ELECTRICITY SUPPLY INDUSTRY IN

BOTSWANA, POWER SUPPLY AND DEMAND IN SOUTHERN AFRICA

Date 17th April 2013

Presented by: Nchena Z Mothebe

PRESENTATION OVERVIEW

1. BOTSWANA ELECTRICITY SUPPLY INDUSTRY OVERVIEW

2. ELECTRICITY CONSUMPTION AND DEMAND FORECAST IN BOTSWANA

3. CURRENT ELECTRICITY SUPPLY AND DEMAND SITUATION IN BOTSWANA

4. BOTSWANA POWER GENERATION PLANS

5. BOTSWANA’S SUPPLY – DEMAND BALANCE OUTLOOK

6. BOTSWANA TRANSMISSION GRID DEVELOPMENT PLAN

7. THE SOUTHERN AFRICAN REGION POWER SUPPLY OUTLOOK

BOTSWANA ESI OVERVIEW

BOTSWANA ESI OVERVIEW

BPC Generation

IPP Generation

BPC Transmission

SAPP Import / Export

BPC Customer Services & Supply

Electricity End Users

Domestic

Commercial

Government

Mining

Botswana Power Corporation (BPC) (Wholly Owned by GoB: Single Buyer Model)

Regulator Being Established

Power Sector Reforms • Electricity Supply Act (2007) Amended

– IPPs • Establishment of an Energy & Water Regulator (BEWRA)

CB

32

Legislation for private sector Generation investments Independent Power Producer (IPP) framework - 2007.

Establishment of an Energy & Water Regulator in progress

Ministry deals with regulatory issues

Single Buyer Model envisaged for the foreseeable future

Power Purchase Agreement with the National Power Utility

Transmission Use of System (TUOS) Agreement

PPA Key Issues (Project Tariff, Project Risk Allocation, Project Termination Provisions, Guarantees, Concessions, Permits / Licenses & Currency)

BOTSWANA ESI OVERVIEW

No. ITEM UNIT 2009/10 2010/11 2011/12 2012/13 (unaudited)

1 Installed Capacity (Base Load)

MW 132 132 132 132

2 Installed Capacity (Peaking)

MW

160 160 160

3 System Max. Demand MW 553 553 542 578

4 Max Demand Growth % 9.9% 0% -2% 7%

5 Energy Sales GWh 3,109 3,118 3,198 3,394

6 Sales Growth % 8% 0.3% 3% 6%

7 Internal Generation GWh 457 372 202 53

8 Total Imports GWh 2,985 3,180 3,591 2,813

9 Number of Customers No. 214,170 251,773 291,338 318,236

10 Number of Employees No. 1,841 2,188 2,047 2,047

11 Average Electricity Selling Price

t/kWh 36 48 57 59

KEY BPC (UTILITY) INFORMATION

ELECTRICITY CONSUMPTION AND DEMAND FORECAST IN BOTSWANA

Botswana’s Historic Electricity Demand Trend

1. Electricity Demand has been increasing significantly over the years. (Energy – 6% & Capacity - 8% annually in the last 5 years) 2. Botswana’s reliance on power imports increased from 51% in 2000 to 94% in 2012. 3. The continuing electricity demand growth at the backdrop of a Regional power supply deficit necessitated construction of a 600MW coal fired

power station to avert a power crisis in Botswana

6%

94%

2012

Local(GWh)

Import(GWh)

0

500

1000

1500

2000

2500

3000

3500

4000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Historic Energy Supply (GWh)

Local (GWh) Import (GWh)

Historic Electricity Market Segmentation

Domestic Market Share has grown from 19% to 28% in last 10 Years. The Commercial sector has grown from 24% to 28% in the same period. 350 out of 494 villages electrified. 28 to be electrified this year. ~70% access.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Government 138.80 147.30 186.60 196.20 227.10 216.90 226.60 262.00 273.50 290.40 307.50 308.00 323.15

Domestic 280.40 333.60 370.50 419.70 489.40 539.30 584.40 681.70 745.10 768.70 829.10 873.00 878.76

Commercial 491.80 462.30 478.10 533.10 527.80 613.10 631.10 634.00 683.90 734.60 830.70 820.00 910.10

Mining 759.70 899.40 919.60 1001.10 1077.10 1046.60 1184.30 1199.00 1186.20 1123.20 1149.30 1117.00 1086.00

