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Benefits
of Co-generation: Utility Perspective
Executive
Summary
Electricity sector
Electricity sector is the sole supply domain of ZESA, which generates, imports
and distributes all electricity in the country except for a few small private
generators. Although reforms in the electricity industry are currently being
implemented, the current legislation favours ZESA and disadvantages IPPs.
Entry of private players into the power sector will depend on progress on power
sector reforms initiated to create a legal and regulatory framework supportive
of private power development. However,currently, IPPs enter a captured market
already dominated by the national utility. One such IPP is the cogeneration
plant commissioned by Hippo Valley Estates in South Eastern Zimbabwe.
Cogeneration at Hippo Valley Estates
Hippo Valley Estates has commissioned a cogeneration plant that generates both
steam and power for the sugar processing factory’s requirements and extra power
for export to the national grid.
The total electricity load for the Chiredzi area (which is farthest from the
country’s generating plant located in the North West) is about 25 MVA. The
introduction of 5 to 10 MVA at HVE will result in significant changes in the
power flow in this network. For instance, quality and reliability of power are
expected to improve in the area.
The cogeneration plant is to be interconnected to the national grid to
facilitate the export of power to the grid. HVE has the potential to generate up
to 26MW and 15MW is to be used to meet factory and estate needs. While 11MW is
for sale to ZESA. Up to 30 GWh can be supplied to ZESA over the 6 months of the
crushing period. This figure can easily be doubled since the crushing season
sometimes runs for up to 10 months.
Benefits of embedded cogenerator to the utility
The performance of Chiredzi 33kV network is expected to vastly improve when the
cogeneration plant is interconnected to the grid. Improvements are expected in
terms of quality of supply, reliability and reduction in line losses. Load flow
assessments carried out on the network confirm that the voltage profile in the
area would improve.
The utility is also expected to realize tremendous technical, economic and
environmental benefits from the introduction of the embedded generator in the
network.
Conclusions and recommendations
Deregulation of the electricity industry will force utilities to face new
challenges and to evaluate the cost-benefit implications of providing an
acceptable level of service. It is in the best interest of ZESA to welcome the
entry of small scale IPPs who contribute significantly at local level, even if
the national impacts are marginal.
There are tremendous benefits that accrue to the utility when embedded
generation is introduced into an electricity supply system. These include:
improved voltage profile on the local network which translates into improved
quality of service to local consumers as problems of voltage fluctuations are
eliminated; With proper protection system in place, reliability of the local
system is improved as the local network can operate in island mode when there is
a failure on the main grid. Clearly the image of the utility improves when
quality of supply improves and supply is more reliable. It then becomes easier
to promote the use of electricity. System losses are reduced significantly and
this translates into loss reduction higher up on the grid network at immense
benefit to the utility.
The use of green or environmental funding can help to bridge the commercial gap
between ZESA and HVE, so that the concept becomes worthwhile for both the
utility and the investor. The Lowveld area has huge potential of up to 210MW
which could fully be utilized if adequate incentives and a conducive operating
environment as well as enabling policy are in place. Additional potential exists
in the timber industry in the Eastern Highlands where over 70,000 tons of wood
waste is inefficiently disposed of.
It is also important to note that in other countries such as Mauritius, the
concept of centralization of power production has been implemented whereby
bagasse from other sugar factories is sold to the power producers. Similarly, it
is worthwhile to consider the centralization of power production in the Lowveld
either through consolidation of milling activities or supply of surplus bagasse
to power producer.
It is in the best interests of both the utility and HVE as an investor to do
everything in their power to utilize this wasted renewable resource by engaging
in progressive partnership. Borrowing from the successful experiences of such
countries as Mauritius, India and Brazil will go a long way in alleviating power
supply problems and allow investment in the power sector.
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