SYSTEM DEVELOPMENT PLAN

SYSTEM DEVELOPMENT PLAN

JUNE 2017

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System Development Plan (SDP)_June2017

TABLE OF CONTENTS

EXECUTIVE SUMMARY ....................................................................................... iii

MAIN REPORT................................................................................................................ 1

1 INTRODUCTION ............................................................................................. 1

2 LOAD FORECAST ........................................................................................ 3

2.1 Introduction ................................................................................................................ 3

2.2 Assumed Forecast Scenario ............................................................................................ 4 2.3 Forecast Results ...................................................................................................... 4

3 THE GENERATION PLANNING BASELINE ........... 10

3.1 INTERIM LOAD SHEDDING MITIGATION MEASURES ............................................... 11

3.1.1 Increased Power Imports ......................................................................................................................... 11

3.1.2 Rented Diesel Powered Plants ............................................................................................................. 11

3.1.3 Demand Side Management and Energy Efficiency .................................................................... 11

4 SYSTEM PLANNING CRITERIA AND ASSUMPTIONS 11

4.1 Generation Expansion Plan Methodology ...................................................................... 11 4.2 Generation Planning Criteria .......................................................................................... 12

4.2.1 Criterion 1 (Security Criterion) ............................................................................................................... 12

4.2.2 Criterion 2 (Reliability Criterion) ............................................................................................................ 12

4.2.3 Criterion 3 (Economic and Financial Criterion) ............................................................................. 12

4.2.4 Demand and Energy Curve .................................................................................................................... 13

PRINCIPLES OF GENERATION EXPANSION PLANNING ................................................... 13

4.2.5 Generation Expansion Option Analysis ............................................................................................ 15

5 POWER SUPPLY EXPANSION OPTIONS ............... 15

5.1 Committed Power Plants ............................................................................................... 15 5.2 GENERATION EXPANSION SIMULATIONS ................................................................ 16

5.2.1 Generation Expansion Option Analysis ............................................................................................ 16

5.2.2 Scenario 1 – Current Development Path Analysis Results ..................................................... 18

5.3 Scenario 3 – Slow Kariba Hydro Recovery Analysis Results ......................................... 20

SUPPLY AND DEMAND GRAPH BY SCENARIO .................................................................................... 22

6 RECOMMENDED GENERATION DEVELOPMENT PATH 24

RECOMMENDATIONS: .......................................................................................................................................... 24

APPENDICES ................................................................................................................... I

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APENDIX A – MODEL DATA AND PARAMETERS .................................................... II

CANDIDATE POWER PLANTS ................................................................................................ II 6.1 Economic Comparison of Development Options Based on Optimized Case ................VIII

APPENDIX B – ENERGY RESOURCE BASE ............................................................. XI

ENERGY RESOURCES AVAILABILITY ..................................................................................XI

Coal XI

6.1.1 Coal Bed Methane .................................................................................................................................... XII

6.1.2 Biomass .......................................................................................................................................................... XII

6.1.3 Solar ................................................................................................................................................................ XIV

6.1.4 Wind ................................................................................................................................................................. XV

6.1.5 Hydropower .................................................................................................................................................. XV

6.1.6 Nuclear .......................................................................................................................................................... XVI

6.1.7 Liquid Fuels ................................................................................................................................................. XVI

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EXECUTIVE SUMMARY

THE OBJECTIVES OF THE SYSTEM DEVELOPMENT PLAN IN ZIMBABWE The objective of this report is to investigate and present the least-cost generation expansion plan for meeting the future electric energy and power requirements in Zimbabwe in compliance with the generation planning criteria from 2018 to 2038 planning period. This aims to provide effective electricity market signals for the market to respond timely, competently, adequately and cost efficiently to the national forecasted electricity requirements. The report therefore presents the electricity power and energy forecast, existing generation capacity, committed generation projects and the gap for exploitation by the market. The market is therefore expected to respond to the time profiled power and energy gaps with competent technologies, in time, with adequate capacities and with cost efficient and competitive investments. The recommended development plan contained therefore presents the least-cost credible generation development path for meeting the future electricity requirements in Zimbabwe and entails the path to the lowest possible electricity end user tariff for all consumers.

The objectives of the System Development Plan also include:

To prescribe the optimum level of generation investments that guarantees energy security, optimum asset utilisation and cost efficient performance of the resultant generation system.

To assess the adequacy of the existing local generation capacity in meeting the forecasted demand and the reserves requirements.

To investigate possible short-term measures for meeting Zimbabwe electricity requirements before commissioning of major planned power projects.

To investigate the technical and cost performance of various candidate generation projects, their ranking and their optimised development sequence

Generation Expansion Plan Methodology Determination of the least-cost generation expansion plan is achieved through the evaluation of technically equivalent alternatives in order to satisfy the forecasted demand under given criteria. Wien Automatic System Planning (WASP) package was used for modelling the assumed generation expansion scenarios. The methodology applied satisfies the ZETDC generation expansion planning criteria optimizes the total system costs (investment, maintenance and operation) of new and existing plant to meet the forecasted demand and reserves for each year in planning period. The study investigates how existing power plants, committed power plants and candidate power plants satisfy the Zimbabwe future energy and power needs. Candidate power plants are those power plants that are not committed, are not existing plants and may be in the form of a technology whose size and commissioning dates can be optimised in the study.

Candidate Plants are modelled to ascertain their technical and cost implication in meeting future demand and reserves. These are then ranked in order of economic loading merit. The studies were carried out using WASP (an IAEA generation expansion software). WASP is designed to

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identify the generation system expansion plan which has the minimum present worth of all operating and investment costs in the study period.

The studies were carried out using WASP (an IAEA generation expansion software). WASP is designed to identify the generation system expansion plan which has the minimum present worth of all operating and investment costs in the study period. Committed Power Plants: Are power plants that have secured significant milestones and have evidence of strong movement towards financial closure or are under construction. The SDP can be summarized as:

SDP = Existing generation system – Decommissions + Committed Power Plants + Ranked Candidate Power Plants

Committed Power Plants are those power plants which, at the time of development of this System Development Plan (SDP), have achieved critical milestones in the project progress evaluation parameters which include feasibility studies, proximity to financial closure, signage of PPAs, signage of EPC contracts, and construction status, and/or have secured Government Project Priority status

The tables below give a summary of the committed and candidate power plants.

Table I: Committed Power Plants

Development

Sequence No. Plant Capacity / MW Year

1. Shilands Power - Committed 210 2019

2. Kariba South Extension - Committed 300 2018

3. Gwanda Solar - Committed 10 2019

4. Bulawayo - Committed 90 2020

5. Hwange 7&8 - Committed 600 2021

6. Batoka - Committed 1200 2024

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Table II: Candidate Power Plants

Plant Name Units Size Installed capacity (MW)

Primary Fuel

Southern Energy 330 660 Coal

CASECO 300 600 Coal

ZPC Diesel 120 Diesel & Gas

Gairezi 15 30 Hydro

Lusulu 350 1400 Gas

Gokwe North (Sengwa) 300 1400 Coal

Devil’s Gorge 250 1000 Hydro

Lupane Gas 150 300 Gas

Solar PV 300 Solar

Harare 30 60 Coal

Munyati 20 100 Coal

Mamina Wind 400 Wind

LOAD FORECASTING

Generation and network planning is done to meet future load requirements as prescribed by a load forecast. Forecast of total system requirements (demand) is the foundation for medium to long term system capacity expansion planning. On the other hand, sales forecasts are necessary in the short to medium term for revenue projections, whereas geographical load forecast are a pre-requisite for network expansion. Assumed Forecast Scenarios

The detailed forecast assumptions and results are contained in the Load Forecast Report (2016). Three scenarios were developed in the report and analysed in detail: High Case Scenario: This is an optimistic scenario above the Government economic recovery policy scenario. This scenario represents a steep and sustained economic recovery higher than the Government planned policy (ZIM-ASSET) scenario. Policy Scenario: This scenario represents the Zim-Asset policy scenario and assumes that the government policies, initiatives and instruments work in a coordinated fashion to achieve the planned and sustained economic growth and recovery targets. Business As Usual (BAU) Scenario: This scenario assumes a that the economy continues to grow at the same supressed rate and current technological practices (efficiencies), economic structure, energy market penetration shares persist into the future. The Policy scenario therefore best represents a realistic demand growth scenario for the Zimbabwean Economy, as it is supported by other policy instruments. Policy Scenario Forecast Results

The table below is a summary of the power and energy demand forecast results for the Policy Scenario which was adopted for purposes of developing the System Development Plan.

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Table III: Energy and Power Demand Projections

Year Energy Demand Forecast (GWh)

Power Demand Forecast (MW)

2016 8,526 1,486

PROJECTIONS

2017 9,073 1,668

2018 9,535 1,867

2019 10,270 2,065

2020 11,097 2,267

2021 11,832 2,418

2022 12,423 2,564

2023 13,152 2,712

2024 13,879 2,866

2025 14,602 3,018

2026 15,184 3,137

2027 15,763 3,255

2028 16,355 3,379

2029 16,944 3,494

2030 17,438 3,598

2031 17,712 3,692

2032 18,187 3,796

2033 18,664 3,898

2034 19,137 3,991

2035 19,619 4,093

2036 20,071 4,195

2037 20,453 4,278

2038 20,839 4,356

GENERATION EXPANSION SIMULATION ANALYSIS

The study is based on the analysis of the following three key generation expansion scenarios:

Scenario 1: Current Development Path – This scenario analyses the performance of the currently generation expansion plan according to the power producers declared projects commitments and the associated project planning milestones. This plan is a credible generation expansion scenario if its implementation is not influenced by the updated signals dispatched through this SDP.

Scenario 2: Optimised Case – This scenario optimizes the current development path through exploitation of mitigation opportunities available on projects that haven’t advanced too far out to consider updated market signals.

Scenario 3: Low Kariba Recovery Scenario: The generation expansion plan looks a lot more vulnerable in the short-term period right to the end of 2020. This is the period of the lead times of the major planned projects like Hwange 7&8 and the rehabilitation of Hwange Stage 1 and 2. This

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period is associated with a major power deficit gap in the 21-year planning period and is very sensitive to failure in planning assumptions. The biggest sensitive or variable in this short term is the performance of the Kariba Hydro power plant due to the hydrological conditions of the Zambezi river basin. This scenario therefore investigates the impact of a slow Kariba Hydrological recovery condition and the sensitivity of the resultant system to an increased power imports compensation response.

1.1.1 Scenario 1 – Current Development Path Analysis Results

The table below show the results of the studies under the Current Development Path scenario:

Table 7: Scenario 1 - Current Development Path

Development


Investment Costs

(Inclusive of

Transmission

Connection) /

USD Million

1. Average Power Imports

(2017-2020) 427 Ending 2020

2. Kariba South Extension 300 2018 412.00

3. Shilands Power 315 2019 270.70

4. Mamina Wind 100 2019 205.90

5. Gwanda Solar 10 2019 17.70

6. Bulawayo Repowering 90 2020 120.00

7. Hwange 7&8 600 2021 1439.00

8. Hwange Stage 1&2 Life

Extension 880 2022

500.00

9. Batoka 1200 2024 2600.00

10. Devil’s Gorge 1000 2031 2250.00

NPV (Scenario Objective Function) 6,822.530

This scenario presents a credible generation development option that benefits from recent versions of the SDP and market signals. It is not an optimum scenario but presents a good base case for optimization.