0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

3500.00

Historic Energy Consuption per Sector (GWh)

47%

24%

19%

10%

2002

34%

28%

28%

10%

2012

Botswana’s Long Term Demand Forecast

-

200

400

600

800

1,000

1,200

1,400

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Po

wer

Dem

and

(M

W)

Botswana Electricity Demand Forecast (MW) (2011 – 2031)

High Low Likely

Yr. 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Likely (MW)

571 580 644 681 711 744 773 854 877 902 924 941 959 1003 1017

Botswana’s Long Term Energy Forecast

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Ener

gy G

Wh

/ a

nn

um

Botswana Electrical Energy Forecast (GWh / Annum) 2011 -2031

High Low Likely

Yr. 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Likely (GWh)

3,229

3,420

3,804

3,982

4,129

4,294

4,428

4,909

5,009

5,134

5,241

5,319

5,391

5,656

5,720

CURRENT ELECTRICITY SUPPLY AND DEMAND SITUATION IN BOTSWANA

Meeting Demand in the Short to Medium Term

Source Capacity Remarks

Morupule A 0 MW 27 year old plant experiencing availability

challenges;

Refurbishment Plan in progress (Restore

116MW) by 2015

Tenders closed in March 2013

Emergency

Power Facilities

160 MW

(Diesel)

70MW – Rented Diesel Generation (To Dec 2013)

90MW – OCGT , Dual Fuel (CBM & Diesel)

Morupule B

528 MW

Coal Fired Plant - Commissioning in progress.

Initial Commercial Operation by end of 2012

Revised Commercial Operation by Mid 2013

Morupule A 120MW P/S Orapa 90MW OCGT 70MW Diesel Rental Morupule B 600MW

Meeting Demand (Short Term – Power Imports) Source Capacity Remarks

Eskom

(South Africa)

300MW 100MW Non Firm

(2013 – 2015)

• 200MW Non Firm

(Jan – July 2013)

EDM

(Mozambique)

Up to 50 MW Non Firm

NamPower

(Namibia)

Up to

100MW

Non Firm

CHALLENGES • Regional Power Supply Deficit which renders the Supply Non Firm. • No new Firm Contracts can be secured till Surplus Capacity for Bilateral Contracts is restored.

THE MORUPULE B PROJECT (UPDATE) Activity Unit 1 Unit 2 Unit 3 Unit 4

Construction 100% 100% 100% 98%

Commissioning 100% 100% 100% 90%

Reliability Run 100% 100% 100% 0%

Performance Tests 100% 100% 100% 0%

Unit Status 1.Unit 1: Out of service since 15th January 2013 to carry our repair works on Primary and Secondary Air Ducts which have exhibited cracks. The Unit is expected back in service by end of April 2013. 2.Unit 2: Out of service since 16th January 2013 to carry out Cleaning and repair works on FBHE Tubes. The unit is expected to be back in service sometime in May/June 2013.. 3.Unit 3: Unit is in service at a loading of 110MW (Net). Unit is also exhibiting Primary and Secondary Air Duct cracks which require attention once other units are in service. 4.Unit 4: Unit in final stage of construction after which it needs to go through Reliability Run &Performance Tests. No firm time lines are available but the Unit IS expected to be in commercial operation by end of June 2013.

Supply – Demand Balance Outlook 2013

Jan Feb Mar Apri May Jun Jul Aug Sep Oct Nov Dec

Orapa 90MW 90 90 90 90 90 90 90 90 90 90 90 90

APR Rental Plant 70 70 70 70 70 70 70 70 70 70 70 70

Eskom (Imports) 300 300 300 300 300 300 300 100 100 100 100 100

Morupule B 132 0 132 132 264 264 264 264 264 396 396 396

Morupule A 0 0 0 0 0 0 0 0 0 0 0 0

Peak Demand 500 520 530 530 550 580 580 570 560 550 540 500

0

100

200

300

400

500

600

700

800

Cap

acit

y (M

W)

Monthly Capacity (MW) 2013

Total Supply 592 460 592 592 724 724 724 524 524 656 656 656

Peak Demand 500 520 530 530 550 580 580 570 560 550 540 500

Capacity Balance 92 -60 62 62 174 144 144 -46 -36 106 116 156

Assumptions:

•Units available at Morupule B: 1 in Q1; 2 in Q2 and Q3; and 3 in Q4

•300 MW Imports from Eskom available

Jan Feb Mar Apri May Jun Jul Aug Sep Oct Nov Dec

Orapa 90MW 90 90 90 90 90 90 90 90 90 90 90 90

APR Rental Plant 70 70 70 70 70 70 70 70 70 70 70 70

Eskom (Imports) 100 100 100 100 100 100 100 100 100 100 100 100

Morupule B 132 132 132 132 264 264 264 264 264 396 396 396

Morupule A 0 0 0 0 0 0 0 0 0 0 0 0

Peak Demand 500 520 530 530 550 580 580 570 560 550 540 500

0

100

200

300

400

500

600

700

Ca

pac

ity

(MW

)

Monthly Capacity Balance 2013

Total Supply 392 392 392 392 524 524 524 524 524 656 656 656

Peak Demand 500 520 530 530 550 580 580 570 560 550 540 500

Capacity Balance -108 -128 -138 -138 -26 -56 -56 -46 -36 106 116 156

Supply – Demand Balance Outlook - 2013

Assumptions:

•Units available at Morupule B: 1 in Q1; 2 in Q2 and Q3; and 3 in Q4

•200 MW Imports from Eskom NOT available

BOTSWANA POWER GENERATION PLANS

Generation Projects Plan Capacity

(MW) Timing Remarks

132 2015 Refurbishment plan in progress Tenders closed in March 2013

600

2013

Commissioning in progress.

300

2016/17

Feasibility study done – Morupule B Phase 2 Units 5 & 6 Published in government gazette on 12th April 2013. Tenders (IPP) expected by April/May 2013. Procurement of Financial, Technical and Legal Advisors in progress.

300

2016/17

Tenders (IPP) expected by April/May 2013. Procurement of Financial, Technical and Legal Advisors in progress.

90

TBA

Conversion to 24hr operation on CBM. Timing of Commercial Availability of CBM in sufficient quality and quantity to operate a gas fired power station remains unknown.

Sources

Morupule A

IPP Brown Field

IPP Green Field

Coal Bed Methane

Morupule B

RENEWABLE ENERGY PROJECTS Capacity

(MW) Timing Remarks

100

2017/18

Bankable Feasibility completed in March 2013 100MW CSTP; Central Tower with 4hrs TES at Jwaneng

75MW

TBA

REFIT Tariff study completed in 2011 Capacity:5kW to 5MW (Solar, Biomass, Biogas) Awaiting Cabinet Approval

1.3MW 2012 PV Pilot Project on-grid in operation since August 2012 (Japanese Grant Funding)

Located at Phakalane, Gaborone

Sources

Solar Thermal

Draft Energy Policy requires that 15% and 25% of the Electricity

Demand be met from Renewable Energy Resources by 2016 and 2030 respectively.

• Central Receiver with Molten Salt as the heat transfer and storage medium.

• 100 MWe with 4hrs Thermal Energy Storage

• The plant will be dry cooled or hybrid cooled designed to optimise water usage.

• All auxiliary power will be sourced from the National grid

• Life of plant will be a minimum of 25 years.

• Located at Jwaneng

• COD: 2017/18

• Project Structure: IPP or PPP?

CSTP PLANT - JWANENG

Gemasola - Spain

BOTSWANA’S SUPPLY – DEMAND BALANCE OUTLOOK

Botswana’s Supply – Demand Balance Outlook

2012 2013 2014 2015 2016 2017 2018 2019 2020

Orapa 90MW 90 90 90 90 90 90 90 90 90

APR Rental Plant 70 70 0 0 0 0 0 0 0

Eskom (Imports) 350 100 100 100 0 0 0 0 0

IPP Green Field 0 0 0 0 132 264 264 264 264

Morupule B (5 & 6) 0 0 0 0 132 264 264 264 264

Morupule B 0 264 528 528 528 528 528 528 528

Morupule A 0 0 60 60 120 120 120 120 120

Peak Demand 580 644 681 711 744 773 854 877 902

0

200

400

600

800

1000

1200

1400

Cap

acit

y (M

W)

Capacity Balance (2013 - 2020)

