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Conference on Power Transmission in Africa: Key Highlights [free access]

February 11, 2019

Africa’s economic growth is rebounding and its rising population and expanding industry are leading to a surge in the demand for energy. However, lack of access to affordable and sustainable energy will stifle the continent’s continued economic and social development. The region still lags far behind the rest of the world. A reliable electric power supply infrastructure is essential to firmly plug Africa into the global economy.

 

So far, the energy policies of the African nations have focused on the expansion of electricity generation, with little attention paid to developing the transmission networks. The growing electricity production capacity will not benefit the people and industry in the absence of adequate transmission facilities. Thus, development of the transmission infrastructure, both at the country and at the regional levels, must be prioritised to help achieve Africa’s energy goals.

 

With this backdrop, Global Transmission Report hosted a conference on Power Transmission in Africa on January 30-31, 2019 in Johannesburg, South Africa, with the objective of highlighting the transmission plans of utilities and the investment opportunities in the region, and discussing technological and financing solutions to realise these. It was also the first-ever conference focused solely on the electricity transmission industry in Africa.

 

The highlights and key messages from the conference are presented below.

 

Utilities’ Plans and Perspective

In the first session, Fernandes Barasa, Managing Director and Chief Executive Officer (CEO), Kenya Electricity Transmission Company Limited (KETRACO), presented the company’s plans under which around 12,000 km of new lines will be added to the grid by 2035. A key project, and one of both domestic and regional importance, is the 500 kV high voltage direct current (HVDC) Ethiopia–Kenya line, which is currently under construction. He elaborated that the utility was working to provide power at lower costs, reduce power losses and achieve universal electricity access by 2022 to help Kenya achieve its Big 4 National Development Objectives.

 

However, availability of adequate financial resources is the biggest challenge that is hampering the utility’s expansion plans. Of the USD5.7 billion funding requirement, around USD2.6 billion has been secured, leaving a financing gap of USD3.1 billion. Some of the financing strategies being explored by KETRACO include mobilising funds from the National Treasury, enhancing internal revenue generation and involving the private sector through various models such as EPC+Finance (engineering, procurement and construction plus finance) and public-private partnerships (PPP).

 

Mbulelo Kibido, General Manager, Transmission Grid Planning, Eskom, discussed the future of regional integration in Southern Africa. He elaborated that Southern Africa has significant untapped resources and utilising these could increase the reliability of power supply for the entire region. A regional super grid must be created to access these resources. Several priority regional transmission projects are being developed to create this super grid. However, Kibido pointed out that several challenges—insufficient transmission capacity, generation shortages, regulatory deficiencies and problems in securing land for development of new projects—need to be addressed to fully utilise the region’s trade potential. Going forward, he envisions the Southern African Power Pool (SAPP) to have an integrated planning process, a single independent system operator, a single regulatory authority and become a fully competitive electricity market.

 

Valentine Katabira, Deputy CEO, Uganda Electricity Transmission Company Limited (UETCL), presented the utility’s plans and highlighted the investment requirement for achieving these. He stated that around 5,600 MW of new generation capacity is planned to be added in the country by 2027. To prepare the grid network to accommodate this capacity and create regional grid interconnections, around USD4.8 billion in investment is required by 2040. Several development agencies including the African Development Bank (AfDB), China Export Import (EXIM) Bank, Agence Française de Développement (AFD), World Bank, etc. have extended funds for the implementation of the utility’s expansion plans. In addition, UETCL is considering the EPC+Finance model to involve private developers in executing a few projects.

 

Figure 1: Key challenges faced by utilities and mitigation measures


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Source: Presentation by Fernandes Barasa, KETRACO

 

 

Interconnecting Grids for Resource Optimisation

As per Dr John Mativo, Senior Technical Advisor, KETRACO, though bilateral power exchange agreements exist between Kenya and a few of its neighbours such as Uganda, Ethiopia and Tanzania, there is low or insignificant power exchange due to the system deficit. The Ethiopia–Kenya–Tanzania–Zambia regional power interconnection is being developed to boost power exchange. However, he stated that most of the regional grid projects face common implementation challenges, the key among them being single commissioning date for all project components, lack of security, vandalism, poor road connectivity, different contract periods, different financiers, etc. He cited the example of the Kenya–Uganda Interconnector, which has been delayed due to arbitration issues between KETRACO and the contractor (Spain’s Inabensa). He also highlighted that the Eastern Africa Power Pool (EAPP), which was established 2005, is not yet operational. Some prerequisites for operation of the day ahead market in the region include creation of power interconnection infrastructure, interconnection codes, regional power market rules, capacity building in power trade, institutional/market reforms, etc.  

