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Energy Supply in Malawi: Options and Issues

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Energy Supply in Malawi: Options and Issues Energy supply in Malawi: Options and issues John L Taulo Department of Mechanical & Mechatronic Engineering, Stellenbosch University, South Africa Kenneth Joseph Gondwe Department of Mechanical Engineering, University of Malawi, Blantyre, Malawi Adoniya Ben Sebitosi Department of Mechanical & Mechatronic Engineering, Stellenbosch University, South Africa Abstract and 5.27 kWh/US$ for the REF, AGS and MGS, Inadequate energy supply is one of the major prob- respectively in the year 2030. In conclusion, the lems confronting Malawi and limiting its social, eco- paper outlines strategies that could be utilized to nomic and industrial development. This paper ensure adequate supply of modern energy which is reviews the current status of energy supply and a key ingredient for achieving sustainable social and demand in Malawi; examines the major sources of economic growth. energy, current exploitation status and their poten- tial contribution to the electricity supply of the coun- Keywords: energy, energy supply, energy demand, try; discusses key issues facing the energy sector; scenario analysis, MAED, Malawi and identifies broad strategies to be implemented to tackle the energy supply challenges. Using second- ary data for its critical analysis, the paper also pres- ents modelling of long-term energy demand fore- cast in the economic sectors of Malawi using the 1. Introduction Model for Analysis of Energy Demand (MAED) for Energy supply has become a growing concern in a study period from 2008-2030. Three scenarios Malawi and an important factor towards achieving namely reference (REF), moderate growth (MGS) growth and development. Future economic growth and accelerated growth (AGS) were formulated to crucially depends on the long term availability of simulate possible future long-term energy demand energy from sources that are affordable, accessible, based on socio-economic and technological devel- and environmentally friendly. However, the country opment with the base year of 2008. Results from all is faced with serious energy supply problems includ- scenarios suggest an increased energy demand in ing, rising energy and electricity demand; insuffi- consuming sectors with biomass being a dominant cient power generation capacity; increasing high oil energy form in household and industry sectors in import bills; lack of investment in new power gen- the study period. Forecast results reveal that energy eration units; high transmission and distribution demand will increase at an annual growth rate of costs, transmission losses; poor power quality and 1.2% and reach 5160 ktoe in 2030 under REF sce- reliability; heavily subsidized pricing; insufficient nario. The growth rates for MGS and AGS are pro- focus on alternative energy sources; and lack of jected at 1.5% each reaching 4639 ktoe and 5974 access to modern electricity for a large segment of ktoe in 2030, respectively. The final electricity the population (MCC,2011). demand of about 105 ktoe in the base year will In addition, the country faces a widening gap grow annually at average rates of 13.8%, 15.3% between electricity demand and supply which is and 12.6% for REF, AGS and MGS, respectively. being exacerbated by urbanisation, economic Over the study period 2008-2030 the annual elec- development, population growth and rural electrifi- tricity per capita will increase from about 111 kWh cation (MCA, 2010). Electricity demand has been to 1062, 1418 and 844 kWh for the REF, AGS and growing consistently at 6-8% per annum (GoM, MGS, respectively. The final energy intensity will 2010a). As a result, the existing system is greatly decrease continuously from about 13.71 kWh/US$ strained and the frequency of blackouts or in the base year to 3.88 kWh/US$, 2.98 kWh/US$ brownouts is increasing, constraining industrial pro- Journal of Energy in Southern Africa • Vol 26 No 2 • May 2015 19 duction and provision of socioeconomic services as country in the year 2010 was US$5.7 billion with well as deterring foreign investment. the following composition by sector: services 52%, Furthermore, inefficient production and unsus- 33% agriculture, and 15% industry. Agriculture tainable use of biomass energy in Malawi is con- contributes 60% of total export earnings and tributing to environmental degradation, such as employs 84% of total labour force. The major high deforestation, desertification, and soil erosion. export crops are tobacco, tea, sugarcane and cot- The use of wood, charcoal and crop residues as fuel ton; tobacco alone accounts for about 67% of the also results in indoor air pollution which causes export earnings from agriculture (World Bank, severe human health impacts directly to the users, 2011). While the country’s GDP has grown steadi- especially rural women. Moreover, the task of gath- ly by an average of 7% per annum over the last five ering traditional supplies of fuelwood is time con- years, electricity generation and supply