Commercial Farmers Union of Zimbabwe

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Zera to audit Zesa

Zera to audit Zesa


Harare Bureau
Zimbabwe Energy Regulatory Authority will institute an independent audit of the cost structure and operations of Zesa to determine whether the utility is passing the cost of its inefficiencies to consumers.

Zera acting chief executive Engineer Misheck Siyakatshana said the regulator had already started reviewing submissions by international consultants for the tender to carry out the cost and operations audit of Zesa.

“The results of the review will be presented to the Ministry of Energy and Power Development who will decide on the course of action as the shareholder,” he said.

Over the past five years, the Government and Zera have only allowed marginal increase in power tariff to avoid crippling businesses.

The audit comes after Zera rejected a proposal by Zesa, in July this year, to hike power tariffs by 49 percent to increase revenue inflow to fund operations, finance maintenance works and bankroll capital intensive projects.

Zesa, owed over $1 billion in arrears by consumers, would have hiked tariffs from an average 9,83c/kWh to 14,69c/kWh if the request had been granted. It was feared hiking tariffs would lead to a wave of price increases. Available research findings show that electricity is a major cost to production in virtually all sectors of the economy accounting for 20 percent of production cost in farming and agriculture, 16 percent in institutions, 15 percent in industry and 11 percent in commercial activities.

Mr Siyakatshana said there was concern from various quarters, including Government, that possible inefficiencies within Zesa could be the reason for high cost of power and sustained demands to raise tariffs.

“The review was commissioned (by Zimbabwe Energy Regulatory authority) following concerns from various stakeholders; Confederation of Zimbabwe Industries, Chamber of Mines, consumer groups and most importantly Government itself that there could be inefficiencies in both the structure and operations of Zesa Holdings and its subsidiaries,” he said.

“The Zimbabwe Energy Regulatory Authority is currently procuring independent international consultants to examine and review the cost structure and operations of Zesa with a view to identify areas of cost saving and efficiency improvement,” Mr Siyakatshana said on Friday last week.
Zesa’s power tariffs are considered a major cost driver to businesses in Zimbabwe. Cost of power is one of many factors cited in studies meant to improve the country’s ease of doing business conditions with a view to raising the competitiveness of local industry and companies to global standards.

“Government is concerned there could be inefficiencies in Zesa and wanted an independent consultant to go through the cost structure operations of Zesa. Government, as shareholder, will decide what to do,” he said.

While a study by National Economic Consultative Forum found out that the average cost of producing electricity from the power utility’s hydro and thermal power stations is higher compared to other regional countries, due to the ageing equipment, inefficiencies were also cited as a factor.

Official statistics show that Zesa’s average cost of producing electricity between 2009 and 2016 has ranged between 9,65c per kilowatt hour and 14,62c/kWh while the tariff ranged from 7,53c/kWh and 9,86c/kWh.

Govt bails out Zesa

Govt bails out Zesa


Felex Share, Harare Bureau
THE Government has averted a potential electricity crisis by issuing a R500 million ($35 million) guarantee to South Africa’s power utility, Eskom to back up power imports from the neighbouring country.

Eskom, which supplies Zesa Holdings with 300 megawatts, recently wrote to the power utility threatening to cut supplies over a               $12 million debt.

Erratic power supplies have a negative impact on industry and the agriculture sector.

Following provision of the guarantee, the onus is now on Zesa to ensure it meets its obligations on time.

Sources yesterday said the guarantee to Eskom was issued last week.

“A looming disaster has been averted, but that does not mean Zesa has to relax because still the debt has to cleared,” said a source.

“In the event that Zesa fails to pay, Eskom will simply call up the guarantee and Government will have to pay the money. This is a burden if Zesa does not pay up. Because in the national budget, that guarantee is not factored in, it means something budgeted for will have to suffer. Legally, Government is saying I am standing behind Zesa.”

The source said Zesa management must be rigorous and innovative to recoup $1,1 billion owed by customers.

This, said the source, was the only  way the power utility could service its debts.

“The guarantee will only be used as a last recourse in the event that Zesa fails to settle its bills,” he said. ‘‘What Zesa needs to do is to ensure it settles its bills and for that to happen it needs the support of everybody including the Reserve Bank of Zimbabwe. Customers also have to respond positively as it is also in their interest.”

Zesa also owes Mozambique’s Hydro Cahora Bassa $10 million.

Zesa chief executive Engineer Josh Chifamba yesterday declined to comment on the guarantee, referring questions to the Ministry of Energy and Power Development.

He, however, said the power utility was putting in place measures “to avoid load shedding at all costs”.

“We are working hard to ensure there won’t be any load shedding. We are going to be talking this coming week with our customers who are into exports with a view to see if they can give us part of their allocation such that we have foreign currency and are able to pay for power imports,” Eng Chifamba said.

“Load shedding is something we should avoid at all costs. It has a negative impact not only on our operations but also on the actual functioning of the economy.

“In times like this, customers earning forex should come and assist. In the process of helping us, they will be helping themselves because without reliable and secure (power) supply their business will be undermined.”

He added: “Previously we have had this kind of dispensation with customers and it’s the same model we are trying to replicate. We have been successful with platinum customers and we are also making a plea to others to come on board. If we lose these supplies the effects are calamitous.

What is a power crisis might turn out to be a serious financial crisis.”

Since the beginning of the year, Zimbabwe’s power situation has significantly improved due to a number of initiatives put in place by Zesa Holdings, including imports.

During the last quarter of last year, the power cuts had been so severe that many residents experienced up to 18-hour outages.

The power cuts also affected businesses, particularly mining companies and the manufacturing sector.

Exploit Zambezi River, southern Africa urge

Exploit Zambezi River, southern Africa urged
Mr Munodawafa

Mr Munodawafa

Conrad Mwanawashe Business Reporter

SOUTHERN African countries that share the Zambezi River, should consider major investments to exploit the 10 000MW untapped hydroelectricity capacity along the water body to guarantee power within the bloc as the World Bank expects demand for electricity to increase by 40 percent over thenext 10 years.

The Zambezi River common between Zimbabwe and Zambia and a part of Mozambique has capacity to generate 14 000MW of hydroelectricity between Katombora Barrage upstream the Victoria Falls and downstream the Cahora Bassa at Lupata in Mozambique.Currently, only about 4 000MW have been exploited so far by Zimbabwe, Zambia and Mozambique, leaving 10 000MW potential excess capacity.

Hydroelectricity generation plants on the Zambezi River currently include the Victoria Falls power station which is on the north bank of the falls on the Zambian side.

There is no corresponding power station on the Zimbabwean side. This is because should there be a power station on the Zimbabwean side the Victoria Falls would cease to be a world wonder.There is also the Kariba power stations 1 266MW capacity with potential for additional 300 /600MW; and the Cahora Bassa — 2 075MW existing and potential — 1 200MW on the north side.

“When we sat down we looked through and said yes we have got potential starting from the Batoka Gorge.“Initially we thought we would generate 1 600MW (at Batoka) but now we know we can get 2 400MW as technology improves,” said Zambezi River Authority chief executive officer Munyaradzi Munodawafa in a presentation to the ZRA board members on a mission to Zambia and Zimbabwe to assess progress on the development of the Batoka Gorge recently.

As development of the Batoka Gorge is now taking shape, the next proposed development target is the Devil’s Gorge upstream the Kariba Dam, which has a potential to generate about 1 240MW.Mupata Gorge, downstream the Kariba, with a potential capacity of 1 000MW is also in the ZRA plans.Further downstream the Cahora Bassa, Mupanda Uncua with 1 600MW potential, Boroma — 444MW and Lupata — 654MW are also proposed.

Apart from these proposed hydroelectricity generation plants, Mr Munodawafa said further upstream of the Victoria Falls there is a small but important gorge which is like a constriction called Katombora Barrage.

Mr Munodawafa said even though the Katombora Barrage will not provide energy it provides a lot of advantages downstream including providing the Victoria Falls with a constant supply of water all the time.The Southern African Power Pool, in its 2015 annual report said southern Africa installed a total of 13 604MW of new generation capacity in the last 11 years which gives an annual average of 1 237MW of new generation capacity.

In 2015, 1 999MW of new generation capacity was commissioned of which 83 percent was from renewable energy and electricity demand increased by 6,8 percent.SAPP anticipates that almost all countries will be commissioning new generation plants in the next few years with a total of 24 062MW new generation capacity planned. However, with the growth in industry and population in the region more power generation capacity will be required.

