A GROUP of energy experts has questioned Zesco’s motive behind the refusal to renew a Bulk Supply Agreement it entered into with the Copperbelt Energy Corporation (CEC) over 22 years ago.

On November 21, 1997, Zesco Limited and CEC entered into an agreement where the former was supplying power to the latter at wholesale, a deal that comes to an end on March 31 this year.

Since then, CEC has been supplying power to mining companies on the Copperbelt, as well as most mining residential areas.

The company is also the major financier of the Zambian premier league side Power Dynamos Football Club.

Last Friday, CEC informed its shareholders that energy minister Mathew Nkhuwa had notified management that the agreement would not be extended once it expires at the end of March.

Responding to the government’s decision, the Energy Advisory and Solicitation Institute (EASI) argued that CEC was already proven to be a responsible stakeholder in the energy sector.

EASI chairperson Chisakula Kaputu said the motive behind the government’s refusal to renew the agreement with CEC was highly questionable.

“Zesco has since the post 2000 commercialisation narrative still remained in the doldrums of a social enterprise with very little to show of a financially sustainable business model existing,” he said in a statement yesterday.
“…EASI believes that we have an energy sector at crossroads with pertinent issues of cost reflective tariffs, Electricity Supply Industry (ESI) sustainability and viability, reform uncertainty, legacy PPAs and BSAs, energy security, etc at the fore, as such transparency and good intent is demanded of all the energy sector players/stakeholders.”

Kaputu demanded clarification from the PF government on what he termed as an ambiguous statement.
He stated that both Zesco and CEC were key stakeholders in the energy sector, hence the need for the government to reflect on the decision.

“The energy sector needs CEC as an already proven key stakeholder and only second to Zesco in functional responsibility in the power generation, transmission, distribution and supply portfolios. The energy sector needs Zesco the most as sole owner of 66 per cent of national installed capacity and over 30,000 km of transmission and distribution national grid as well as custodian of [the] National Control Centre/systems operator functionality,” stated Kaputu. “Government’s decision on the nearing expiring ZESCO – CEC BSA must be taken in the best interest of the country and energy sector above all else. Ambiguity around the bold statement that the ZESCO-CEC BSA ‘will not be renewed’ after it expires on 31st March 2020 needs to be clarified at the earliest opportunity. In order to calm the anxiety of the mining load owners and Copperbelt Province energy users in general, the discussion/negotiation around the ZESCO-CEC BSA issue needs to be expedited with resolution made way ahead of the expiry date of 31st March 2020.”

According to a notice to shareholders, the government, through Nkhuwa and Zesco, had notified CEC that the Bulk Supply Agreement would not be renewed once it expired.

“In accordance with Section 81(1) of the Securities Act No. 41 of 2016, the Board of Directors of Copperbelt Energy Corporation Plc (“CEC” or “the Company”) advises the Company’s shareholders, and the market, that the power purchase agreement or Bulk Supply Agreement (“BSA”) between CEC and ZESCO Limited (“ZESCO”), entered into on 21 November 1997 is expected to come to an end on 31 March 2020,” company secretary Julia Chaila stated. “The Government of the Republic of Zambia (“GRZ”), through the Minister of Energy, and Zesco have notified CEC of their position that the BSA will expire on the date stated above and will not be renewed. GRZ and Zesco have expressed to CEC their commitment to continue facilitating an efficient and economic supply of power to consumers on the Copperbelt both during the validity of and post the BSA. CEC wishes to emphasise its unwavering commitment to use its infrastructure and capabilities in ensuring continued and seamless supply of power to all consumers on the Copperbelt now and after the BSA.”

Source: The Mast

NKOMBO KACHEMBA, Kitwe
MINISTER of Energy Mathew Nkhuwa has assured the mining industry of continued power supply if Zesco and the Copperbelt Energy Corporation (CEC) fail to resolve the impasse over the bulk supply agreement.
Zesco has an agreement under which it supplies power to CEC which it sells to mines on the Copperbelt.https://epaper.daily-mail.co.zm/

Source: Zambia Daily Mail

Copperbelt Energy Corporation (CEC) Plc says it geared to tap into the Southern African Power Pool (SAPP) as an alternative source of electricity, should its Bulk Supply Agreement (BSA) with Zesco Limited not be renewed.

