Power shortages taking toll on economy

30 Jun, 2019 - 00:06 0 Views
Power shortages taking toll on economy

The Sunday Mail

Vision 2030
Allen Choruma

At our current national power generation capacity, it goes without saying that unless there is strong political will, coupled with significant investments in refurbishment of existing power plants and in new power generation projects, our developmental aspirations anchored on Vision 2030 may not be realised.

Energy and Power Development Minister Advocate Fortune Chasi needs to urgently come up with a strategic power development framework to address both current and future energy requirements for Zimbabwe.

Currently, our power deficit is being met by expensive and unsustainable power imports largely from Eskom (South Africa) and Hydro Cahora Bassa (Mozambique).

Reliance on expensive imported electricity — whose prices are between US$0,13 /kWh to US$0,15/kWh — also poses both security and economic risks for the country.

Scandals

While the country is gripped by debilitating power shortages, the Zimbabwe Electricity Supply Authority (Zesa) has been mired in corruption scandals and wanton looting of State resources, as widely reported in the mainstream media.

In early 2019, Zesa’s CEO was dismissed under unclear circumstances, together with the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) former CEO.

They have since been arraigned before the courts on allegations of abuse of office.

Other Zesa projects such as the Dema diesel power plant (producing expensive power at around US18 cents/kWh) and the Gwanda solar project are mired in controversy, with suspected “underhand deals” being brought into the public domain.

Minister Chasi has a plateful of governance issues to address at the national power utility, Zesa, which if not attended to quickly, could derail his vision and well-intentioned efforts to address power challenges in Zimbabwe.

Projects

Zimbabwe power challenges can be resolved if Government implements all the power projects that are either at planning stage or being implemented.

Some of Zimbabwe Power Company (ZPC) projects currently underway or at planning stage include the following: Hwange repowering to allow the station to produce at installed capacity of 920 MW; Hwange Expansion Project — China Machinery and Energy Corporation won bid for expansion of Hwange units 6 and 7, which is expected to generate 600 MW (project commenced in 2018 and expected to cost US$1 billion); Munyati Power Station — repowering to increase capacity to 100 MW; Bulawayo Station — repowering to increase capacity to 90 MW; Kariba South Extension — Sinohydro completed (2018) expansion of Kariba South to add 300 MW at a cost of US$400 million.

Other projects at planning stage include: Batoka Gorge (US$3 billion) — a joint project between Zimbabwe and Zambia expected to produce 1 600 MW; Lupane Coal-Bed Methane (CBM) project — to produce 300 MW; ZPC solar projects — to produce 300 MW; and Gairezi Hydro(Manicaland) — to produce 30 MW.

Independent Power Projects

Government cannot satisfy all local power demand alone.

Independent Power Producers (IPPs) should be encouraged to invest in power projects.

The biggest IPP project is RioZim’s Sengwa power project in Gokwe, which is based on a coal resource of 1,3 billion tonnes capable of generating up to 2 800 MW.

RioZim will implement this project in four phases of 700 MW each.

Power China — a sister company of Sinohydro — won the tender for the power project.

RioZim’s Sengwa power plant can be duplicated elsewhere, provided Zera opens up the energy sector to IPPs and allow power tariffs to be determined by market forces.

Government power subsidies, through Zesa, can continue for strategic national projects and social projects aimed at protecting vulnerable communities.

Smaller hydro-power plants are operational in Manicaland such as Duru (2,2 MW), Pungwe A ( 2,75 MW), Nyamingwa (1,1 MW), Triangle (45 MW), Hippo (33 MW), Pungwe B (15 MW).

They all have a combined installed capacity of 100 MW.

There is also an emerging trend where big companies are turning their office and car park rooftops into solar projects to provide power for in-house office use — off-grid — reducing power demand on the national grid.

Thermal Power

Zimbabwe is endowed with enormous coal resources which are economically viable to extract.

According to geological experts, Zimbabwe’s coal reserves amount to 30 billion tonnes.

At current exploitation levels, it will take more than 100 years to exploit the coal reserves.

Thermal power accounts for 74 percent of the power generated in the SADC region.