Total Supply 510 524 778 778 1002 1266 1266 1266 1266

Peak Demand 580 644 681 711 744 773 854 877 902

Capacity Balance -70 -120 97 67 258 493 412 389 364

An export market will be required by 2016 if all projects are realised in order deal with surplus capacity

Demand Side Management Initiatives No Strategy Capacity

(MW) Remarks

1 Compact Fluorescent Lamps (CFL – Project)

30 820 000 CFLs Installed with positive impact on Peak Demand Reduction (Done)

2 Load Shifting (Water Heating Control)

30 Smart Metering Project in progress. Commercial Operation by May 2013. (Work In Progress)

TOTAL DSM CAPACITY 60MW Virtual Peaking Power Plant

Other DSM Measures: Tariff Restructuring (Time of Use; MVA Charges )

Incentives for Energy Conservation & Energy Efficiency)

BOTSWANA TRANSMISSION GRID DEVELOPMENT PLAN

Transmission Grid Constrains

GABORONE

Francistown

Maun

Selebi-Phikwe

S O U T H

A F R I C A

Z I M B A B W E

N A M I B I A

Matimba P/S

Delta

Thamaga

2x2

15

km4

7km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

AK 6

Orapa

Isang

Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

66kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

Gantsi

25km

Kanye

HVDC Westcor

Livingston

Proposed Existing

Molepolole

DML

Heuningvlei

Omaere

Orapa – 90MWHana

Shakawe

BK11

3

Main Challenges to be addressed

1. Lack of Grid Access in the Northwest Region

2. Demand Growth Outstripping

Grid Capacity in the South

3. Inadequate Transmission

capacity to support new generation investments (IPPs and Public Sector)

Impact of Challenges 1. Suppression of Economic

development (mining) 2. Suppression of Coal Beneficiation 3. Unreliable Power Supply in the

South

System Peak Demand (26 June 2012)

GABORONE

Francistown

Maun

Selebi-Phikwe

S O U T HA F R I C A

Z I M B A B W E

N A M I B I A

Matimba P/S

Delta

Thamaga

2x215km

47km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

Orapa

Isang

Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

66kV

Sowa

Mowana

HwangeVictoria

ZAMBIA

Gantsi

Kanye

HVDC W estcor

Livingston

Existing

Molepolole

Heuningvlei

Omaere

Orapa – 90MW

Shakawe

301MW

49MW

14MW

7MW

42MW

54MW

78MW

3MW

1MW

Total System Load 578MW (593MW) Morupule A - 29MW Morupule B - 130MW Imports - 365 MW Emergency – 54MW

Transmission Grid Expansion Plan

GABORONE

Francistown

Maun

Selebi-Phikwe

S O U T H

A F R I C A

Z I M B A B W E

N A M I B I A

Matimba P/S

Delta

Thamaga

2x2

15

km

47

km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

AK 6

Orapa

Isang

Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

66kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

Gantsi

25km

Kanye

HVDC Westcor

Livingston

Proposed Existing

Molepolole

DML

Heuningvlei

Omaere

Orapa – 90MWHana

Shakawe

BK11

3

ZIZABONA

SOUTHERN SYSTEM

NORTH WEST

Gaborone East

S O U T H

A F R I C A

Gaborone Central

Innovation Hub

Phakalane

220kV Line

132kV Line

Tlokweng

Free Zone

ISANG

Government Enclave

Gaborone South

Spitzkop

Airport Road

Rakola

KEY

SOUTHERN SYSTEM REINFORCEMENT & EXPANSION PLAN

Thamaga

Segoditshane

Proposed Existing

Molepolole

Mogoditshane

Dwaalboom Ramotswa

Mochudi

Broadhurst

Woodhall

Kgale View

Substation

Mmakgodumo

Kanye

Lobatse

Substation

Jwaneng

From Morupule

400kV Line

ZIZABONA PROJECT

To Maun

PROJECT TIMING BENEFIT

North West Grid Extension (400/220/132kV)

2013 - 2017 New Customers (Mining)