The World Bank recently said it is working on a programme with SAPP with a view to providing capacity to speed up development of regional power generation and transmission projects.Expects say there is need to guarantee sufficient power generation, transmission and distribution capacity which has a direct bearing on the availability and reliability of low cost, environmentally friendly electric energy in the region.

SADC says in order to capitalise on the region’s potential for electricity generation, encourages investment in the region’s electricity infrastructure, especially in electricity plants, transmission lines, coal depots, and nuclear demonstration plants.At present, most electricity in southern Africa is produced through burning coal. However, SADC aims to develop the region’s renewable energy resources, with plans for hydro-power plants underway in Mozambique, the Democratic Republic of Congo, Lesotho, and along the Zambezi River.

Kariba plunge pool rehab to begin

Kariba plunge pool rehab to begin

Conrad Mwanawashe Business Reporter

CONTRACTORS engaged by the Zambezi River Authority to remedy the erosion of the plunge pool on the Kariba Dam wall are expected to be on site within the next three weeks to commence the rehabilitation works.A plunge pool is defined as a deep basin excavated at the foot of a waterfall by the action of the falling water. ZRA shortlisted six companies from Asia and Europe to carry out the repair works on the plunge pool on the Kariba Dam wall from the 23 expressions of interest submitted in 2013.

“The procurement process of identifying a contractor getting the European Commission, African Development Bank, World bank and Swedish Government, you know there are four financiers, getting them to agree was always going to somewhat slow,” said ZRA chairman and secretary for Energy in the Ministry of Energy and Power Development Partson Mbiriri.

“We are not dealing with just one institution but four.“So we are kind of running behind on the projects but nonetheless come November we should have the contractor on site attending to the plunge pool.”Mr Mbiriri, however, could not divulge the identity of the contractors who have been finally appointed to carry out the rehabilitation works.

Rehabilitating the pool is estimated to cost $125 million and to be completed in about three years.The rehabilitation will also see work carried out on the dam’s floodgates one at a time.

Mr Mbiriri said the plunge pool may have been growing over time because at times ZRA would open all the six gates all the times but now is opening alternate gates when need be or just one gate so as to minimise the impact on the plunge pool.

“What has been happening is that instead of the plunge pool developing going downstream it has been developing coming towards the wall. That is where the risk has been,” said Mr Mbiriri.

The contractors are expected to drill and blast the lower part of the plunge pool to create a slope that forces the water to go down and not to swell within the plunge pool.

Zinwa invests $7m in Tokwe Mukosi power station

Zinwa invests $7m in Tokwe Mukosi power station

By  | August 26, 2016

Source: Zinwa invests $7m in Tokwe Mukosi power station | The Herald August 26, 2016

Martin Kadzere : Senior Business Reporter

THE Zimbabwe National Water Authority has so far invested $7 million towards civil works for the construction of a 15 megawatt hydro power station at Tokwe Mukosi Dam. This will be in addition to several other multi-million dollar commercial projects that the authority intends to implement once the construction of the dam is completed.The dam construction, which commenced in the late 90s is expected to be completed before the beginning of the rainy season after Government committed to release the $20 million required to complete the project and clear outstanding arrears to the contractor.

According to a document gleaned by The Herald Business, the mini-hydroelectric project would provide additional cash flows from the water allocations to the power plant.

It is anticipated that at least $1,2 million in revenue would be generated from power plant.

The project cost includes evacuation infrastructure through a grid extension and Zinwa is at an advanced stage of finalising selection of an investment partner of the project.

Zinwa is looking at partnering the Zimbabwe Power Company or other suitable investment or a technical partner on the management, operation and maintenance of this project.

“The preferred investors would be entities or parties of repute in the energy sector with demonstrable strong financial and technical capacity,” read part of the document.

It is anticipated the plant would be commissioned and come on-stream within 24-36 months of commencement of works after completion of the dam wall construction.

The dam wall was designed with the potential of generating 15MW of power if the peak power facility concept is considered using the same water resource released for irrigation.

Power generated will be sold to the Zimbabwe Electricity Transmission and Distribution Company as the principal off-taker and will also be available to power Zinwa’s fisheries projects and lodge facilities around the dam.

Off take agreements, are intended to be negotiated with mining companies such as Renco and Unki Mines.

These companies have already expressed willingness to take up the additional power to be generated and “can confirm their expressions of interest”, the document said.

This would enhance bankability of the financing structure conceived for this investment.

Apart from the power station, irrigation will be the main economic value to be realised from the dam. At a yield of 364 000 megalitres per annum, the dam will have sufficient water to irrigate up to 25 000 hectares. Zinwa also plans to be a major supplier of Nile bream in Zimbabwe through entering partnership with prospective investors.

The authority has already established the breeding ponds, which will produce fingerlings for stocking the dam and other projects in the Lowveld region. This will provide an additional source of revenue as the product can be sold to local and South African market.

In addition, Zinwa is also looking at establishing a crocodile farming project which would be modelled along the lines of existing projects in Kariba.

This will generate additional revenues for Zinwa from the sale of game meat and crocodile skins to international markets. Capacity for value addition of the crocodile skins will also be fully explored.

The Government has been funding the construction of the Tokwe Mukosi from its own resources through the Public Sector Investment Programme. Since 2001, the Government has spent $262 million on the dam with an additional $13 million having been set aside in the 2015 National Budget.

Zimbabwe faces electricity disaster

Zimbabwe faces electricity disaster

By  | September 22, 2016

Source: Zimbabwe faces electricity disaster | The Financial Gazette September 22, 2016

REGIONAL  power suppliers could switch off Zimbabwe after the country’s integrated power utility, ZESA Holdings, failed to meet prepayment arrangements for power imports, the Financial Gazette can report.
The Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a subsidiary of ZESA, has defaulted on payments for power supplies from Eskom of South Africa and Hydro Cahora Bassa of Mozambique. It has also failed to pay for power supplies from a sister firm, the Zimbabwe Power Company (ZPC) and the Dema Diesel Power Plant, which was constructed by private players recently to plug a generation gap in the country.
The Financial Gazette is reliably informed that ZESA owes the four suppliers about US$734 million.
Of this amount, US$715 million is reportedly owed to the ZPC and Dema Diesel Power Plant, whose establishment was a subject of contention between government and ZESA.
Mozambique’s Hydro Cahora Bassa, which is owed US$10 million, has already reduced by half its supplies to Zimbabwe, from the 100 megawatts (MW) to 50 MW.
South Africa’s Eskom, which is owed US$8,8 million, told the Financial Gazette this week that it would demand that Zimbabwe adheres to a prepayment arrangement to guarantee electricity supplies to the country.
Eskom’s spokesperson, Khulu Phasiwe, said: “The arrangement with Zimbabwe’s ZETDC will continue to be on prepayment. That’s the nature of the contract. If ZETDC are having problems paying in advance for electricity from us then they will have to wait until they have money for it.”
Phasiwe added: “We are not targeting Zimbabwe only. We do the same with all our customers within the Southern African Power Pool. Even with all our clients here in South Africa, we are migrating to pre-payment arrangements. We have found that after we supply electricity, some clients would come to us and say we didn’t order.”
ZETDC managing director, Julian Chinembiri, confirmed that Eskom, HCB and Dema could disconnect ZETDC due to the huge payment arrears.
“Power supply is seriously compromised at the moment,” said Chinembiri, adding: “About US$734 million is outstanding for power purchases.  This may lead to failure to procure power leading to load shedding. ZPC is owed a lot of money, threatening (local) generation.
“Eskom, HCB and Dema require upfront payment. But their accounts are now in huge arrears hence threatening to disconnect us,” Chinembiri said.
He said last year alone, the ZETDC reduced supplies to the market by more than 1 813 gigawatts hours (GWh), and this potentially prejudiced industry and commerce business worth more than US$5,2 billion.
“The situation is bad because (power suppliers) are calling us everyday threatening to cut us off if we don’t clear our arrears. It has been clearly demonstrated that ZETDC is in an extremely precarious situation arising from a sub-economic tariff. It has now become difficult for us to be able to pay since our proposal for a tariff increase was rejected by government.
“The decline of a tariff (increase) to ZETDC has dire consequences on the company’s performance and its ability to anchor the economic recovery to be realised from the Zim-Asset strategy,” Chinembiri said.
Energy and Power Development Minister, Samuel Undenge, is under increasing pressure to keep the country’s power sector relevant to Zim-Asset — a government economic blueprint called Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
Managed blackouts were last experienced in December last year when households and businesses endured long hours of supply disruptions.

