Commercial Farmers Union of Zimbabwe

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ZESA

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

zesalogo

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.

@BiancaMlilo

$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.

@ProsperNdlovu

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. — sardc.net

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. — sardc.net

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.

Also read:

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.

‘Electricity demand significantly down’

‘Electricity demand significantly down’

Business Reporter
DEMAND for electricity has significantly come down since 1999 owing to the slowdown in economic activity over the years, a Government official has said.

Energy and Power Development Secretary Partison Mbiriri said on Friday that the country is facing a deficit of 400MW against a demand of 1 400MW.

Mr Mbiriri said that contrary to reports that the country’s peak period demand for electricity stands at 2 200MW, demand has been coming down over the years.

“The 2 200MW that is widely reported was for 1999, our demand is now around 1 400 MW.

“We are generating 1 000MW leaving a deficit of 400MW but on a good day we can go up to 1 200MW,” he said.

Currently, Mr Mbiriri said, the country is importing between 50MW and 300MW from Eskom in South Africa to make up the deficit in demand for power.

“We are importing 50MW during the day and 300MW during the night,” he said.

He however, said that the country should be self-sufficient in terms of power by 2018 or at the latest by 2019 when several public and private led power projects are completed, including extension of Kariba South and Hwange.

“We hope that at that time we will be able to export,” he said.

Mr Mbiriri recently said that demand for power from industry is much lower compared to last year, which has reduced pressure on the national grid.

Industrial capacity utilisation averages 34 percent due to a myriad of factors including lack of affordable funding, old and antiquated equipment.

Economic challenges have prevented several companies from increasing production or significant new investment going into industry and the economy.

Government is working on a number of new power projects including the expansion of 750MW Kariba South by 300MW and Hwange thermal station by 600MW.

Further, contracts have also been awarded for the re-powering of the country’s three small thermal power stations, which should boost power output.

These ongoing power generation capacity expansion projects will bring the country to excess generation by 2018 in line with the Zim-Asset targets.

The State-owned power generation firm, Zimbabwe Power Company, has also awarded contracts for 3 by 100MW solar power projects.

In addition, the Government also awarded Sakunda Holdings a tender to set up a 200MW diesel plant in Dema while various independent power producers have been awarded tenders to set up solar power plants across the country.

Electricity tariff hike will come at a huge cost

Electricity tariff hike will come at a huge cost

Tafara Shumba Correspondent
The proposed hike of electricity tariff by zesa Holdings and recent developments within the electric utility raked up this memory, for they share similarities. Both zesa and the dear beggar misplace their priorities at somebody’s expense.

zesa’s application for 14 percent tariff hike is currently under the scrutiny of an inter-ministerial committee. Initially, the parastatal applied to have the tariff raised from 9.86 cents per kilowatt per hour to 14.6c/kWh. However, the regulatory authority, the Zimbabwe Electricity Regulatory Authority (zera) recommended to cabinet an increase of 11.2c /kWh. The hike is ostensibly meant to cover for import costs of 300 and 40 megawatts of electricity from South Africa and Mozambique respectively.

The proposed increase was received with strong resistance from people of all walks of life.

Electricity is one of the chief economic drivers whose cost has ripple effects on the political and socio-economic lives of residents and industry.

The Confederation of Zimbabwe Industries (CZI), Chamber of Mines of Zimbabwe, Zimbabwe Farmers Union (ZFU), Commercial Farmers Union (CFU), Zimbabwe Commercial Farmers Union (ZCFU) and other business organisations have all expressed their reservations on the increase of electricity levy, arguing that the increase would come at a huge cost to the economy.

Indeed, the increase will increase the woes of the ordinary person as he is at the last point in the supply chain to bear the net effects. The hike will definitely increase the production cost of goods and services.

Unfortunately the burden will be passed on to the final consumer, the ordinary resident who is already struggling to make ends meet.

Although the increment seems to be insignificant, residents are paying the current rates through their noses.

