A new approach needed on power crisis

October 25, 2021

The recent announcements by some countries that they will stop financing coal projects is bad news for developing countries such as Zimbabwe.

This comes at a time Zimbabwe is set to harvest more megawatts from the expansion of the Hwange thermal power station and has lined up a number of projects to increase generation at the power stations.

The US$1.4bn project, which was derailed by Covid-19, is back on track and expected to start contributing to the national grid next year.

The two units will add 600MW to the grid.

As we report elsewhere in this edition, a new 600MW project which was supposed to come on board has been dumped as there are no financiers to fund the power project as the global financing ban on coal-powered thermal stations gathers steam.

Barring machine breakdown, thermal power stations should be more reliable than hydro which is affected by reduced water levels in Kariba Dam. With reserves of 26bn tonnes, it would take Zimbabwe 834 years to exhaust the resource.

That the ban on coal was coming was inevitable in light of the drive to reduce emissions blamed on the adverse effects of climate change. How Zimbabwe was found flat-footed remains a mystery.

Renewables have been the way to go were it not for the huge costs outlay involved at the initial stage. With the maximum demand expected to hit 2370MW next year on the back of an improved economy, it means the power utility has to step up both in securing power and investing in new renewable projects.  This means that it has to get power from sister utilities. However, the power utility has struggled to make payments as it mainly collects its revenue in local currency.

The power utility has also struggled to ensure customers pay their bills with the biggest defaulter being the government. The failure by ZESA to collect revenue from customers presents another risk which chases away potential investors in the energy sector.

A silver lining is on the horizon as ZESA is in talks with sister utilities in Zambia and Mozambique on the Zambezi-Kafue gorges project which will result in the generation of 14,500MW to be shared by the three countries.

Discussions have to be quickened as the global ban on coal financing is here to stay.

The government has to speed up the framework for independent power producers (IPPs) to start producing. Over 100 IPPs were licenced and a few have started power generation.

The projected growth in the economy on the back of stable policies puts pressure on the power utility to be equal to the task. Investments in alternative power sources such as diesel-powered generators have in the past made Zimbabwe’s products uncompetitive on the regional arena.

The coming into force of the African Continental Free Trade Area will spur trading across borders. This places the power utility at the centre of the push to increase production by local companies and tap into the world’s biggest trading bloc.

Time is not on ZESA’s side but a journey of a thousand miles begins with a single step.

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