Owing to low generation capacity, largely due to low water levels at Kariba Dam, which supplies water for power generation at Kariba Hydro Power Station, and inefficiencies at the power utility’s four thermal power stations across the country, Zimbabwe turned to regional power utilities to augment poor production.

In December last year, the Zambezi River Authority, responsible for the management of water in the Zambezi River basin from which both Zimbabwe and Zambia draw their water for hydroelectricity, was forced to cut water allocation for electricity generation from 33 billion cubic metres per annum to 10 billion cubic metres due to dwindling water supplies. This meant that ZPC was restricted to generating 285MW at Kariba South Power Station.
ZPC is currently struggling to generate half of the country’s national demand, which is estimated at 1 600 megawatts (MW).
According to generation statistics obtained this week from ZPC’s website, Kariba South Power Station was generating about 285MW, while Hwange Power Station was producing about 375MW of electricity.
Small thermal power stations in Harare and Munyati were generating a combined 33MW. Bulawayo Power Station was not generating anything due to breakdowns.
To cover for the deficit, the country has been importing about 350 megawatts (MW) from Eskom and 100MW from HCB.
It has also been procuring 100MW from the controversial diesel generators at Dema Power Plant.
These power utilities agreed to support Zimbabwe to keep its lights on, but on condition that ZETDC pays for the electricity on a pre-paid basis.
For the past 10 months this has been working out well as the country has not had any load-shedding since December 2015 because ZESA was able to pay upfront for the electricity imports.
Failure to pay ZPC would seriously compromise local power generation while Eskom, HCB and Dema could simply cut off ZETDC.
ZETDC has argued that the current tariff of US$0,0986 per kilowatt hour (kWh) is not cost reflective and for several years now government has been rejecting proposals for a tariff increase.
ZETDC this year applied to increase the tariff to US$0,1469 per kWh to cover for increased costs of procuring emergency power from Dema, HCB and Eskom. But the request was turned down.
The power utility’s actual costs have been higher than the approved tariff, resulting in ZETDC suffering a cumulative loss of US$517 million between 2009 and 2015 due to the low tariff.
The loss emanated from the fact that between 2009 and 2010, government allowed ZETDC to sell electricity to consumers at US$0,0753 kWh on average while the actual costs were hovering  between US$0,0933 and US$0,0965 kWh.
For the two years from 2011 to 2012, ZETDC’s costs ranged between US$0,1056 and US$0,1374 against an approved tariff of US$0,983 per kWh.
From 2013 to this year, the electricity tariff remained at US$0,986 per kWh but costs were hovering between US$0,1049 and US$0,1462 per kWh.
The ZETDC boss said this year  a projected loss of US$189 million would be incurred due to the low tariff, adding that the power utility would “soon be forced into a difficult decision of switching off the lights”.
Also compounding ZETDC’s woes are its debtors who are struggling to settle their bills.
The power utility is owed US$1,1 billion by electricity consumers.
The mining sector owes ZETDC US$52 million, while industry owes more than US$210 million. Commercial consumers owe the most at US$436 million.
Domestic consumers and farmers have an obligation to pay more than US$294 million and US$84 million respectively.
This debt, Chinembiri said, would ultimately affect the country’s ability to pay for power imports.
In light of this, ZETDC might defer its planned maintenance, a situation which is likely to result in increased forced outages and increased response time to faults. Network expansion and rehabilitation projects may be halted. Lack of network refurbishment may lead to frequent breakdowns and high fault incidences.
About US$20 million is currently required to replace faulty transformers and maintain other critical spares and consumables.
But there is growing fear that ZETDC might fail to maintain its infrastructure due to squeezed finances.

New beginnings beckon for Kasikiri, Mukuni villages

New beginnings beckon for Kasikiri, Mukuni villages
A view of the Batoka Gorge

A view of the Batoka Gorge

Conrad Mwanawashe Business Reporter
A NEW state-of-the-art power station, a one-stop shop, immigration facilities, a bridge linking Zimbabwe and Zambia and new settlements set the stage for a sprawling habitat.

Inland Zimbabwe, a world class road network, a new town set on 500 hectares of land complete with shopping malls, schools, hospitals and clinics, not forgetting churches and play centres, marks new beginnings beckoning for a sleepy village of Victoria Falls.

The year is 2024 and the setting is Kasikiri Village. The same goes for Mukuni Village across the Zambezi River in Zambia. This is at least the vision guiding the Zambezi River Authority as it battles barriers to complete the life-changing 2 400MW Batoka Gorge Hydroelectric Scheme situated downstream the Victoria Falls by 2024.

The ZRA is a bi-national organisation established to exploit the full potential of the mighty river for the socio-economic development of the two countries. What could possibly stop Kasikiri Village from transformation when it will host probably Zimbabwe’s biggest single power generation asset?

Currently both villages are oblivious of the magnitude of the economic asset they both play host to. With open swathes, far spaced vegetation and vast tracts of uninhabited lands, Kasikiri borders the Zambezi River but the benefit of being close to the big river have yet to show.

The community relies on market gardening while some survive on earnings from children and relatives based in Victoria Falls town. The Batoka Gorge Hydroelectric Scheme is estimated to cost about $4 billion on completion expected in 2024. First generation is however, expected two years from now.

Already, Kasikiri community is excited that their village has been favoured with hosting the Batoka Gorge Hydroelectric Scheme as they have tapped into the ZRA vision that promises transformation.

“We are excited about this project. We know we will get employment and be able to feed our families. Currently we are struggling as we survive on market gardening. We also hope they will assist our schools and build hospitals,” said Lungile Mpofu one of the villagers.

The communal leaders from both countries have also given thumbs up to the project.

“We have now received local community clearances from the chiefs and their people from both sides. They have already done their cultural clearances. In terms of that the project is ready to go; we are not going to have any opposition from the locals. They are happy and they are supporting the project,” said ZRA chief executive officer Munyaradzi Munodawafa.

Mr Munodawafa was addressing the ZRA board members and media during a two-day tour of the Batoka HES last week. On a bigger scale the benefits from the Batoka HES include improved power supply, decline in electricity costs, creation and enhancement of downstream industries and creation of employment, among others.

Improved electricity supply does not apply only to Zimbabwe but to Zambia also both of which will share equally the 2 400MW to be generated at full capacity. Currently, Zesa’s generation capacity, is estimated at below 1000MW against estimated of around 2 000MW.

Imports are making up for the shortfall. This is expected to change starting from 2019 when first generation from Batoka is expected. It is estimated that electricity generation costs will decline once Batoka is on stream giving relatively cheap power to both countries.

Availability of electricity will therefore significantly improve. Industry, which has been suffocating due to intermittent power supplies, will find reason to run mills all the time as the supply of one of the significant enablers will become more reliable.

Modern economies are highly dependent on power as technology becomes the driving factor behind economic growth. It follows therefore that, guaranteeing power supply could increase investors rating for the country.

This could see Zimbabwe improving on the World Bank’s Doing Business report, Getting Electricity rating from 161 in 2016. This will also present an opportunity for new investment in the area.

It is estimated that 3 000 people will be employed during construction of the dam but more could be hired for the power station, bridge and road construction projects. Aerodromes and helipads have already been constructed.

Downstream industries will be created to feed the electricity project and this could lead to thousands more being employed while economic activity in the area would be enhanced. It is also expected that indigenous companies will be contracted for some of the jobs during construction.

There will also be construction of settlements on 500 hectares of land in the area and all this has been provided for. These developments will be duplicated in Zambia’s Mukuni Village.

“We have started and stopped, started and stopped, but this time we are running on track. Both Governments want the project to succeed. Given the past experiences of power shortages in the two Republics we are very anxious to see this project implemented,” said ZRA chairman and Secretary for Energy and Power Development Patson Mbiriri.

Outputs from studies on the Batoka HES show that the dam will be a roller compacted concrete arch gravity with a height of 181 metres. There will be two surface power houses, on each bank with an installed capacity of 1 200MW each while transmission lines from Batoka-Livingstone-Muzuma will be 170km long – 300kV for the Zambian side.

For the Zimbabwe side from Batoka – Hwange power will be evacuated through a 70km long 400kV line and another one from Batoka-Chakari will be 400km long-400kV. ZRA authorities allayed fears that construction of the Batoka HES could have a flooding effect on the Victoria Falls, one of the world’s eight wonders.

ZRA chief executive Mr Munodawafa said the Victoria Falls would not be affected in anyway because the Batoka HES will be a “runoff river scheme”. “This is not a fully fledged reservoir. It’s a runoff and we will be regulating as and when necessary,” said Mr Munodawafa.

