The dispute over tariff charges for electricity emanating from the Cahora Bassa power station in Mozambique has been under way for three decades.
The conflict arose due to differences between Eskom, which continues to have excess generation capacity, and the Portuguese owners, Hidroelectrica De Cahora Bassa (HCB), which believes the agreed tariff of 2c/kWh is unrealistic and should be adjusted upwards.
The fight now looks set to go to independent arbitration. However, no firm date has been set for the start of the process.
Earlier attempts to bring the parties together have also come to naught and all sides are believed to be waiting on the legal process.
The biggest loser in the fight, Mozambique, is believed to be working behind the scenes in an effort to find some resolution.
It is understood that President Joaquim Chissano is probing some new concepts to take the issue out of the quagmire.
It is possible that one of the ideas being tossed around is to redirect Cahora Bassa power to Beira in central Mozambique where there are studies in progress for the creation of some power-intensive projects.
A consortium comprising Fluor Daniel, ABB and Kaiser Aluminium is studying a 300 000 t/y aluminium smelter in Beira running at 180 kA in the first phase. Known as the Beira aluminium smelter study (Bass), the project is being supported by the US Technical Development Agency.
The initiators told Engineering News recently that four possible sites had been identified, that the R8-million study is on track and that it should be completed by October this year.
One of the key challenges facing the project is locating a source of electric power.
Access to competitively-priced power in Beira, the selection of an attractive site, and finding the most cost-effective way to import and transport alumina into the selected location, are seen as the main technical challenges.
However, Chissano’s idea has a number of hurdles to cross.
Firstly, it would mean an increased off-take for Mozambique, which at this stage draws only 270 MW of Cahora Bassa’s 2 000 MW capacity.
The bulk is contracted to Eskom (950 MW) and Zimbabwe’s electricity authority (400 MW).
The other hurdle to overcome is the arbitration, because until the legal process is put in motion it is unlikely that the three parties will be willing to meet.
Eskom, for its part, doesn’t need the electricity and until Portugal’s October election is completed, the government will probably look to face-saving exercises on Cahora Bassa.
Some observers believe that, once the new South African and Portuguese administrations are in place, there may be space for a political resolution to a problem that is becoming more and more embarrassing to all concerned.