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SADC energy sector braces for COVID-19 impact

SADC energy sector braces for COVID-19 impact

By Joseph Ngwawi.

The southern Africa energy sector has not been spared by the ongoing coronavirus pandemic, with both positive and negative impacts on efforts by the region to address power shortages.

On the positive side, most countries in the Southern African Development Community (SADC) have experienced reductions in demand for electricity during peak hours.

According to the Southern African Power Pool (SAPP), the majority of its member countries have not had to impose demand side management measures such as load shedding during the past few weeks as there has generally been a decline in system load.

“There has been a general decrease in demand recorded by SAPP members due to lockdown measures that were taken by most SADC countries,” SAPP said during a teleconference meeting of the SADC Energy Thematic Group (ETG) held on 5 May.

SAPP is a regional body that coordinates the planning, generation, transmission and marketing of electricity on behalf of member state utilities in SADC. It is made up of power utilities from Angola, Botswana, Democratic Republic of Congo, Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa, United Republic of Tanzania, Zambia and Zimbabwe.

The majority of these countries have been on lockdowns since the end of March, a development that has seen them shutting down businesses, closing borders and asking people to stay home as part of measures to contain the spread of the corona virus, which had affected more than 8,800 people in the region as of 8 May, according to the Africa Centres for Disease Control and Prevention.

According to SAPP, South Africa, which is the largest producer and consumer of electricity in the region, has experienced a 40% decline in peak system load since it embarked on a corona virus nationwide lockdown on 27 March.

South Africa accounts for more than 70% of the installed electricity generation capacity for the 12 SAPP member countries, according to the 2018 SADC Energy Monitor. Being the largest economy in southern Africa, South Africa also consumes the bulk of the power generated in the region.

According to SAPP, Zimbabwe has experienced a reduction of 25% of its system load since the country embarked on a lockdown on 30 March.

Other countries with significant demand reductions are Botswana where the Botswana Power Corporation has experienced a 14% decline in system load, while NamPower of Namibia has reported a decrease of 10% for its load.

A similar situation has been reported for other SADC member states such as Lesotho, Malawi and Zambia.

However, the negative impact of the pandemic are more worrisome, given the long-term implications of the lockdown measures on the ability of the SADC region to achieve energy self-sufficiency.

According to members of the SADC ETG, the lockdowns are likely to significantly delay implementation of both planned projects and those where construction has already commenced.

By their very nature, construction of power plants involve the employment of several hundreds of workers and regular meetings among teams from engineering, construction and procurement firms.

However, with the lockdown directives barring gatherings and calling for social distancing, there is likely to be delays in meeting project timelines and amendment of work schedules, SAPP warned.

The same is expected for environmental and social impact assessments, which are one of the requirements before construction of a power plant commences.

As a result of the lockdowns, most environmental site visits and geotechnical investigations have been shelved until further notice and project teams have resorted to increased use of desk-top studies and information.

SAPP is coordinating a number of power generation and transmission projects across the region and one of these is the Mozambique-Malawi Transmission Project for which tendering is in the process and construction is expected to be completed by the end of 2022.

This is one of several transmission projects expected to connect Malawi to the regional power grid, a development that would leave Angola and the United Republic of Tanzania as the only SAPP member countries whose power systems are not linked to the rest of the pool.

There are fears that the worst-case scenario is that funding partners could invoke force majeure clauses in contracts already signed should the coronavirus pandemic and the accompanying restrictions continue.

Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties prevents one or both parties from fulfilling their obligations under the contract.

Such clauses are invoked in the event of a war breaking out, a long-running industrial strike, riot, crime or epidemic.

Other ETG members said they have been affected by the lockdowns, with the Regional Electricity Regulators Association of Southern Africa (RERA) saying it is conducting an assessment of the impact of the coronavirus pandemic on its members.

The 14-member RERA comprises the electricity and energy regulators from Angola, Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia and Zimbabwe. sardc.net


 

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