Are renewables the solution to Zimbabwe’s power sector woes?

Christine Juta

In the past decade, the average Zimbabwean household has experienced power cuts on a regular basis.

Whether these are due to scheduled maintenance, technical faults or load shedding, power cuts inconvenience both consumers and the utility.

Recently, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) announced a power shortfall due to generation constraints at Hwange Power Station, dam wall rehabilitation at Kariba and limited imports.

As a result, consumers have endured power cuts lasting up to a  eight hours a day.

Whereas most urban households are connected to the grid (83%), consumers still grapple with poor reliability.

This affects the willingness of consumers to pay for electricity and tariff increases are often met with staunch resistance.

The national electrification rate is only 42%, a slow increase from 28% in 1992. This means that more than half of the Zimbabwean population lack access to clean, affordable and reliable electricity, with most of these unserved communities in the rural areas.

Given these challenges of inadequate generation capacity, ageing power challenges there is thus an urgent need for sustained dialogue by all concerned stakeholders.

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Why is accelerating access and ensuring reliability a challenge for Zimbabwe power sector? 

It should be noted that low electrification rates, inadequate generation capacity and poor system reliability are challenges not unique to the Zimbabwean power sector.

In fact, in sub-Saharan Africa alone, more than half a billion people lack access to electricity.

This means around three quarters of the global population without electricity access live in sub-Saharan Africa.

Faced with a growing population and rapid urbanisation, Africa’s unmet electricity demand continues to increase.

African governments recognize the need to increase electricity generation infrastructure and promote regional electricity trade to meet this growing energy demand.

However, power sectors across the continent largely remain state-owned, vertically integrated utilities.

Many of these state-owned utilities are technically and financially inefficient, rendering them unable to not only to maintain existing electricity supply infrastructure but also invest in additional generation infrastructure.

Power sector reform activities in Zimbabwe

In Zimbabwe, power sector reforms were driven by the state-owned utility’s failure to meet critical maintenance and power purchase obligations.

Around the year 2000, ZESA faced a severe liquidity crisis, mainly because of a below cost average electricity tariff.

This meant the utility had insufficient revenue rendering it unable to meet operational costs, service debt as well as working capital needs.

Power sector reforms thus aimed to establish a transparently regulated, functionally unbundled industry structure with financially viable private and public corporate entities to deliver efficient and reliable electricity services.

Zimbabwean power sector reform activities have since yielded partial vertical unbundling of the state-owned utility, private sector participation in generation and establishment of a regulatory authority.

The Zimbabwe Energy Regulatory Authority (ZERA), regulates individuals or companies that generate, transmit, distribute, or retail electricity for commercial purposes beyond 100 Kilowatts (KW).

Part of this regulatory oversight includes issuing electricity generation licenses to independent power producers.

To date, ZERA has issued electricity generation licenses to several renewable energy independent power producers.

Yet the challenge of inadequate generation capacity persists.

This is because Zimbabwean IPPs are struggling to reach financial closure, and as such only a fraction of licensed IPPs are either construction or operational. Despite the introduction of independent power producers, the Zimbabwe Power Company (ZPC) maintains interest in new generation capacity.

The energy situation in Zimbabwe is partly a legacy issue and there is an urgent need to address the debt crisis in the energy sector.

On one hand, various consumers owe the national utility in outstanding bills, with reports pointing to local authorities as the biggest defaulters.

At the same time, massive theft of public infrastructure continues to cripple utility efforts to maintain an efficient power network.

About 4,000 transformers have been reported stolen or vandalized countrywide, creating huge setbacks in ensuring provision of reliable electricity supply.

As a result, the utility is unable to maintain existing infrastructure let alone expand generation capacity to meet growing demand and thus relies heavily on power imports from the region.

Could renewables be the answer to accelerating access and ensuring reliability?

Like many sub-Saharan African countries, Zimbabwe has abundant renewable energy resource potential.

Zimbabwe’s National Renewable Energy Policy (NREP) targets to achieve an installed renewable energy generation capacity of 1,100MW (excluding large hydro) by 2025 or 16.5% of the country’s overall electricity supply, whichever is the greater.

The same policy also targets an installed renewable energy capacity of 2,100MW or 26.5% of the overall electricity supply by 2030.

Though significant, these targets are not insurmountable.

However, the reality is a far cry from policy targets, as only 6.14 MW of licensed solar PV IPPs are operational (excluding the 2.25 MW solar PV/diesel plant).

Surprisingly, it appears that the countries leading the transition to renewable energy are not necessarily those with the best renewable energy resources but rather those with the good governance systems to ensure effective, transparent and competitive procurement of new electricity generation infrastructure.

Variable renewable energy technologies present a viable option to meet Zimbabwe’s electricity access and reliability challenges.

For starters, the falling costs for wind and solar photovoltaic continue to make renewables more competitive than traditional electricity generation technologies such as large hydro and coal thermal power plants.

These modular generation technologies are less capital intensive making it possible for independent power producers to invest in new generation infrastructure without state guarantees.

Secondly, Zimbabwe has not been spared from climate change induced droughts which threaten the security of large hydro power plants, such as Kariba power station.

Diversifying the energy mix will thus make the country’s power sector more resilient to climate change.

Thirdly, capital continues to flee from funding new coal power plants.

Recently, China announced a move to end the financing of new coal power plants abroad.

Fourth, investment in renewables presents economic co-benefits in the form of direct and indirect jobs. A report on the job creation potential of a clean energy transition shows that investment in renewables could create 25 million direct jobs in energy-poor countries in Asia and Africa. This would be 30 times more than the number of jobs created by a comparable investment in fossil fuels.

The writing is on the wall.

Renewables present co-benefits Zimbabwe cannot afford to miss.

However, closing the energy access gap and improving reliability will require much more than unfulfilled licenses and ambitious targets.

Author Bio

Christine Juta is a PhD Candidate at Power Futures Lab (formerly Managing Infrastructure Reform and Regulation in Africa), based at the Graduate School of Business of the University of Cape Town.

 Her research explores the role of new business models and enabling technology innovation in the political economy of the next wave of power sector reforms in Africa, especially focused on market design, system operation and regulation.