And CEC says it cannot restrict electricity to Konkola Copper Mines (KCM) Plc as it has done in the past to defaulting clients for unpaid invoices because the mining company has started making some payments.

The BSA between Zesco and CEC is a 20-year agreement that underpins power supply to the Copperbelt and it is set to come to an end in March, 2020.

Ministry of Energy Permanent Secretary Trevor Kaunda disclosed that the BSA will not be renewed.

“Government made a decision earlier in the year, if you have been following the news, that when the Bulk Supply Agreement that is existing now comes to an end in March, next year, it shall not be renewed. I think that is the Cabinet decision that was made earlier in the year. It’s not a rumour, that’s just what it is. So, those are now the discussions that are taking place between the parties. Post-March, 2020, how does supply in the Copperbelt and, indeed, other areas look like? That’s the discussion which is in place, and at an appropriate time, the nation shall be updated once those discussions are concluded because, basically, we still have the rest of December up to March for those discussions in terms of the outlook,” Kaunda said in an interview in Lusaka.

But responding to a press query for an update on CEC’s progress on its BSA with Zesco, CEC senior manager corporate communication & investor relations Chama Nsabika stated that the Kitwe-based power utility was geared to tap into the regional market through the SAPP, the cooperation of the national electricity companies in southern Africa, as an alternative source of power should the stalemate with Zesco over its BSA persist.

“The alternative source of power would be the regional market. CEC has bilateral Power Purchase Agreements (PPAs) with regional utilities and can, if necessary, access some of this power to benefit the local market. Deploying this solution, obviously only makes sense in circumstances where the local market is unable to meet CEC’s requirements. It is cardinal that everybody recognises that the situation we are faced with requires concerted efforts at constructive engagement and putting in place a mutually acceptable solution in good time. CEC will continue to render quality service to all its customers, using its infrastructure and capabilities, to the benefit of both its mining and non-mining customers. While the solution to the BSA remains to be agreed, CEC believes that in time, a mutually-acceptable solution that safeguards the interests of customers and investors will be found,” Nsabika stated.

On the company’s ongoing dispute with Zesco over non-payment of retainers from power CEC sold to mining companies, Nsabika noted that the status quo remained.

“On 4th December, 2019, in accordance with the Lusaka Securities Exchange listings rules, CEC issued a further cautionary announcement advising the market that the matter is in progress and remains under adjudication. The status quo remains,” she added.

And Nsabika added that the company would not restrict power supply to KCM despite its outstanding debt for electricity supplied to the mine’s business units as it had started making payments.

KCM remained in receipt of power throughout this year despite its indebtedness to CEC.

“It is true that KCM remains CEC’s largest customer and any non-payment for power supplied has a negative impact, not only on CEC’s financial performance, but also on the financial well-being of the entire value chain; a fact we also reflected in our published half-year results for the period January to June, 2019. It is also true that any payment default would constrain CEC’s ability to meet its payments to Zesco. CEC has continued to work constructively with all stakeholders, including the government, KCM and Zesco in respect of the KCM situation and it is evident that all parties are committed to seeing a KCM that meets its payment obligations. KCM has since made some payment against the outstanding amounts. We, therefore, take the view that the option to restrict power is not necessary at this stage,” stated Nsabika.

Source: News Diggers

Copperbelt Energy Corporation (CEC) Plc’s electricity supply to Konkola Copper Mines (KCM) has drastically dropped to an average 160 megawatts by the end of 2019, from a peak of around 210 megawatts one year ago, company data reveals.

And CEC plans to invest a 2x20MW solar PV in Kitwe with partner, InnoVent, under GET FiT programme, with an overall intention to invest in up to 200MW in solar technology over the next three to six years.

According to CEC head – power plants and mechanical systems John Silweya, CEC’s power distribution to KCM had sharply dropped to an average 160MW this year, from an average 210MW prior to the provisional liquidation team takeover of the mine in May, this year.