In South Africa, Eskom generates 91,2 percent, or 46 776 MW, of South African power requirements from coal.

Zimbabwe needs to invest in environmentally sustainable thermal power generation technologies that reduce carbon emissions.

Advanced technologies that capture carbon emissions and use the gas for other commercial activities have been developed.

Zimbabwe can invest in these low-carbon emission technologies at its thermal power stations to cut carbon emissions.

Renewable Energy

In order to address environmental issues, Government should also focus on alternative and sustainable renewable power resources such as water, wind and solar.

Zimbabwe is well endowed with sun, water and wind, and needs to develop or adopt technology that makes harvesting of power from renewable resources cheaper.

Renewable energy resources are sustainable as they can be used over and over without running out (depleting).

Renewable power will be produced sustainably at zero carbon emission; thus, protecting our environment and reducing global warming.

We are informed that Zera is working on a number of initiatives and a policy framework on development of power from renewable resources, which will make it mandatory in future for Zesa to purchase electricity from renewable energy sources.

Zera has also been issuing permits to IPPs to develop solar projects.

Renewable Energy Feed in Tariffs (Refits)

As a measure to promote use of renewable energy as an alternative source of power in Zimbabwe, Zera is also developing a regulatory policy framework on Renewable Energy Feed-in Tariffs (Refits).

The Refits policy framework, once approved into law, will make it mandatory for power utilities to purchase electricity from renewable energy sources.

Demand-Side Management (DSM)

Despite the huge power deficit being faced in Zimbabwe, Zesa has embarked on a number of initiatives to address some of the national power challenges and should be commended for doing so.

Under the DSM programme, Zesa is promoting use of solar water heaters (geysers) and energy-saving bulbs.

The initiative is expected to save power usage of up to 300MW.

Zesa is also encouraging consumers to use solar panels to reduce demand.

Prepaid meters, apart from improving revenue collection, have also reduced demand as consumers’ become frugal and budget for power.

Recommendations

In pursuit of Vision 2030, here is a summary of my ten power development recommendations:

  1. Political Will — Strong political will, clear vision and planning needed from Government to overhaul and transform the energy sector.
  2. Governance — Improve governance in Zesa and weed out corruption, incompetency and inefficiencies and safeguard national resources. Current Zesa Holdings structure — splitting Zesa into strategic units such as ZPC, ZETDC, ZENT, Powertel and REA — should be maintained for effective oversight and management of the energy sector.
  3. Investment (new projects) — Investment in new power projects needed to meet power demand i.e. Batoka Gorge.
  4. Completion of existing projects — Need to complete projects already approved. For example, the controversial Gwanda solar project.
  5. Rehabilitation (Repowering) — Repowering of existing infrastructure such as Hwange to installed capacity and closure of old and outdated thermal stations (Harare/Bulawayo), which have outlived their design life and are costly to run.
  6. Renewable Energy — Strategically prioritise investment in renewable clean energy such as hydro, solar and wind. Zera to incentivise domestic consumers to use solar energy off grid to reduce national grid power demand.
  7. Tariffs — Remove tariff controls and allow Zesa and IPPs to charge economically viable tariffs (current tariff ZW$ 0.10 cents/kWh) to sustain operations and make profits.
  8. Deregulation — Deregulate power sector and open it up to IPPs and allow market forces to determine tariffs. This would encourage private investments in the power sector. IPP projects like the RioZim’s 2 700 MW Sengwa project should be supported by Government.
  9. Billing and Debt Recovery — Zesa billing and debt recovery systems should be streamlined and made more efficient. Debt recovery mechanisms should be strengthened to allow Zesa to recover inter-parastatal, local authority and Government debt to improve Zesa cash flows. Zesa debt needs to be restructured by Government to strengthen Zesa balance sheet and allow the public entity to access international finance to bankroll infrastructure rehabilitation and investment in new projects.
  10. Zera — Zera structures need to be overhauled so that it becomes more robust and plays a more effective role on the energy market. A robust energy plan is needed from Zera on how the country’s energy requirements can be met to satisfy demand for current and future generations.

 

Allen Choruma can be contacted on e mail: [email protected]

 

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