Unbending the Winding Path of a Low-Income Country’s Energy Sector amid the COVID-19 Pandemic: Perspectives from Malawi
1.2. The Concept of Resilience in the Context of Energy Systems
1.3. Objective of the Paper
2. Materials and Methods
- How has COVID-19 affected operations costs for energy systems?
- How has COVID-19 impacted the early-stage development of energy projects, construction and the implications for the Malawi’s energy outlook?
- Which areas require a stimulus package to contain the delivery costs of energy and prevent disruption of essential services during the COVID-19 pandemic?
- What are the stakeholders’ responses to COVID-19 in the energy sector?
- Are onsite/backup (decentralised) energy systems for medical care facilities helpful in managing the impacts of COVID-19 in the energy sector?
- What are the challenges and solutions on digital payments? Particularly when purchasing electricity units?
- What is the state of third-party service providers such as banks and mobile network operators? How can they enhance preparedness and continuity of operations for the energy sector?
- What are the implications of the COVID-19 on energy policy and legal framework?
- What lessons can we implement from COVID-19 in order to enhance the resilience of energy systems?
3. Findings and Discussions
3.1. Impacts of COVID-19 on the Energy Sector in Malawi
3.1.1. Impacts on Early-Stage Energy Projects Development, Construction and Implications in the Country’s Energy Outlook
- Maintenance works on the grid distribution network, and connections for new energy customers in Malawi were affected due to the lack of essential materials, such as conductors for medium voltage (MV) and low voltage (LV) installations. Furthermore, the response to rectifying faults by the power utility companies had dwindled due to fault-clearing staff teams working in shifts of limited staff numbers per grouping to comply with restrictions.
- The construction of a hydro-based mini-grid (300 kW installed capacity) at Usingini was delayed. The project developer was unable to import goods and services for the project. Later the project was suspended due to the delays.
- Maintenance works of two turbines at Kapichira hydropower plant, with a total generation capacity of 64 MW, were delayed as spare parts could not be imported, and expatriate engineers contracted to conduct the maintenance works could not travel due to travel restrictions from COVID-19. Delayed maintenance of the hydropower plant led to the loss of 64 MW on the national grid.
- The development of a 300 MW hydropower project at Mpatamanga, which is under the planning stage, has also been delayed.
- Construction works of 120 MW solicited grid-connected solar PV projects at Golomoti, Nanjoka in Salima and Nkhotakota were suspended as the equipment could not be shipped into Malawi. For instance, equipment such as solar panels, batteries, and invertors for both the Nanjoka and Nkhotakota solar farms were imported from China and scheduled for commissioning in July and December 2020, respectively. However, the equipment could not be shipped as China was affected by the coronavirus.
- Developers of energy projects, such as Independent Power Producers (IPPs) in Malawi, could not comply with deadlines for equipment installation; this delayed the commissioning of projects.
- Energy projects funded by supporting partners, for instance, the World Bank Malawi Electricity Access Project (MEAP), were delayed as the officers responsible for the project could not travel to Malawi. If implemented on time, this project may have increased access to modern energy for most households, health facilities, schools, water pumping stations and enterprises in Malawi.
- The development, commencement, assessment, and implementation of increasing energy access projects supported by the United Nations Development Programme (UNDP) in partnership with the Department of Energy Affairs of the Malawi Government were delayed.
- For liquid fuels and gas (LFG), it was discovered that the volume of fuels imported into Malawi by the National Oil Company (NOCMA) and Petroleum Importers Limited (PIL) reduced due to the decline in oil demand largely caused by travel restrictions and less production from manufacturing companies. The reduced volumes imported and sold in the country negatively impacted fuel levies collected and used for the Malawi Rural Electrification Program (MAREP) and Roads Administration Fund (RAF). The impact on funding for MAREP, a program extending the electricity grid to rural trading centres and/or marketplaces in a phased manner, affected energy access in Malawi.
3.1.2. Impact on Operational Costs for Energy Systems
- Provision of personal protective equipment (PPE) and other COVID-19 containment measures such as masks, hand sanitisers, regular disinfecting of staff-shared machines such as cars and office computers. These were not planned or budgeted for by the power utility companies and mini-grid operators in their annual operational and maintenance (O&M) budgets.
- Demand for risk allowance by employees for working in an environment that exposed them to risks of COVID-19 such as fault-clearing in household premises, offices, and the distribution network. Employees of power utility companies and mini-grid operators organised sit-in demonstrations and a strike to demand improvements in service conditions reflecting the risks emanating from COVID-19, which affected company revenue.