They have many other financial obligations which cost them an arm and a leg.

What if all utility and service providers decide to hike their products? It is unfortunate that the poor citizen has always become the first port of call for everybody who needs money to fund a project.

Tollgates mushroomed all over and there were even plans to install more before the ministry changed hands in the cabinet reshuffle.

Ingenuity and performance can never be measured by extortionate actions.

A good performer thinks outside the box and solves challenges without transferring the burden to the poor.

Of course, electricity has to be imported to cover for the declining electricity generation at Kariba due to low water level.

However, there are other avenues that the parastal can explore before resorting to the obvious.

What irks everybody most is the insincerity of zesa.

It acts as if it is virtually moneyless yet the lifestyle of its executives and employees betrays that pretence.

A lifestyle audit at zesa would bring to light how the utility company misplaces its priorities.

For transparency’s sake, zesa must publish its budget that shows operating costs and costs of importing power supply.

It will not surprise anyone to discover that a greater chunk goes to salaries and perks.

zesa should have restructured itself in line with the declined electricity generation.

There is no need to keep a sea of highly remunerated employees when your generation capacity at Kariba has declined from 750mw to 275mw.

People are aware that zesa dishes out free electricity to every serving and retired employees.

Of course it is a long-standing company tradition, but the macro environment prevailing dictates that such policies be held in abeyance. Continuing with such profligacy be-gets mistrust in zesa.

Even the way that public funds are managed at zesa justifies people’s resistance to the tariff hike.

The Herald’s recent expose of Minister Samuel Udenge’s shenanigans makes it even more unwarrantable to increase tariffs.

Dr Udenge, who is on record authoritatively saying there was no going back on tariff increase, is alleged to have directed Zimbabwe Power Company (ZPC) and the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to engage Psychology Maziwisa and Oscar Pambuka’s company for public relations campaigns.

A company that is extending a begging bowl to the poor has the luxury of hiring a public relations company when it has its own public relations department. Only God knows what Dr Udenge profited from the corrupt arrangement. As for Cde Maziwisa, a new entrant to the august House, has started on a very bad note that has dented his chances of a ministerial appointment. Thank God that the deal has been stopped, but people are keenly waiting to see if any teeth will sink into Dr Udenge’s flesh.

Before burdening consumers, zesa must recover over $1 billion debt it is owed. They know their debtors and so must be brave enough to face them, notwithstanding their footing. That money can go a long way in funding various energy generation projects that were mulled on some years back, but have not yet kicked off.

These debtors must be put on pre-paid meter system so that the debt can be recovered through the 40 percent debt recovery plan that zesa is taking from every electricity purchase. In fact, zesa would ensure a 100 percent revenue collection if it puts everybody on the prepaid meter system. zesa seems to be compensating that debt by increasing electricity tariff. It’s unfortunate that those who are currently paying faithfully for their electricity will be the same people who will continue to pay for the increased tariff. It becomes unfair to be punished for being faithful.

It is believed that zesa is losing about 40 percent of electricity during transmission and distribution. Is it not fair for it to plug the loopholes before rushing to the poor consumers?

zesa has been basing its arguments for an increase on the regional pricing regime. They cannot increase tariffs just to match regional prices. They must not forget that the economies are different and there are many areas where these pricing disparities exist. That is the reason why workers have not been demanding salaries that match with those of the region. Electricity is an economic enabler which every investor considers before investing in a country. Zimbabwe is seriously in need of investment. Therefore, zesa should seek to make these economic enablers cheaper so as to attract investors rather than seek to match regional costs.

It is also high time that zesa reconsiders the unbundling exercise it undertook a few years ago because it is costly. Instead of importing electricity, it must consider having synergies with those foreign power suppliers. It must also increase efforts into energy generation especially the Batoka Gorge project which is expected to generate 2400mw to be shared between Zambia and Zimbabwe.

As cabinet deliberates on the zesa application for tariff increase, it must not be lost to the ripple socio-political and economic effects the hike will have.