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Scenario 2: Optimised Case Analysis Results

This scenario exploits opportunities for optimization of the generation development sequence in Current Development path above. The study results are as tabulated below:

Table 8: Scenario 2 – Optimized Case

Development

Sequence No. Plant

Capacity /

MW Year

Investment

Costs (Inclusive

of Transmission

Connection) /

USD Million

1. Average Power Imports (2017-

2020) 470

Ending

2020

0


3. Shilands Power 210 2019 270.70

4. Gwanda Solar 10 2019 17.70

5. Hwange 7 & 8 600 2021 1439.00


Extension 880 2022

500.00

7. Batoka 1200 2024 2600.00

8. Devil’s Gorge 1000 2031 2250.00


1.2 Scenario 3 – Slow Kariba Hydro Recovery Analysis Results

This scenario tests the impact of a possible slow recovery of hydrological conditions on the Zambezi River Basin as a probability from imperial record of hydro statistics.

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Table 9: Scenario 3 – Slow Kariba Hydro Recovery scenario

Development

Sequence No. Plant

Capacity /

MW Year

Investment

Costs

(Inclusive of

Transmission

Connection) /

USD Million


2020) 670

Ending

2020

0


3. Shilands Power 210 2019 270.70

4. Gwanda Solar 10 2019 17.70

5. Bulawayo 90 2020 120.00

6. Hwange 7 & 8 600 2021 1439.00


Extension 880 2022

500.00

8. Batoka 1200 2024 2600.00

9. Devil’s Gorge 1000 2031 2250.00


SCENARIOS SUMMARY ANALYSIS The performance of scenarios 1 to 3 are compared below based on Loss of Load Probability and cost of system to meeting demand and reserves:

Table 10: Generation Expansion Options Summary

Expansion Option Loss of Load Probability (LOLP - %)

Discounted Cost of meeting demand (US$ Billion)

Scenario 1 – Current development Path 4.384 6.82

Scenario 2 – Optimized Case 0.004 6.54

Scenario 3 –Slow Kariba Hydro Recovery 0.457 6.49

Scenario 3 is the least cost power supply mix for meeting demand and demonstrates the favourable effect of power imports at projected tariffs to the generation mix. This scenario is however subject to hydrological conditions and can therefore not be a target planning scenario but provides standing advice should this scenario prevail.

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SCENARIOS’ GREEN HOUSE GAS (GHG) EMISSIONS

The graph below shows the corresponding Green House Gas emissions per GWh of energy generated that are associated with the simulated generation scenarios.

Graph 3: Corresponding Green House Gas Emissions per GWh of Energy Generated

Scenario 3 (Slow Kariba Hydrological Recovery) has a higher utilisation of power imports and will result in a lower National Green House Emission per GWh of country generated emissions.

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SUPPLY AND DEMAND GRAPH BY SCENARIO

The graph shows the effect of the mitigation actions implemented in the optimised scenario to reduce idle generation capacity, improve the utilisation level and the generation system investment efficiency.

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Peak Demand Current Development Path Optimised Case

Kariba Slow Hydro Recovery

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Table 12: Power Plants Development Performance Ranking Order

Development Sequence No.

Plant Capacity / MW Derived Indicative Tariff / c/kwh

1. Batoka HES 1200MW 3.00

2. Devil’s George HES 1000 3.40

3. Imports Block1 N/A 5.00

4. Imports Block 2 N/A 6.06

5. Hwange 1&2 Life Extension 210 6.50

6. Hwange 7 & 8 600 9.24


8. Gwanda Solar 10 11.00

9. Shilands (CCGT) stage 2 210 10.0

Shilands (OCGT) Stage 1 210 12.5

The above list economic dispatch ranking order for the entire list of generation technologies that have been analysed.

RECOMMENDATIONS

1. The Optimized Scenario is the recommended least cost generation expansion path.

2. Hwange 7&8 and Hwange Rehabilitation must be implemented. They are competitive and provide stability to the Zimbabwe Power Supply System. They are strategic in satisfying both demand and reserve requirements.

3. Bulawayo station rehabilitation is not recommended due to a projected unviable plant factor in the 21 year planning period. Rehabilitation of all small thermals is thus not recommended. Bulawayo Repowering was assessed as a committed plant but it’s energy was however not dispatchable due to lake of competitiveness.

4. ZETDC with aid of regulatory instruments should pursue an aggressive peak clipping, load shifting and valley filling complimentary program through off-peak tariff incentives. Such a program can be implemented efficiently and sustainably in conjunction with a smart metering project. This will change the normalized load duration curve to a flat profile, reduces the system demand factor and increases the system Load Factor. The resultant system is associated with the following:

a. Lower total system capacity requirement for the same size of the economy. b. Higher utilization of utility assets and more attractive average end user tariff.

5. The System Development Plan should be timeously adopted and that generation

procurement be changed from an unsolicited bidding system to a System Development

Plan Guided Generation Procurement System.

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Table 13: Summary of the Recommended Generation Development Sequence

Development

Sequence No. Plant

Capacity /

MW Year

Investment

Costs (Inclusive

of Transmission

Connection) /

USD Million


2020) 470

Ending

2020

0


3. Shilands Power 210 2019 270.70

4. Gwanda Solar 10 2019 17.70

5. Hwange 7 & 8 600 2021 1439.00


Extension 880 2022

500.00

7. Batoka 1200 2024 2600.00

8. Devil’s Gorge 1000 2031 2250.00


THE AVERAGE GENERATION TARIFF FOR THE RECOMMENDED GENERATION EXPANSION PLAN

Red Curve – The average indicative generation tariff curve for the planning period 2018 - 2038

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Linear (Projected Annual Average Generation Tariff c/kwh)

2 per. Mov. Avg. (Projected Annual Average Generation Tariff c/kwh)

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Yellow Curve - Average indicated generation tariff linear trend line Blue Curve – Average indicative generation tariff moving average trend line

The red curve shows the projected average generation tariff for the proposed development plan. The yellow trend line serves to show the average linear diminishing trend of the average generation tariff. The average electricity generation tariff is projected to reduce within the planning period at three key planning time cardinal points as shown below:

Cardinal Point Average Generation Tariff Reduction Drivers

Project Name Indicative Project Tariff / c/kwh

2022 Hwange Stg 1 & 2 880MW Rehab

6.5

2024 1200MW Batoka 3.0

2031 1000 Devil’s George 3.4

The tariff reduction is due to the favourable tariff blending effect from the three projects above. The blue curve shows the moving average generation tariff of the recommended generation development plan and smoothens the tariff changes in the planning horizon for a possible tariff negotiation baseline. The three projects above have a similar trend impact on the CO2 production trend and the environmental performance of the proposed generation expansion system.

RENEWABLES PENETRATION CURVES FOR THE RECOMMENDED DEVELOPMENT PATH

The curve above shows a dominant renewable energy penetration with the shaded area representing residual space taken by thermal sources.

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Percentage of Renewables Penetration in the Energy Mix

The penetration of renewables is high and the graph reflects the progressive blending of renewables and thermal plants in the planning horizon. The peaks reflect the commissioning of Batoka and Devil’s George Power Plants.

CAPACITY UTILISATION PERFORMANCE OF THE RECOMMENDED DEVELOPMENT PATH

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The recommended scenario mitigates capacity underutilization efficiency losses of the generation system than any of the other two scenarios studied. This is demonstrated in the supply and demand capacity balance graph for all the three scenarios above. This scenario achieves an optimum balance between the following key system performance indicators:

a. Higher capacity utilization efficiency of the resultant generation system b. Generation planning criteria compliance c. Competitive resultant average end-user electricity tariff.

The above proposed generation expansion plan has an average planning period plant factor of 52.4%. Thus, only 52.4% of the generation investment system is projected to be utilized in electricity energy generation function. After accounting for plant maintenance requirements, about 64% of the possible 26579GWh is used for electricity generation. The generation system utilisation efficiencies can be improved by a ZETDC aggressive promotion of peak clipping, load shifting and valley filling complimentary programs that can be implemented at a large scale through off-peak tariff incentives and promotions.


MAIN REPORT

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1 INTRODUCTION

The system Development Plan is the Zimbabwe Generation Expansion Plan. It presents to the market the least cost schedule of power generation developments and answers the questions

1. What capacity?

2. Where?

3. When? and

4. What technology?

This plan focuses on generation investments required to meet future demand and reserves. The plan covers the investment needed in the period 2017 to 2038. The generation expansion plan recommended in this report results in the following:

1. Least cost generation expansion plan with the lowest economic costs to Zimbabwe economy

2. Most efficient economic dispatch of power plants to meet energy and power needs. THE ELECTRICITY INDUSTRY IN ZIMBABWE The electricity industry in Zimbabwe has been opened to competition in the generation supply sector with Transmission, Distribution and Supply retaining monopoly for now. The electricity industry was opened to competition in the generation sector in 2002 and the participation of the independent power producers has been slow as may be reflective of need for securitisation of power generated, lack of capacity of licenced IPPs to attract finance, high financial costs (characterised by short repayment periods) for IPPs leading to high expected tariffs and difficulties in getting insurance for secured loans by investors. As such no major power stations have been commissioned since unbundling.

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THE OBJECTIVES OF THE SYSTEM DEVELOPMENT PLAN IN ZIMBABWE The objective of this report is to investigate and present the least-cost generation expansion plan for meeting the future electric energy and power requirements in Zimbabwe in compliance with the generation planning criteria from 2018 to 2038 planning period. This aims to provide effective electricity market signals for the market to respond timely, competently, adequately and cost efficiently to the national forecasted electricity requirements. The report therefore presents the electricity power and energy forecast, existing generation capacity, committed generation projects and the gap for exploitation by the market. The market is therefore expected to respond to the time profiled power and energy gaps with competent technologies, in time, with adequate capacities and with cost efficient and competitive investments. The recommended development plan contained therefore presents the least-cost credible generation development path for meeting the future electricity requirements in Zimbabwe and entails the path to the lowest possible electricity end user tariff for all consumers.

The objectives of the System Development Plan also include:

To assess the adequacy of the existing local generation capacity in meeting the forecasted demand and the reserves requirements.

To investigate possible short-term measures for meeting Zimbabwe electricity requirements before commissioning of major planned power projects.

To investigate the technical and cost performance of various candidate generation projects, their ranking and their optimised development sequence

GENERATION EXPANSION PLANNING PROCESS

1. Establish base year and length of study period (Planning Period)

2. Review of the Electricity Load (energy and power) forecast

3. Establish the baseline generation portfolio and its technical and economic parameters

4. Establish the bucket of planned and committed projects, project details and techno-economical parameters

5. Derive a supply and demand balance where supply (existing and committed projects) are matched to annual peak demand requirements in each year in the planning horizon. Identify the power deficit years.

