CEC – 60 Years On! is a new bi-monthly column which will carry information about the Company – all intended to explain and highlight various aspects of the business including company operations, growth plans, contributions to the economy and social investments. The expectation is that various stakeholders will have a clearer and better understanding of CEC or even improve their knowledge of the Company and the energy sector, generally, through the information to be shared in this column.
The first in a series of these articles lays the ground for what is to follow. Hence, we start with a brief history and mandate of Zambia’s oldest power utility.
CEC was established in 1953 as the Rhodesia-Congo Border Power Corporation with the mandate of interconnecting the, hitherto, separately run thermal power stations and improving security of power supply for the mining operations across the mining belt of Zambia and Congo. Later, with the coming of hydroelectricity to the Congo, the Company secured hydroelectric power from the Congo to supply to the mines in Zambia before Zambia produced hydroelectricity from the Kariba Dam. In fact, the Company contributed significantly to the development of the Kariba North Bank Power Station, having participated in funding the power station’s feasibility studies.
Since then, the Company has undergone several name and ownership changes. In 1964, it became known as the Copperbelt Power Company (CPC) and with the ‘Zambianization’ drive of the 1980s, CPC became part of the mining conglomerate, Zambia Consolidated Copper Mines (ZCCM), as the Power Division in 1982. The change to Copperbelt Energy Corporation Plc (CEC), as the company is known today, came in November 1997. This followed the privatization of ZCCM and the coming of Cinergy Global Power of the United States of America and National Grid of the United Kingdom who, jointly, acquired a controlling stake of 77% in the Company; making it Sub-Saharan Africa’s first electric utility privatization. Subsequently, in 2006, the two investors sold off their interest to a group led by local entrepreneurs known as Zambian Energy Corporation (Zam-En).
Established as a private company whose business philosophy is anchored on stringently meeting the power supply needs of a dedicated customer base with unique needs – the mining industry – CEC’s mandate remains as relevant as ever, 60 years and counting. Of course, that does not mean that the Company has not reinvented itself over the years in some way or other. While the detail of that reinvention is the subject of future articles, it is noteworthy to mention that CEC, today, has interests in businesses closely linked to its core. These interests include optic fibre based telecommunications services carried on through its joint venture subsidiaries – CEC Liquid Telecom and Hai. Mining has been Zambia’s economic mainstay and CEC the engine that has unfailingly powered the wheels of mining. CEC accounts for about 50% of national energy consumption.
Assets and Business Model
CEC is an asset-rich company, owning; operating and maintaining a network of power infrastructure valued at more than USD620 million. This includes more than 1,000 kilometers of primary transmission lines at 220kV and 66kV, with 700km embedded with optic fibre; 42 high voltage substations; 80MW of embedded thermal power generation; 1MW of solar PV generation and a modern system control center. It co-owns and operates, with DRC’s national utility, Société Nationale d’Electricite (SNEL), the transmission lines interconnecting the Zambia and DRC electric grids, and which forms an integral part of the Southern African Power Pool (SAPP) central transmission corridor. This is the only connection between DRC and Southern Africa, hence, it’s an indispensable enabler of an interconnected regional power market.
CEC has an extensive operational footprint covering the entire mineral-rich Copperbelt Province of Zambia and parts of the Katanga Province of the DRC. Its business model is underpinned partly by its core network, its regional relationships with other utilities and service delivery. The model is segmented into four aspects which include local power supply, regional power trading, domestic wheeling and international wheeling. The Company also provides power solutions to external parties.
Local power supply involves the long-term sourcing and supply of electric power primarily to the mines on the Copperbelt. The power is mainly sourced from national utility ZESCO Limited (ZESCO) under a Bulk Supply Agreement (BSA). In addition to supply of power, the business provides value additions to customers, including provision of emergency/back up power (supplied in the event of grid power failure). This is critical value-addition considering that the customers we serve predominantly run underground mining operations.
Regional power trading is the sourcing of power through medium to long term bilateral arrangements with regional utilities, and from the day-ahead market of the SAPP. This power is sold primarily to the mining companies in the DRC’s Katanga region through SNEL.
Domestic wheeling refers to the provision of domestic transport services (transfer of electrical power through transmission and distribution lines) using the CEC network from one point to another. This service is primarily provided to the national utility, ZESCO.
International wheeling is the transmission of power on behalf of regional utilities including but not limited to ZESCO, SNEL, and ESKOM through the Zambia-DRC interconnector, which is the only mode of power transmission between DRC and Southern Africa.
CEC also provides power solutions to external parties using its people skills and state-of-the-art diagnostic tools. Services provided include a wide range of electrical tests and monitoring (e.g. insulation test and power quality monitoring), laboratory services (e.g. infrared thermography and partial discharge analysis). Other services include transformer oil treatment, maintenance and overhauls and electrical power network studies (including coordination).
60 years plus, how has CEC reinvented itself over years to continue creating value for its shareholders, customers, other stakeholders and the economy at large? Look out for the next article to ensure you stay informed and knowledgeable about CEC.
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