He explained that since mid-2019, KCM’s operational challenges had triggered a sharp drop in its access to electricity at its major mining assets of Nkana, Nchanga and Konkola.

“We supply both the Nchanga Mine and the one in Chililabombwe when they are at their peak with about 210MW. They did have challenges; I think you heard at the smelter, there was a challenge there so now I think the mine in Chililabombwe is doing about 80 MW and in Nchanga, they seem to be recovering, they are doing about 80MW as well now, so maybe about 160MW. But we are hoping that they can recover from those operational challenges, we are here to support them,” Silweya told journalists during a media tour of the Luano substation in Chingola District.

And live data from the control room indicating power distribution across CEC’s vast network across its entire network showed a breakdown in power supply across KCM’s three mining assets.

KCM Nkana accessed around 1.76MW; KCM Nchanga accessed 95.2MW, while KCM Konkola received 78.7MW by the end of November.

And speaking to journalists when he gave an overview of CEC’s operations, managing director Owen Silavwe explained that KCM remained the “wettest mine” in the world, hence the need to continuously supply the underground mining operation with electricity or risk losing the entire asset.

“So, one of the key features of the Copperbelt mines, unlike the or the North-Western Province mines, the Copperbelt mines are underground mines, they operate below the water table so one of the key features is that they tend to be very wet mines. For example, Konkola is the wettest mine in the world and because of that, you need these strategic assets to make sure that of the grid is not there, you have to be able to do critical operations. You need to be able to pump out the water because one of the facts known about Konkola was that if it stayed 30 minutes without pumping water, you basically lose the mine. You may not be able to operate. So, you need to continuously pump out the water, so you can’t afford not to have the ability to pump out if you have no grid at Konkola,” explained Silavwe, who also announced that the mining company had not paid for its electricity off-take for the majority of this year.

CEC is one of the oldest power utilities in the country, established in 1951 by mining companies on the Copperbelt, to manage their electricity supply needs as opposed to each mine managing its own electricity generation and distribution, which was the case prior to that year.

The company now supplies power to 10 mines on the Copperbelt, chief among them being KCM, which despite its ongoing operational challenges, consumes the largest chunk of electricity.

And CEC plans to invest a 2x20MW solar PV in Kitwe with partner, InnoVent, under the government’s GET FiT programme, with an overall intention to invest in up to 200MW in solar technology over the next three to six years.

Company data availed in a powerpoint presentation showed the utility’s ambitious power diversification programme over the next half-decade.

“Developing 2x20MW solar PV in Kitwe with partner, InnoVent, under GET FiT programme; intention to invest in up to 200MW in solar technology over the next three to six years; involved in up to 150MW Upepo hybrid (solar, wind, storage) generation project; participating in GET FiT small hydro programme,” read part of the presentation.

A check at one of the company’s 1MW solar pilot project showed that efforts were already underway to actualize this agenda.

“We installed this plant in April, 2018, and the installation took about three weeks. It’s a one megawatt (plant) and the output in simple terms, can power up to 500 big houses. If it’s these small houses in the compound, it can be in excess of 1,000 (houses). The number of panels installed is about 3,800; we have 24 inverters and we have got an 11 KV evacuation line. This power we are using here is consumed at CEC only. This is a pilot plant; we were thinking that before we embark on a bigger project, it’s better we learn, we start small then it had been strategically located near CBU (Copperbelt University) because we also want to assist CBU; we have got about 42 hectares of land, which is earmarked for the same facility. This is one megawatt and we hope the rest of the land, which is remaining, we should be able to put about 20 megawatts,” CEC project manager in charge of business development Cassious Chongo said during a tour of the 1MW plant in Kitwe last week.

“Solar energy is reliable enough, but it has got its negative sides because its intermittent. By that I mean that when there is some disturbance, the output drops. So, on this one, the next project we are working on is the battery storage where we should be able to mitigate that by installing the battery storage.”

CEC mostly owns transmission and distribution infrastructure, whose key usage is when the national grid is unavailable.

A big chunk of it is at Luano substation, which has generating capacity of 40MW; 20MW in Chililabombwe; 10MW in Mufulira and another 10MW in Luanshya.