Zesa seeks approval for 14 percent tariff hike

Zesa seeks approval for 14 percent tariff hike

Felex Share Harare Bureau
ELECTRICITY charges will increase by about 14 percent if Cabinet rubberstamps the Zimbabwe Energy Regulatory Authority-approved application for a tariff hike which was made by Zesa Holdings.

According to impeccable sources, an inter-Ministerial Committee is currently studying Zera’s determination to have electricity charges raised from 9,83 cents per kilowatt per hour to 11,2c.

Zesa Holdings, through the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), had applied for a tariff increase of 14,6c/kWh to help finance imports to mitigate power shortages and expand generation capacity.

“We’ve an inter-ministerial taskforce that is studying what has been brought by Zera through the Ministry of Energy and Power Development to ensure that there’s a win-win situation to both the power utility and the consumers,” said a source.

“The truth of the matter is that Zera, after conducting their stakeholder consultations, made a determination to peg the price at 11,2c/kWh. An inter-ministerial committee, senior officials from about four ministries, are meeting with members of the Office of the President and Cabinet to look at this development and they agreed on that figure. The ministries involved include that of Energy and Power Development, Agriculture, Mechanisation and Irrigation Development, Industry and Commerce as well as that of Information Communication Technology, Postal and Courier Services.”

Added the source: “The agreement is that the Ministers, after their deliberations and finding a common position, will take the position to Cabinet for endorsement, through the ideal ministry. In essence the 11,2c/kWh is waiting for Cabinet approval only. Zera had promised to come back with a determination two weeks after their consultations in January but now it’s more than four months. The reason being that they had to find a win-win situation.”

Zera has repeatedly said it is still consolidating stakeholders’ input before making a determination.

ZETDC managing director Engineer Julian Chinembiri said they were still waiting for a response to their application.

He said the delay in announcing the tariff was affecting their operations.

“They (Zera) recently wrote to us saying they’ll soon give us a tariff and we’re still waiting,” he said.

“On our part, if we don’t get that tariff it means our operations will be affected heavily. The cost of the power which we’re now importing is high and we also need money to meet maintenance costs. Failure to do so will see us returning to the load shedding era because all our imports, which are significantly contributing to the current stability in power supplies, are prepaid.

“Without a tariff, we won’t be able to pay in advance. In short, we’re channelling most of our revenue to power imports at the moment and we’ve put a number of things on hold.”

Zimbabwe is spending millions of dollars importing power mainly from South Africa (300MW) and Mozambique (40MW) on a cash basis model.

The development has seen Zesa cutting down on load shedding consumers since December last year.

The situation is unsustainable as the import tariffs are higher than what is currently obtaining especially when the power utility is saddled with a more than $1 billion debt.

The power utility is currently working on supply side interventions that entail expanding capacity at Kariba South hydro power station by 300MW and Hwange by 600MW.

Eng Chinembiri said power cuts being experienced in some areas were a result of faults not load shedding.

“We now have a stable power supply since the end of last year and our hope is this will continue,” he said.

“During this period, we aren’t load shedding and people with no electricity should report to nearest depots because it’ll be due to faults. We don’t have systems to monitor low voltage faults in homes and that’s why we’re appealing to our consumers to report.”

Sadc to roll out 3 000MW of new power in 2016

Sadc to roll out 3 000MW of new power in 2016

Southern Africa aims to commission new power projects that will add 3 059 megawatts of electricity this year as the region targets to ensure that it meets its energy needs by 2020. According to the Southern African Power Pool (SAPP), which coordinates the planning, generation and transmission of electricity on behalf of member state utilities, the majority of the new power this year is expected to come from South Africa.

At least three power generation projects with a combined output of 1 624MW will be commissioned in South Africa.

Another significant contribution is expected to come from Zambia, which is due to add 300MW.

Angola, which is yet to be linked to the regional grid, will contribute 780MW.

