CAMA demands reduction of electricity tariff following termination of diesel power generation contract between ESCOM and Aggreko

The Aggreko diesel power generation at ESCOM Power Station at Makata Industrial Area

* ESCOM should take off the 3-4% tariff which was effected to cover for the supplement diesel power generation

* Consumers expect a MERA that is transparent and accountable to consumers and that is proactive

* When and where any changes in supply and price have taken place whether upwards or downwards, MERA shoul pass on the changes to consumers immediately

By Duncan Mlanjira

Electricity Supply Corporation of Malawi (ESCOM) have confirmed that indeed it has terminated the contract of Aggreko, that was supplying diesel power generation and thus Consumer Association of Malawi (CAMA) is demanding that electricity tariffs should immediately be reduced.

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In a public statement, CAMA’s Executive Director John Kapito asks Malawi Energy Regulatory Authority (MERA) should facilitate that ESCOM should take off the 3-4% tariff which was effected to cover for the supplement diesel power generation.

“Consumers expect a MERA that is transparent and accountable to consumers and that is proactive when and where any changes in supply and price have taken place whether upwards or downwards MERA is able to pass on the changes to consumers immediately,” Kapito said in the statement.

When contacted, ESCOM’s publicist, Kitty Chingota confirmed that their contract with Aggreko came to an end and also confirmed that extra percentage of tariff that was being charged to consumers.

On the demand made by CAMA Chingota said: “The decision to adjust end user customer tariff is made by MERA. MERA will advise how such savings will be treated.”

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On MERA’s part, it’s publicist Fitina Khonje said the regulator is “conducting an assessment and we will update the nation once this is finalised”.

The termination of the diesel power generation might trigger more load shedding schedules the country is currently facing following the loss of 130MW from Kapichira Hydro Power Station, whose dam and other equipment were destroyed due to Cyclone Ana in January.

However, on April 29, Electricity Generation Company (EGENCO) Chief Executive Officer William Liabunya assured Malawians that a contractor shall be identified to commence Kapichira Dam restoration works by end of May, saying all procurement process are complete.

Destruction at Kapichira Power Station

Washed away drenching equipment

In December, 2021 — before Cyclone Ana hit the country — EGENCO shut down 10MW it generates from Tedzani II to undergo rehabilitation works and when brought back, the company also shut down Tedzani IV for maintenance works of a machine at Tedzani IV when rock boulders went into its water exit channel (tailrace).

The rocks also were from the effects of Tropical Cyclone Ana but the maintenance works were completed within four days during which power was complemented by diesel generators spread across country as well as solar power.

He said having lost the 130MW from Kapichira, EGENCO is now generating 225MW to 230MW.

On a site visit to Tedzani and Nkula on April 29, Minister of Energy, Ibrahim Matola also assured that all is being done to restore Kachipira Hydro Power Station to restore the 32% that is off the national grid.

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Matola reiterated that the government already factored in its national budget the cost of repairing the extensive damage of Kapichira Dam but meanwhile, the additional 10MW of Tedzani II should reduce ESCOM’s schedule of load shedding, which at times stretches up to 8 hours a day.

He also said while the attention is on the extensive damage of Kapichira Dam, it should also be noted that all the other hydro stations of Tedzani and Nkula were also affected by Cyclone Ana as well as the second storm of Gombe.

“But EGENCO engineers and management are doing all their best to restore all the challenges these two Cyclones caused,” he had said.

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Meanwhile, President Chakwera visited Mozambique last month for the continuation bilateral process of the power interconnection agreement between the two countries, which was commissioned last year.

The construction works for the Mozambique-Malawi power transmission interconnection project, from which Malawi is expected to be supplied with 50MW of electricity supply, was commissioned at Phombeya in Balaka District by President Chakwera and his counterpart Filipe Jacinto Nyusi.

Chakwera and Nyusi at Phombeya

The 50MW of electricity supply is for the initial stage with some future potential to increase as the country’s Integrated Resource Plan of 2017 indicates that peak electricity demand will be 1,860MW by 2030 yet currently Malawi’s installed electricity generation capacity is hovering at 50MW.

ESCOM also officially commissioned a 3.4 megawatts (MW) Muloza Hydro Power Station — that is privately owned by Cedar Energy — and is to cater for over 2,800 rural households in Phalombe, Mulanje and Thyolo.

The plant is situated at Sukasanje along the road from Phalombe to Muloza in Mulanje as part of government’s initiative to engage private investors to produce power for ESCOM in order to complement services by EGENCO — under independent power producers (IPP).

The goal is to attain 1,000MW of electricity energy by 2025 as recently pledged by Chakwera and other efforts are through solar energy which the President commissioned its plant construction in November in Salima, that is expected to add 20MW to the national grid.