Source: News Diggers

Copperbelt Energy Corporation (CEC) Plc chief executive officer Owen Silavwe says talks are underway with Zesco Limited to renew the Bulk Supply Agreement (BSA) ahead of the expiry of the existing one, which lapses next year.

And Silavwe says the decision to not load shed mining companies in Zambia is more “economical” and not an act of selfishness as the country’s economy is largely influenced by the performance of the sector.

Speaking during a media interaction with journalists at the company’s head office in Kitwe, Wednesday, Silavwe announced that the power utility was in talks to renew their BSA with Zesco as not renewing the agreement would spell doom for its Copperbelt commercial and retail clients, who are being supplied electricity from CEC.

CEC currently supplies a stable supply of electricity to 10 major corporate clients in the province, including Konkola Copper Mines (KCM) Plc, its biggest client who consume largest chunk of power from its network.

The power utility also supplies to its retail clients, non-mining consumers, across the province at an average tariff of 3.5 US cents per kilowatt hour.

“We supply the power to everybody on the Copperbelt so it’s a question of how are we going to ensure that we do this in a way that will not antagonize the sector or the economy, I think that for me is quite critical. And I don’t think we have any challenges in achieving that in a very amicable and efficient way. I think what I would say is there is work that’s going on at the moment and that work is meant to find a solution to this. The Bulk Supply Agreement underpins the supply of power to everybody in the Copperbelt; it’s not just the mines, basically everybody on the Copperbelt. So, my view on it is that whichever way you look at it, a solution has to be found, if renewal is the solution, then so be it. But the critical takeaway is that a solution needs to be found, otherwise come that, day, nobody would want to see challenges on the Copperbelt, and basically challenges to the economy,” Silavwe said.

“So, we should try, as a country, to avoid dooms day! I don’t think we plan for dooms day. We are working on it, but we don’t have a conclusion today. The fact is process is ongoing, today. It’s not about what I want to see, it what is mutually agreed between the parties at the end of the day, that is important.”

And Silavwe explained CEC worked hard to ensure that the country’s power deficit did not affect mining companies.

“CEC supplies power to the mines on the Copperbelt; Zesco supplies power directly to the mines in North-Western so all the mines, whether on the Copperbelt or North-Western, they are currently not being load shed. It’s not just the mines on the Copperbelt. And the reason for that is obviously to try and protect the economy. At the moment, as I understand it, and it’s not that CEC is being selfish that’s why they are not being load shed. So, we obviously try and coordinate actions whether we are working through ourselves or we are working through the Ministry (of Energy), we try and make sure that we coordinate our efforts,” said Silavwe.

“One of the things we do as CEC is, if, for example, the mines need to be load shed, we try and make sure we use our contracts within the region to buy power and supplement whatever gaps are there because, remember the challenge with the mines is that if, for example, you take away 10 per cent of their power because they are running processes that are basically interconnected, they are dependent on each other. You might find that the mine actually needs to close, if they can’t run one process, it basically means they can’t run a subsequent process and they can’t run the next process. So, generally, what you try and do is to protect that to ensure that you protect the mine operations and you ensure that you don’t end up in that scenario. Most of the local residents on the Copperbelt work on the mines because the mines are second largest employer after government.”

Source: News Diggers

THE Copperbelt Energy Corporation (CEC) is conducting feasibility studies for the construction of a 350 megawatt renewable energy plant. CEC senior manager for special projects Cassius Chongo said this during a presentation on alternative renewable sources of energy in Kitwe on Thursday. Mr Chongo said the plant will be generating electricity through the use of solar and wind energy CLICK TO READ MORE

US $200m two solar power projects are set to build in Zambia. Funded by the Japanese Renewable Energy Company Univergy Solar, the two plants are expected to add a total of 200MW to the country’s national grid next year.

According to a statement from Zambia’s embassy in Tokyo, Univergy Solar Company is expected to develop and implement a 135MW project in northern Zambia and another 65MW project in Zambia’s copperbelt.