Of the new energy generation projects planned for commissioning this year, only 2 269 MW will be added to the regional grid since the Southern African Development Community (SADC) is not yet fully integrated in terms of energy trading.

All mainland SADC countries, with the exception of Angola, Malawi and the United Republic of Tanzania, are interconnected through SAPP regional grid, allowing them to share surplus energy.

New generation capacity installed in any of the three non-participating countries is not accessible to the nine other members of SAPP – Botswana, the Democratic Republic of Congo, Lesotho, Mozambique, Namibia, Swaziland, South Africa, Zambia and Zimbabwe.

Gas is expected to contribute the largest share of the new generation capacity in the region in 2016, with five projects – three from Mozambique and two from South Africa – expected to add 1 410 MW by the end of year.

Unlike in previous years where coal-fired plants contributed the largest share of new generation capacity, 2016 will witness only two new coal projects coming on board with a combined capacity of 390MW, which translates to 12,74 percent.

The move towards renewable energy follows a resolution made in 2012 by Southern African countries to increase the uptake of cleaner and alternative energy sources that result in reduced carbon emission that increase climate warming and cause environmental damage.

In addition to being affordable, secure and reliable, renewable energy such as hydro, solar and wind will not be depleted and are also in abundance in the SADC region.

The long-term target set by SADC is to achieve a renewable energy mix in the regional grid of at least 32 percent by 2020 and 35 percent by 2030.

According to the African Development Bank, Southern Africa alone has the potential to become a “gold mine” for renewable energy due to the abundant solar and wind resources that are now hugely sought after by international investors in their quest for clean energy.

The SADC region is also hugely endowed with watercourses such as the Congo and Zambezi, with the Inga Dam situated on the Congo River having the potential to produce about 40 000MW of electricity, according to SAPP.

With regard to geothermal, the United Nations Environment Programme and the Global Environment Facility estimate that about 4 000MW of electricity is available along the Rift Valley in Tanzania, Malawi and Mozambique.

Of the new energy generation projects planned for commissioning this year, a major share of it will come from Independent Power Producers (IPPs) who are expected to contribute about 71,06 percent of new generation.

For example, new power to be commissioned in Malawi, Mozambique, South Africa, and Zambia will be produced by IPPs. This is a huge stride compared to last year when IPPs, all from South Africa, where responsible for only 29,83 percent of new generation capacity.

According to SAPP, Southern Africa plans to commission 21 793MW of power between 2016 and 2020. This development is expected to allow the region to attain its energy needs. SADC has been experiencing energy shortfalls for more than a decade due to growth in demand, forcing most countries to implement demand side management programmes such as load-shedding.

While load-shedding has succeeded in restraining the overall electricity demand in the region to some extent, the measure has also affected socio-economic growth, hence the need to boost power generation capacity.

To ensure all SADC countries share and benefit from increased generation capacity across borders, the region is also intensifying efforts to construct new transmission lines so that full integration is achieved. – sardc.net

ZESA seeks cost reflective power tariff

ZESA seeks cost reflective power tariff

Business Reporter

POWER utility Zesa Holdings needs a cost reflective power tariff to sustain imports and the prevailing consistent supply of electricity, secretary for Energy and Power Development Partson Mbiriri has said. This comes as Zimbabwe has gone for six months without significant interruptions to power supply, largely due to low demand from industry compared to 2015 and the imports from South Africa.

The country faces a debilitating shortage of power and relies on imports, including from Mozambique, to close the power deficit.

Presently, Zesa imports up to a maximum of 300 megawatts from Eskom under a non-firm power supply agreement, but the imports are coming at slightly higher cost than local power; meaning the cash strapped utility has to, somehow, subsidise consumers.

Electricidade de Moçambique supplies Zesa Holdings 100MW, firm, unlike the deal with Eskom which may not export if internal demand is high, and plans are afoot to increase hydro power imports from EDM, which is much cheaper compared to others.

Mr Mbiriri said the blended rate for power should be reflective of the different sources of the power utility to be able to sustain imports, to bridge the deficit, and for its operations to be viable.“The key to sustainability of imports is our tariff,” he said.