ZIZABONA 2013 - 2016 Regional Access

Rakola 220/132kV S/S & Lines 2013 - 2015 Secure and Power Supply Quality

Ramotswa 132/11kV S/S & lines 2014 - 2015 Secure and Power Supply Quality

Mochudi 132/33kV S/S & lines 2014 - 2015 Secure and Power Supply Quality

Tlokweng 132/11kV S/S & lines 2014 - 2015 Secure and Power Supply Quality

Govt. Enclave 132/11kV S/S and cables

2017 -2018 Secure and Power Supply Quality

BOTSWANA TRANSMISSION PROJECTS FOR FINANCING

THE SOUTHERN AFRICAN REGION POWER SUPPLY OUTLOOK

Dem Rep of Congo Congo Gabon

Luanda

Windhoek

Lusaka

Harare

Lilongwe

Nairobi

Dar es Salaam

Gaborone Pretoria

Johannesburg

Cape Town

Maputo Mbabane

Kinshasa Brazzaville

Angola

Tanzania

Kenya

Mozambique

South Africa

Swaziland

Lesotho

Namibia

Zambia

Botswana

Zimbabwe

Malawi

Rwanda

Burundi

H

H

H

H

H

H

H

H

H

H H

H

H

H H

H

P

H

H

T

T

T

T

T

T T T

T T T T T T

T

T

H H

H

T H

P

N

H H

H

P

T

Hydro station

Pumped storage scheme Thermal Station

Existing

Planned

1. 12 Member Countries

9 Operating 3 Non Operating 2. IPPs & ITC

Membership 3. Bilateral Contracts & Day Ahead Market 4. IGMOU, IUMOU &

ABOM

THE SAPP INTERCONNECTION

Non - Operating Members

Operating Members

KEY Total Declared 48,762MW Peak Demand 50,636MW Deficit 1874MW

SAPP – REGIONAL SUPPLY SITUATION

No. Country Utility

Installed

Capacity

[MW] As at

Jan 2013

Available

Capacity

[MW]

Jan 2013

Suppressed

Demand &

Forecast

Demand

Capacity

Shortfall

including

reserves,

MW

Calculated

Reserve

Margin, %

1 Angola ENE 1,793 1,480 1341

2 Botswana BPC 352 292 604

3 DRC SNEL 2,442 1,170 1398

4 Lesotho LEC 72 72 138

5 Malawi ESCOM 287 287 412

6 Mozambique EDM /HCB 2308 2,279 636

7 Namibia NamPower 393 360 635

8 South Africa Eskom 44,170 41,074 42416

9 Swaziland SEC 70 70 255

10 Tanzania TANESCO 1380 1,143 1444

11 Zambia ZESCO / CEC/LHPC 1,870 1,845 2287

12 Zimbabwe ZESA 2,045 1,600 2267

57,182 51,672 53,833 (7,742) -4.2%

53,722 48,762 50,636 (7,111) -3.8%

TOTAL SAPP

Total Interconnected SAPP

DEMAND AND SUPPLY SITUATION

COMMITTED GENERATION PROJECTS (NEW &

REHAB)

No Country

2013 2014 2015 2016 TOTAL

1 Angola 0 645 550 2415 3,610

2 Botswana 600 - 132 300 1032

3 DRC 55 - 580 - 635

4 Lesotho - 25 300 - 325

5 Malawi 64 - - - 64

6 Mozambique - 150 300 300 750

7 Namibia 60 - - - 60

8 RSA 923 3,105 2,543 1,322 7,893

9 Swaziland - - - - -

10 Tanzania 60 160 500 1,110 1,830

11 Zambia 230 315 600 164 1,309

12 Zimbabwe - 300 690 900 1,890

1,992 4,700 6,063 6,511 19,398 TOTAL

NEW GENERATION CAPACITY, MW

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2012 2013 2014 2015 2016 2017 2018

MW

Planned Capacity vs Forecast , MWAll SAPP Members

Forecast Capacity Planned

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2012 2013 2014 2015 2016 2017 2018

MW

Planned Capacity vs Forecast , MWSAPP Operating Members Only

Forecast Capacity Planned

2016

Critical

For

Capacity

2017

Critical

For

Energy

SAPP PLANNED & REQUIRED CAPACITY

SAPP NEW GENERATION TECHNOLOGIES

(2013 -2018)

52.7%

27.3%

0.5%

17.0% 2.5%

MW Installed Capacity by Technology

Coal Hydro Solar Gas Wind

Introduction of Renewable Energy

(3% from renewable energy in 5 year period)

THANK YOU Contact Details: motheben@bpc.bw

+2673603000