6. Establish the basket of potential projects and technology energy solutions that can potential compete to meet future power and energy gaps identified in step 5 above. This basket should be in excess of the preliminary gaps identified above and should be made up of diversified energy and technological solutions as reflective of the market trends.

7. Create an electronic model of the electricity market by creation of the following critical market model elements

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a. Load model (power and energy model from base years for each year and hour in the planning period). Thus the model will create energy and power model for each hour in a 21 year planning period as in this study. e.g. 8760x21hrs to represent hourly electricity requirements.

b. Generation model (existing generation, committed generation and candidate solutions to meet gaps with all relevant technical, economic, project, environmental and commercial parameters)

c. Create an electronic model of the generation system performance requirements (quantifiable environmental policies and statutes, generation reserve requirements, generation planning criteria, other relevant policies and statutes, etc.) This sets the boundaries for the resultant generation system that is to be acceptable

8. Create generation scenarios (at least three) to investigate, through detailed simulations. Apply market intelligence and engineering expertise to craft quality solutions.

9. Run a model validation exercise to test model integrity and performance.

10. Run simulations to derive solutions from each scenario and the performance indicators of each solution analysed.

11. Create new additional scenarios for investigation from the initial analysis of study results. Here the analysis results provide clues of other scenarios to investigate.

12. Rank the performance of each scenario solution based of the cost of solution to meet power and energy requirements in the entire planning period.

13. Identify and recommend the Generation Expansion Path from a viable highest ranking generation scenario solution - ideally the least cost solution that is practically implementable.

14. Prepare a report to communicate the generation expansion path (market requirements, technology, capacities, commissioning times, policy and performance requirements) as a market signals package to stimulate timely, relevant and competitive generation investments. This is the System Development Plan.

2 LOAD FORECAST

2.1 Introduction

Generation and network planning is done to meet future load requirements as prescribed by a load forecast. Forecast of total system requirements (demand) is the foundation for medium to long term system capacity expansion planning. On the other hand, sales forecasts are necessary in the short to medium term for revenue projections, whereas geographical load forecast are a pre-requisite for network expansion.

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2.2 Assumed Forecast Scenario

The detailed forecast assumptions and results are contained in the Load Forecast Report (2016). Three scenarios were developed in the report and analysed in detail: High Case Scenario: This is an optimistic scenario above the Government economic recovery policy scenario. This scenario represents a steep and sustained economic recovery higher than the Government planned policy (ZIM-ASSET) scenario. Policy Scenario: This scenario represents the Zim-Asset policy scenario and assumes that the government policies, initiatives and instruments work in a coordinated fashion to achieve the planned and sustained economic growth and recovery targets. Business As Usual (BAU) Scenario: This scenario assumes a that the economy continues to grow at the same supressed rate and current technological practices (efficiencies), economic structure, energy market penetration shares persist into the future. The Policy scenario therefore best represents a realistic demand growth scenario for the Zimbabwean Economy, as it is supported by other policy instruments. 2.3 Forecast Results

The table below is a summary of the power and energy demand forecast results for the Policy Scenario which was adopted for purposes of developing the System Development Plan. Table 1: Energy and Power Demand Projections

Year Energy Demand Forecast (GWh)

Power Demand Forecast (MW)

2016 8,526 1,486

PROJECTIONS

2017 9,073 1,668

2018 9,535 1,867

2019 10,270 2,065

2020 11,097 2,267

2021 11,832 2,418

2022 12,423 2,564

2023 13,152 2,712

2024 13,879 2,866

2025 14,602 3,018

2026 15,184 3,137

2027 15,763 3,255

2028 16,355 3,379

2029 16,944 3,494

2030 17,438 3,598

2031 17,712 3,692

2032 18,187 3,796

2033 18,664 3,898

2034 19,137 3,991

2035 19,619 4,093

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2036 20,071 4,195

2037 20,453 4,278

2038 20,839 4,356

MARKET TRENDS AFFECTING LOAD GROWTH IN THE ECONOMY

Electricity consumption patterns by customer category or sector is changing and has undergone major changes in the recent past. This is primarily driven by the following:

National economic policies to encourage investments in different sectors of the

economy, such as beneficiation policy, infrastructural development, easy of doing

business, increasing local capacity utilisation, ZIMASSET pillars, command

agriculture and other command programmes, Special Economic Zones among

others as well as the resultant GDP growth projections

Looking East Policy to mitigate against economic sanctions and national credit

rating

Investors’ confidence

Growing energy conservation awareness & drive

Increased access and affordability to energy efficient equipment and systems

Increased access and affordability to solar water heating and Off-Grid Systems

Strong energy conservation Government policies

Increased penetration and usage of LED lighting

Increased penetration, acceptance and access of LPG Gas in domestic, industrial

and commercial uses

Increased penetration of solar street lighting

Increased penetration of solar roof top panel system

Government policies and interventions for instance:

o Banning of incandescent bulbs

o Local manufacture of energy savers and solar solutions

o National Declared Contributions

o National Energy Policy

Net metering regulations

Need for global competitiveness

Technology penetration

The interaction and evolution of all of the above factors amongst others, is complex and determines the present and future energy requirements for the nation. The electricity load forecasting is the scientific process that investigates and accounts for the interrelationship of all of the above load drivers amongst others. This process derives power and energy consumption trends for the planning horizon (typically 20 years) by sector. This process is a specialist area that is very data intensive. The electricity load forecasting process starts by a national electricity load survey exercise. At that stage of the, Government policies and all of the above energy drivers’ data among other model specific data is collected. Detailed simulations and reporting completes the process to produce the Zimbabwe Electricity Load Forecast Report.

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MARKET SIGNIFICANCY OF THE ELECTRICITY LOAD FORECAST

The Electricity Load Forecast is used for the following key uses among others:

1. Generation expansion planning (The Load Forecast answers the question – what are the future electricity requirements of the nation, where, what year, what’s driving demand and in what sectors of the economy)

2. Electricity Transmission and Distribution Network Planning (The Load Forecast answers

the question - can our network supply the future demand according to the requirements

projected in the Load Forecast and the resultant generation plan to meet the projected load

requirements in a manner compliant to all relevant regulatory and performance

requirements.)

3. Generation and Network projects business justification (The load Forecast answers the

question – does the network or generation project under consideration have a market,

business justification and therefore is it viable)

4. Electricity tariffs determination (The load Forecast answers the question – What are the

electricity sales forecasts in the specific planning period under consideration and what are

the costs directly associated with provision of energy to requirements, from generation,

through network wheeling to billing meter point)

IMPLICATIONS OF OVER AND UNDER FORECASTS

ZETDC has a license obligation to plan, develop and operate the system in a coordinated and efficient manner. Competent Load Forecasts are at the heart of the ZETDC capacity to satisfy this mandatory license condition. Over and under demand forecast affects the coordination and efficiency of the resultant power system and result in a suboptimum and high electricity tariffs to all consumers.

Under forecasts results in an unreliable power system that relies on unplanned and expensive measures to supply power to the nation. Over forecast results in stranded capacity and investments and equipment underutilisation. This results in a poor infrastructure investment performance situation with possible difficulties in servicing loan repayments associated with the relevant investments and guaranteed higher electricity tariffs associated with low equipment utilisation.

It is for this reason that ZETDC closely manages the accuracy of its load forecasts.

RECENT ELECTRICITY MARKET TRENDS The electricity market, regardless of the current deficit, is finite and all businesses in the industry plan and strategize around the electricity Load Forecast as key basis for business participation. Several electricity generation projects have been planned and are at various stages of planning, commitment and development. The amount of generation capacity that can be considered as advanced, committed and therefore imminent is significant relative to the rate of electricity load growth. There is strong evidence showing that the market space for new generation projects is becoming thin in the near future. ZETDC in no longer load shedding electricity customers routinely as way of operating the system since December 2015. The power liquidity and generation tariff’s competitiveness on the SAPP market has improved and is projected to continue improving. Eskom as at 2017 has strongly pursued regional electricity markets to sell their growing excess electricity generation. The average cost of electricity power imports for the year 2016 and January to May 2017 is 8.256 c/kwh and 7.294 c/kwh respectively. Electricity load forecasting is very complex process and involves the modelling of the impact of policies on power demand, current and future economic and energy structure, evolution of technology developments and availability and competiveness of other available energy options

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that would provide the same service. Competition is growing in the electricity generation sector by design of the new unbundled electricity market. Power producers awake to this active competition at the stage of Power Purchase Agreements (PPA) negotiations. Project planning has advanced sufficiently to cost the project and unit cost of electricity from the power plant. If power producer’s business model has been mainly motivated by news of power deficit without detailed electricity market research, chances are that the power producer would not strategize sufficiently for market resilience, relevancy and competitiveness. In such cases, the PPA tariff by design may not competitive. Power Off-takers are not motivated to sign PPAs that are no competitive as they have a mandate to dispatch generation based on the least cost economic dispatch regime from the entire market that includes the region. LOAD DIVERSITY AND KEY DEMAND ANALYSIS PARAMETERS

The following are demand parameters and factors for the market players to understand and can assist in the correct interpretation of specific loads in relation to the system peak demand. DEMAND FACTOR

Demand Factor = Maximum demand / Total connected load

For example, an oversized motor 20 Kw drives a constant 15 Kw load whenever it is ON.

The motor demand factor is then 15/20 =0.75= 75 %.

Demand factor is always < =1.

The lower the demand factor, the less system capacity required to serve the connected

load.

Demand factor is an important parameter for the market to understand and lack of understanding it can result in a sub optimum or system over investment. One of the major ZETDC license conditions, is to ensure a coordinated and cost efficient least cost planning of the network and cost efficient and least cost procurement of power from all possible power producers from the region. The delivery of this license condition is assured through competent and high quality electricity load forecasting. Over forecast results in over investments in both generation and network infrastructure and is associated with high, in efficient electricity tariffs and may have an adverse effect to the sustainability of some market players that are directly affected by the over investment. Equally an under-forecast will result in a costly under investment and an inadequate network and power supply capacity. It is therefore one of the ZETDC’s license conditions, to facilitate the sustainable operation of all market players through an effective delivery of high quality and timely market signals that attract the correct and desirable responses from market. An over forecast of electricity demand is a real risk for Zimbabwe and ESKOM is currently experiencing this situation and can be influenced by an over-response to the historic heavy load-shedding situation. Market intelligence as informed by the global knowledge of the investment programs in the electricity sector points to a high probability if no an imminent over investment situation if mitigations are not applied in time. The total connected load of a business is therefore not the Maximum demand of the load as most demand factors are less than one. A collection of demand factors below shows the sector distribution.

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Table 2: Typical Demand Factors

Demand Factor

Utility Demand Factor

Residence Load (<0.25 KW) 1

Residence Load (<0.5 KW) 0.6

Residence Load (>0.1 KW) 0.5

Restaurant 0.7

Theatre 0.6

Hotel 0.5

School 0.55

Small Industry 0.6

Store 0.7

Office ,School 0.4

Hospital 0.5

Air Port, Bank, Shops, 0.6

Motor Load (up to 10HP) 0.75

Motor Load (10HP to 20HP) 0.65

Motor Load (20HP to 100HP) 0.55

Motor Load (Above 100HP) 0.50

LOAD FACTOR

Load Factor = Actual Energy Consumed Over a Period / Energy that could have been

Consumer Over The Same Period if Plant was running Continuously At Peak

Load Factor = (energy (kWh per month)) / (peak demand (kW) x hours/month)

It is the ratio of actual kilowatt-Hours used in a given period, divided by the total possible

kilowatt -hours that could have been used in the same period at the peak KW level.