- Reduced numbers of employees travelling in one vehicle while undertaking routine work-related activities to observe social distancing led to an increase in the number of vehicles used per activity, such as fault-clearing. The increase in the number of vehicles used per activity resulted in more fuel consumption and therefore cost for the faults and maintenance activities budget lines. In terms of vulnerability context, Sadati et al. , Wilder–Smith and Freedman  argued that the COVID-19 containment measures might not be effective in curbing the spread of coronavirus and could lead to inadvertent consequences. In the case of the power utility companies in Malawi, the increase in O&M costs, which reduced the profitability of the power utility companies, may affect energy service delivery in the long run and compromise the fight against the pandemic, which requires energy input.
- The double hiring of consultants: Local consultants were hired later to install energy system components due to travel restrictions imposed on expatriate consultants who were initially contracted to perform installations of an integrated system for user interface.
- Employing alternative measures to conduct community sensitisation, training, and civic education activities to raise awareness for the mini-grid project and safety issues in place of in-person meetings. For instance, United Purpose, a mini-grid developer, resorted to using a public address system at night instead of in-person daytime workshops. To ensure the security of staff operating the public address system at night, the mini-grid developer hired police services to provide security for the staff, which increased the project cost.
3.1.3. Areas That Require a Stimulus Package to Meet the Costs of Delivering Energy Systems and Prevent Disruption of Essential Services during the COVID-19 Pandemic
- Electricity demand declining due to the confinement measures, as most sectors of the economy operated skeleton crews and customer liquidity went down. The pandemic caused electricity demand to fall as industrial electricity consumption holds the largest share in Malawi electricity consumption. Public institutions, such as boarding schools, also shut down, resulting in reduced demand for electricity. Similar reductions in electricity demand were observed in several regions of the world [64,65,66,67], and a notable decline in energy consumption reached 20% in France, 25% in Italy, and 12% in the United Kingdom .
- Retailing of electricity units went down as most families with informal income sources did not have the resources to buy electricity units while staying at home, forcing most post-paid families to opt for defaulting on electricity bills.
- Businesses operations scaled down such that productive use of energy from mini-grids, notably welding and carpentry businesses, consumed less energy. This reduced energy consumption from anchor customers of mini-grids is a threat to the sustainability of mini-grids. This reduction in business operation among small and medium enterprises (SMEs) has also been noted in sub-Saharan Africa, accounting for 38% of the regional GDP .
- The COVID-19 pandemic affected revenue for the Electricity Supply Corporation of Malawi (ESCOM). The pandemic compelled manufacturing companies to request ESCOM to reduce its maximum demand (MD) charges because of scaled-down production and operations. The industry or commercial base of ESCOM customers account for 80% of ESCOM revenue, while domestic customers account for only 20% of the revenue.
- Demand for off-grid systems increased. Notable examples included basic electricity for remote COVID-19 quarantine and treatment centres, demand for refrigeration of medication in rural healthcare facilities that lack the power and subsequent equipment to provide cold storage, and an increased need for communication and information on COVID-19, which led to the increase in electricity demand for charging appliances used for communication.
- Demand for fuelwood in the form of firewood and charcoal increased in the household sector as most people were staying and working from home. This demand accelerated the rate of deforestation. For example, it was reported that the catchment area for Lichenya River in Mulanje Mountain, which supplies water for the 220 kW micro-hydropower mini-grid system for Mulanje Energy Generation Company, suffered extensive deforestation during the coronavirus period. Law enforcement agencies were working below capacity, following orders to work from home at times when there was an increased demand for fuelwood. It was also reported that staying in homes presented a burden on women to cook and increased the rate of obtaining fuelwood.
- A financial package to reduce the retail price of Liquefied Petroleum Gas (LPG), which has the potential to substitute biomass as energy for cooking at the household level in Malawi. This package should also have health benefits as it has the potential to reduce exposure to smoke from biomass fuel and indoor air pollution, which cause respiratory diseases and can exacerbate respiratory problems caused by COVID-19.
- Financial package to reduce electricity tariffs. With people confined to their homes and resorting to teleworking and e-payment for shopping, families need support to buy electricity.
- Financial package for tax and duty waivers on electrical supplies to energy sector players.
3.2. Options for Meeting Energy Needs in Light of COVID-19
3.2.1. Stakeholder Responses to COVID-19 in the Energy Sector
- Provision of sanitation supplies such as hand sanitisers and regular disinfection of staff-shared machines such as cars and office computers;
- Changing the mode of working from full-time to working in shifts per day or week in order to comply with social distancing measures;
- Reducing the number of officers travelling in cars to observe social distancing;
- Suspension of new electricity connection;
- Suspension of all power distribution network projects. For example, installation of transformers and distribution lines as the equipment is held at the border due to travel restrictions, and following the skyrocketing prices of the equipment by suppliers amid the pandemic;
- Intensification of awareness campaigns for households on the benefits of purchasing electricity units using digital payments rather than queuing at electricity utility offices;
- Promotion of the use of energy-efficient technologies such as LEDs to help households reduce energy costs and reduce pressure on the grid to prevent load shedding, which can impact essential services.
