A staggering K32.3 billion monthly diesel bill has sparked questions over the cost of keeping Malawi’s electricity system running, but EGENCO says the figure is simply wrong.
The Electricity Generation Company (Malawi) Limited has rejected reports that it would need the eye-watering amount to operate 23 diesel generators, saying the calculation is built on assumptions that do not match its actual operations.
The clarification comes amid public debate over EGENCO’s plans to recommission diesel generators to supplement electricity generation, with some members of the public and civil society organisations questioning the cost of the move.
The debate follows calculations by Times which established that EGENCO could spend approximately K32.3 billion per month on diesel alone if 23 generators were operated for 16 hours a day.
However, in a statement, EGENCO said the calculation was based on an assumed fuel consumption rate of 500 litres per hour per generator, the prevailing retail pump price of diesel, 23 generators and 16 operating hours per day.
The company said these assumptions do not reflect its actual operating practices.
According to EGENCO, its diesel generators are not continuously operated at full load and therefore do not consume fuel at a constant rate of 500 litres per hour under normal operating conditions.
The company has also clarified that diesel used for electricity generation is not purchased at retail pump prices.
“The pricing structure for fuel used in power generation differs from that applicable to motor vehicle fuel and does not include certain levies, making it relatively less expensive,” EGENCO said.
EGENCO further rejected the assumption that all 23 generators would operate simultaneously for 16 hours every day.
The company said its diesel generators are deployed according to system requirements and are mainly used during periods of peak demand, including morning, midday and evening peaks.
It added that not all generators are operated every day, meaning fuel consumption and operating costs vary depending on electricity demand and the number of units required at a particular time.
EGENCO has also denied claims that it has hired or plans to hire diesel generators either locally or outside Malawi.
The company said it already owns diesel generators located at Mapanga, Kanengo, Lilongwe A and Lubinga.
However, some of the generators are currently non-operational due to a shortage of critical spare parts.
EGENCO said the procurement of the parts has been difficult over the past three years due to foreign exchange constraints.
The company said its current plan is to rehabilitate and recommission its existing diesel generators to supplement hydropower generation during periods of peak electricity demand.
EGENCO said government has demonstrated significant support for the initiative by allocating approximately US$8.1 million for the procurement of critical spare parts for both hydropower stations and diesel generation facilities.
The Electricity Generation Company (Malawi) Limited has rejected reports that it would need the eye-watering amount to operate 23 diesel generators, saying the calculation is built on assumptions that do not match its actual operations.
The clarification comes amid public debate over EGENCO’s plans to recommission diesel generators to supplement electricity generation, with some members of the public and civil society organisations questioning the cost of the move.
The debate follows calculations by Times which established that EGENCO could spend approximately K32.3 billion per month on diesel alone if 23 generators were operated for 16 hours a day.
However, in a statement, EGENCO said the calculation was based on an assumed fuel consumption rate of 500 litres per hour per generator, the prevailing retail pump price of diesel, 23 generators and 16 operating hours per day.
The company said these assumptions do not reflect its actual operating practices.
According to EGENCO, its diesel generators are not continuously operated at full load and therefore do not consume fuel at a constant rate of 500 litres per hour under normal operating conditions.
The company has also clarified that diesel used for electricity generation is not purchased at retail pump prices.
“The pricing structure for fuel used in power generation differs from that applicable to motor vehicle fuel and does not include certain levies, making it relatively less expensive,” EGENCO said.
EGENCO further rejected the assumption that all 23 generators would operate simultaneously for 16 hours every day.
The company said its diesel generators are deployed according to system requirements and are mainly used during periods of peak demand, including morning, midday and evening peaks.
It added that not all generators are operated every day, meaning fuel consumption and operating costs vary depending on electricity demand and the number of units required at a particular time.
EGENCO has also denied claims that it has hired or plans to hire diesel generators either locally or outside Malawi.
The company said it already owns diesel generators located at Mapanga, Kanengo, Lilongwe A and Lubinga.
However, some of the generators are currently non-operational due to a shortage of critical spare parts.
EGENCO said the procurement of the parts has been difficult over the past three years due to foreign exchange constraints.
The company said its current plan is to rehabilitate and recommission its existing diesel generators to supplement hydropower generation during periods of peak electricity demand.
EGENCO said government has demonstrated significant support for the initiative by allocating approximately US$8.1 million for the procurement of critical spare parts for both hydropower stations and diesel generation facilities.
