Power imports cost 10 times more: LEC

KANANELO BOLOETSE

MASERU – Lesotho imports electricity from South Africa and Mozambique at a price 10 times higher than what it pays to get electricity from the ’Muela hydropower station in Butha-Buthe. This was revealed by the Lesotho Electricity Company (LEC) in its application to the Lesotho Electricity and Water Authority (LEWA) for a 30.9 percent tariff increase across all customer categories.

LEC said it purchases its power from ’Muela station operated by the Lesotho Highlands Development Authority (LHDA) but indicated that ’Muela produces only a fraction of what the country needs. And the rest, which is just over 50 percent of the total electricity requirement, is imported from ESKOM of South Africa and Electricidade de Moçambique (EDM) of Mozambique.

“In order to augment the deficit LEC is compelled to import approximately fifty (50 percent) of the national demand,” LEC said in its application.

It added that: “The cost per kWh of the imported energy is extremely expensive (approximately 10 times more) compared to the cost per kWh from the local generation. However, for the purposes of security of supply and to avoid load shedding and its negative consequences, the LEC is currently compelled to import the required excess demand irrespective of the current undesirable high cost.”

It said bulk electricity purchases projections stand at 941, 608, 921.80 kWh for the financial 2021 to 2022 at the estimated cost of M621, 693, 373.62. Trying to convince the regulator why the massive hike was necessary LEC said imports of bulk power from two major sourcing destinations, ESKOM and EDM, had consistently grown by double digits in the last few years. It said there was no evidence “that this trend line will bend downwards any time soon, or at least in the next 12 months”.

“The weaker Loti/Dollar exchange rate in the past year has not helped the situation either, and there are no macro-economic fundamentals, in our assessment, that point to a sustained improvement in the near terms,” it said.

’Muela station was built as part of Phase 1A of the Lesotho Highlands Water Project (LHWP) which was instituted as a bi-national project spanning the borders of South Africa and Lesotho in accordance with a treaty signed in 1986.

LHWP diverts water from the Senqu River System in Lesotho to South Africa’s economic hub, the water-stressed Gauteng region. The water en route to South Africa is first put to good use locally as it is used to generate electricity at ’Muela station. Water from Katse Dam is delivered to the power station through the transfer tunnel, then the delivery tunnel transports it from there to South Africa

Before ’Muela station was built, Lesotho depended entirely on South Africa for its electricity requirements. “The installed 72MW capacity at ’Muela Hydropower plant is far below the required national demand,” LEC said in its application. The inability of the local generation capacity to meet local demand, it said, had been worsened by the multi-year drought which commenced in 2015.

“While the local hydrological system has shown resilience to short-term streamflow deficiencies during within-year droughts, prolonged deficits during multi-year droughts are a significant threat to water resources in the LHDA dam networks, as envisaged by the low dam levels at Katse and Mohale dams,” it said. “Since the aforementioned period, the dam levels have only reached levels marginally above 50 percent, following the end of the rainy season,” it added.

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