Thus the Load Factor accounts for the energy utilization of a system, while Demand Factor looks at capacity utilization of the same system. Load Factor is a measure of the effective utilization of the load and equipment or capacity investment.

higher load factor means better and efficient utilization of the power system infrastructure and customer equipment capacity. Low load factor means that occasionally a high demand is set and therefore to service that peak, capacity is sitting idle for long periods, thereby imposing higher costs on the system due to underutilization of investments at both the electricity utility level and the consumer. Although the Load factor is a term that does not appear on the customer utility bill, it does affect significantly the electricity costs and tariffs at various levels of the Power System. Load factor is a major indicator of how efficiently the customer uses the electricity. The table below shows the combined table of Demand Factors and Load Factors

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Table 3: Typical Demand and Load Factors

Demand Factor & Load Factor

Utility Demand Factor (%) Load Factor (%)

Communications – buildings 60-65 70-75

Telephone exchange building 55-70 20-25

Air passenger terminal building 65-80 28-32

Aircraft fire and rescue station 25-35 13-17

Aircraft line operations building 65-80 24-28

Academic instruction building 40-60 22-26

Applied instruction building 35-65 24-28

Chemistry and Toxicology Laboratory 70-80 22-28

Materials Laboratory 30-35 27-32

Physics Laboratory 70-80 22-28

Electrical and electronics laboratory 20-30 3-7

Cold storage warehouse 70-75 20-25

General warehouse 75-80 23-28

Controlled humidity warehouse 60-65 33-38

Hazardous/flammable storehouse 75-80 20-25

Disposal, salvage, scrap building 35-40 25-20

Hospital 38-42 45-50

Laboratory 32-37 20-25

K-6 schools 75-80 10-15

7-12 schools 65-70 12-17

Churches 65-70 5-25

Post Office 75-80 20-25

Retail store 65-70 25-32

Bank 75-80 20-25

Supermarket 55-60 25-30

Restaurant 45-75 15-25

Auto repair shop 40-60 15-20

Hobby shop, art/crafts 30-40 25-30

Bowling alley 70-75 10-15

Gymnasium 70-75 20-45

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Skating rink 70-75 10-15

Indoor swimming pool 55-60 25-50

Theatres 45-55 8-13

Library 75-80 30-35

Golf clubhouse 75-80 15-20

Museum 75-80 30-35

Load Factors are therefore lower than Demand Factors and speak more of capacity utilization efficiency, they are the basis of the electricity generation expansion planning Optimization process. Electricity Investments should therefore not be based on just capacity analysis but optimum capacity utilization and utilization efficiencies.

3 THE GENERATION PLANNING BASELINE

The major local electricity generation power plants are mature and aged. The thermal fleet has outlived its economic life. As such, the power plants have been derated and their operational dependable capacities are way below their installed capacities. Low hydrological conditions have also recently affected the country’s largest hydro-power plant, Kariba South Power Station, which has seen its dependable output drastically reduced. The existing local generation capacity is way below the system peak demand and regional power are currently being used to cover the supply deficit.

The summary table below shows the indicative performance of the existing plants. Summarized in the table below is the overall performance of the existing local power plants.

Table 4: Existing Power Plants Installed and Dependable Capacities

PLANT INSTALLED CAPACITY(MW) CAPACITY (MW)

Hwange (1-6) 880 300

Harare 120 30

Bulawayo 120 20

Munyati 100 20

Chisumbanje 18.3 4

Dema 100 100

Total Thermal 1378.3 674

Duru 2.2 2.2

Nyamingura 1.1 1.1

Pungwe A 2.7 2.7

Pungwe B 15.3 15.3

Pungwe C 3.75 3.75

Kariba 750 385

Total Hydro 775.05 410.05

Total Local Capacity 2153.35 884

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3.1 INTERIM LOAD SHEDDING MITIGATION MEASURES

3.1.1 Increased Power Imports

ZETDC is currently balancing its system by a significant dependence on power imports from ESKOM and HCB. These are arrangements based on annual PPA contracts. The ESKOM arrangement is none-firm, while the HCB contract is firm at 50MW. Power imports have become even cheaper than the cheapest thermal power plant in Zimbabwe with the average price of imports reducing to 7.294 c/kwh for the period January to June 2017. This market trend if sustained changes power imports to a real compelling power supply source that has to optimally included in the generation mix for strategic management of reliability of electricity supplies and electricity tariff pricing.

3.1.2 Rented Diesel Powered Plants

ZETDC has signed a three-year contract with Sakunda holdings for the firm supply of energy at 100MW capacity.

3.1.3 Demand Side Management and Energy Efficiency

ZETDC continues to exploit the demand side management and energy conservation opportunities as a sustainable measure.

4 SYSTEM PLANNING CRITERIA AND ASSUMPTIONS

4.1 Generation Expansion Plan Methodology

The objective of a Generation Expansion Planning (GEP) study is to determine a least-cost generation expansion programme. This is achieved through the evaluation of technically equivalent alternatives in order to satisfy the forecasted demand under given criteria. Wien Automatic System Planning (WASP) package was used for modelling the assumed generation expansion scenarios. The technically equivalent options are drawn from feasible options that encompass existing and new internal generating capacities as well as imports from the Southern African Power Pool (SAPP) when necessary. A wide range of options were assessed so as accommodate all possible developmental paths from which an economic, reliable, secure and achievable generation expansion plan can be ascertained. During the studies, a broad range of planning issues, such as the size of the units, output of the units, generation technologies, fuel availability and costs, timing, siting, operating and capital costs, and environmental issues were considered. The methodology applied compares the total system costs (investment, maintenance and operation) of new and existing plant to meet the forecasted demand with adequate reserves. A series of technically equivalent scenarios or options designed to meet the Zimbabwe and SAPP Generation Planning Criteria are derived and then ranked according to the results of independent economic and financial analyses, cost of unserved energy and Loss of Load Probability. The selected plans are then subjected to sensitivity analyses taking into account possible changes in underlying assumptions before the least cost plan is identified. This plan is what is termed the Zimbabwe System Development Plan for the planning horizon. It is reviewed and updated periodically whenever there are changes in key assumptions.

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4.2 Generation Planning Criteria

Generation expansion planning was carried out in this study based the approved Zimbabwe Generation Planning Criteria, which is also an approved SAPP criterion. Below is the summary of the applied generation criteria.

4.2.1 Criterion 1 (Security Criterion)

The minimum level of internal generation shall have, as a long-term objective, capacity greater than 100% of demand with a reserve not less than the system largest loss.

4.2.2 Criterion 2 (Reliability Criterion)

The minimum reserve level to be carried on the system should be at least 10.6% of Adjusted Demand for Thermal-based power and 7.6% for Hydropower and a weighted average for a combination of both. Adjusted Demand is equal to the Peak System Demand plus the amount of Firm Tariff Power exported minus the amount of Firm Tariff Power imported in the same interval.

It should be noted that the SAPP rules for Operating Members call for a minimum reserve capacity of 10.6% for all-thermal systems and 7.6% for all-hydro systems, or a weighted average for a mixed thermal/hydro system. This reserve criterion, based on the SAPP requirements (weighted average) was used for this study.

4.2.3 Criterion 3 (Economic and Financial Criterion)

For economic considerations, Firm Imports may exceed the reserve requirement limit (10.6% of Adjusted Demand for Thermal-based power and 7.6% for Hydropower and a weighted average for a combination of both) as long as Criterion 1 is met and sources of energy are significantly diversified in both technology and geography and are cost effective relative to local options.

All the three planning criteria should be satisfied and have been satisfied. National Declared Contributions (NDC) All the three planning criteria should be satisfied by the SDP process and have been satisfied. Zimbabwe government has made NDC commitments following the Paris Agreement on Green Economy migration and mitigation plan. The NDCs are yet to be converted to industry policy or statutory instruments that can in effect be used to regulate, mandate and enforce environmental performance in in the Electricity Sector project developments and operations. In the absence of such instruments, this SDP has subjected the recommended generation development scenario to an NDC compliance check. DEMAND AND RESERVE The Electricity Demand is a key planning input and forms the basis from which the adequacy of the Transmission and Generation system can be assessed. Electricity Demand is simply the projected system load that has to be supplied by the generation system under appraisal and the projected network capacity expansion. System Reserve: is the additional generation capacity that is required over and above the projected demand to run the system securely and reliably under normal and emergency conditions.

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4.2.4 Demand and Energy Curve

The curve below represents a typical week day demand curve. The area under the blue curve represents the energy. A daily load curve for every day of the year of the 21 year planning period is established in the WASP model and generation expansion options or scenarios are then tested to satisfy the demand and reserve curves in satisfaction of all the generation expansion planning criteria.

The area under the red curve is satisfied by Base Load plants. The area under the yellow curve but above the red curve is satisfied by the mid merit plants and the area above the yellow curve is satisfied by the peaking power plants. The Base load, mid merit and peaking power plants are all required to supply demand and reserves in a secure, reliable and economic manner. These functions require different technological capabilities and performance characteristics. Base load plants

• Normally associated with the lowest generation tariff • Technology not suitable to changes in load • Examples include thermal, nuclear and hydro were its in plenty supply

Mid merit plants • Load Following • Examples include: Hydro, diesel engines, gas engines and turbines

Peaking Plants • Operate at Peak or emergency (quick start up with rapid increase in demand

and quick ramp down and shut downs) Examples Hydro, Gas & Diesel plants

PRINCIPLES OF GENERATION EXPANSION PLANNING

The generation expansion methodology used in this study is based on the following:

1. Uses WASP generation expansion simulation package

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2. The methodology applied optimizes the total system costs (investment, maintenance and operation) of new and existing plant to meet the forecasted demand and reserves for each year in planning period.

3. Satisfies the ZETDC generation expansion planning criteria

The study investigates how existing power plants, committed power plants and candidate power plants satisfy the Zimbabwe future energy and power needs. Candidate power plants are those power plants that are not committed, are not existing plants and may be in the form of a technology whose size and commissioning dates can be optimised in the study.

CANDIDATE PLANTS are modelled to ascertain their technical and cost implication in meeting future demand and reserves. These are then ranked in order of economic loading merit. The studies were carried out using WASP (an IAEA generation expansion software). WASP is designed to identify the generation system expansion plan which has the minimum present worth of all operating and investment costs in the study period.

