Wovwe hybrid power plant project on course: PML approves African Energy to proceed with pre-feasibility studies

The Malawi power grid is soon expected to receive a combined 75 megawatts (MW)   of coal and solar power generated from a single hybrid power plant to be located at Wovwe in Karonga district.

Lumbani Mbale: an important step towards the  accomplishment of the power project.

This follows a successful review and preliminary approval of an unsolicited IPP proposal submitted by African Energy and Power Ltd (“African Energy”) to Electricity Supply Corportaion of Malawi (Escom) in February 2020 and later to  Power Market Limited (PML)  in July 2020.

The commencement of the investment in the energy sector raises hopes for improved power supply in the country and is critical to attract investments, particularly in the mining sector.

After reviewing the unsolicited proposal, the PML  has finally given African Energy, a go ahead to proceed with prefeasibility studies  on  the project,  in the build-up to the conclusion of a Power Purchase Agreement (PPA) with PML once all the required procedures and stages set out in the IPP Framework have been complied with.

In its correspondence made available to Nyasa Times, PML has confirmed that the African Energy’s hybrid power plant proposal is in line with its power procurement plan and that the project can proceed to prefeasibility studies.

Commenting on the development, African Energy’s managing director and mining business tycoon, Lumbani Mbale stated that the development is great news to the company and an important step towards the  accomplishment of the power project.

“At African Energy, we exist to create value and provide sustainable power and energy solutions to the Malawian population through sustainable strategic relationships with relevant stakeholders,” said Mbale.

“We and all our financing partners are more than determined to see the project come to completion for the benefit of the Malawi economy and all our shareholders,” he added.

Mbale added that with Malawi Energy Regulatory Authority (Meras licensing of PML as a single buyer, the project is expected to move at a much faster pace than before and we trust that the Malawi government will support us throughout all the stages.

According to the unsolicited expression of interest submitted to PML, the hybrid power project will be made up of  50MW of Coal Generation at a negotiable tariff of USD0.17/kWh with  Expected Annual Energy Sales 416,000 MWh.

The plant will also house a 25MW Solar Generation consisting of a Ground-Mounted single tracker solar PV with a negotiable tariff USD 0.07/kWh. The Expected Energy sales from the solar component of the plant is Expected is 43,750 MWh.

According to one of the Project’s Project Engineers, Chris Heinermann, combining coal and solar power generation as one plant will significantly reduce pollution associated with coal power production, while offering electricity to the grid at a competitive tariff.

“Apart from power production, African Energy and Power Limited is  also one of the few Malawian licensed  wholesaler and importer of liquid fuels and gas with a  supply capacity of over 5 Million Liters per month.

Through one of its parent companies, GDP Capital and Minerals Ltd, the company will have access to over 500 000 tons of coal per annum  to power the plant, from its  Nthalire, Mwankenja, Nakonde and Lufira coal basins, currently under exploration.

Energy consultant Grain Malunga, who is also former minister of Natural Resources, Energy and Mining, said completion of the project is critical, arguing that it has potential to improve electricity supply in the country.

“We see the project boosting the energy sector,” he said.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI), which has complained of subdued production due to power deficit, is hopeful there will be speedy  implementation of the project, as power outages have taken a toll on industrial output.

The private sector is keen to see long-term solutions to electricity problems and developments such as these in the energy sector could improve the business outlook.

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Bien
1 month ago

We have vast areas where you can put Wind Turbines, the Viphya Plateau. Its kilometers and kilometers high ground where there air pressure enough to drive Wind Turbines to produce more than 100 Mega Watts. Think Green please, we should not be the recieving end of rejected projects that has been proven to be hazardous elsewhere. We should learn from others.

johnM
johnM
1 month ago

The world is reducing its dependence on coal and we are, in 2021, opening new coal plants. This is backward step

Mzeedi
Mzeedi
1 month ago
Reply to  johnM

My friend coal is sti the largest source of electricity in the world. More than hydro nuclear etc. This won’t change anytime soon

johnM
johnM
1 month ago
Reply to  Mzeedi

That may be true however it still backward and we should not follow something just because the rest of the world use coal. We should look at other altenatives

Cairo
Cairo
1 month ago
Reply to  johnM

What does that mean? Thats what you have my friend, right now Botswana power is continuous because they also use coal to provide power in Palapye. Thats the resource u have and it has to be used.

johnM
johnM
1 month ago
Reply to  Cairo

South Africa largely uses coal to produce electricity and they experience blackouts. Botswana does not experience disturbances to their supply of electricity because they manage their infrastructure better.

Bien
1 month ago
Reply to  johnM

With lots of current technology to use for modern Power Production and you choose coal really?

Last edited 1 month ago by Bien
Erik P
Erik P
1 month ago

Malawi energy policy seems irrelevant now. There is now tax and duty on solar lamps with stands (the pico lantern type that are used for lighting in low income communities) as they are classified as bedside lamps, and this project is hardly sustainable energy. However, I applaud private investment in energy production. ESCOM are a waste of space and aren’t the solution to Malawi’s energy needs. The Malawian economy will never improve without significantly more energy provision. All that needs to happen now is to reduce the subsidy that city users get on electricity so it makes it worth private… Read more »

Concerned
Concerned
1 month ago

17c per kWh is not competitive and it gets worse when you factor in environmental and climate change implications. And, there doesnt seem to be enough coal to fire the power plant. My understanding is that current supply equals demand, and there is no low quality coal to supply a power plant.

johnM
johnM
1 month ago
Reply to  Concerned

There is a lot of Coal in Karonga. I don’t know if its of low quality however the coal seams in Karonga and Chitipa are adequate

Banda
Banda
1 month ago

Suppose noooo one thought to do an exchange rate analysis or they would/may not have agreed to a supply cost $0.17 per kilo watt hour (1000 watts per hour) exchange rate of 780 Kwacha to 1 Dollar works out – 132.65….(You pay 47.50 now on the first 50kwh and 67.50 above) Will I expect a rate increase soon? Seems better Egenco pay to build an run without a large profit to reduce costs.

Sindyeka Dekhani
Sindyeka Dekhani
1 month ago

Winawake ati amayankhulira Manja ake anakhalira ma project awawa. Iliponso in ya Magetsi ku Misuku, Chitipa. Zayamba kuwululika kuti Mngulu ameneyu anali Buluzi chabe, iye ndi nzake wamakatani sankafuna zabwino zavKamuzu zipitilire.

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