               21160                 48            5
3              2055               33624                   51           2
4              814                 6512                   34            3
5              605                 4820                   17            1
6              845                6760                    27            7
7              800                6400                   15            10

Total     19 141            170,292                385         46


Other includes clinics and other rural public centres

Statistical and Technical evaluations of the Rural Electrification programme need to be carried out to establish the electricity access rate including understanding the areas and/or regions that have a high connection rate.

D. COAL SUB-SECTOR

Swaziland meets local coal demand through imports from the Republic of South Africa (RSA) whereas local production is for export. There is only one coal mine in the country in operation, which is Maloma Colliery. The mine is now under new management. The high quality anthracite coal is exported to South Africa for use in the metallurgical and cement industries, while cheaper bituminous coal is imported from South Africa for use as a fuel.

Feasibility studies will be undertaken to investigate the generation of power locally through SEC and Independent Power Producers (IPPs). The necessary incentives to allow their entry into the market will be developed in the short to medium term.  Load growth projection for SAPP indicates that excess generation capacity will run out within the next three to four years.

Government will also conduct a cost-benefit analysis regarding increased use of indigenous coal in the industry and households taking due consideration of the environmental and health consequences. The use of clean coal technologies will in particular be assessed in the utilisation of coal.

300MW Coal Fired Thermal Power Station
For economic reasons the country has been importing power from the SADC region for the past thirty years. This was due to the low tariffs as a result of excess generation capacity that was available. However, this capacity building program will come with an increase in electricity tariffs. It is for this reason that Swaziland has embarked on a feasibility study aimed at developing a size-able thermal power station in the country for own use and for export purposes. Phase I of the feasibility study was concluded in June 2007 and includes strategic considerations such as increased security of supply and the amount of coal available. Phase 2 of this study will include among others the assessment of environmental and social aspects.

A Cabinet decision has been reached for the 300MW coal fired thermal power station to be developed by SEC within the coal belt. The benefits of this power station will be security of electricity supply, reliability as well as job creation. A tender has been advertised for prospective companies to mine the coal for supply to the power station.

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