has suming and exhausting. This burden is borne by remained stagnant. With rapid increase in popula- women and children, who are then diverted from tion and industry, energy needs are on the rise. other activities such as education and farming that Electricity shortages are estimated to cost the coun- could eventually have improved their productivity try around 2-3% of GDP (MCA, 2010). and living conditions. Thus, improving the energy Primary energy supplies of the country consist of supply situation and, in particular increasing access hydropower, biomass, petroleum products, coal to electricity, are of prime concern in Malawi. and other renewable energy sources.1 Petroleum Very few studies on the country’s energy sector and petroleum products are imported and the and strategies for the future are presented in the lit- country spends about 10 % of its foreign currency erature. Kaunda (2013) investigated the energy sit- reserves on the import of petroleum products uation and small scale hydropower potential and (GoM, 2003). On the other hand, the country’s vast application status in Malawi. Kaunda and Mtalo resource of renewable hydropower energy remains (2013) presented work that studied the impacts of virtually unexploited. More than 84.7% of the total environmental degradation and climate change on population in Malawi live in rural areas and has power generation in Malawi. Although Gamula et access only to wood and paraffin as major energy al. (2013) provided an overview of the energy sec- resources. Currently, the overall electrification rate tor development in Malawi and the likely scenario in Malawi is 10%, with 37% of the urban popula- in 2050, their study did not take into account fuel tion and only 2% of the rural population having prices, technology costs as well as renewable ener- access to electricity (NSO, 2009). Per capita con- gy potentials. Jumbe (2004) examined the relation- sumption-often viewed as a key index of develop- ship between electricity consumption and GDP for ment- in the country, is only 290 kg of oil equiva- Malawi for the period 1970-1999. The study found lent (kgoe) per person of primary energy compared bidirectional causality between electricity consump- to the averages of 563 kgoe for low income coun- tion and GDP. Openshaw (2010) studied biomass tries and the world average of 1820 kgoe (IEA, energy, employment generation, and its contribu- 2010). Similarly, the per capita consumption of tion to poverty alleviation. Despite these studies, electrical energy is still low, estimated at 93 kWh per there has been comparatively limited interest in year compared with 432 kWh and 2167 kWh per examining the energy supply situation, options and year for Sub-Saharan Africa and world averages, issues associated with it in Malawi. Consequently, respectively (World Bank, 2001). there has been a corresponding dearth of research. There is a strong correlation between human The present article aims at filling this gap in the lit- development index (HDI) and per capita electricity erature. consumption. According to UNDP Human This paper highlights the energy supply deficit Development Report of 2013, Malawi’s per capita the country faces and its impacts on social eco- consumption and its corresponding HDI of 0.418 is nomic development against the background of rich well below the sub-Saharan regional and global endowment of renewable energy resources. It also averages. Malawi needs to reach the first critical critiques the constraints that are hindering growth in threshold of 500 kWh per year use. electric power generation, presents plausible alter- Table 1 presents the distribution of primary ener- native pathways and discusses on key issues that gy supply for the years 1996 and 2008. Biomass stakeholders must take on board to bring improve- remains the main primary energy source and ment in the energy supply. accounted for 88.5% of the total energy supply for country. Petroleum fuels, electricity and coal sup- 2. Current status of energy demand and plied 6.4%, 2.4%, and 2.8%, respectively. Total pri- supply in Malawi mary energy supply in 1996 was 2741.32 kilo Malawi is located in South-east Africa and has a tonnes of oil equivalent (ktoe) and increased to total area of 118 484 km2 and a population of 4125.97 ktoe in 2008 (GoM, 2010b).The major about 15.6 million inhabitants, with an annual sources of traditional biomass are firewood, char- growth rate of 2.8% (NSO, 2009). The GDP of the coal, and agricultural residues, and their shares in 20 Journal of Energy in Southern Africa • Vol 26 No 2 • May 2015 energy supply are approximately 87%, 6.4% and resources, and service with 201 ktoe, 180 ktoe, 168 6.6%, respectively (Openshaw,2010). The share of ktoe and 106 ktoe, respectively. Rural households commercial fuels including petroleum products, utilized the greatest proportion of the energy (77%) hydro and coal is 11.6%. The contribution of petro- out of which 97% is of biomass origin and compris- leum products in energy supply in Malawi has es mainly of firewood, charcoal and crop residues.
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