He also allayed environmentalist arguments about the dearth of water rafting due to the construction of Batoka HES saying the height of the dam wall has been reduced to 181m from 300m mooted at the start of the project.

There were also fears of displacement of people for power evacuation but the ZRA chief said the power lines will be following existing tracks and therefore there are very minimal chances of displacements. But construction of the Batoka HES will not lead to any displacements as there are no people residing close to the construction area.

Zesa threatens power disconnections to recover $1 billion

Zesa threatens power disconnections to recover $1 billion

Sun sets behind a power tower near a building in New Delhi

Pamela Shumba, Senior Reporter
ZESA will soon embark on massive nationwide power disconnections to recover more than $1 billion from defaulting consumers.

Zesa Holdings spokesperson Mr Fullard Gwasira yesterday told The Chronicle both commercial and domestic consumers were neglecting to pay electricity bills.

He said the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) would handover stubborn defaulters to lawyers.

“Electricity consumers owe us over a billion dollars. We’ve intensified revenue collection efforts in order to maintain the prevailing stable power supply.

“To that end we’re advising all customers in arrears to pay up their bills immediately or approach our customer service with workable payment plans to avoid the inconveniences associated with withdrawal of supplies,” said Mr Gwasira.

He said the smooth power supply- free from load shedding- could only be maintained if consumers constantly pay for electricity.

“We’re committed to maintaining the prevailing reliable power supply situation, which is only being made possible by stable local generation and prepaid power imports.

“I would like to urge all defaulting customers to pay their bills on time to avoid the inconvenience of disconnection. All defaulters who do not respond will be handed over to our lawyers,” said Mr Gwasira.

He said the power utility has since issued notices in the press notifying consumers about ZETDC’s move, in line with its credit control measures.

“There has been an increase in the number of defaulters. This has resulted in the debt rising to over $1 billion and constraining the capacity of the company to pay for critical obligations such as electricity imports, coal and spares to repair faults and statutory obligations,” said Mr Gwasira.

The Zimbabwe Energy Regulatory Authority (Zera) recently turned down Zesa’s request for a 13,6 percent tariff increase.

Several consumers have over the years continued to accuse Zesa of inflating bills. They claim most bills are based on estimates.

To reconnect customers, Zesa charges a reconnection fee of $10 for domestic consumers and $20 for businesses.

Under the Zim-Asset blueprint, Zesa is targeting to install 800 000 prepaid metres by 2018 and has already connected 550 000 customers.

Zesa introduced prepaid metering technology to replace the conventional billing system that had been posing challenges to the power utility.

Prepaid metering has helped improve cash flows for the company.

Eskom disconnects Zim

Eskom disconnects Zim


SOUTH African power company, Eskom, last week disconnected its electricity supply to Zimbabwe, plunging large parts of the country into darkness on Heroes Day as the Southern African country is experiencing serious power shortages which have made it impossible to continue with exports.

By Elias Mambo

The disconnection of 300MW by Eskom comes at a time the controversial Dema Diesel Power Plant has run into compliant problems resulting in its failure to feed into the national grid.

Sources said the Dema project was supposed to have been connected to the national grid early this month, but has experienced various problems, including serious fuel shortages.

The project, which was initially valued at US$194 million a year, was awarded to Sakunda Holdings, owned by Zanu PF benefactor Kuda Tagwirei, who partnered President Robert Mugabe’s in-law, Derrick Chikore, without going to tender.
Derrick is brother to Simba who is married to the president’s daughter Bona.

As reported by this paper a few weeks ago, Aggreko, a company which supplied the diesel generators, in April dispatched a team of close to 50 people to Zimbabwe among them project managers, operations managers, engineers, commissioning staff and other specialists.

The team came from Dubai, where Aggreko’s international projects business operates from as well as South Africa and other African countries.

Sources close to the development said the team has been in the country for this long without making much progress because Sakunda had problems with the Zimbabwe Revenue Authority, which refused to clear certain equipment urgently and allow operations to commence before relevant taxes were paid.

“Since July 7, engineers were running high voltage tests. The plant ran for a week then it was down,” the source said. “It is still being commissioned and that is what happens when testing frequency voltages.”

Sources also said engineers are working flat out to make sure the plant runs so that power shortages are abated.

Despite clear evidence of irregularities and corruption, Zesa sources said consumers will be forced to pay increased tariffs to accommodate Aggreko, Sakunda and some other people in the background of the controversial deal.

The project, which is under the direct supervision of the Office of the President and Cabinet, is part of a string of scandals rocking state power utility company, Zesa Holdings.

Documents show ZPC will pay US$8 million in advance every month for the Dema project which could run for three years.

The Zimbabwe Energy Regulatory Authority (Zera) has already approved a tariff of 15,45 US cents/kWh for the power purchases agreement.

By comparison, electricity generated at Kariba costs 4,11 USc/kWh, while that from Hwange Thermal Station costs 6,97 USc/kWh, making expansion projects far cheaper.

The Dema deal, documents show, will have serious cash-flow implications on Zimbabwe Power Company, hence Zesa’s recent application to increase the tariff by 49% which was interpreted by electricity consumers as an attempt to force the power utility’s struggling customers, already battling with huge bills and poor service delivery, to subsidise corrupt activities.

Zera, however, turned down the application last month meaning electricity tariffs will remain at 9,86 USc/kWh for the remainder of 2016.

Zesa limits Dema power to 100MW

Zesa limits Dema power to 100MW


Golden Sibanda, Harare Bureau
THE Zimbabwe Electricity Transmission and Distribution Company will not purchase more electricity from the Dema diesel power plant beyond 100 megawatts to minimise the impact of the tariff on the cost of the energy mix.

The tariff for the Dema plant is blended with cost of power from other local power plants and price of imported power to get an average price. The project is being spearheaded by local firm Sakunda Holdings.

ZETDC chief executive Engineer Julian Chinembiri said the company signed a power purchase agreement for the supply of 100 megawatts, as they do not have financial capacity to absorb the full output of 200MW from the Dema plant.

The project is an initiative to ameliorate acute power shortage in the short-term. Zimbabwe is expected to generate surplus power by 2018, when new projects currently underway start feeding the grid.

Eng Chinembiri said the other output from the diesel powered power plant can be sold to other consumers in the region.

“We are getting 100MW (from Dema), as per the power purchase agreement. We have no plans to purchase more electricity from the plant as we will not be able to afford it,” Eng Chinembiri said in an interview.

ZETDC, the transmission and distribution unit of power utility, Zesa Holdings, is buying power from the Dema diesel power plant at 15,45/KWh.

Its purchasing power has been further constrained by the refusal by energy regulator, ZERA, to award a 49 percent tariff increase.

The Zimbabwe Energy Regulatory Authority declined the proposal for the tariff hike on grounds that it had considered the prevailing economic situation and efforts by Government to expand generation capacity.

The Zimbabwe Power Company, the generation unit of Zesa, produces power at Kariba at 4,11c/kWh, while that from Hwange thermal Station costs 6,97c/kWh, making expansion projects cheaper.

It is against this background that the Dema project was mooted as an emergency power alternative to allow Government, through Zesa, to complete the capacity extension of projects at Kariba South and Hwange.

The expansion, designed to resolve the country’s debilitating power deficit, will bring an additional 900MW to the national power grid. Zimbabwe requires 1 400MW against internal generation capacity of 1 000MW.

The existing demand gap is currently being met through imports from Mozambique (Cahorra Basa), Zambia (Lusemfwa) and South Africa (Eskom).

Zesa had requested permission to increase the electricity tariff from the current average rate of 9,83c/KWh to 14,69c/KWh to be able to generate enough revenue to meet operational and capital project needs.

Mandatory power usage audits on the cards

Mandatory power usage audits on the cards
Engineer Gloria Magombo

Engineer Gloria Magombo

Bianca Mlilo Business Reporter
THE Zimbabwe Energy Regulatory Authority (Zera) plans to introduce new energy saving regulations that guarantee mandatory audits on consumers for purposes of energy efficiency. Zera chief executive officer Engineer Gloria Magombo told Business Chronicle that the regulations would only come into effect after training industry on energy efficiency.“We did an energy audit last year and as part of the energy audit we realised that there is a potential for savings from different companies and households, domestic, industry and mining sectors,” said Eng Magombo.

“We also identified what they need to do to improve efficiency. So what we’ve done is that we want to introduce regulations for mandatory audits to be done with proper plans for implementation of energy efficiency measures just like Kenya.”

The Kenyan Energy Regulatory Commission, whose mandate is to regulate the electrical energy, petroleum and related products, has employed a similar strategy under which companies are fined if they exceed their allotted energy limit.

