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Why Tanzania has Power Problems (Saying the Unspeakable)

Discussion in 'Jukwaa la Siasa' started by Akwaba, Jul 18, 2011.

  1. Akwaba

    Akwaba Senior Member

    #1
    Jul 18, 2011
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    Electricity prices are too low!!! Umeme bei ni ya chini sana!


    The core problem is that Tanzania has the view that all government companies are mean't to provide very cheap services by using tax payer money to SUBSIDIZE the cost. Tanzanians don't mind because they THINK they don't pay taxes its only those big companies. However, the government to keep TANZANIANS happy forced TANESCO to keep electricity prices very low by world standards and in turn did not subsidize the cost by giving the money to build power plants. So as the old power plants giving essentially free electricity became insufficient there was little money for TANESCO on its own to build power plants. It has to go to government which in the past was not willing. $400 million is alot of money. And donors were not giving money as they were unsure if TANESCO would get privatized.

    For all you people out there who are not clear let me explain privatization. It means that the government sells TANESCO to a private company so that it can RAISE prices (No one can then blame the government for raising prices, it will just say we have no control). And then charge Tanzanians what it costs to build power plants, generate electricity, and make a very nice PROFIT.

    "Only when one comes to the details does the problem come up more clearly, for instance that Tanesco uses 70% of its income for purchasing the gas, paying the capacity charge and electricity for Songas alone, an untenable financial matrix."
    Home

    [​IMG]
    TANESCO PRICE @7 cents per KWH

    Due to Comments I am adding a U.S. study comparing cost per MWH for various types of power sources. In the study they include construction cost, financing cost, and fuel cost and divide everything over the life of the plant. Note profit is not included.
    To get the price in KwH divide by 1000.
    http://en.wikipedia.org/wiki/Relative_cost_of_electricity_generated_by_different_sources
    [​IMG]

    Umeme bei ni ya chini sana!

    Tatizo la msingi ni kwamba Tanzania ina maoni kuwa makampuni yote ni mean't serikali kutoa huduma nafuu sana kwa kutumia walipa kodi fedha kwa ajili ya kufidia gharama. Watanzania hawana akili kutokana na kudhani kwamba si kulipa ushuru wa makampuni hayo tu kubwa. Hata hivyo, serikali kuhifadhi WATANZANIA furaha kulazimishwa TANESCO kuweka umeme bei ya chini sana kwa viwango vya dunia na kwa hiyo hakuwa na ruzuku ya gharama kwa kutoa fedha ya kujenga mitambo ya nguvu. Kwa hiyo kama zamani mitambo ya kutoa umeme kimsingi bure akawa haitoshi kulikuwa na fedha kidogo kwa ajili ya TANESCO yenyewe ya kujenga mitambo ya nguvu. Ina kwenda kwa serikali ambayo katika siku za nyuma hakuwa tayari. $ 400,000,000 ni fedha nyingi. Na wafadhili walikuwa hawatoi fedha kama walikuwa uhakika kama TANESCO bila kupata yaliyobinafsishwa.

    Maana watu wote wewe huko nje ambao ni wazi napenda kuelezea ubinafsishaji. Ina maana kwamba serikali anauza TANESCO kwa kampuni binafsi ili iweze kuongeza bei (Hakuna mtu anaweza lawama serikali kwa ajili ya kuongeza bei, itakuwa tu kusema hatuna udhibiti). Na kisha malipo Watanzania nini gharama ya kujenga mitambo ya nguvu, kuzalisha umeme, na faida nzuri sana.

    "Ni wakati tu moja anakuja na maelezo haina tatizo kuja wazi zaidi, kwa mfano kwamba Tanesco anatumia 70% ya mapato yake kwa ajili ya ununuzi wa gesi, kulipa malipo uwezo na umeme kwa ajili ya Songas peke yake, halikubaliki ya fedha ya tumbo."
     

    Attached Files:

  2. K

    Kamundu JF-Expert Member

    #2
    Jul 19, 2011
    Joined: Nov 22, 2006
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    Can somebody be specific on this issue because we need to be careful when we said cheal electricity. We should not base our rates on what Tanesco is buying from Songas or symbol but how much people are paying. Tanesco need to be break up in three different sections (1) Sourcing- Source of Power- Tanesco should buy from many different Indepent companies like Symbion, Songas, other Coal power companies and who ever company which is able to sale for a specify rate (2) Transmission- This is the actual transmission proces which is going to include transportation, maintenance and development- This company is going to be our current Tanesco (3) Billing- This is going to be a different private company which is going to focus 100% on billing. This company is going to help Tanesco focus on other things, they may take a small percentage as their admin fees cost, however they must improve customer service, billing system and they can not set up billing rates. Most of companies are charging 3%-5% admin fees. In this way Tanesco is not going to be free and is going to focus only on Transmisson and Maintenance. On every electric bill is going to be like this

    Total Usage: 10.02 KwH
    Price Per KWH $4.99 based on Symbion
    Total cost of Usage: $4.99*10.02 KwH which is $50
    Admin Fees: 4%*$50 which is $2.00
    Tanesco Fees: $10 This is fixed for Tanesco
    Total Bill $62.
    This is how to operate this type of company. The main problem in Tanzania is most people are not exposed any they all think the same like computers!!!!