Furthermore, the solar power project will be implemented in collaboration with a Zambian company and is expected to create hundreds of jobs and business opportunities for local firms engaged to maintain the solar farms and generation plants.

Construction timeline

The Japanese firm will sign a Memorandum of Understanding (MOU) with the Zambian government to start work on the projects in the first quarter of 2020. The two projects are expected to be completed between six and eight months after the commencement date.

Also Read:Zambia to establish 107 MW solar energy plant in Hwange District

Zambia mainly relies on hydropower and has an electricity deficit of about 750MW due to low water levels at generation plants after a severe drought hit power production. The country cut its economic growth forecast to around 2% for 2019, from an estimated 4%, due to the impact of the drought on its power supply and agricultural production.

Solar power in Zambia

Zambia expects to triple power output to 6,000 megawatts (MW) in 2 years through expansion of solar energy by foreign investors, the head of its investment agency said.

Erratic electricity supplies have hit mining in the continent’s second-biggest copper producer, where the bulk of its generation capacity of 2,200MW of power is water-powered. The power problems and copper price slide have driven the kwacha currency to record lows amid a selloff in commodity-linked currencies as top copper consumer China’s economy has slowed.

THE Copperbelt Energy Corporation (CEC) has forged partnerships with three private companies in establishing solar-powered plants estimated to cost US$340 million that will be generating 230 megawatts (MW) of electricity.
CEC has formed a consortium with a French company in implementing the GET Fit programme, a government programme aimed at enhancing the use of renewable energy in the country.https://epaper.daily-mail.co.zm/

GOVERNMENT has granted the Copperbelt Energy Corporation (CEC) approval to import about 200 megawatts (MW) of power from the Southern Africa Power Pool (SAPP) to mitigate the supply deficit in the wake of the power shortfall being experienced in the country.
SAPP is a cooperation of the national electricity companies in Southern Africa under the auspices of the Southern African Development Community (SADC).
CEC supplies power to the mines on the Copperbelt and in the Democratic Republic of Congo (DRC), some which is sourced locally from Zesco Limited through the bulk power supply agreement. 

he Copperbelt Energy Corporation (CEC) has donated a motor vehicle to the Zambia Police Service in Kitwe to enhance security of strategic power installations on the Copperbelt.

The Motor vehicle valued at US $40,000 was received by Home Affairs Minister Stephen Kampyongo who was accompanied by Copperbelt Provincial Minister Japhen Mwakalombe and Inspector General of Police Kakoma Kanganja.

Speaking at the handover ceremony that was held at the CEC offices in Kitwe today, Home Affairs Minister Stephen Kampyongo said the donation has come at the right and critical time when mobility of the police officers is most important in the maintenance of law and order and protection of strategic infrastructure.

“We cannot as a country afford vandalism to our essential energy infrastructure at a time when the country is stressed by inadequate production of electricity due to the inadequate rainfall received in the southern half of the country, ” Mr Kampyongo charged.

He said while government is committed to providing necessary tools and equipment to the police officers, they were yet to be fully equipment to curb crime and vandalism of critical economic infrastructure.

He said the donation will enhance the Ministry’s resolve to discharge its mandate of protecting property and people.

Kampyongo further appealed to other corporate entities on the Copperbelt and the country as a whole to emulate CEC in supporting the police.

And CEC Board Chairman, London Mwafulilwa said the company has been experiencing a heightened spate of infringements to its electrical installations ranging from vandalism and theft of transmission lines for copper conductors.
Mwafulilwa said these have resulted in the monetary losses as well as disruptions in service delivery to productive sectors of the economy reliant on power.

He stated that this year alone, the company has recorded 10 cases of theft and three of vandalism where about 1, 505 metres of its overhead copper conductors have been cut off and stolen from the system on the Copperbelt.

He noted that arresting the market for copper conductors would help curb the problem.

Mwafulilwa further proposed that the police considers deploying dedicated officers to work on anti-theft involving conductors and other components of electrical systems containing copper for the benefit of all power utilities in the country.

And Copperbelt Police Commissioner Charity Katanga said the donated vehicle will enhance the operations of the police in curbing crimes targeted at CEC power installations.