“We’ve taken a stance whereby we start by capacitating industry on how to do those energy efficiency measures and so far we’ve trained about 50 engineers from different companies who will then be used to implement the first phase of the programme before we bring in regulations.

“The regulations will then make it mandatory for them to audit and implement efficiency measures,” Eng Magombo said.

The Zimbabwe Energy Regulatory Authority (Zera) is a statutory body established by the Energy Regulatory Authority Act and is mandated to regulate the procurement, production, transportation, transmission, distribution, importation and exportation of energy derived from any energy source.


$1,5bn Hwange power plant project gets rolling

$1,5bn Hwange power plant project gets rolling
Patson Mbiriri

Patson Mbiriri

Prosper Ndlovu Business Editor—
THE $1,5 billion 600MW Hwange Thermal Power Station expansion project has started rolling with preliminary agreements in place ahead of financial closure by October this year. With the fall in water levels in the Zambezi River due to drought and the resultant loss of generation capacity at the Kariba Hydro-Power Station coupled with low power generation in the four thermal stations, Zimbabwe has resorted to imports to bridge the energy supply gap.

Energy and Power Development Ministry Permanent Secretary, Mr Patson Mbiriri, told Business Chronicle in Bulawayo on Friday that the much anticipated project was “certainly on course”. “Most probably we will conclude financial closure by October to November. That’s our target.

“This is a big project and a lot of money is involved, you’re talking of up to $1,4 billion and you cannot expect that to be in place within a short space of time,” said Mr Mbiriri. “Most agreements for the project have been initiated, we are certainly on course. Some initial costing is underway and geophysical works have started.”

Despite concerns over perceived delays in the project implementation, the Permanent Secretary said the Government was satisfied with progress made so far. He said: “We have made agreements with coal and limestone suppliers as well as water. All that work is being done.

“We will need to put a second pipeline from the Zambezi River at Deka confluence. “Our initial target was to conclude financial closure by the first half but we are happy with progress made”.

The massive power project is a key component, among other crucial investment projects, of the Zimbabwe-China development mega deals that were sealed by President Mugabe during his State visit to the Asian giant in 2014.

The estimated construction period for the new power project is 42 months from commencement, according to the Zimbabwe Power Company. Upon completion, the project will add 600MW (2x300MW) into the national power grid through units 7 and 8.

At the moment Hwange Thermal Power Station generates an average of 500MW against its installed 920MW capacity. It is the largest coal-fired power station in the country comprising 4x120MW and 2×220 MW units and is the 14th largest station in the Southern African region.

The 4x120MW units were commissioned between 1983 and 1986 while the 2x220MW were commissioned in 1986 and 1987. Due to ageing equipment, the existing station has been subjected to frequent breakdowns, which has compromised efficiency and reduced its capacity.

The contract for the expansion of Hwange units 7 and 8 was awarded to Chinese firm Sino Hydro, which also landed the tender for capacity extension of the 750MW Kariba Hydro Power Station.

The Government, through Zesa Holdings, is working on increasing domestic power generation to bridge the gap between power supply and demand. The country generates about 1,100MW against peak demand of 2,200MW.

To bridge the gap Zimbabwe is importing over 300MW from South Africa’s Eskom to ease its power deficit while discussions are in progress with other regional utilities. Several licences have also been issued to independent power producers to complement at least nine projects ZPC is working on, which will see Zimbabwe achieving excess capacity and exporting to the region from 2018 and beyond.


Zesa threatens load-shedding

Zesa threatens load-shedding

By  | July 31, 2016

Source: Zesa threatens load-shedding – Sunday News Jul 31, 2016

Roberta Katunga Senior Business Reporter—
POWER utility company Zesa has threatened to reintroduce load shedding after energy regulator, Zimbabwe Energy Regulatory Authority (Zera) turned down the company’s proposed 13,6 percent tarrif increase, officials have said. They added that the company was now pinning its hopes on the Government getting a “proper” costing and generation structure which might influence Zera to rethink the decision. Zera has invited bids for companies to carry out an independent review of the operation and cost structure of Zesa and its subsidiaries.

Zera recently announced that it turned down a request by Zesa to approve a power increase from 9,86c/kWh to 11,2c/kWh. Zesa business planning and development manager Mr Patrick Chivaura told business leaders in Bulawayo during the Confederation of Zimbabwe Industries conference that ended in the city on Friday that his company would have to load-shed hence private companies must quickly move in to fill in the gap by investing in their own power plants.

“The regulator rejected our tariff application saying our tariffs are too high, if our tariffs are too high, then industry must maybe invest in its own plants,” said Mr Chivaura.

However, Zesa has since the beginning of the year improved in power generation, resulting in no load- shedding for both domestic and industrial customers. Late last year, Zesa was implementing tight load- shedding which in some cases saw areas going for more than 20 hours a day without electricity.

The improvement was on the back of a deal with South African power company Eskom to provide power to Zimbabwe on a pre-paid facility. At its best, Zimbabwe only produces 1 300 megawatts against a national demand of 2 000MW of electricity at peak consumption and covers the deficit through imports.

In an interview, Zesa board chairman Dr Herbert Murerwa said the company was now waiting to prove its case for tariff increase from the recommendations of the international consultant.

“Energy is a commodity that is important and the cost of production of that energy has to be taken into account. This is a commodity that the country cannot run out of. We are waiting for the recommendations of the independent consultant,” said Dr Murerwa, a former Minister of Finance. It has also emerged that Zesa was pinning to finance most of its capital expenditure from the tariff increase. Zesa spokesman Mr Fullard Gwasira revealed that Capex budgeted for this year was $1,498 billion against power generation of 11,440GWh.

Capital expenditure, or Capex, are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments by the firm.

“Zesa is still importing power from Eskom as prepaid electricity just like we are doing in our homes and ZETDC prepays power imports worth $6,6 million a month to Eskom alone. While our 2016 tariff application has not been approved, Zera does acknowledge the fact that there has been a change in the generation mix,” said Mr Gwasira.

He said changes in the generation mix would put a strain on the utility especially in the immediate term before they realise any cost savings given the fact that the last tariff increase was in 2012. Mr Gwasira said the tariff increase rejection would impact negatively on maintenance and Capex.

“The fact that Zesa has been able to keep the lights on for the past four years despite not having a tariff increase reflects the efficiency interventions which management has been able to put in place over the years,” he said.

According to Zesa’s financial report, the power utility is set to record a decrease in revenue. The report, seen by Sunday News showed a forecasted revenue of $781 886 718 against expenditure of $954 995 514 at 9,86c/kWh tariff as compared to last year’s audited revenue of $851 271 331. If Zesa had been granted a tariff of 11,2c/kWh, forecasted revenue for the year would have been $901 938 903.

Sadc responds to water, energy challenges

Sadc responds to water, energy challenges

Egline Tauya Correspondent
Water and energy are essential to human and economic development, which are hampered in southern Africa due to the current shortages.

Sadc has agreed on a way forward to address these challenges and implement measures leading to sustainable development.

The measures are contained in an outcome statement released by a Sadc Ministerial Workshop on Water and Energy held on June 20 in Gaborone, Botswana.

Sadc ministers responsible for water and energy agreed to forge closer regional collaboration in promoting water and energy security, rather than addressing solutions mainly at national level.

“Some of the challenges which are contributing to energy insecurity in the region are the focus on national self-sufficiency by Member States, which leads to stretching the little resources and yields minimum generation capacities,” reads part of the statement.

“On a similar note, Riparian States sharing a river basin are still inward-looking and aiming at building national dams to meet their national needs, which tend to be very expensive and create some competition within the river basin.”

To address these challenges and ensure a “water and energy-secure region, joint investment in strategic water and energy projects is a must. For example, the Grand Inga hydropower project in the Congo basin would immediately contribute towards the regional energy supply if implemented.”

According to the Southern Africa Power Pool (SAPP), the Inga Dam has the potential to produce about 40 000 Megawatts (MW) of electricity — enough to meet the needs of most of the Sadc region.

“Similarly, for the water sector, the Secretariat should, as a matter of urgency, initiate a study on transferring water from the water-rich basins to the water-stressed parts of the region expeditiously, through inter/intra basin transfers,” said the document.

One success story of transferring water from water-rich basins to water-scarce parts is the Kunene Water Supply Project, which provides water to dry areas in northern Namibia and southern Angola.

Another remedy to the water and energy challenge is the strengthening of inter-sectoral coordination. The management of water development in the region should not undermine energy supply or vice versa, because action in one area impacts on the other.

