PRESENTATION AT THE ERB RENEWABLE ENERGY FORUM SOLAR WATER GEYSER PROJECT

IMPACTS ON THE CONSUMPTION PROFILE OF ELECTRICITY

PRESENTED BY: MR KELVIS KASONKOMONA AND MR MELLON CHINJILA

ON BEHALF OF THE ZESCO MANAGING DIRECTOR

24-25 AUGUST 2011

PRESENTATION OUTLINE
1. INTRODUCTION 2. REHABILITATION OF EXISTING POWER STATIONS 3. BUILDING NEW POWER PLANTS 4. DEMAND SIDE MANAGEMENT 5. SOLAR GEYSER PROJECT-CASE STUDY 2 6. OTHER SOLAR ENERGY INITIATIVES UNDER CONSIDERATION 7. CONCLUSION

 RENEWABLE ENERGY SOURCES

1. INTRODUCTION

HYDRO ENERGY SOLAR ENERGY WIND ENERGY GEOTHERMAL AND BIOMASS ENERGIES ETC

SOLAR ENERGY MOST ABUNDANT OF ALL ENERGY SOURCES SOLAR ENERGY TECHNOLOGIES CAN BE USED FOR
HEATING COOLING AGRICULTURE APPLICATIONS ELECTRICITY AND NATURAL LIGHTING

1. INTRODUCTION
SOUTHERN AFRICA SOLAR ENERGY POTENTIAL ESTIMATED AT BETWEEN 25,000 - 30,000 TWh/YEAR (Tera Watt Hour/Year)
GLOBAL SOLAR IRRADIATION IDENTIFIED IN NORTHERN ZAMBIA OF 2300 KWH/M2/YEAR

SOLAR ENERGY HAS NOT BEEN UTILISED FULLY ZAMBIAS ELECTRICAL ENERGY LARGELY BASED ON HYDRO ENERGY
99% HYDRO ENERGY 1% THERMAL ENERGY (NON-RENEWABLE)

 AS EARLY AS 2000 ZAMBIA AND THE REGION FORECASTED A POWER DEFICIT TO OCCUR BY 2011 HOWEVER THE DEFICIT OCCURRED EARLIER DUE TO THE UNPRECEDENTED ECONOMIC GROWTH IN ZAMBIA AS WELL AS THE REGION (ZAMBIA 7.1%, REGION 5.2% IN 2010) ZESCO HOWEVER HAD FORESEEN THIS CHALLENGE AND HAD FORMULATED A BUSINESS PLAN THAT INCLUDED
REHABILITATION OF EXISTING POWER STATIONS BUILDING OF NEW POWER PLANTS DEMAND SIDE MANAGEMENT TO INCLUDE RENEWABLE ENERGY

1. INTRODUCTION

1. INTRODUCTION
IN S T A L L E D C A P A C IT Y v s A N N U A L M A X IM U M D E M A N D
6 0 ,0 0 0 5 0 ,0 0 0 4 0 ,0 0 0 3 0 ,0 0 0 2 0 ,0 0 0 1 0 ,0 0 0 0 IN S T A L L E D C A P A C IT Y MW

MW

Rapid Load Growth

1998

2000

2002

2004

2006

2008

2010

2012

Available Capacity

YEAR
SAPP PROJECTED ENERGY DEFICIT BY 2007

2. REHABILITATION OF EXISTING POWER STATIONS

S/N 1 2 POWER STATION KAFUE GORGE POWER STATION KARIBA NORTH BANK POWER STATION CAPACITY BEFORE REHABILITATION 900MW 600MW CAPACITY AFTER REHABILITATION 990MW 720MW (LAST MACHINE TO BE COMPLETED BY MID 2012) 108MW 24MW 1,842MW ADDITIONAL 210MW

3 4

VICTORIA FALLS POWER STATION SMALL HYDROS TOTAL

108MW 24MW 1,632MW

OVER USD 300 MILLION HAS BEEN SPENT SO FAR ON REHAB

3. BUILDING NEW POWER PLANTS

THE PROJECTS TO BUILD NEW GENERATION PLANTS ARE IN PROGRESS AND THEY TAKE LONG TO COMPLETE (4 TO 5 YEARS) THE EARLIEST ADDITIONAL CAPACITY IS ONLY EXPECTED IN 2013 (360 MW KARIBA NORTH BANK EXTENSION PROJECT)

