LIGHTING THE WAY

Zambia 2014 | MINING, ENERGY & INDUSTRY | INTERVIEW

TBY talks to Katai E. Kachasa, CEO of Lunsemfwa Hydro Power Company, on current projects, enabling independent commerical power producers, and Zambia's ideal energy mix for the future.

Katai E. Kachasa
BIOGRAPHY
Katai E Kachasa is the founding CEO of Lunsemfwa Hydro Power Company Limited (LHPC). Before starting up LHPC in 2002, Katai had a 26-year career in the Zambian copper mining industry where he worked in operating divisions and corporate centres of ZCCM Limited. He was for several years the Manager – Engineering for Mufulira Division, an integrated division comprising mining operation through to refining. Following the privatization of the Zambian mining industry in 2000, Katai worked as the Consulting Electrical Engineer for Mopani Copper Mines Plc until 2002. Katai holds a Bachelor of Electrical Engineering degree from the University of Zambia.

At what stage are your current studies for the forthcoming 330 MW Muchinga power plant and the 100 MW Mulungushi power project?

Technical feasibility studies for both projects have been completed and final environmental and social impact assessment studies are being completed. All of this should be concluded by year-end. The next stage is concluding the power purchase agreements from offtakers agreeable by lenders. The issues to be addressed will be what sort of power dispatch the market will want and at what price. At LHPC, we feel we ought to be designing and developing projects to accommodate peaking power requirements, since that will be needed in the medium to long term.

A new fourth unit of 6 MW capacity was installed in 2012 at Lunsemfwa Station. Are further additions or upgrades for this station in the pipeline?

The 6 MW fourth generator at Lunsemfwa Power Station (LPS) optimized the flow and no further upgrades are planned at this station. The 330 MW capacity station being studied will utilize the Mita Hills reservoir currently being used for LPS. Once the 330 MW station is commissioned, existing LPS will be by-passed, and utilized only during exceptionally high rainfall periods.

What is the nature of your collaboration with the Rural Electrification Authority (REA), and what major steps is LHPC taking to make sure power supply is boosted in local areas?

LHPC is a rural-based generating company, and has been extending electricity supply to schools around its facilities as part of our CSR program. The planned stations will be sited in areas where cooperation with REA will be needed in extending access to electricity. The REA has been made aware of these projects, and final designs will allow for supply to surrounding areas in collaboration with REA. LHPC is also encouraging farming downstream of new power plants as a means of jump starting economic activity that will anchor electricity access.

You plan to produce 500 MW by 2020. What do you anticipate being your greatest challenges in achieving this goal, and what are your strategies for mitigating those challenges?

It is LHPC's desire to avail the 500 MW planned capacity to the Zambian market as part of our contribution to the Zambia 2030 development vision. The major challenges will be the government's resolve to adjust electricity tariffs to investment and cost reflective levels. As a strategy, LHPC is a member of the Southern African Power Pool, and so would explore the SADC market should the Zambian market remain sluggish. The other challenge will be government's timely definition of water usage strategy priorities, which ensures sustainable hydropower usage.

How do you envision national utilities and independent power producers (IPPs) in Africa collaborating to address power deficits on the continent?

The urgent priority is full transformation of African national power utilities into full and independent commercial entities with government supplementing efforts to address initial social and economic challenges. Governments should then provide an enabling investment environment for the IPPs. Under those conditions, national utilities and IPPs will be able to collaborate successfully in addressing the power deficits on the continent. For example, IPPs will be able to bring new generation capacity on the market quickly and then use the pre-established transmission backbones to mitigate deficits. Governments with access to concessionary funding will be better placed to invest in new transmission projects.

What is Zambia's ideal future energy mix?

Zambia sits on a hydropower potential well above the 600 MW usually quoted. Hydropower offers many advantages for base power suited for the extractive industry, which will dominate the Zambian economy. With improving technologies for coal-fired power plants, Zambia will need to embrace coal as an energy source. Solar power technology has become cheaper than it was a decade ago. The ideal energy mix for Zambia will thus be hydropower and coal in the short term. Coal and solar with a hydropower energy component will, in the long term, be the ideal mix, as Zambia moves into the energy resource deficit period.