Water is needed in the generation of hydropower and cooling of thermal power stations, for example, as well as in irrigation for food production. Similarly, energy is required in pumping water to where it is needed.

The ministers noted the need to intensify Demand Side Management (DSM) strategies that allow the region to enjoy surplus water and power, as well as to save such resources.

Energy efficiency measures include the use of remote electric geyser switches, water sensor dispatching equipment and time-controlled shower units for institutions, as well as banning the use of incandescent light bulbs, electric geysers, boilers and other inefficient water heating and lighting equipment.

Switching from traditional light bulbs to compact florescent lamps and commercial lighting, as well as the uptake of solar water heaters have been effective in most Sadc countries as they have significantly reduced energy use. The use of compact florescent lamps can save up to 80 percent of the electricity consumption compared to incandescent bulbs.

Solar water heaters are another energy conservation device. Research shows that use of solar water heaters could reduce household electricity bills by 40 percent or more.

Implementation of these DSM programmes in southern Africa has resulted in savings of about 4 561MW of electricity between 2009 and 2015.

It is envisaged that the Sadc region will save more than 6 000MW by 2018 if such initiatives are implemented according to plan.

The water sector has a similar programme that seeks to promote water demand management as a means to ensuring efficient and sustainable water resource utilisation.

The programmes include use of smart water meters, rainwater harvesting, and use of sprinklers as opposed to flood irrigation. For example, the use of harvested rainwater for domestic and industrial purposes would reduce water and energy consumption during the rainfall months.

The ministers called on Sadc Member States “to promote and invest in alternative energy sources for power generation such as hydro, solar and wind power, including coal and gas, using appropriate and efficient technologies, thereby promoting optimal energy mix.”

“On the water side, Member States should invest more in rainwater harvesting, recycling, and desalination depending on the circumstance and should promote conjunctive use of groundwater and surface water.”

There is need for the region to accelerate the implementation of priority energy and water infrastructure projects in the Sadc Regional Infrastructure Development Master Plan (RIDMP).

The RIDMP Energy Sector Plan has identified 73 power projects that will increase generation capacity from the current 56 000 MW and ensure that the projected demand of 96 000MW is surpassed by 2027. —

The Water Sector Plan contains a total of 34 infrastructure projects aimed at improving access to water in the region.

Another critical measure is for all Sadc Member States to be fully connected to the regional power grid so that countries can share surplus power across borders.

Most mainland Sadc countries are interconnected through the SAPP regional grid — with the exception of Angola, Malawi and the United Republic of Tanzania. Full regional connectivity would strengthen the sharing of energy resources.

Member States were encouraged to exploit renewable energy sources, which are abundant in the region. However, for this to happen, there is need for innovation in the mobilisation of financial resources.

“Member States should provide incentives that promote the renewable energy investments which may lower capital expenditure,” the outcome statement said, adding that there is need to “explore other options such as competitive bidding to facilitate development of renewable energy projects.”

The outcome statement will be tabled for consideration at the forthcoming Sadc Council of Ministers and Summit of Sadc Heads of State and Government in Swaziland in late August.

The Sadc Ministerial Workshop with the theme, “Accelerating Energy Delivery and Access to Water Resources in the Sadc Region – A Collective Approach,” is one of three regional meetings convened by the Sadc chairperson, President Seretse Khama Ian Khama.

The meetings are aimed at finding innovative ways of managing the competing environmental, social and economic dimensions of development in southern Africa. A similar meeting on food security and poverty eradication was convened in May, while another one on illegal trade in wildlife is scheduled for July.

Various stakeholders, including energy and water ministers, representatives of national energy and water regulators and utilities, SADC energy and water thematic group members and implementing partners, International Cooperating Partners, research institutions and independent power producers participated in the meeting. —

Nationwide blackout hits Zim

Developing: Nationwide blackout hits Zim

By  | June 28, 2016

Source: Developing: Nationwide blackout hits Zim – NewsDay Zimbabwe June 28, 2016

ZIMBABWE lost 800 megawatts early this morning after there was a system disturbance at Insukamini, resulting all power imports being lost, but the situation is being rectified and by the end of the day, power will be restored, Zesa has said.

In an interview, Zesa spokesman, Fullard Gwasira said the system disturbance occurred around 5.15am on Tuesday and resulted in the country losing power imports from Hydro Cahora Bassa, South Africa and Zambia.

“All power stations, expect Hwange, tripped when the disturbance happened,” he said.

“Hwange Power Station did not trip because of the works that we have been undertaking.

“Our engineers are working on the issue and, by the end of the day, power would be restored and so far 95% of the power has been restored.”
He said the country had 300 megawatts of power after the system disturbance.

ZPC Kariba South Power Station almost complete

ZPC Kariba South Power Station almost complete

From Golden Sibanda in Kariba
CONSTRUCTION works of the Zimbabwe Power Company’s Kariba South Power Station’s power generation capacity extension is 50 percent complete with some key aspects of the project nearing completion.

ZPC Projects manager Endmond Mukahadira told journalists during a tour of the hydro power plant’s $533 million capacity extension that the project was on course to start power generation by December 2017.

Extension of the 750 megawatt power plant power station will add another 300MW to national grid and is being undertaken to bridge the huge power deficit between demand and power supply in the country.

Mukahadira said overall project completion, which entails on site and off site electrical and civil engineering works had now reached 48 percent completion with a total of 1,200 local and foreign workers involved.

Construction of the power house is now at 12 percent, a total of 3,1 kilometres has been excavated in terms of tunnelling, while the overall progress of the concreting works has now reached 37 percent, Mukahadira said.

Mukahadira said that the electromechanical works included offsite works entailing manufacturing of equipment in China had also covered significant ground.

The overall project, which started in 2014, is anticipated to take 14 months and is scheduled for completion around mid to end of March 2018.

“The overall project completion is now 48 percent as of the 25th of May and we are now moving towards 50 percent.

At the end of this month, we would have reached 50 percent completion,” he said.

“Some of the equipment has already been delivered on site. Instation has already been completed for the 2 by 250 tonnes cranes.

The first unit goes on line on the 24th of December 2017 and the second on March 18, 2018.”

Chinese company, Sino Hydro, won the contract to construct the power station at an engineering, procurement and construction cost of $354 million, but other attended expenses such as consultants, equity contribution, interest and statutory costs of the will see total cost rising to $533 million.

Energy and Power Development secretary Partison Mbiriri, who was the guest speaker said that demand for power in the country had gone down from an average of 2, 200MW in the last few years to 1,000MW-1 600MW.

The station, whose capacity was affected by low lake water levels, can maintain its current output to the end of the year as Kariba Dam water levels, live water usable for power generation, have improved 33 percent from 29 percent in January, but still lower compared to 43 percent in the same period last year.

However, demand for power has been declining in recent years due to the deteriorating economic conditions, which saw the country’s gross domestic product being decimated by 50 percent in the decade to 2008.

Demand for power continues to outstrip power though with the deficit being met through imports of 100MW firm supply deal with EDM of Mozambique and 300MW non firm supply arrangement with ESKOM of South Africa.

It is against this background that the government is working on a number of public and private drive initiatives to increase power, which also include 600MW extension of Hwange Thermal Power Station.

Other projects being pursued include Batoka, a joint project with Zambia that will generate 2,400MW and Sengwa, which is being developed by Rio Zim, as well as China Sunlight project, joint venture between the government and a Chinese firm.

A plethora of licences have been issued to private power producers.

Mbiriri said Zimbabwe will have completely dealt with its power deficit situation in the next two years and would possibly have excess to export to the region if internal demand for power does not increase.

Power trade pacts drive electricity supply balance

Power trade pacts drive electricity supply balance

Prosper Ndlovu
ENERGY and power development are integral components in the implementation of the Southern African Development Community (Sadc) industrialisation agenda aimed at unlocking more opportunities and economic integration. At the centre of the regional economic strategy is revitalisation of regional integration and enhancing competitiveness through fostering robust industrialisation that is anchored on value addition and beneficiation of natural resources. These are mainly focused on infrastructure areas in energy, information communication technology, transport and water as well as processing industries linked to agriculture and mining value chains.

A sober realisation has been that while this noble initiative buttresses the broader Sadc Industrialisation Strategy and Roadmap (2015-63) as well as the Regional Infrastructure Development Master Plan (RIDMP), its objectives could not be easily attained in the absence of sufficient energy and power backing.