3.2.2. The Role of Onsite/Backup (Decentralised) Energy Systems for Medical Care Facilities in Managing the Impacts of COVID-19 on the Energy Sector
3.2.3. Electronic Payments as a Means of Observing Social Distance in Payments for Energy
- Challenges with electronic payments systems in Malawi deterred people from using the electronic platforms for paying energy services;
- Mobile networks and banks are slow to resolve and process refunds on failed transactions towards bill payments and prepayment of electricity units;
- Electronic payment platforms were also unavailable when needed due to mobile and internet network challenges;
- Power outages also rendered third-party vending of electricity units unreliable or unavailable as mobile network providers, and banks rely on their power availability for efficient digital payments and transactions.
3.3. Lessons for Enhancing the Resilience of Energy Systems
3.3.1. Implications of the COVID-19 to Energy Policy and Legal Framework
3.3.2. Lessons from the COVID-19 to Enhance the Resilience of Energy Systems
- Electronic transactions are essential for enhancing payments and therefore revenue collection in vulnerability contexts such as of COVID-19;
- Bulk ordering and warehousing of essential materials and equipment to last for several months is crucial for reducing the vulnerability of the energy sector to natural events such as COVID-19;
- Local capacity for both human resources and the production of essential materials is crucial to enhancing the resilience of the energy sector. The lockdown and travel restrictions rendered it impossible for expatriate professionals to travel to Malawi. There are also the presented challenges of importing essential goods for energy projects. This pandemic is a wake-up call for different professionals, including energy sector practitioners, to fast-track local capacity building;
- Preparedness based on quick information collection and responsiveness is essential. Apparently, no institution in Malawi appeared to be enforcing measures when the COVID-19 was announced in China.
4. Conclusions and Recommendations
- The Ministry of Energy should start energy scenario planning for 5 or 10 years, including other hazards such as drought, and suggest solutions in advance. For instance, in a scenario where a pandemic lasts 5 years or more, or the country faces drought for many years considering that Malawi relies heavily on hydropower plants and many more scenarios. This will help the country to devise solutions in advance and boost preparedness.
- The Ministry of Energy should liaise with the Ministry of Trade and Industry to support local companies manufacturing essential electrical supplies to ensure an uninterrupted supply chain. For example, companies and organization that are producing PPE locally.
- Ministry of Energy should liaise with the Ministry of Labour and Manpower Development, and Professional Bodies such as the Malawi Institution of Engineers and Renewable Energy Industry Association and implement local skills development programmes for the energy sector.
- Reserve Bank should enforce strict compliance with customer complaint resolutions for electronic payments.
- The government should construct more fuel reserves, thereby increasing storage capacity and avoiding a standstill in the future if such situations constraining travel and importation recur.
- Policy-makers must devise recovery measures that are forward-and-outward, looking beyond the market-driven approach. Innovative approaches are needed to secure financing amid crisis at foreseeable scales and reasonable speed; this can be achieved through a coherent design approach that ensures inclusiveness, evidence from past situations, and secure political buy-in.
Institutional Review Board Statement
Informed Consent Statement
Conflicts of Interest
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Zalengera, C.; Chitawo, M.L.; Chitedze, I.; To, L.S.; Mwale, V.; Gondwe, K.T.; Maroyi, T. Unbending the Winding Path of a Low-Income Country’s Energy Sector amid the COVID-19 Pandemic: Perspectives from Malawi. Energies 2021, 14, 7184. https://doi.org/10.3390/en14217184
Zalengera C, Chitawo ML, Chitedze I, To LS, Mwale V, Gondwe KT, Maroyi T. Unbending the Winding Path of a Low-Income Country’s Energy Sector amid the COVID-19 Pandemic: Perspectives from Malawi. Energies. 2021; 14(21):7184. https://doi.org/10.3390/en14217184Chicago/Turabian Style
Zalengera, Collen, Maxon L. Chitawo, Isaac Chitedze, Long Seng To, Vincent Mwale, Kondwani T. Gondwe, and Timeyo Maroyi. 2021. "Unbending the Winding Path of a Low-Income Country’s Energy Sector amid the COVID-19 Pandemic: Perspectives from Malawi" Energies 14, no. 21: 7184. https://doi.org/10.3390/en14217184