Diesel-powered generators the Electricity Generation Company (Egenco) plans to install at Luwinga in Mzuzu will consume fuel estimated at K587 million a month to produce six megawatts (MW) of power, calculations have shown.
Egenco chief executive officer William Liabunya said last week three generators of two MW each will be planted in Mzuzu with each of them consuming 500 litres of diesel per hour, translating to 1 500 litres every hour for the three.
In an interview during a tour of the site at Luwinga, Liabunya said the generators will be running for at least 16 hours every day.
With diesel going at K815.80 per litre, Egenco will be spending about K19 579 200 each day, translating to roughly K587 376 000 per month.
Liabunya said the three generators for Mzuzu are expected to leave Beira in Mozambique this week for Malawi and will be installed by December 25.
He admitted that the country is in a desperate situation and despite being an expensive alternative of generating electricity, they will have to manage with the diesel-powered generators.
Said Liabunya: “Malawi is undergoing a very challenging situation as far as electricity generation is concerned. We know diesel engine generation is expensive, you cannot compare it with hydro which is the cheapest. It is high in investment, but with low operational cost.
“Diesels are different from these because they are not renewable, so it requires that each and every minute the generator is running, you have to put in fuel which is a cost. It is costly, but it’s an option that we have. We are looking for a quickest measure that we can use to avert the situation that we are in.”
He also reiterated that use of diesel-powered generators will have a bearing on electricity tariffs, stating, they are likely to go up.
“For us to sustain and have these diesel engines running throughout, we have to have money paid for the power that is produced at least to compensate for the production.
“We are already engaged with government and Malawi Energy Regulatory Authority [Mera] [so that] that we can have the tariff considered and adjusted accordingly to reflect the cost that we will put in the production,” said Liabunya.
Supervisor at the Luwinga site, Peter Kaonga, said they are almost through with construction works in readiness for the installation of the generators.
Egenco plans to install 36 MW of diesel generators with a six MW plant in Mzuzu, 10MW in Lilongwe and 20MW in Blantyre as well as the procuring of 50 MW emergency power and the acquisition of land for solar panels.
Last week, Liabunya told The Nation that it plans to airlift generators from India to speed up the process of generating power from diesel-powered generators.
The company said the 30MW gensets from India are expected in the country by mid-December this year.
Egenco said it has bought 36MW and will also hire 50MW diesel-powered generators to supplement the hydro-electricity generation declining due to low levels of water in Lake Malawi and its sole outlet, Shire River, home to over 90 percent of Egenco’s hydro-power plants.
Civil works for the installation of the 36MW have already started in Mzuzu, Kanengo in Lilongwe and Mapanga in Blantyre in anticipation of the generators, according to Liabunya.
He said: “We want all the generators to be in the country by December 2017 or early January 2018. We are expecting to add 40 megawatts by the end of December.”
The additional 40MW will increase the country’s electricity production to 200MW and likely reduce the prolonged blackouts that currently go up to 25 hours, according to Liabunya.
Escom botched up the generator deal few months ago when it went against own recommendation to award the supply contract to a company called Aggreko. The deal was cancelled and Egenco had to start all over again.
Earlier, former chief executive officer for the Electricity Supply Corporation of Malawi (Escom) Kandi Padambo said while it is imperative to use such for short-term relief, the move is not sustainable for the economy.
He said: “Use of diesel generators for electricity generation is very expensive, even if it is for home use only. One needs to come up with cost as to how much one can use per kilowatt per hour because even for a 10 MW generator, it will require heavy machinery which is costly and it is the electricity user who is going to pay for these.” n