Power shortages remain a common feature across Sadc and Africa as a whole mainly in the major urban areas while vast swathes of rural areas have no electric power at all. “Sub-Saharan Africa is generally short of electricity,” according to the Africa Progress Report 2015. A few countries are able to provide uninterrupted power supply all year round.

As a consequence the region is losing between 2-4 percent of its annual gross domestic product due to incessant blackouts that negatively affect economic activity, Africa Renewal, a United Nations department of public information publication reported in April 2016. The El-Nino-induced drought that has swept across the Sadc has negatively affected hydro-electric dams, further crippling power generation capacity.

Since 2015 Zimbabwe, for instance, has suffered a loss of power production at its Kariba Hydro-power plant, which has reduced its output to about 400MW against installed 750MW capacity due to a cap in water usage by the Zambezi River Authority. Zambia has suffered a similar fate as it shares the same water resource with Zimbabwe.

Similarly higher fuel costs have made it more expensive to run thermal generators while poor maintenance of existing infrastructure and lack of private investment, have also contributed to the poor state of energy development in the region.

These barriers have impacted negatively on regional tariff competitiveness with utilities pricing blamed for increasing consumer burden and costs of production in major economic sectors.

In the case of Zimbabwe average power output has plunged to a region of 1,000MW from about 1,400M against average demand of 2,200MW. The situation has forced the country to resort to imports from regional producers to bridge the supply gap.

In South Africa the Reserve Bank has indicated it was anticipating a loss of 0,6 percent in economic growth in 2015 and 2016 due to power shortages.

Given the above context, power trading agreements between countries that possess excess power generating capacity and those battling supply shortages are set to become a dominant theme in the regional electricity markets in the next five coming years, says Standard Bank.

Mozambique, which currently has the potential to produce more electricity than its economy requires at present, is likely to dominate the supply-side of this trading market with Namibia, Zambia and Botswana expected be the main purchasers in the region, after South Africa, it said.

Zimbabwe, while working on implementing several power projects set to add up to 2,000MW to the national grid in the next four years, is currently importing an average 50MW from Mozambique and 300MW from South Africa’s Eskom.

According to Standard Bank, the biggest challenge to these power trading arrangements would be reliable and stable transmission networks to facilitate the seamless transfer of electricity between sellers and purchasers.

These networks, it said, require significant co-operation between neighbouring countries hence the role of the Southern African Power Pool (SAPP) in ensuring cross-border planning, investment and trading between member states remains critical.

“Power will increasingly become one of the most tradable commodities across the region in the coming years given the electricity shortage we’re seeing across Southern Africa,” says Cody Aduloju, executive in Standard Bank’s power and infrastructure division.

“Almost every aspect of a modern economy relies on electricity to function so the countries that emerge as the ones with excess supply will have significant negotiating power, so to speak.”

Aduloju says that Mozambique, which plans to double its generating capacity to five Gigawatts (GW) by 2025, is one of the few countries in Africa that currently possesses an over-supply of electricity thanks to the hydro power available from the Cahora Bassa dam, which has an installed capacity of 2,075MW of power per year or around 73 percent of the country’s installed generating capacity.

Mozambique has the potential to expand the existing capacity of the Cahorra Bassa hydro facility by approximately 60 percent provided it can attract the necessary investment, he says.

“The biggest challenge that Mozambique faces in taking advantage of this opportunity and many other power projects, is that it has weak transmission infrastructure, which is a key requirement for exporting adequate levels of electricity to other countries in the region,” says Aduloju.

“However, it has phenomenal potential for electricity production, ranging from coal-, gas- and hydro powered generation.” Mozambique recently commissioned Sasol’s CTRG 175MW gas fired project. While small by international comparison, the value of such projects should not be underestimated in a regional context.

The 118MW gas-fired plant built in Mozambique by Gigawatt, a company that was awarded a gas power generation concession by the country’s government to supply electricity to the capital city of Maputo, would add significantly to the nation’s grid.

Experts say improved transmission line infrastructure would enable Mozambique to boost power exports. The country already supplies approximately 1,349MW to South Africa, 50MW to Botswana and some to Zimbabwe.

Mozambique has recently begun supplying 100MW to Zambia where there is a shortage of power due to low water levels at Kariba Dam. Namibia also represents a huge opportunity for countries with potential oversupply in the region as it currently imports about 61 percent of its electricity needs.

Given Namibia’s total power demand of 534MW, that would leave an estimated 320MW in possible supply deals up for grabs based on current peak usage Zof 508MW, said Standard Bank.

Botswana is another country in the region that is likely to remain reliant on its neighbours for the foreseeable future given that the country already imports 68 percent of its power needs. SAPP has, since inception facilitated the regional power trading framework by ensuring reliable and economical electricity supply across the region.

Its members include utilities and private power producers from Botswana, South Africa, Mozambique, Lesotho, the Democratic Republic of Congo (DRC), Zimbabwe, Zambia, Namibia, Swaziland and Malawi.

Plans are also afoot to determine the viability of building a multi-billion project to build a power transmission network linking the power grids of South Africa, Mozambique, Namibia, the DRC and Angola.

Hydro power has already been identified as a possible opportunity for Angola via the proposed 2067MW Luaca and 300MW (50 percent) Baynes plants. That is expected to go some way towards enabling Angola to achieve its goal of almost tripling its installed generating capacity 9,000MW by 2025.

Aduloju says that the DRC represents perhaps the biggest missed opportunity for the economic growth of any single country across the entire African continent.

While most African states rely on coal-fired power generation, growing environmental concerns have stressed the need to embrace green energy such as solar and gas as part of measures to reduce pollution. Comparatively, Africa generally has a huge potential of benefitting from solar projects given its exposure to the sun.

The technology is slowly gaining a foothold in Sadc with countries such as South Africa taking the lead. However, experts have blamed slow progress to high costs of solar technology installations, which limit its accessibility to the poor.

“It is unlikely that any country in Africa will have sufficient power generating capacity in the foreseeable future so it is absolutely imperative that the continent consider an adequate power trading mechanism in addition to investments in generating infrastructure,” said Aduloju.

Govt eys power surplus by 2018

Govt eys power surplus by 2018

Government is targeting to have power surplus by 2018 as a result of several power projects that are being implemented in different parts of the country, an official has said. The director for Policy and Planning in the Ministry of Energy and Power Development Mr Benson Munyaradzi said they don’t anticipate any shortages up to 2018 since some of the projects are almost complete.

“Going forward we don’t anticipate power shortages up to 2018 due to a number of power projects which we are carrying out. We are actually going to have a surplus of power.

“Government has put in place long term and short term measures targeted at increasing power generation in the country.

“The short term measures include the use of diesel generators such as the project that we are going to open at Dema in two weeks, which is expected to produce 100 megawatts for the grid,” he said.

He added that while there are efforts to increase power generation, power demand had declined from a peak of 2 200 megawatts in 1996 to between 1300 to 1500 megawatts currently due to efficient use of power by stakeholders.

“There is a decline in demand for power especially among major consumers in the mining, agricultural and manufacturing sector.

“We have to revise our demand projections on the medium term up to 2018 by 200 megawatts,” he said.

He also said that Government has registered a number of power companies that have capacity to produce up to 4 000 megawatts, if they get the necessary funding.

“So if there are people who want to invest in the country they should not be worried about the availability of power, it will be available unless something dramatic happens.

“The Kariba expansion project is now at 45 percent complete and the first unit is going to be commissioned in 2018 we are on schedule and after completion we will get 300 megawatts extra from Kariba,” he said.

“As a ministry we have some policy interventions that we are making that are linked to Sustainable Development Goals mainly focusing on power. We have started working on the SDG targets through a UN project called sustainable energy for all and we are creating the action agenda is expected to be completed in 2018.

“We have also developed the bio-fuels policy, which is now awaiting Cabinet approval and we are also working on the Independent Power Producers policy just to mention a few,” he added. BH24

‘No load shedding for winter wheat farmers’

‘No load shedding for winter wheat farmers’
Dr Undenge

Dr Undenge

Tinashe Makichi Business Reporter
Government will ensure consistent supply of electricity for the 2016-2017 winter wheat farming season, Energy and Power Developmemt Minister Dr Samuel Undenge said.

Speaking on the sidelines of the ZANU-PF Nyanga Inter-District meeting last week, Dr Undenge said load shedding for winter wheat farmers was now a thing of the past.

He said this will be supported by the recent power import deals that were signed between Government and its regional counterparts.

“I can assure the nation that the power challenges that once affected winter wheat farming are now a thing of the past,” said Dr Undenge.

He said more power projects are expected to come online and this will further reduce the current power deficit affecting the country.

