With only the 9% of the population able to access electricity, a percentage that drops to 5% in rural areas, Malawi is one of the countries with the lowest electricity access in the world. Because of this, biomass consumption in households is really high as it is used for heating and cooking purposes, thus causing a considerable deforestation and degradation of the country’s natural resources.
The total electricity capacity installed in Malawi accounts for 351 MW. The main electricity sources are hydroelectric and biomass power plants very similar to 347MW, which is the average electricity consumption in the country. As a result, a high overstress on the grid is induced, causing continuous interruptions and outages. Moreover, since the country depends mainly in hydroelectric energy, the power production is severely affected by natural phenomenon like draughts, because the river flows must be maintained in order not to affect Lake Malawi’s reservoir.
This unreliability of the power supply is seen as one of the greatest limitations to economic growth in the country, reason why many electrical grid transformation projects are currently being developed.
In order to address the investments required for these projects, Malawi is funded by foreign organizations such as the Millennium Challenge Account (MCA), a US government fund for the development of Third World countries. The MCA will provide approximately US $ 350 million to various projects in the energy sector, related to the increase of the already installed power, such as the expansion and modernization of electricity transmission and distribution network, and the creation of several interconnections with neighboring countries. Thanks to this investment, it will be possible to increase the country's installed capacity, by expanding several hydroelectric plants and building new coal-fired power stations, thereby diversifying electricity generation, while ensuring access to electricity in several regions within the country.
In addition to this funding, the country is undertaking a project targeting the structural transformation of the energy sector, which will allow the entry of foreign investors as independent generators and promote market competition, as well as the entry into the regional power market (Southern African Power Pool or SAPP) with the consequent increase in security of supply.
Thanks to this structural transformation, the country will go from having a single company (ESCOM) in charge of the generation, transmission and supply of electricity to a structure formed by several agents and controlled by the market regulator, called MERA.
Through this, EGENCO, a public company will be in charge of power generation, in competition with independent generators, who will sell electricity to the sole buyer, ESCOM, who will be responsible for grid operation and power distribution.
ESCOM will be responsible for the forecasting demand, purchasing and selling energy locally and internationally, as well as managing relationships with customers. The objectives of this transformation are mainly:
- Create a robust and efficient energy sector that can support the socio-economic growth of the country, reducing poverty, sustainable economic development and improving labor productivity.
- To establish a liberalized market, with a greater number of actors that allows access to electricity at competitive prices.
- Transformation of the country's energy economy from a highly dependent biomass economy to a modern economy with a greater number of sources integrated into the energy mix.
- Improve the efficiency and effectiveness of the commercial activities of the energy supply, as well as the security and reliability of the supply.
- Improve the management of the electricity sector and mitigate the impacts of energy production on the environment and on the health and safety of the population.
- Increase the number of households with access to electricity by 30% by 2020 and by 40% by 2050.
- Reduce economic losses due to inefficient management of the network and of consumers, given the lack of reliable information.
- Reduce peak consumption by structuring and implementing a per-hour rate system, as well as energy efficiency measures such as the promotion of low-consumption appliances.
By pursuing these objectives, Malawi's energy ministry expects to have a modern electricity market that meets industry standards so as to enable and assist the socio-economic development of the country.
Indra is participating in the process of transformation of the Malawi electricity market financed by MCA through the implementation of a leading-edge systems for the distribution, commercial and corporate areas of the company, which will provide a global and integrated vision of the business and contribute management enhancements such as; the reduction of energy losses, the technological modernization of the company or the increase in the capabilities of its employees.
In addition to the implementation of Indra's own systems, (InCMS and InGRID), several new developments have been made during this project, which will allow the expansion of the range of solutions offered for Utilities, which are:
- Fleet management system
This new system will allow the centralized management of the fleets responsible for the maintenance of the electrical network, being able to carry out the real-time tracking of the work vehicles, necessary information for estimation with more precision the times of resolution of incidents.
- Own CRM on opensource platform
In order to be able to store and manage all the information collected by these systems, the infrastructure is proposed for the project in collaboration with a prestigious partner recognized world-wide such as Huawei, which has been in charge of supplying equipment for the data centers, counting in a Data center and a secondary backup.
Both data centers are located in individual transportable containers, which are fed from the conventional network and have adequate protection systems and energy storage systems, capable of maintaining normal operation in case of a lack of supply. These data centers have a size of a 40 feet container and easily transportable.
In addition to our proposed solutions, an ERP system developed by Microsoft (Microsoft Dynamics AX) will also be implemented in ESCOM, thanks to the agreement between both companies. By using this system, ESCOM employees will be able to manage different capital areas of the company like Finances, Logistics and Human Resources.
Because of all the new systems and procedures implemented in ESCOM during the project, the company will undergo a huge cultural transformation, which must be addressed to avoid any rejection by ESCOM’s employees. That is why the project is developing a complete set of change management activities, whose goal is to accelerate the adaptation of the employees in all the departments within the company. Because of the magnitude of the transformation proposed, these activities have been determined and budgeted for from the beginning of the project, which has been carried out with the close collaboration of all the agents involved in it.
The experience in similar projects from other companies in the African energy sector have led to important benefits such as an average reduction of 20% in technical costs and 25% in commercial costs, which in many cases has amortized the initial investment in a record of two to three years.
Furthermore, the duration of power outages has been reduced on average by 90% and energy losses by 50%, while other data reveal a reduction of more than 80% in the duration of the commercial cycle (meter reading, billing and collection) and of 60% in the request-to-delivery time.