ZAMBIA/ZESC0 GENERATION PROJECTS

NEW PROJECTS TO INCREASE GENERATION CAPACITY INCLUDE
ITEM NO. PROJECT NAME CAPACITY (MW) COST (US$) EXP. COMM. DATE

1 2 3 4 5 6 7 8

KNBE (Zesco) ITT(Zesco/TATA) Kalungwishi(IPP) Maamba Coal Fired Station (IPP) (NAVA BHARAT) EMCO COAL FIRED KGLHEPS(IPP) Lusiwasi (Zesco) Lunzua (Zesco)

360 120 218 300 300 750 86 14.4

420m 240m 500m 750m TBA 2bn 164m 52m

2013 2014 2015 2013 2014 2017 2015 2013

4. DEMAND SIDE MANAGEMENT

BUILDING POWER PLANTS IS BEING SUPPLEMENTED BY IMPLEMENTATION OF DEMAND SIDE MANAGEMENT AIMED AT SAVING POWER, INCREASING CUSTOMER BASE AND ENHANCING REVENUE FOR THE COMPANY ZESCO HAS IN THIS VEIN EMBARKED ON WORLD WIDE PROVEN DEMAND SIDE MANAGEMENT STRATEGIES WHICH INCLUDE; PREPAYMENT METERING CUSTOMER IS IN CONTROL OF THE ELECTRICITY CONSUMPTION & BILL COMPACT FLUORESCENT LAMPS (CFLs)-UP TO 80% SAVING SAVES POWER ON ACCOUNT OF HIGH EFFICIENCY (EXPECTING 150MW SAVING FROM DISTRIBUTION OF CFLs) AND PROVISION OF TECHNICAL ADVISORY SERVICES TO CUSTOMERS ON THE EFFICIENT USE OF ELECTRICITY.

4. DEMAND SIDE MANAGEMENT

THE OTHER INITIATIVE ZESCO HAS RECENTLY EMBARKED ON IN DEMAND SIDE MANAGEMENT WORLD PROVEN STRATEGIES IS THE INSTALLATION OF SOLAR GEYSERS ENERGY SAVED THROUGH SOLAR GEYSERS AND THE OTHER APPROACHES BECOMES AVAILABLE FOR
MITIGATING POWER DEFICITS THAT CAN LEAD TO LOAD SHEDDING AVOID EXPENSIVE POWER IMPORTS ELECTRIFYING NEW DEVELOPMENTS, CUSTOMER BASE AND REVENUE AND HENCE INCREASE

5. SOLAR GEYSER PROJECT-CASE STUDY 2

ZESCO LAUNCHED THE SOLAR GEYSER PROJECT IN MAY 2011 UP TO 40% OF DOMESTIC ELECTRICITY CONSUMPTION ATTRIBUTED TO AVERAGE HOUSEHOLD GEYSER ZESCO TO INSTALL 350 000 SOLAR GEYSERS IN 3 YEARS FREE OF COST TO THE CUSTOMERS INITIAL PHASE 100,000 GEYSERS WILL BE INSTALLED (PROCUREMENT PROCESS THROUGH ZPPA IN PROGRESS). SOME GEYSERS ALREADY INSTALLED AS A PILOT SCHEME.

MW
1000 1100 1200 1300 1400 1500 1600 1700

5.1 IMPACT ON THE CONSUMPTION PROFILE OF ELECTRICITY

DAILY LOAD PROFILE

MORNING PEAK; BATHING AND PREPARING BREAKFAST LUNCH TIME PEAK

TIME OF DAY

150MW SAVING-SOLAR GEYSERS 300MW SAVING SOLAR GEYSERS & CFLs

EVENING PEAK; BATHING AND COOKING

0:01:00 0:38:00 1:15:00 1:52:00 2:29:00 3:06:00 3:43:00 4:20:00 4:57:00 5:34:00 6:11:00 6:48:00 7:25:00 8:02:00 8:39:00 9:16:00 9:53:00 10:30:00 11:07:00 11:44:00 12:21:00 12:58:00 13:35:00 14:12:00 14:49:00 15:26:00 16:03:00 16:40:00 17:17:00 17:54:00 18:31:00 19:08:00 19:45:00 20:22:00 20:59:00 21:36:00 22:13:00 22:50:00 23:27:00