The studies were carried out using WASP (an IAEA generation expansion software). WASP is designed to identify the generation system expansion plan which has the minimum present worth of all operating and investment costs in the study period. COMMITTED POWER PLANTS: Are power plants that have secured significant milestones and have evidence of strong movement towards financial closure or are under construction. WASP KEY INPUTS

1. Demand and load duration curve (seasonal)

2. Existing system and commitments

3. Candidates for future expansion

a. Technical parameters (e.g. unit size, minimum and maximum unit operational limits, outage rates, scheduled maintenance; life time, fuel type, heat rates etc.).

b. Economic parameters (investment cost, variable and fixed operation and

maintenance costs, domestic and foreign fuel costs, energy not-served cost)

c. Other parameters (emission rates)

4. Reliability constraints

5. Hydrological variations (seasonal)

6. Spinning reserve limits

7. Scheduled Maintenance Days

KEY OUTPUTS FROM WASP

1. Optimum expansion plan over study period

2. Economic Loading Order Merit

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3. Expected generation from all units for all periods

4. Reliability performance

a. Loss of Load Probability (LOLP)

b. Cost of Un-served energy

c. Reserve margins

d. Objective Function

Objective Function: The total costs of an expansion plan which is defined as the sum of capital

investment costs (corrected by salvage value) of the candidate plants added by the plan plus the

total operating costs (including energy not served costs) of the system for each year; all costs

discounted to a reference year. This forms the key criteria for ranking candidate plants and

generation technologies to achieve a cost efficient generation system.

4.2.5 Generation Expansion Option Analysis

The study is based on an analysis of four key generation options or scenarios each based on varying assumptions. Each generation expansion scenario represents an option of satisfying the Zimbabwe power and energy needs in the planning period. WASP optimization process determined the generating system expansion plan that meets demand at minimum cost, while satisfying certain user specified constraints through the calculation of an Objective Function for each generation scenario tested. The objective functions of all the generation expansion options are then compared to find the least cost option. The generation scenario with the least objective function is the economically optimal and is associated with the least blended generation tariff. Scenario analysis and final recommendation of development sequence is informed by the need to meet the generation planning criteria so as to ensure reliable, secure and optimal generation development.

5 POWER SUPPLY EXPANSION OPTIONS

The SDP can therefore be summarized as:

SDP = Existing generation system – Decommissions + Committed Power Plants + Ranked Candidate Power Plants

5.1 Committed Power Plants

Committed Power Plants are those power plants which, at the time of development of this System Development Plan (SDP), have achieved critical milestones in the project progress evaluation parameters which include feasibility studies, proximity to financial closure, signage of PPAs, signage of EPC contracts, and construction status, and/or have secured Government Project Priority status

The tables below give a summary of the committed and candidate power plants.

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Table 5: Committed Power Plants

Development


7. Shilands Power - Committed 210 2019

8. Kariba South Extension - Committed 300 2018

9. Gwanda Solar - Committed 10 2019

10. Bulawayo - Committed 90 2020

11. Hwange 7&8 - Committed 600 2021

12. Batoka - Committed 1200 2024

Table 6: Candidate Power Plants

Plant Name Units Size Installed capacity (MW)

Primary Fuel

Southern Energy 330 660 Coal

CASECO 300 600 Coal

ZPC Diesel 120 Diesel & Gas

Gairezi 15 30 Hydro

Lusulu 350 1400 Gas

Gokwe North (Sengwa) 300 1400 Coal

Devil’s Gorge 250 1000 Hydro

Lupane Gas 150 300 Gas

Solar PV 300 Solar

Harare 30 60 Coal

Munyati 20 100 Coal

Mamina Wind 400 Wind

5.2 GENERATION EXPANSION SIMULATIONS

5.2.1 Generation Expansion Option Analysis

The study is based on analysis of three key generation options scenarios, each based on varying assumptions. Each generation expansion scenario represents an option of satisfying the Zimbabwe power and energy needs in the planning period. The current generation expansion plan has most of the key projects fixed in terms of the project capacity, target commissioning periods and technology of use and therefore leaves a lower than desirable market space for the optimisation of candidate power plants for a resultant efficient generation system. WASP optimization process determines the generation system expansion plan that meets demand at minimum cost, while satisfying certain user specified constraints through the

17


calculation of an Objective Function for each generation scenario tested. The objective functions of all the generation expansion options are then compared to find the credible least cost option. The credible generation scenario with the least objective function is the economically optimal and is associated with the least blended generation tariff. Generation scenario credibility is affected by physical implementation constraints on time, agreements and opportunities. The study is based on the analysis of the following three key generation expansion scenarios:

Scenario 1: Current Development Path – This scenario analyses the performance of the currently generation expansion plan according to the power producers declared projects commitments and the associated project planning milestones. This plan is a credible generation expansion scenario if its implementation is not influenced by the updated signals dispatched through this SDP.

Scenario 2: Optimised Case – This scenario optimizes the current development path through exploitation of mitigation opportunities available on projects that haven’t advanced too far out to consider updated market signals.

Scenario 3: Low Kariba Recovery Scenario: The generation expansion plan looks a lot more vulnerable in the short-term period right to the end of 2020. This is the period of the lead times of the major planned projects like Hwange 7&8 and the rehabilitation of Hwange Stage 1 and 2. This period is associated with a major power deficit gap in the 21-year planning period and is very sensitive to failure in planning assumptions. The biggest sensitive or variable in this short term is the performance of the Kariba Hydro power plant due to the hydrological conditions of the Zambezi river basin. This scenario therefore investigates the impact of a slow Kariba Hydrological recovery condition and the sensitivity of the resultant system to an increased power imports compensation response.

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5.2.2 Scenario 1 – Current Development Path Analysis Results

The table below show the results of the studies under the Current Development Path scenario:

Table 7: Scenario 1 - Current Development Path

Development


Investment Costs

(Inclusive of

Transmission

Connection) /

USD Million

11. Average Power Imports

(2017-2020) 427 Ending 2020


13. Shilands Power 315 2019 270.70

14. Mamina Wind 100 2019 205.90

15. Gwanda Solar 10 2019 17.70

16. Bulawayo Repowering 90 2020 120.00

17. Hwange 7&8 600 2021 1439.00


Extension 880 2022

500.00

19. Batoka 1200 2024 2600.00

20. Devil’s Gorge 1000 2031 2250.00


This scenario presents a credible generation development option that benefits from recent versions of the SDP and market signals. It is not an optimum scenario but presents a good base case for optimization. Scenario 2: Optimised Case Analysis Results

This scenario exploits opportunities for optimization of the generation development sequence in Current Development path above. The study results are as tabulated below:

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Table 8: Scenario 2 – Optimized Case

Development

Sequence No. Plant

Capacity /

MW Year

Investment

Costs (Inclusive

of Transmission

Connection) /

USD Million


2020) 470

Ending

2020

0


11. Shilands Power 210 2019 270.70

12. Gwanda Solar 10 2019 17.70

13. Hwange 7 & 8 600 2021 1439.00


Extension 880 2022

500.00

15. Batoka 1200 2024 2600.00

16. Devil’s Gorge 1000 2031 2250.00


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5.3 Scenario 3 – Slow Kariba Hydro Recovery Analysis Results

This scenario tests the impact of a possible slow recovery of hydrological conditions on the Zambezi River Basin as a probability from imperial record of hydro statistics.

Table 9: Scenario 3 – Slow Kariba Hydro Recovery scenario

Development

Sequence No. Plant

Capacity /

MW Year

Investment

Costs

(Inclusive of

Transmission

Connection) /

USD Million


2020) 670

Ending

2020

0


12. Shilands Power 210 2019 270.70

13. Gwanda Solar 10 2019 17.70

14. Bulawayo 90 2020 120.00

15. Hwange 7 & 8 600 2021 1439.00


Extension 880 2022

500.00

17. Batoka 1200 2024 2600.00

18. Devil’s Gorge 1000 2031 2250.00


SCENARIOS SUMMARY ANALYSIS The performance of scenarios 1 to 3 are compared below based on Loss of Load Probability and Cost of system to meeting demand:

Table 10: Generation Expansion Options Summary

Expansion Option Loss of Load Probability (LOLP - %)

Discounted Cost of meeting demand (US$Billion)

Scenario 1 – Current development Path 4.384 6.82

Scenario 2 – Optimized Case 0.004 6.54

Scenario 3 –Slow Kariba Hydro Recovery 0.457 6.49

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Scenario 3 is the least cost power supply mix for meeting demand and demonstrates the favourable effect of power imports at projected tariffs to the generation mix. This scenario is however induced by hydrological conditions and can therefore not be a target planning scenario.

SCENARIOS’ GREEN HOUSE GAS (GHG) EMISSIONS

The graph below shows the corresponding Green House Gas emissions per GWh of energy generated that are associated with the simulated generation scenarios.

Graph 3: Corresponding Green House Gas Emissions per GWh of Energy Generated

Scenario 3 (Slow Kariba Hydrological Recovery) has a higher utilisation of power imports and will result in a lower National Green House Emission per GWh of country generated emissions.

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Slow Kariba Hydrological Recovery Optimised Case Current Developmental Path

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SUPPLY AND DEMAND GRAPH BY SCENARIO

The graph shows the effect of the mitigation actions implemented in the optimised scenario to reduce idle generation capacity, improve the utilisation level and optimise the generation system investment efficiency.

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Kariba Slow Hydro Recovery

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Table 12: Power Plants Development Performance Ranking Order

Development Sequence No.

Plant Capacity / MW Derived Indicative Tariff / c/kwh

10. Batoka HES 1200MW 3.00

11. Devil’s George HES 1000 3.40

12. Imports Block1 N/A 5.00


14. Hwange 1&2 Life Extension 210 6.50

15. Hwange 7 & 8 600 9.24


17. Gwanda Solar 10 11.00

18. Shilands (CCGT) stage 2 210 10.0

Shilands (OCGT) Stage 1 210 12.5

The above list economic dispatch ranking order for the entire list of generation technologies that have been analysed.

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6 RECOMMENDED GENERATION DEVELOPMENT PATH

RECOMMENDATIONS:

1. The Optimized Scenario is the recommended least cost generation expansion path.

2. Hwange 7&8 and Hwange Rehabilitation must be implemented. They are competitive and provide stability to the Zimbabwe Power Supply System. They are strategic in satisfying both demand and reserve requirements.

3. Bulawayo station rehabilitation is not recommended due to a projected unviable plant factor in the 21 year planning period. Rehabilitation of all small thermals is thus not recommended. Bulawayo Repowering was assessed as a committed plant but it’s energy was however not dispatchable due to lake of competitiveness.