 

Jean Madzongwe, Transaction Advisor, SAPP Project Advisory Unit (PAU), provided an overview of SAPP and its role in facilitating power trade among member countries. She elaborated that there are plans to grow the current SAPP electricity market into one that is also a balancing, ancillary services and financial market. She highlighted that the SAPP market was very competitive, with the share of competitive market increasing from 11.3 per cent in 2016/17 to 24 per cent in 2017/18. Around 16 priority projects to further strengthen SAPP and connect non-operating member countries are being developed, with the majority being at the feasibility stage.

 

Figure 2: SAPP Interconnector Projects


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Source: Presentation by Jean Madzongwe, SAPP

 

Policy and Regulatory Perspective

Godfrey Chibulunje, Director of Electricity, Electricity and Water Utilities Regulatory Authority, Tanzania, provided an overview of the agency’s role and responsibilities. He discussed the government’s plans to expand the country’s generation and transmission system, under which over 3,750 MW of new generation capacity and around 4,400 km of high voltage lines will be constructed. He highlighted some of the challenges faced by the county’s power sector, the key among these being financial constraints, high energy and non-technical losses, high cost of land compensation, unfavourable power purchase agreements (PPAs), and non-recovery of electricity tariffs . Measures to mitigate these challenges include securing funds from development partners, use of smart meter technology, utilising existing way-leaves, investing in skill development, etc. He emphasised that there is an urgent need to invest in the country’s power infrastructure to meet the country’s industrialisation agenda and growing demand as well as to meet the national target of a 75 per cent electrification rate by 2035.          

 

Namrata Mukherjee, Head, Policy Advocacy, Sterlite Power Transmission, advocated for introducing competition in power transmission by allowing more players to compete on a level playing field. She cited India and Brazil as successful examples, where such a model had increased efficiencies both in terms of cost and time. Both India and Brazil have put in place strong regulatory frameworks for awarding transmission projects through a competitive bidding process. While there are differences in the regulatory and tariff recovery frameworks adopted by the two countries, both have benefited from this mechanism, in terms of early commissioning and lower tariffs.

 

Kurt Dedekind, Planning Manager, Eskom, and Secretary of the International Council on Large Electric Systems (CIGRE) Africa Working Group (WG), highlighted that some of the major challenges faced by the Sub-Saharan Africa (SSA) countries include low electricity access rates, a rapidly growing population and a lack of skill development. To address these, the World Bank and CIGRE have established a working group for transfer of knowledge to managers, engineers and planners working with relevant African ministries, agencies, utilities, institutions, universitis, etc. The goal of the WG is to provide the workforce with access to unbiased, up-to-date technical experience, which in turn will help the development of the electricity sector and increase access to electricity in Africa.

 

New Transmission Technologies – Shaping the Future Grid

Kosuke Ambe, Deputy Division General Manger, Tokyo Rope, highlighted that the overhead conductor market is facing the challenges of huge electricity demand, environmental concerns, sag violations, right-of-way (RoW) issues, high construction costs and longer execution periods. To address these issues, the company has developed a next generation conductor cable—Aluminum Conductor Fiber Reinforced (ACFR)—with a carbon fibre composite cable (CFCC) core, which offers the advantages of high strength, low expansion and less weight as compared to an Aluminum Conductor Steel Reinforced (ACSR) cable. Several utilities in Asia have deployed the ACFR cable, including Japan’s Tohoku Electric Power Company Incorporated, China Southern Power Grid and Indonesia’s PLN.

 

Khayakazi Dioka, Corporate Specialist, HV Plant Engineering, Eskom, discussed the various technology strategies that Eskom was deploying for better management of power transformers. Some of the recently introduced technologies include fibre optic hot spot measurements, dry bushings with composite insulators, vacuum tap changers, thermally upgraded paper, self dehydrating breathers and online dissolved gas analysis (DGA). She emphasised that online condition monitoring was of the utmost importance for better asset management. Currently, 45 per cent of Eskom’s transformers and reactors have gas analysers and the remaining fleet is being retrofitted with this technology.

 

Vikas Varshney, Associate General Manager, International Business Development, Sterlite Power Transmission, discussed some of the technology solutions provided by Sterlite’s MSI (Master System Integrator) to resolve complex problems faced by utilities. The MSI has helped in planning network expansions despite challenges of RoW, environmental regulations and urbanisation. Recently, the company executed a project in India’s Kerala state where it used monopoles (to mitigate space constraints) and micropiles (to reduce excavation), optimised towers with high tension low sag (HTLS), changed single-circuit to multi-circuit, multi-voltage, and used HTLS conductors (to increase ampacity with lesser sag). This resulted in increasing the N-1 capacity of the exiting corridor by 14 times.