But it remains unclear whether the power utility will get its way given concerns around the likely burden on consumers who already owe distribution and transmission unit, ZETDC, over $1 billion.

Already, industry which has also been struggling to clear its huge arrears from accumulated electricity bills, has voiced its concerns over possible tariff ncreases and has lobbied vigorously against any hikes.

Mr Mbiriri said it was critically important that all stakeholders from consumers, officials in the Ministry of Energy and Power Development and all Government ministers consider the implications of a non-cost reflective tariff to sustainability of imports.

This comes as the power utility has requested for a 49 percent tariff adjustment, the first since the marginal to 9,86 percent in 2013, but awaits a decision from regulators who are still awaiting input from Government on the application by Zesa Holdings. If the increase is granted, it is likely to be lower than requested.

“It is being considered by Government and we hope that very

soon a decision will be made. Certainly from the ministry’s point of view, we would like it (tariff), at the very least, to be cost reflective,” he said.

Mr Mbiri said the basis for calculating the appropriate tariff should take into account the cost of producing thermal and hydro power, cost of transmission and cost of imports from the region.

“(We should be able to say) what does it cost us to generate the (power) from Kariba (South), what does it cost us to generate from Hwange; the three small thermal power stations, what does it cost us to transmit this power to the users?” he said.

“When you blend thermal, hydro and imports, what figure does it give us or what blend rate does it give us in terms of cost? That really, to me, should be the basis for determining the tariff,” he added. “That is the formula that has been built into (the process).”

Mr Mbiriri said at the prevailing 9,86 cents per kilowatt hour the tariff is, however, not very far from being cost reflective despite the fact that Zesa has not been awarded an increase since October 2013.

But sub-economic rate partly explains the challenges Zesa faces to guarantee reliable supply of power, because of constraints around financial resources to refurbish, maintain and fund operations.

Mr Mbiriri said the current tariff is “not very far” from cost reflective despite “that is why we are managing to keep our heads above water” with regard to importation of power from regional utilities.

Although the country faces constraints in terms of generation during old age of Hwange, one of the two major plants in the country, the situation has been worsened by reduced output at Kariba South hydro power station due to lower water levels this year.

ZESA gives winter warmer cheer

Zesa gives winter  warmer cheer

Zesa gives winter warmer cheer

Debra Matabvu
ZIMBABWEANS will not experience power cuts this winter season as the Zimbabwe Electricity Distribution Transmission Company, a subsidiary of power utility Zesa, says it will meet demand.
Zesa spokesperson Mr Fullard Gwasira said there would only be minimal load shedding if demand rose above projected levels.
According to another Zesa subsidiary, the Zimbabwe Power Company on its website, about 1 005MW is being produced by Kariba, Hwange, Harare, Bulawayo and Munyati power stations.
The power utility is also banking on the Dema diesel generator, which is expected to produce 200MW during the peak of winter, while Harare Power Station will add 40MW to the grid.
Power imports from South Africa and Mozambique will shore up any shortfalls.
“The power supply situation currently prevailing in the country is that there is no load shedding and it is anticipated that this position will prevail right through the winter season for all customers,” Mr Gwasira said.
“However, if electricity demand rises beyond the projected levels, customers may witness load shedding, though mechanisms have been put in place to minimise the impact.
“The supply portfolio mix between imports and local generation is reviewed constantly. We are able to meet the current power demand from local generating assets of Kariba South Hydro Power Station, Hwange Thermal Power station and the three small thermal of Harare, Bulawayo and Munyati, coupled with imports from fellow regional utilities such as Eskom of South Africa and Hydro Cahorra Bassa (HCB) of Mozambique, among others.”
Zimbabwe requires 1 800MW of electricity daily in winter due to higher consumption from use of gadgets like heaters and geysers.
According to the Southern African Power Pool’s latest monthly report, power trade has significantly declined in the region – an indication that most countries in Sadc do not have electricity shortfalls.
In recent years, electricity customers were hit by power cuts during winter, with some suburbs going for more than 16 hours without electricity. Zimbabwe’s power supply situation has been stable since December 2015.