4. ZETDC with aid of regulatory instruments should pursue an aggressive peak clipping, load shifting and valley filling complimentary program through off-peak tariff incentives. Such a program can be implemented efficiently and sustainably in conjunction with a smart metering project. This will change the normalized load duration curve to a flat profile, reduces the system demand factor and increases the system Load Factor. The resultant system is associated with the following:

a. Lower total system capacity requirement for the same size of the economy.

b. Higher utilization of utility assets and more attractive average end user tariff. Table 13: Summary of the Recommended Generation Development Sequence

Development

Sequence No. Plant

Capacity /

MW Year

Investment

Costs (Inclusive

of Transmission

Connection) /

USD Million


2020) 470

Ending

2020

0


3. Shilands Power 210 2019 270.70

4. Gwanda Solar 10 2019 17.70

5. Hwange 7 & 8 600 2021 1439.00


Extension 880 2022

500.00

7. Batoka 1200 2024 2600.00

8. Devil’s Gorge 1000 2031 2250.00


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THE AVERAGE GENERATION TARIFF FOR THE RECOMMENDED GENERATION EXPANSION PLAN

Red Curve – The average indicative generation tariff curve for the planning period 2018 - 2038 Yellow Curve - Average indicated generation tariff linear trend line Blue Curve – Average indicative generation tariff moving average trend line

The red curve shows the projected average generation tariff for the proposed development plan. The yellow trend line serves to show the average linear diminishing trend of the average generation tariff. The average electricity generation tariff is projected to reduce within the planning period at three key planning time cardinal points as shown below:

Cardinal Point Average Generation Tariff Reduction Drivers

Project Name Indicative Project Tariff / c/kwh

2022 Hwange Stg 1 & 2 880MW Rehab

6.5

2024 1200MW Batoka 3.0

2031 1000 Devil’s George 3.4

The tariff reduction is due to the favourable tariff blending effect from the three projects above. The blue curve shows the moving average generation tariff of the recommended generation development plan and smoothens the tariff changes in the planning horizon for a possible tariff negotiation baseline. The three projects above have a similar trend impact on the CO2 production trend and the environmental performance of the proposed generation expansion system.

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AG

E G

EN

ER

AT

ION

TA

RIF

F I

NC

L R

ES

ER

VE

C

/KW

H

PLANNING YEAR



Linear (Projected Annual Average Generation Tariff c/kwh)

2 per. Mov. Avg. (Projected Annual Average Generation Tariff c/kwh)

26


RENEWABLES PENETRATION CURVES FOR THE RECOMMENDED DEVELOPMENT PATH

The curve above shows a dominant renewable energy penetration with the shaded area representing residual space taken by thermal sources.

Percentage of Renewables Penetration in the Energy Mix

The penetration of renewables is high and the graph reflects the progressive blending of renewables and thermal plants in the planning horizon. The peaks reflect the commissioning of Batoka and Devil’s George Power Plants.

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CAPACITY UTILISATION PERFORMANCE OF THE RECOMMENDED DEVELOPMENT PATH

The recommended scenario mitigates capacity underutilization efficiency losses of the generation system than any of the other two scenarios studied. This is demonstrated in the supply and demand capacity balance graph for all the three scenarios above. This scenario achieves an optimum balance between the following key system performance indicators:

a. Higher capacity utilization efficiency of the resultant generation system b. Generation planning criteria compliance c. Competitive resultant average end-user electricity tariff.

The above proposed generation expansion plan has an average planning period plant factor of 52.4%. Thus, only 52.4% of the generation investment system is projected to be utilized in electricity energy generation function. After accounting for plant maintenance requirements, about 64% of the possible 26579GWh is used for electricity generation. The generation system utilisation efficiencies can be improved by a ZETDC aggressive promotion of peak clipping, load shifting and valley filling complimentary programs that can be implemented at a large scale through off-peak tariff incentives and promotions.

RESERVE MARKET ZETDC is mandated to plan and operate the system within the regulated system reserve policy. This ensures system reliability within the planning period under various generation scenarios of outages and faults. It is currently acceptable for the ZETDC system to operate in a derogated status with regard to system reserve performance, due to the prevalent major power supply deficit

0

500

1000

1500

2000

2500

3000

3500

4000

0%

2%

5%

7%

9%

12%

14%

16%

19%

21%

23%

26%

28%

30%

33%

35%

37%

40%

42%

44%

47%

49%

51%

54%

56%

58%

61%

63%

65%

68%

70%

72%

75%

77%

79%

82%

84%

86%

89%

91%

93%

96%

98%

DE

MA

ND

/ C

AP

AC

ITY

/ M

W

% OF TIME IN YEAR 2024

NORMALISED 2024 LOAD DURATION CURVE

Demand Demand + Reserve Planned Capacity

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and the prohibitive costs of procuring such reserve requirements from the region together with the power imports to meet demand. ZETDC is however mandated to plan its system for the future to satisfy the reserve requirements. As a critical and must have system operation facility, the reserve requirements create the Reserve Market. Thus through this SDP, ZETDC sends to the market signals for provision of such services as quantified by year. The Reserve market comprises of the following:

a. Standing Reserve b. Synchronized reserve c. Fast response

The graph below shows the System Reserve market requirements.

The reserve built into the proposed generation plan is mainly composed of the synchronized reserve. The red graph shows the Reserve Requirements according to regulatory requirements and this could not be satisfied completely throughout the planning period. This market can be satisfied by the following technologies:

1. Demand Response and Interruptible Load 2. Demand Response and Smart Grid Technologies 3. Conjunctive operation of power plants 4. SAPP Power Pool Reserve Market

The reserve market in Zimbabwe has not attracted a strong market to date. The active market players have so far focused with the energy market. The recommended generation system reserve performance is therefore reflective of the weak market interest. The non-compliant reserve gap between the blue and red curve can however be competently and cost efficiently satisfied by SAPP Market reserve contracts.

29


ADOPTION OF THE SYSTEM DEVELOPMENT PLAN It is recommended that: 1. The System Development Plan be timeously adopted and that generation procurement be

changed from an unsolicited bidding system to a System Development Plan Guided

Generation Procurement System.

SOLAR PV 1. Developments of Solar capacity at supply side should be limited to protect system security

and blended tariff impact. 2. Demand side solar technology should be promoted as compared to supply side solutions.

These include: Solar water geysers Solar PV roof top panels Distributed generation PV solar pumping etc.

3. ZERA should include commercial incentives in addition to the Net metering code to encourage

and promote solar roof top panels and drive its penetration on the demand side. 4. ZERA should consider disincentives for connection of large solar power plants at the supply

side. RECOMMENDATIONS ON THE SDP IMPLIMENTATION ARRANGEMENTS 1. The System Development Plan be adopted as the desired least cost Generation Expansion

Plan for Zimbabwe

2. ZERA should immediately undertake a due diligence exercise to determine the readiness of

projects by IPPs identified in the System Development Plan. Should the project not meet

International projects readiness standards such as Project Readiness Definition Index then

issued licenses for that project be cancelled.

3. ZERA to develop IPP Procurement Procedures to be followed for the purpose of competitive

bidding process.

4. Unsolicited proposals may still be followed as long as they are cost competitive and are a

direct improvement and replacement of projects identified in the System Development Plan.

5. The following roles and responsibilities are recommended

i. Contracting Entity

The responsibilities of the Contracting Authority include:

Produce and update the System Development Plan with inputs from key stakeholders

Planning the connection of IPPs and signing of Transmission Connection Agreements

30


Negotiate and sign PPAs with IPPs

Assist Government in negotiation with developers and sign the Project Development

Agreement (PDA) on behalf of the Government.

Assist the Government team in negotiating MOU, PDA and Concession Agreements

(CA) with developers

Track project implementation in accordance with the implementation agreement and

timelines and informs Government on progress achieved

ii. Regulatory Authority

The responsibilities of the Contracting Authority include:

Develop and implement IPP procurement procedures

Advise Government with respect to IPP procurement policies

Timely approval of PPAs

Licensing of IPPs

Monitor compliance of IPP procurement with set laws

Settle market disputes

Monitor progress on project implementation in terms of licensing conditions

Make available to developers all laws and regulations of general application to IPP

projects

Effective regulation of competitive investments in the electricity sector

iii. Government

The responsibilities of the Government include:

Create enabling environment for investors in the electricity sector

Coordination and alignment of policies

Provide clarity on application of Indigenization Policy in the electricity sector given the

capital intensive nature of the sector

Promote viable projects to the investor community

Procure projects in line with set procurement procedures and rules

Confirm investment incentives for IPP concessionaires in line with the law

Administer concession agreement

I


APPENDICES

II


APENDIX A – MODEL DATA AND PARAMETERS

Table 14: Technical and Economic Data for Batoka George

Item Unit Quantity

Total Capacity MW 1200

Sent out MW 1194

Unit Size MW 300

No. of Units 4

Efficiency % 95

Total Project Costs US$ million 2600

O&M fixed US$/MWh 3.6

O&M variable US$/MWh 0.85

Forced Outage Rate (FOR) % 2

Planned Maintenance Outage rate Weeks 2

Plant Life Years 60

CANDIDATE POWER PLANTS

I. CASECO Technical Assumptions

Table 15: Technical and Economic Data for CASECO

Item Unit Quantity


Sent out capacity MW 553

Unit Size MW 300

No. of Units 2

Efficiency % 30


Fixed O&M Costs US$/MWh 4.8

Variable O&M costs US$/MWh 0.4

Heat rate net kcal/kWh 2400

Fuel Cost US$/tonne 72

Fuel Calorific value kcal/kg 6931


Expected Plant life Years 20

Shilands is developing a 315MW Diesel/Gas thermal power plant in Mutare. A PPA has been signed for 210MW capacity. The project phase 1 will commission an open cycle facility and phase 2 progresses the facility to a closed cycle plant after the first 5 years of operation.

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II. Gokwe Technical Assumptions

Table 15: Technical and Economic Data for Gokwe North

Item Unit Quantity


No. Of Units 4

Unit Size MW 300

Efficiency % 30

CAPEX

Total Project Cost US$ million 3434

EPC US$ million 980.4




Fuel type Coal

Fuel cost US$/tonne 30

Fuel CV net kcal/kg 6931

Annual Planned Maintenance Days/yr 51

III. Lupane Gas Assumptions

Table 16: Technical and Economic Data for Gas Turbines

Units Unit


No. of Units 2

Unit Size MW 150

Variable O$M US$/kWh 0.30

Variable fuel USc/kWh 2.73 (natural gas @ 2.5$/GJ)

6.30 (distillate)

Total Variable costs USc/kWh 3.03(natural gas @2.5$/GJ)

6.60(distillate)

Total costs USc/kWh 4.39(natural gas @ 2.5$/GJ)

7.97(distillate)

EPC Cost 52.5 (US$ 350/kW)

Owner’ cost 5.3 (10% of EPC cost)

Financing Cost 15.8 (30 % of EPC cost)

Total IPP Cost US$m 73.5(US$490/kW)

O&M US$/kWh 6.00

O&M Variable USc/kWh 0.30

Fuel type Natural gas Methane Distillate

Heat rate net kJ/kWh 10900 10900 10420

Fuel cost US$/GJ 2-2.5 2-2.5

US$/toe 260.0

Fuel CV net MJ/kg 43.0

Forced Outage Rate (FOR) % 4%

Planned Outage Days 30

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IV. Lusulu Thermal Power Station

Table 17: Technical and Economic Assumption

Item Unit Quantity


Unit Size MW 350

No. of Units 4

Efficiency % 30









V. Southern Energy (SENE)

Table 18: Technical and Economic Data for Southern Energy

Item Unit Quantity


Sent out capacity MW 600

Unit Size MW 330

No. of Units 2

Efficiency % 30









I. Kariba South Extension

The existing Kariba South hydro power station currently has an installed capacity of 750 MW comprising of six, 125 MW each, generating units. The unabstracted water consumption for Kariba electricity generation, is limited by the environmental constraints specific to the Kariba Complex as determined at design stage. These constraints are meant to preserve the environment up and down stream of Kariba Dam Wall. The Zambezi River Authority (ZRA) is therefore establishment by the government of Zimbabwe and Zambia to manage the equitable and sustainable usage of the water resource along the Zambezi River Basin stretch that both