     
  3. Ndjabu Da Dude

    Ndjabu Da Dude JF-Expert Member

    #3
    Jul 19, 2011
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    "Umeme bei ni ya chini sana"
    ukilinganisha na nchi gani?

    Na hii statement uliyonukuu:

    "Only when one comes to the details does the problem come up more clearly, for instance that Tanesco uses 70% of its income for purchasing the gas, paying the capacity charge and electricity for Songas alone, an untenable financial matrix."

    nayo haileti maana yoyote bila ya kulinganisha na gharama za matumizi ya kampuni nyingine za umeme sehemu nyingine ambazo zinaendeshwa tofauti na kwa mafanikio. Tupatie mifano hai ya kutetea hoja zako.
     
  4. Zing

    Zing JF-Expert Member

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  5. G

    Game Theory JF-Expert Member

    #5
    Jul 19, 2011
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    MEN LIE , WOMEN LIE...NUMBERS DONT LIE


    MALAYSIA:

    POPULATION: 28 million
    ELECTRICITY CAPACITY (AVAILABLE) : 21,000 MEGAWATTS



    TANZANIA:

    POPULATION: 45 million

    ELECTRICITY CAPACITY:(AVAILABLE) 3,500 MEGAWATTS
     
  6. Ndjabu Da Dude

    Ndjabu Da Dude JF-Expert Member

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  7. Ndjabu Da Dude

    Ndjabu Da Dude JF-Expert Member

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    Kama ni kulinganisha, ni embe kwa embe siyo embe kwa chungwa.
     
  8. Roulette

    Roulette JF-Expert Member

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    Kwa kweli nashangaa manambaa yenu hayo. Tatizo la electricity ni POOR MANAGEMENT SYSTEM. Vya price, maintenance, capacities etc vinaingia vyote kwenye management. Na management inarudi tena kwa uongozi ule ule ambao unafail management ya vitu vingi vingine kama education, health, housing for all, subsidies for farmers, industries, mining and natural ressources, tourism etc.
     
  9. Akwaba

    Akwaba Senior Member

    #9
    Jul 19, 2011
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    I added a chart showing some AVERAGE prices around the world. Here are the TANESCO charges.
    [TABLE]
    [TR]
    [/TR]
    [TR]
    [TD="class: xl65, width: 175, bgcolor: transparent"]
    [/TD]
    [TD="class: xl66, width: 129, bgcolor: transparent"]Domestic Low Usage (D1)[/TD]
    [TD="class: xl66, width: 105, bgcolor: transparent"]General Usage (T1)[/TD]
    [TD="class: xl66, width: 115, bgcolor: transparent"]Low Voltage Max (T2)[/TD]
    [TD="class: xl66, width: 116, bgcolor: transparent"]High Voltage Max (T3)[/TD]
    [TD="class: xl67, width: 62, bgcolor: transparent"]Zanzibar[/TD]
    [/TR]
    [TR]
    [TD="class: xl68, bgcolor: transparent"]
    [/TD]
    [TD="class: xl63, bgcolor: transparent"]
    Tshs
    [/TD]
    [TD="class: xl63, bgcolor: transparent"]
    Tshs
    [/TD]
    [TD="class: xl63, bgcolor: transparent"]
    Tshs
    [/TD]
    [TD="class: xl63, bgcolor: transparent"]
    Tshs
    [/TD]
    [TD="class: xl69, bgcolor: transparent"]
    Tshs
    [/TD]
    [/TR]
    [TR]
    [TD="class: xl68, bgcolor: transparent"]Low Energy(0-50kWh) - per kWh[/TD]
    [TD="class: xl64, bgcolor: transparent"]60.00[/TD]
    [TD="class: xl64, bgcolor: transparent"] 157.00[/TD]
    [TD="class: xl64, bgcolor: transparent"] 94.00[/TD]
    [TD="class: xl64, bgcolor: transparent"] 84.00[/TD]
    [TD="class: xl70, bgcolor: transparent"] 83.00[/TD]
    [/TR]
    [TR]
    [TD="class: xl68, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl70, bgcolor: transparent"]
    [/TD]
    [/TR]
    [TR]
    [TD="class: xl68, bgcolor: transparent"]Service Charge per Month[/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]2,303.00[/TD]
    [TD="class: xl64, bgcolor: transparent"]8,534.00[/TD]
    [TD="class: xl64, bgcolor: transparent"]8,500.00[/TD]
    [TD="class: xl70, bgcolor: transparent"]8,534.00[/TD]
    [/TR]
    [TR]
    [TD="class: xl68, bgcolor: transparent"]Demand Charge per KVA[/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]
    [/TD]
    [TD="class: xl64, bgcolor: transparent"]9,347.00[/TD]
    [TD="class: xl64, bgcolor: transparent"]8,669.00[/TD]
    [TD="class: xl70, bgcolor: transparent"]4,755.00[/TD]
    [/TR]
    [TR]
    [TD="class: xl71, bgcolor: transparent"]Energy Charge per kWh[/TD]
    [TD="class: xl72, bgcolor: transparent"]
    [/TD]
    [TD="class: xl72, bgcolor: transparent"]129.00[/TD]
    [TD="class: xl72, bgcolor: transparent"]85.00[/TD]
    [TD="class: xl72, bgcolor: transparent"]79.00[/TD]
    [TD="class: xl73, bgcolor: transparent"]75.00
    [/TD]
    [/TR]
    [/TABLE]