US$70m power deal in limbo

US$70m power deal in limbo

Harare-thermal-power-station

Harare Power Station

THE Harare Power Station re-powering project is hanging in the balance amid indications that the Indian Export-Import Bank (Eximbank) is reluctant to guarantee the required financial backing.
Two years ago, Jaguar Overseas of India, was awarded the engineering, procurement and construction contract by the Zimbabwe Power Company (ZPC) — a power generation unit owned by ZESA Holdings — to re-power the Harare Power Station by replacing the old plant with a modern one with more capacity and improved efficiency.
It approached Eximbank for US$70 million financial support, but has been struggling to secure that funding for the project.
Impeccable sources at ZPC, told the Financial Gazette’s Companies & Markets (C&M)last week that the Indian bank is continuously asking for more information, a situation that seem to suggest that the institution is not interested in funding the project.
“I would say it’s almost two years (since we submitted our request) but Eximbank of India is continuously asking for more information and we now don’t know when the funds will be availed to enable the commencement of the project,” a source from ZPC told C&M.
Efforts by this newspaper to get a comment from ZPC managing director, Noah Gwariro, were not successful by the time of going to print as he was said to be away on business.
Energy and Power Development Minister, Samuel Undenge and his permanent secretary, Partson Mbiriri, were also not available to comment on the issue.
The re-powering project would see the replacement of the current boiler technology with a circulated fluidised bed, which is more efficient and cost effective.
This will grow the plant’s generation capacity to 120 megawatts (MW) from the current 30MW.
Surprisingly, Jaguar, which is in a quandary over the issue of funding the Harare Power Station project, has also been awarded the tender to re-power Munyati Power Station.
The project at Munyati will see the replacement of 15 existing boilers, overhaul of cooling towers and water treatment plant, refurbishment of two 50MW steam turbines and carrying out civil works.
The outdated power plant it intends to repower is currently generating about 20MW on average, but Munyati Power Station will have its electricity generation capacity restored to 100MW.
Government has also secured US$87 million from the Government of India to re-power Bulawayo Power Station.
The loan will be repaid in 13 years at an interest rate of two percent per annum.
But the refurbishment of the 120MW Bulawayo Power Station, which should have commenced early this year, has been deferred to later this year after parties to the transaction agreed to float a tender for the project in India, instead of Zimbabwe.
Zimbabwe faces a critical power shortage with generation averaging just below 1000MW and this has been unable to meet the country’s demand of about 1 600MW.
To cover for the shortfall, the power utility, ZESA Holdings, is importing about 300MW of electricity from Eskom of South Africa and 100MW from Hydro Cahora Bassa of Mozambique.
However, government, through ZPC, is working to close the electricity supply gap in the country through expansion projects at Kariba South Hydro Power Station and Hwange Thermal Power Station.
A Chinese contractor, Sino Hydro Corporation, is undertaking expansion work at Kariba Hydro Power Station, which is expected to add 300MW to the country’s existing power generation capacity.
The expansion work at Kariba Hydro Power Station is expected to be complete by 2018 after the government and China Eximbank signed a US$355 million loan agreement for the expansion of the plant.
Expansion of Hwange Thermal Power Station, the largest coal-fired power station in the country, will also be undertaken by Sino Hydro Corporation.
The expansion will see the thermal power station adding two more units with a combined generation capacity of 600MW.
Zimbabwe is also pursuing other projects to harness power from solar and the US$4,5 billion Batoka Gorge project along the Zambezi River, some 54 kilometres downstream of Victoria Falls.
The multi-billion dollar hydro power project, which is being driven by the Zambezi River Authority, a company owned by the Zimbabwean and Zambian governments, is expected to generate 2 400MW of electricity to be shared equally by the two countries.
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