5.1. IMPACT ON THE CONSUMPTION PROFILE OF ELECTRICITY

REDUCED ELECTRICITY DEMAND BY RESIDENTIAL CUSTOMERS WHICH TRANSLATES TO FINANCIAL GAIN / SAVING OF UP TO 40% 150MW IS EXPECTED TO BE SAVED THIS WILL ASSIST ELIMINATE LOAD SHEDDING THAT IS CURRENTLY COSTING THE COMPANY US$6.1MILLION PER YEAR (COST OF LOST REVENUE AS A RESULT OF LOAD SHEDDING) ADDITIONALLY ZESCO WOULD SPEND ZMK 14.1 BILLION TO IMPORT POWER DURING PEAK HOURS EXCLUDING THE NON-CASH POWER BANKING

5.2 PROJECT BUSINESS CASE

THE EXPECTED ANNUAL SAVINGS AS A RESULT OF INSTALLING THE INITIAL 100,000 GEYSERS IS US$12 MILLION COMPOSED OF GAINS DUE TO ELIMINATION OF LOAD SHEDDING (US$6.1 MILLION) AND EARNINGS FROM CARBON CREDITS (US$5.9 MILLION). SOLAR GEYSER LIFE SPAN IS ABOUT 15 YEARS, THE PERIOD OVER WHICH ZESCO WOULD SAVE A TOTAL OF US $180 MILLION FOR 100,000 SOLAR GEYSERS INSTALLED AGAINST AN INITIAL INVESTMENT OF US $40 MILLION. THE SOLAR GEYSER PROJECT IS BANKABLE BECAUSE THE PAYBACK PERIOD IS ONLY THREE (3) YEARS.

5.2 PROJECT BUSINESS CASE

REDUCED ELECTRICITY CONSUMPTION BY THE CUSTOMER WITH FINANCIAL SAVINGS AND IMPROVED AFFORDABILITY. ACCESS TO HOT WATER AND IMPROVEMENT OF THE QUALITY OF LIFE FOR THE CUSTOMER. SAVED ENERGY WILL SUPPORT INCREASED ACCESS TO ELECTRICITY. REDUCED LOAD SHEDDING

6. OTHER SOLAR ENERGY SAVING INITIATIVE PROJECTS UNDER CONSIDERATION

ZESCO IS ENCOURAGING OTHER STAKEHOLDERS SUCH AS; LOCAL AUTHORITIES TO INTRODUCE ADDITIONAL SUSTAINABLE USE OF SOLAR ENERGY TO COVER STREET LIGHTING, TRAFFIC LIGHTS (CASE STUDY 3 TO BE PRESENTED) CUSTOMERS ON OFF GRID TO USE SOLAR LANTERNS AND ANY OTHER ENERGY EFFICIENT TECHNOLOGIES AND INITIATIVES TO SAVE ENERGY. DIESEL GENERATORS THE SOURCE FOR OFF GRID IS EXPENSIVE TO RUN.

7. CONCLUSION
SOLAR GEYSERS & CFLS TO RESULT IN SAVINGS OF ABOUT 300MW IN THE INITIAL PHASE THIS IS ALMOST 3 TIMES INSTALLED CAPACITY AT VICTORIA FALLS POWER STATION OF 108MW TO CONSTRUCT A 300MW HYDRO POWER PLANT WOULD COST USD 600 MILLION AND WOULD TAKE 4 TO 5 YEARS TO COMPLETE

7. CONCLUSION
THE INITIAL POWER SAVING OF 300MW WILL MITIGATE LOAD SHEDDING (POWER DEFICIT) & ALLOW MORE CUSTOMERS TO BE CONNECTED THE ELECTRICITY CONSUMPTION PROFILE WILL BECOME MUCH SMOOTHER, RESULTING IN MORE EFFICIENT USE OF GENERATION AND TRANSMISSION INFRASTRUCTURE

7. CONCLUSION
THE SOLAR GEYSER PROJECT IS PART OF STRATEGIC BUSINESS PLAN TO COMPLIMENT THE BUILDING OF NEW POWER PLANTS AND GROWING THE CUSTOMER BASE. THE PROJECT IS COMMERCIALLY VIABLE AND HAS SIGNIFICANT BENEFITS TO CUSTOMERS. THE SAVED CLEAN ENERGY WILL GO A LONG WAY IN ENHANCING ECONOMIC DEVELOPMENT AND ENVIRONMENTAL PROTECTION.

SOLAR GEYSER INSTALLATION

SOLAR GEYSER INSTALLATION

THANK YOU!