 

Optimal Solutions for Transmission Design and Construction

Lebo Maphumulo, Corporate Specialist, Lines Engineering, Eskom, discussed the various high surge impedance loading (HSIL) techniques that utilities can deploy to increase SIL of long lines. Some of the solutions for addressing this issue include uprating existing lines involving only bundle expansion (in this case only the hardware needs to be changed); construction of new lines involving a combination of expanded bundle and phase compaction (in this case the bundle can be expanded as far as possible on the existing compact tower); and construction of new lines involving phase compaction (as the perfect inverted delta configuration eliminates the need to transpose the line to aid voltage unbalance because the voltage drop throughout the line is equal between the phases).

 

Arthur Burger, Chief Electrical Engineer, HV Power Lines, Eskom, discussed the different solutions that are currently available to increase power line overhead conductor thermal ratings. He elaborated that the ‘probabilistic ratings’ method is preferred if a suitable weather database for the line area is available. Technical assessment of the line condition, combined with the probabilistic ratings method may help avoid physical improvements or installation of extra equipment to address the issue of line thermal ratings.

 

Jonathan Chetty, Senior Design Engineer, Transmission Towers, Eskom, talked about the various tower designs that are being developed by Eskom to address constraints such as servitude, high voltage underpasses, multi-circuit lines and difficult terrains. He cited the example of the 400 kV Malta–Jupiter line where the 540 Series tower (55 metre servitude for four circuits; meant for urban areas) and DC Steelpole (self-supporting and narrow footprint; meant for built-up areas) have been installed. Eskom has also designed the Sugar Cane/Extra Clearance Towers, which are being installed predominantly in Kwa-Zulu Natal in the sugarcane burning areas where extra high clearance is required.

 

Private Sector Participation in Transmission and Financing Options

Dr Mativo highlighted that transmission line lengths per capita in the majority of African countries were far lower than those in developed countries. Thus, there is an urgent need to build more transmission lines within and between countries as well as to upgrade existing transmission capacity. He elaborated that Kenya is facing a financing gap of USD3 billion for funding its transmission infrastructure projects. Recognising the role that PPP can play in reducing this gap, Kenya has set up a PPP governance structure to encourage private participation. Currently, KETRACO is evaluating two models—independent power transmission (IPT) and build, own, operate, transfer (BOOT)—for awarding projects under the PPP mode. The utility has already identified five transmission line projects involving USD235 million in investments to be awarded under the PPP model on a pilot basis. The first IPT tender is expected to be awarded in 2020.

 

Aveneet Vohra, Vice President and Head, International Business, Sterlite Power Transmission, shared Sterlite’s experience as a private transmission developer in India and Brazil. He explained that in India, the PPP model had reduced power tariffs by more than 50 per cent in five out of 14 projects. Tariff-based competitive bidding (TBCB) had also resulted in faster execution of projects, with the concept-to-commissioning period being reduced from 60 months (for cost plus projects) to 36 months (TBCB projects). Likewise, the Brazilin transmission sector has also experienced tariff reduction, with the June 2018 auction witnessing bids for more than 55 per cent reduction in the average tariff. Thus, well-structured PPPs can help ensure that greenfield projects are delivered on time and within budget and at the same time generate attractive risk-adjusted returns for investors. However, before Africa embraces the PPP model for power transmission, a lot of groundwork needs to be done in terms of developing policies, legal and regulatory frameworks for IPTs; ensuring adequate revenue flow and credit enhancement for projects; tailoring IPT projects to attract international investors; skill building to implement IPT transactions, etc.

 

As per Romaine Py, Head of Investments, African Infrastructure Investment Managers (AIIM), it is unlikely that African transmission networks will be fully privatised. Further, African governments are faced with fiscal challenges with an average SSA government debt to GDP reaching 48.1 per cent in 2018. Thus, to ensure that network expansion continues, new business models need to be sought to promote PPP in the African transmission sector. He proposed that implementation of IPTs in Africa could build on Africa’s largely successful experience with independent power producers (IPPs). Also, IPTs have a lower regulatory requirement as the annual revenues are largely established up-front through the tender process. However, to ensure the success of the IPT model, there should be economies of scale to be successful (project size of >USD100 million), a robust regulatory framework, consistency of business model with directions in power sector reform, and financial viability of the power sector and industry structure.

 

Seaga Molepo, Senior Power Engineer, African Development Bank (AfDB), mentioned that the energy sector was a strategic priority for the Bank. Under the New Deal on Energy for Africa, which aims to achieve universal energy access by 2025, the Bank plans to ramp up its investments to provide finance, co-financing and syndication by investing USD12 billion and leveraging USD50 billion in public and private financing for investments in the energy sector. It also recently launched the Power Africa Transmission Roadmap to 2030, under which a need to mobilise at least USD3 billion to install 7,500+ MW of transmission capacity, and bring at least 10 priority transmission projects to financial closure has been identified. He also put forward the case for PPP in transmission, stating that scarce public finance was the key constraint for state-owned utilities to execute projects in a timely manner. Some of the factors that AfDB would consider before financing transmission PPP projects include a clear policy direction on how to introduce transmission infrastructure PPP, an enabling legal and regulatory framework for PPP, understanding implementation challenges through pilot-scale trials, clearly defined performance criteria (e.g. percentage availability, etc.), government support framework to guarantee payment obligations, projects that are fully prepared with minimal permitting and approval risks and transparent and competitive tender processes.