V


countries share. Kariba Complex (South and North) can only generate combined 10000 GWh of energy annually under normal hydrological conditions without penalties. This is split equally amongst the two countries. An increase of this consumption constraint is highly unlikely due to the climate change impact on flows that has an overall effect of even reducing the hydrological flows on the Zambezi river basin. The Kariba South extension of the plant will see two additional units, 150MW each, being installed to increase the total installed capacity to 1050MW. The additional 300MW capacity associated with Kariba Extension does not increase the electric energy generated annually from the Complex as it is limited by environmental constraints. However, this capacity can be used strategically and effectively as a peaking, reserve and response facility. The Kariba dam water constraint would however render the additional 300MW capacity unable to add any firm energy to the system until the upstream Batoka has been commissioned. The main benefits of Kariba South Extension are therefore to increased peaking power (without additional energy), reserve and response capacity, increased operational flexibility and strategic capacity for conjunctive operation with Batoka Hydro Electric Scheme. The table below summarizes the technical and planning data for Kariba South Extension

Table 19: Technical and Economic Data for Kariba South Extension

Item Unit Quantity


Sent Out Capacity MW 298.5

No. Of Units 2

Unit Size MW 150

Efficiency % 95

Total Project Cost US$ million 412

Power Plant Costs US$ million 369

Related Transmission Costs US$ million 43

Fixed O&M costs US$/MWh 1.132

Variable O&M costs USc/kWh 0.261


Annual Planned Maintenance Weeks 2

Expected plant life Years 50

II. Hwange 7 & 8

The project entails expansion of the existing coal-fired Hwange thermal power station by adding two generating units, 300 MW each, giving 600 MW additional capacity. Hwange power station is the Zimbabwe’s largest power plant with 880 MW installed capacity. It has two stages with stage 1 having four units each rated 120 MW and stage 2 with two generating units each rated 200 MW. The project was initially awarded to China Machinery Engineering Co-operation (CMEC) but the company failed to meet its obligations resulting in the awarding of the tender to which was the second highest bidder. Contract negotiations with Sino Hydro are in progress. Failure by

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China Machinery Engineering Co-operation (CMEC), the company to which the project tender was initially awarded, to deliver on the expectations of this critical project has greatly delayed its implementation. Awarding of the tender to Sino-Hydro after the cancellation of the CMEC contract saw the signage of a load agreement for the project with China Exim Bank on the 1st of December 2015. Conditions precedent for the disbursement of the loan are on the verge of being finalized. The project is expected to be completed in December 2020. It should be noted that part of the infrastructure for implementing the project in already in place and part of it has been incorporated in the original design for the existing Hwange power station. The transmission scope of work associated with the project, estimated to cost US$266 million, is as follows:

Construction of Hwange 400/330kV Substation c/w 2 x 30MVA transformers +

associated transformer & line bays.

Installation of 3 x 40MVAR line reactors on the existing Hwange – Insukamini line

and Hwange – Sherwood lines.

Construction of 20km Hwange – Southern Energy 400kV line complete with

associated bays

Construction of the 2nd Marvel to Insukamini 40km x 400kV line.

Construction of Sherwood B Substation c/w 2 x 250MVA transformers & +/-

125MVAr SVC

Installation of Insukamini 1 x 750MVA transformer.

The table below shows the technical and financial data for the project, based on previous feasibility studies: Table 20: Technical and Economic Data for Hwange 7 & 8

Item Unit Quantity


Number of Units 2

Annual Sent Out Energy GWh 4821.12

Efficiency % 30


Power Plant Costs US$ million 1173

Related Transmission Costs US$ million 266


Variable O&M US$/MWh 0.4

Heat rate net kJ/kWh 16240

Fuel Type HPS Coal


Fuel Calorific value MJ/kg 24.63


Annual Planned Maintenance Weeks 4

Expected plant life Years 30

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III. Batoka Gorge – Hydro

The project involves the construction of a dam and a hydro power plant on the Zambezi River, 40 km downstream of the Victoria Falls. In the same manner that Kariba South Power Station operates, the dam will be an equally shared resource between Zambia and Zimbabwe. The Batoka Complex design capacity is 2400MW and this is shared equally amongst the two countries. The project will be implemented jointly as in the case of the Kariba Complex project. The project has a lead time of seven years and with 2024 commissioning. The transmission scope of work on the Zimbabwe side is estimated to cost US$385 million. The scope is as follows:

Construction of 2x420km 400kV Triple Bison lines from Batoka to Chakari 400kV

switching station

Construction of 1x400kV Triple Bison line from Batoka to Hwange 400kV

substation

Construction of 400kV Chakari switching station The table below shows the technical and financial data for the project, based on feasibility studies.

Table 21: Technical and Economic Parameters Used in the Production Costing for

Committed and Candidate Plants

Hwange Kariba Harare BulawayoMunyati BatokaCaseco Diesel Southern Gokwe

ExpansionExtension ZPC Energy North

Construction period (yrs) 3.5 3.5 2 2 2 6 4-6.5 2.5 3.5

Planned in service date Dec-19 Mar-18 Dec-16 Dec-17 Dec-17 2022 Dec-17 Sep-17 Dec-17

Life expectancy (yrs) 30 25 15 15 15 25 20 20 25

Plant Capacity (Installed MW) 600 300 60 120 100 800 600 120 660 1200

Minimum operating level 160 10 15 10 160 100 180 140

Heat rate Kj/kWh (for thermal plants) 16240 - 16240 16240 16240 - 2400 2250 2390 2350

Average incremental heat rate (kcal/KWh) 1870 3500 3500 3500 1870 2121 1870 1870

Availability/Planned outage/ Forced outage % 90/8/2 90/8/2 90/8/2 90/8/2 90/8/2 90/8/2 14/6 4 14/6 14/6

Spinning reserves % of unity capacity 10 5 10 6 10 10 10 10

Scheduled maintenance days per year 28 28 28 28 28 10 28 28

Maintenance class size (MW) 300 20 30 20 300 120 300 300

Domestic fuel cost (c/million kcals) 489 1400 850 1000 700 0 489 587

Foreign fuel cost (c/million kcals) 0 0 0 0 0 8910 0 0

Fixed O&M cost ($/MWh) 4.8 1.37 1.37 1.37 4.8 5.21 4.8 4.8

Variable O&M cost ($/MWh) 0.4 0.4 0.4 0.4 0.4 8.9 0.4 0.5

Heat value of the fuel used (kcal/kg) 5921 6938 6938 6938 5921 9889 5921 5921

Pollutant I emission (default SO2) (% wt. of fuel) 2.3 3 2.5 2.5 2.3 0 2.3 2.3

Pollutant II emission (default: NOx) (% wt. of fuel)0.3 0.5 0.3 0.3 0.4 0 0.3 0.4

Efficiency % 30 95 45 45 45 95 30 30 30

Calorific value MJ/kg (for thermal plants) 28-30 - 28-30 28-30 28-30 - 6931 6931 6931

Fuel type 0 0 3 0 coal

New Stations/Expansions

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The production costing simulation was first carried out without forcing the commissioning date of any particular plant. This means that only the technical and economic parameters of each plant were entered into the model and the model allowed to determine the least cost expansion plan (optimization or variable expansion case).

In the second level of analysis, the sequence of commissioning the candidate plants was varied according to the commissioning dates as specified in ZERA licenses (fixed expansion case). Care was taken to make sure that the derived combinations are technically equivalent (the derived combination or option should satisfy the generation planning criteria). The results of the fixed optimisation were then compared to the derived least cost expansion plan. The next section of this report analyse the results.

NB: In all instances, the costs of the transmission network development associated with all options were included in the capital costs.

6.1 Economic Comparison of Development Options Based on Optimized Case

To determine the costs associated with the derived generation expansion options, all life cycle costs were considered by the model. The results are the discounted costs for each alternative expansion plan. The project with the least discounted costs is considered to be the least cost option. In carrying out the analysis, the transmission projects related to the expansion plans were taken into consideration as shown on the table below.

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Table 22: Summary of Generation and Transmission Related Expansion Costs

Name of Plant

Number of Units

Power Plant Costs (US$ Million)

Related Transmission Costs (US$ Million)

Total Costs (US$ Million)

Hwange 7 and 8 2x300 MW 1173 266 1,439

Kariba South Extension

2x150 MW 369 43 412

CASECO

2*300MW

1386

215

2200 (including dam and mine construction costs)

Southern Energy

2*330MW

1300

62

1750 (including associated costs)

Lusulu 4x250MW 1667 253 1920

Batoka 4*300MW 2215 385 2600

Lupane Gas 2*150MW 504 90 594

Gokwe North 2*250MW 3100 234 3434

Bulawayo Repowering 90MW 120

Harare 11 Repowering 60MW 70

Munyati Repowering 100MW 113

Mutare Diesel/Gas 1*120MW 92 92

Gairezi 2*15MW 108 68 176

ZPC Solar 3*100MW 479 7.81 780

Mamina Wind 100MW Generic model data

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Table 23: Technical and Economic Parameters Used in the Production Costing for Existing Plants

Power Station

Hwange Kariba Harare Bulawayo Munyati

Plant Capacity (Installed MW) 920 750 120 120 100

PPA Capacity (dependable MW)

Min 640 540 36.3 16 20

Max 780 750 43 80 57

Firm energy (GWh) 5000

Energy generated/yr (GWh) 4190 4985 155 187 202

Energy sent out/yr (GWh) 3827 4982 145 172 189

Heat rate Kj/kWh 13547 0 18600 18910 20150

Availability/ Planned Outage/ Forced Outage % 73/9/19 95/4/1 40/18/42 38/17/45 37/22/41

Efficiency % 27 95 19 19 16

Calorific value MJ/kg (for thermal plants) 24.63 31 31 31

Coal Costs 67,748,972 - 38,870,092 14,615,632 22,248,300

ZRA Water Costs - 21,684,164 - - -

Hwange Diesel Costs 26,282,212 - - - -

O & M - Fixed (US$/kWh) 0.0078 0.0028 0.0120 0.0119 0.0096

O & M - Variable (US$/kWh) 0.0019 0.0007 0.0030 0.0030 0.0024

Sales (kWh) 3,778,068,000 5,026,725,000 471,600,000 219,000,000 270,996,000

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APPENDIX B – ENERGY RESOURCE BASE

ENERGY RESOURCES AVAILABILITY

Zimbabwe's major energy resources are coal, coal bed methane, hydropower, biomass and solar energy. The local power generation plants in the SDP will utilise the Zimbabwe energy resource base which is summarised in the sections below.