China through China-Eximbank has since availed funding to Zimbabwe to ease electricity shortages by expanding the Kariba hydro-power station.

The project is expected to take four years to complete and increase Kariba’s capacity by 300 megawatts.

Zimbabwe used to face severe power outages, affecting households and businesses but the situation has since improved.

Dr Undenge said Government will make sure Hwange power station is constantly maintained for consistent supply of electricity.

Government also plans to

connect electricity to all public institutions,clinics and schools by 2018.

He said this is part of Government’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

“Government has plans to make sure 2018 all public institutions, schools, clinics should be electrified by 2018. That is Government’s position at the moment.

“The electrification of all public institutions is actually an economic driver and that has to be taken seriously,” said Dr Undenge.

Meanwhile the Zimbabwe Power Company (ZPC) last week said it surpassed its power generation target in the first quarter of 2016 by 2,35 percent, mainly due to improved generation at Kariba Power Station.

ZPC runs the Hwange Thermal Power Station, the Kariba Hydro-electric Power Station and three small thermal power stations, Munyati in Kwekwe, Harare and Bulawayo.

“In the first quarter of 2016, ZPC sent out a total of 1 751,18 Gigawatt Hours (GWh) of energy against a target of 1 711,04 GWh,” ZPC managing director Noah Gwariro said in an update.

“The production target for the period was surpassed by 2,35 percent due to production at Kariba Power Station which was fairly smooth during the quarter and was maintained at an average above the allocated 285MW to compensate for the general system power shortages that were experienced during the quarter.”

Going forward, Mr Gwariro said ZPC would focus on improving operational and process efficiencies, mitigating against water shortages at Kariba.

100MW boost for Zim national grid

100MW boost for Zim national grid
Chief Secretary to the President and Cabinet Dr Misheck Sibanda chats with Economic Planning and Investment Promotion Permanent Secretary Dr Desire Sibanda during a tour of Dema Emergency Generation Power Plant in Seke yesterday. — (Picture by Munyaradzi Chamalimba)

Chief Secretary to the President and Cabinet Dr Misheck Sibanda chats with Economic Planning and Investment Promotion Permanent Secretary Dr Desire Sibanda during a tour of Dema Emergency Generation Power Plant in Seke yesterday. — (Picture by Munyaradzi Chamalimba)

Felex Share Senior Reporter
Zimbabwe will add 100 megawatts to its national grid by June 21 with the coming on stream of the Dema emergency power plant as initiatives put in place by Government to alleviate power shortages start bearing fruit.

This came out during a “monitoring tour” of the Dema project by Chief Secretary to the President and Cabinet Dr Misheck Sibanda, his deputies and permanent secretaries from various ministries yesterday.

All the 200MW from the emergency plant are expected to be on line by July 10.

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The Office of the President and Cabinet has upped tempo in supervising major projects that are key in driving the Government’s economic blueprint, Zim-Asset.

Cabinet granted Zesa Holdings the nod to go the route of emergency power as a stopgap measure after the country experienced acute load-shedding in the fourth quarter of last year.

The outages saw residents going for up to 18 hours without electricity due to declining water levels at Kariba Dam.

Sakunda Holdings won the Dema contract and is leasing generators from Aggreko, the world’s leading temporary power generation company.

Dr Sibanda said the visit was meant to ensure “on-spot management” of the project following the arrival of key equipment at the site.

“We have come to inspect this project which is a Government-approved project,” said Dr Sibanda.

“In the wisdom of Cabinet, it was decided that we should move towards emergency power generation to augment the scarce power generation we have in the country. We are implementing Zim-Asset and we want to see our economy grow and catch up with others. Power is very critical to this kind of economic growth we are envisaging,” he said.

A number of countries have taken the route of emergency power, though it is expensive.

Added Dr Sibanda: “It is the intention of our office as the office mandated to monitor major projects under Zim-Asset that we do on-the-spot management and monitor implementation of the projects.

“Henceforth, we will be inspecting most of the major projects in the country.

“We call upon those given the opportunities to do your part so that together we grow our economy. We promise to come back shortly before the 21st (of June) to ensure you are ready for commissioning.”

Government is working on various projects, chief among them expansion of Kariba South Power Station (300MW) and Hwange Units 7 and 8 to (600 MW).

While the big projects materialise, the Dema project will be implemented and complemented by another 120MW that should come from the Mutare Peaking Power Plant.

The plant is also one of the priority projects targeted under Zim-Asset and the contractor, Helcraw Electrical (Pvt) Ltd, is already on the ground.

Sakunda Holdings founder and chief executive Mr Kudakwashe Tagwirei said civil works would be completed by June 7 with installation of generators following.

“We thank Government for allowing us to be the biggest independent power producer in the country,” he said.

“This is a critical moment in our history where we are talking about ZimAsset, indigenisation and empowerment. We will not fail you. The intention is that most of that power will be consumed here but depending on Government initiatives, some can be exported into the region.”

On challenges, Mr Tagwirei said: “We need clearance to go into the Dema substation and so for the last three weeks we have been failing to get access because of security clearance. Zesa has been working on that. We also face tremendous challenge at the Beitbridge border post. We have 85 trucks stuck there and in two weeks they will be 200. Fifty percent of those trucks are going to be inspected physically and it takes about three days to inspect one truck because of the way they were loaded. We do not mind if inspection is done here while they are being offloaded.”

Dr Sibanda responded: “We listened to the challenges being faced at this major project. As we were going around, we started addressing some of them and we want to assure you that before the end of the week you will see some changes.”

Energy and Power Development secretary Mr Partson Mbiriri said: “We assure you that we shall be meeting the targets. I want to implore my colleagues who have roles to do their bit in terms of facilitating the logistics at the border and along the route.”

Coal output slump hits power plants

Coal output slump hits power plants
Bulawayo Thermal Power Station

Bulawayo Thermal Power Station

Bianca Mlilo, Business Reporter
A SLUMP in coal output has reduced the Zimbabwe Power Company’s electricity generation capacity to around 1,000MW from about 1,200MW.
Power generation statistics as of yesterday morning indicated Munyati Power Station was producing 27MW, Bulawayo 23MW, Harare: 0MW, Kariba: 467MW and Hwange 560MW, bringing the total combined power generated to 1,077MW.

ZPC indicated in its report that coal stocks were at an average of 252,283 tonnes on a daily basis for the week May 18-24, 2016 consumed to daily coal consumption that ranges from 390,000t to 490,000t. It said the target delivery was 520,000 a day.

“(Harare) Station 3 was shut down on May 23, 2016 at 1005hrs to build up coal stocks in preparation for the commissioning of the TA1 rotor,” reads part of the report.

Zimbabwe imports about 350MW from regional producers to cover the energy supply gap.

The decrease in coal deliveries has been attributed to a slump in production figures by coal mining entities in the country.

With Hwange Colliery Company Limited (HCCL) facing viability challenges and competition from new players, experts say the country’s second largest coal miner, Makomo Resources and other smaller entities do not have sufficient capacity to meet domestic demand.

The Chamber of Mines 2016 first quarter performance report indicates that coal recorded a slight decrease in volumes as compared to the same period last year.

The 2015 total volume was 1,380,642 tonnes and the total 2016 volume was 1,374,250 tonnes. The report has projected production of 3,726 million tonnes of coal for 2016.

Coal is one of Zimbabwe’s most available minerals and the country’s biggest miner, HCCL produces an average 6,2 million tonnes of coal per annum.

Low power generation has also been exacerbated by incessant equipment breakdowns in the three thermal power stations whose machinery has outlived its lifespan.

As a result the giant thermal power station in Hwange no longer produces at its 920MW capacity and in some days falls as low as 270MW.
Zimbabwe’s electricity shortage has largely been attributed to lack of investment in new power plants.

However, the government is addressing the situation through a number of initiatives among them the expansion of Kariba and Hwange power stations as well as the licensing of independent power producers.

Last year, Finance and Economic Development Minister Patrick Chinamasa announced that China had committed to provide about $1,2 billion loan for the rehabilitation of Hwange Thermal Power plant.

As a result, the power plant is being expanded with the addition of Units 7 and 8.

A similar expansion programme is also being undertaken at Kariba and the projects are at different stages of expansion.

The expansion programme would see Kariba South adding 300MW while 600MW will be added at Hwange.

Energy and Power Development secretary Partson Mbiriri has said demand for electricity has significantly declined since 1999 owing to slowdown in economic activity in recent years.

He said the country was facing a deficit of 400MW against a demand of 1,400MW.

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