 

Figure 3: Key benefits of PPP in transmission

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Source: Presentation by Avneet Vohra, Sterlite Power Transmission

 

 

Renewable Integration and Energy Storage

Crescent Mushwana, Research Group Leader, Energy Systems, Council for Scientific and Industrial Research (CSIR), said that maintaining system stability is critical as the share of high variable renewable energy (VRE) increases in the grid. The primary focus in strong systems is on frequency stability while in weaker systems, it is on rotor angle stability and voltage stability. He opined that power system stability challenges should never become a barrier to increasing RE shares and that tested solutions to address stability issues already exist. He cited the examples of South Australia and the North American Electric Reliability Corporation (NERC), which experienced grid faults due to RE fluctuations and the measures adopted to address these. He also proposed creating microgrids as a means of increasing electricity access in the region.

 

Mikhail Nikomarov, CEO, Bushveld Energy, discussed the role that battery storage can play in addressing challenges posed by RE in grid integration. He showcased examples and studies wherein battery storage could decrease overall system utilisation and the requirement for ‘network overbuilding’; help in regional integration challenges; and defer network expansion, especially in radial grids. While several battery storage technologies are available, Bushveld is focusing on the vanadium redox flow battery (VRFB), which is being deployed for developing projects across Africa.

 

Figure 4: Solutions to address grid stability issues for RE integration


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Source: Presentation by Cresent Mushwana, CSIR

 

Asset Management and Optimal Utilisation 

Patrick O'Halloran, Chief Engineer Network & Systems Management, City Power, explained that the utility’s 88 kV network was aged and had reached its capacity in certain areas due to increasing load. To address this issue, City Power considered several solutions including reconductoring, rebuilding existing lines with new towers, and installing underground cables. The utility finally decided to upgrade the 88 kV overhead line network in live-line conditions. Under this, new conductor technology involving 180°C Aluminum Conductor Composite Core (ACCC) conductors was deployed (as compared to the more conventional All Aluminium Alloy Conductor (AAAC) as were Aluminium Conductor Steel Reinforced (ACSR) conductors; specialised installation practices involving live-line installation (against to dead-line reconductoring techniques) were undertaken; and long rod silicon insulators were installed (rather than glass or porcelain insulators).

 

Nompumelelo Bofu, Senior Engineer, Eskom, discussed the use of aerial technologies and robotics in line construction, maintenance and inspection. She elaborated that helicopters were becoming a popular choice for line construction across all terrains and not only in rugged terrain. Further, drones were also being deployed for line construction, but their use was limited due to lower lifting capacity (up to 300 kg) and flying time. They were being used mainly for pilot wire stringing. Further, AI (artificial intelligence) technologies are now available that can help interpret data obtained from drone or helicopter inspections. Going forward, these technologies—drones and robots—can be deployed for providing unmanned deliveries, undertaking repetitive and heavy lifting tasks and reducing worker fatigue.

 

Shem Chelliah, Regional Manager, GE Grid Solutions, highlighted that utilities across the globe are facing the common challenges of improving availability and reliability while reducing costs and managing risks. Asset performance management (APM) is one such tool that can address these issues. APM has resulted in significant improvements for GE customers, the key among these being a 5 to 15 per cent reduction in planned maintenance costs; a 10 to 40 per cent reduction in unplanned maintenance costs; increasing asset life by 5 to 25 per cent; and an up to 50 per cent reduction in failure rate. He cited the example of New York Power Authority, where GE will use its APM solution to capture key data across the utility’s generation and transmission infrastructure (16 generation units and over 1,400 circuit miles of transmission lines) to help increase grid availability, reliability, efficiency and profitability.

 

Conclusion

Africa’s energy sector is transforming with a vision to becoming one that is more diverse and dynamic. While governments are focusing on building generation capacity to meet the growing energy demand and increasing electricity access, the emphasis is also on expanding the transmission sector. Most utilities are experimenting with new technologies and innovative construction techniques to resolve grid expansion challenges. However, given the fiscal burden faced by most African governments, introducing competition in power transmission has become the most obvious choice for many African countries. That said, these discussions are still in the nascent stage and a lot of groundwork needs to be done before PPP can be introduced in the sector.