Coal

Coal reserves in Zimbabwe are estimated at about 10.6 billion metric tonnes (MT) in situ in 21 deposits, of which some 2 billion MT are considered mineable by opencast methods (UNEP, 1997). Coal contributes 21 % of total final energy consumption. It is used as a primary energy for power generation (2.91 million tonnes). It is also used as a final energy for industry (0.609 million tonnes), agriculture (0.362 million tonnes), mining (0.052 million tonnes) and to a minor extent for household purposes (Ministry of Energy and Power Development, 1998). Proven reserves can last for 107 years and total reserves over 2000 years at present production rate of 4.7 million tonnes per year (UNEP, 1997). The table below shows the availability of coal in Zimbabwe

Table 24: Coal Reserves in Zimbabwe

Proven reserves 0.502 bn tonnes

Estimated reserves 2.000 bn tonnes

Total reserves including probable 10.600 bn tonnes

Source: ESMAP, 1992

High quality coal deposits are available in Hwange, other parts of Matabeleland North, the Zambezi Valley and in the South East, adjacent to the GonareZhou National Park. The bigger part of Zimbabwe's current coal output is currently produced in the Hwange area. The major coalfields in Zimbabwe are given in the table below.

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Table 25: Major Coal Fields in Zimbabwe

Coal Deposit Insitu (million tonnes)

Hwange 418

Chaba 103

Western area 962

Entuba 532

Lubimbi 2183

Lusulu 1200

Sengwa 400

Lubu – Sebungu 83

Marowa 14

Sinamatella 96

Sessami- Kaonga 1000

Bubi 60

Sabi 569

Tuli 115

Total 7735

Source: Ministry of Energy and Power Development, 2006

6.1.1 Coal Bed Methane

Zimbabwe’s coal bed methane is the largest known reserve in Sub-Saharan Africa. Coal bed methane deposits at Lupane, Chiredzi, Hwange and Beitbridge are estimated at more than 600 billion cubic metres (Ministry of Energy and Power Development, 2006). Coal bed methane can be used for power generation, feedstock for fertilizer production and other petrochemicals. The gas is also used as motor fuel, either in compressed form or liquid form or through conversion as gas based diesel, gasoline or methanol. Furthermore, the gas can be used as a household fuel for cooking and heating, either in piped or bottled forms.

Practical applications of coal bed methane in Zimbabwe would include power generation at Lupane (300MW), alternative feed stock to replace about 120 MW used for production of fertilizer through electrolysis at Sable Chemicals, opening up the petrochemicals sub-sector and for certain metallurgical processes at plants such as ZISCO and Zimasco (Ministry of Energy and Power Development, 2006). The gas is currently being used for flame stabilization at Hwange Power Station, where it has partially substituted diesel. Coal bed methane is a resource, which is being planned for exploitation in the country. The main problem is finance for carrying out detailed exploration work.

6.1.2 Biomass

6.1.2.1 Fuel wood

Fuel wood resources in accessible woodlands cover about 20 percent of the total land area, representing a stock of 320 million MT, with a sustainable yield of 13 million MT per annum. Total national fuel wood consumption is estimated at around 9.4 million MT (UNEP, 1997). On a national level, the sustainable yield is able to meet Zimbabwe’s total fuel wood needs, however there are localised shortages in some districts. While

XIII


problems of resource depletion are partly regional, there is increasing trade from fuel wood surplus to deficit areas and urban areas.

6.1.2.2 Forestry residues

The timber industry in Zimbabwe is almost entirely based on plantation timber, whose production is dominated by three large organizations producing about 87% of the national output. Plantation forests occupy about 0.02% of the total land area of Zimbabwe. Over 70,000 tons of this biomass waste is produced annually. While at the largest mills a small fraction (~10%) of the wood waste generated is currently consumed in process steam boilers for lumber drying kilns, the vast majority is burned in the open air or dumped (Southern Centre for Energy and Environment, 2001).

The commercial forest stocks comprise 81,000 ha of pine, 24,000 ha of eucalyptus and 13,000 ha of wattle, the majority of which are in the Eastern Highlands. Saw milling is the largest sector of the industry while the pulp, paper and board industries have generally not been able to keep pace with the growth in sawmill activities. Consequently, the demand for chips is less than the amount of chips and other wastes produced. The estimated potential of waste from pine plantations is shown below.

Table 26: Waste from Pine Plantations

Source: Southern Centre for energy and Environment, 2001

6.1.2.3 Urban waste

Waste management is one of the most pressing challenges confronting urban local authorities throughout Zimbabwe. Currently, more than 2.5 million tonnes of household and industrial waste is produced per annum in urban areas and this continues to rise due to unprecedented urban growth rates and absence of waste minimization strategies (Practical Action, 2005).

Most of this waste ends up in municipal disposal areas. A small amount is however being recycled into useful products. Some of this waste material has the potential to fuel power plants to create electricity or other forms of energy.

The use of such waste in energy plants depends on the type of technology used. Municipal solid waste (MSW) can be directly combusted in waste-to-energy facilities as a fuel with minimal processing, known as mass burn; it can undergo

Thinning Volume per m3 per ha per year

Forestry Commission 4.3

Border Timbers 3.6

Wattle Company 0.9

Total Estimate 221500m3

Clear Felling Volume per m3 per ha per year

Forestry Commission 4.5

Border Timbers 2.2

Wattle Company 0.6

Total Estimate 192100 m3

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moderate to extensive processing before being directly combusted as refuse-derived fuel; or it can be gasified using pyrolysis or thermal gasification techniques. Each of these technologies can produce electricity as well as an alternative to land filling or composting the municipal solid waste. In Harare alone, it is estimated that an 80 MW plant could be supported by urban waste.

6.1.2.4 Energy Crops

The two sugar plantations at the south eastern part of the country have been producing electricity from the bagasse produced during the processing of the sugarcane. On average 72.5 MW is currently being produced for own consumption. The current production levels could be improved through the integration of novel biomass conversion technologies and high efficiency steam utilisation technologies.

6.1.2.5 Biogas

Biogas offers an option for supply of household and agro-industrial energy in Zimbabwe. More than 400 biogas digesters have been installed in Zimbabwe, which range in capacity from 3 cubic meters to 16 cubic meters (Ministry of Energy and Power Development, 2006). The basic feedstock is cow dung or pig manure.

All the major cities in Zimbabwe treat their sewage anaerobically producing biogas. Although a small share of the produced gas is used in some instances to preheat the digesters, most of the gas is just vented into the atmosphere. The table below shows the potential of biogas production from sewage treatment works in four major towns.

Table 27: Potential of Biogas Production from Sewage Treatment Works in Four Major Towns

Cubic Meters/day Sewage Biogas Methane produced

Harare 300000 140000 70000

Mutare 30000 1107 554

Masvingo 16800 621 311

Bulawayo 35000 2951 1475

Source: Southern Centre for Energy and Environment, 2001

Electricity generation using biogas has to be studied, given the success of the micro turbine technology that utilises the Brayton cycle in other countries, e.g. Germany.

6.1.3 Solar

The most abundant renewable energy source in Zimbabwe is solar radiation, providing an average of 2000 kW/h per square kilometer per annum, spread over roughly 3000 hours per annum. At this rate, the current total electrical energy consumption of 10000 GWh could be generated by PV cells with an efficiency of 10%, and by installations covering 1.3% of Zimbabwe’s total surface land area (World Solar Council, 1996). Solar energy has a wide range of applications some of which are shown below:

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Table 28: Solar Energy Applications

APPLICATION PV USE

Rural Electrification Lighting and power supplies for buildings, power supplies for remote villages, street lighting, home stand alone systems, battery charging, and mini-grid systems.

Health Care Systems Lighting in rural clinics, communications (telephone, radio communication systems), vaccine refrigeration, ice-pack freezing for vaccine carriers, sterilisers, blood storage refrigerators, water pumping, and security lighting.

Communications Radio repeaters, television and radio receivers in remote areas, mobile radio, rural telephone networks, data acquisition and transmission.

Visual Signals Lighting for road signs, advertising railway crossing and signals, hazard and warning lights.

Corrosion Protection Systems Cathodic protection for bridges, pipelines and steel structures, well-head protection.

Small Enterprise Use Lighting systems, power for small equipment such as sewing machines, freezers, battery chargers, grinders.

Miscellaneous Camping sites and recreational vehicles, power calculators, energy power for disaster relief, etc.

6.1.4 Wind

Wind power has been used for pumping water in rural areas for more than a century in Zimbabwe. There is considerable potential for wind energy to be harnessed for other applications in some areas. Zimbabwe has an evenly distributed meteorological station network. A number of stations record wind speeds using anemometers at heights of 10 meters above ground level. Wind data from all these stations recorded, is available for periods of up to 30 years.

The Department of Meteorological Services indicates that the highest wind speeds at 10 m above ground level are found in Harare, Chivhu, Gweru, Bulawayo, and Chipinge. The average speed of these areas is 3.8m/s at 10 m height above ground level. These speeds are irregular both by season and by area and vary widely diurnally. A study has shown that of the potential sites, extrapolated wind speeds at higher levels are slightly higher, exceeding 5 m/s at about 35 m in some cases. A few wind-powered electric turbines have been installed for isolated local uses and more can be developed with proper financing.

6.1.5 Hydropower

Hydroelectric potential on the Zambezi River, to be shared equally between Zimbabwe and Zambia, is estimated at 37 TWh per annum, of which about 10 TWh per annum have been harnessed (Lahmeyer et al, 1993). This is the major source of hydropower for Zimbabwe and has a total potential of 7200 MW of which 4200 MW can be developed by Zimbabwe jointly with Zambia. The two countries share a hydroelectric power station on the Kariba dam that was built on the Zambezi River in 1955 -1960. The present total capacity for the two countries is 1350 MW, of which Zimbabwe's share is 750 MW.

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The table below shows the potential of hydropower on the Zambezi River.

Table 29: Potential Hydroelectric Resources on Zambezi River

Site Capacity (MW)

Batoka Gorge 1200

Devil's Gorge 1000

Mupata Gorge 1000

Potential for small-scale hydropower also exists in Zimbabwe. Because of the terrain and rainfall pattern, this potential is mostly concentrated in the Eastern part of the country. Studies need to be carried out in detail to ascertain the hydropower potential. Preliminary studies show a significant potential to harness this resource either to meet the energy of isolated networks or for supplying the grid. Mini hydropower could also be harnessed to provide mechanical power for activities such as milling. 6.1.6 Nuclear

Zimbabwe has the potential to generate electricity using nuclear energy from Uranium. The ore reserves for Uranium are located at Kanyemba. The water resource needed for cooling purposes is readily available from the tail waters of Cabora Bassa on the Zambezi River. However, many challenges remain for nuclear power to become an acceptable source of energy in Zimbabwe. These include:

Difficulties in disposal of waste,

Making nuclear generated power economically competitive compared to fossil fuel

alternatives,

Adhering to non-proliferation and safety of nuclear plants,

Developing low cost reactors for small electricity grids such as the Zimbabwe

electricity system.

6.1.7 Liquid Fuels

All liquid fuels are currently imported. Exploration for in-country oil resources has not yielded successful results to date. The bulk of liquid fuels are used in the transport sector. There are limited uses in industry and agriculture. Households use kerosene for thermal uses and lighting.

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SYSTEM DEVELOPMENT PLAN