    The highest charge is $0.1 per KwH. This is not feasible in a country with low savings rate where commercial loans are at 15% interest. You can only achieve the low rates if TANESCO can easily get commercial loans at 5% interest. This is why TANESCO needs to beg to donors and the government. They don't provide the money readily until there is a disaster.
     
  10. Susuviri

    Susuviri JF-Expert Member

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    Jul 19, 2011
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    Hongera sana Akwaba mkuu! In the midst of chaotic chatter including mad propsition of giving a weak president -Emergency power (see Mwanakijiji's thread), u make absolute sense! The truth is in the figures!
     
  11. Ndjabu Da Dude

    Ndjabu Da Dude JF-Expert Member

    #11
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    So how does the chart you've provided support your contention that, in Tanzania, "Electricity prices are too low!!!" You'll need to explain that, and in addition take into consideration the fact that different countries use different technologies to harness electric power. 1 kWh of electrical power derived from nuclear power, solar power, natural gas, coal etc doesn't cost the same as 1 kWh of electrical power derived from HEP, diesel, petrol, or whatever.
     
  12. Akwaba

    Akwaba Senior Member

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    Jul 19, 2011
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    OK, you are right more detail is needed. I modified the original post and included a study comparing cost per MwH for various sources. It basically looks at all cost and divides it by the life of the power plant. So in reality it would cost more. In Tanzania WITHOUT government help the cost would be higher because of financing costs, they could be as much as double. Unless a large foreign company owns the power plants and can get low interest financing.

    Tanesco Average User Price: $0.10 per KwH
    Tanesco Large Customer Price: $0.05 per KwH

    [TABLE]
    [TR]
    [TD="width: 217"]Generation Type[/TD]
    [TD="width: 86"]Cost USD[/TD]
    [/TR]
    [TR]
    [TD]Conventional Coal[/TD]
    [TD]$0.09[/TD]
    [/TR]
    [TR]
    [TD]Advanced Coal[/TD]
    [TD]$0.11[/TD]
    [/TR]
    [TR]
    [TD]Conv. Combined Cycle Nat Gas[/TD]
    [TD]$0.07[/TD]
    [/TR]
    [TR]
    [TD]Advanced Nat Gas[/TD]
    [TD]$0.06[/TD]
    [/TR]
    [TR]
    [TD]Conventional Turbine Gas[/TD]
    [TD]$0.12[/TD]
    [/TR]
    [TR]
    [TD]Advanced Comb Turbine Gas[/TD]
    [TD]$0.10[/TD]
    [/TR]
    [TR]
    [TD]Advanced Nuclear[/TD]
    [TD]$0.11[/TD]
    [/TR]
    [TR]
    [TD]Wind[/TD]
    [TD]$0.10[/TD]
    [/TR]
    [TR]
    [TD]Wind – Offshore[/TD]
    [TD]$0.24[/TD]
    [/TR]
    [TR]
    [TD]Solar PV[/TD]
    [TD]$0.21[/TD]
    [/TR]
    [TR]
    [TD]Solar Thermal[/TD]
    [TD]$0.31[/TD]
    [/TR]
    [TR]
    [TD]Geothermal[/TD]
    [TD]$0.10[/TD]
    [/TR]
    [TR]
    [TD]Biomass[/TD]
    [TD]$0.11[/TD]
    [/TR]
    [TR]
    [TD]Hydro[/TD]
    [TD]$0.09[/TD]
    [/TR]
    [/TABLE]
     
  13. Akwaba

    Akwaba Senior Member

    #13
    Jul 19, 2011
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    It seems one of the countries with low electricity costs has raised their rates. It seems electricity in Malaysia is subsidized by the state. This means taking money away from Hospitals, education, and roads and paying peoples electricity bills. I am not sure this is the right thing to do.

    "The Malaysian government's subsidy burden was $8 billion in 2010, or 16.4% of the government budget, the Ministry of Finance said in its Economic Report. "
    Malaysia Raises Power Prices - WSJ.com

    One reason for this might be Malaysia's oil reserves are running dry.
    Malaysia?s oil drying up, Petronas told US envoys - The Malaysian Insider
     
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