LIVINGSTONE MARUFU
Industry is reeling from rolling power cuts with some companies enduring prolonged unscheduled load shedding of up to 12 hours daily, Business Times can report.
Power utility ZESA imposed rolling power cuts a few weeks ago due to low generation capacity at its power stations in Kariba, Hwange, Bulawayo, Munyati and Harare.
The concerns come as the industry and mining sector held a power crisis meeting with ZESA yesterday to rescue the situation from further deterioration.
Captains of industry said the electricity crisis has deepened, forcing companies to use backup diesel generators, which are expensive to run.
Now, there are growing fears there will be shortages of goods on retailers’ shelves.
“Production is disrupted and there is a likelihood of serious shortages of our local products on the shelves,” the Zimbabwe National Chamber of Commerce president Mike Kamungeremu told Business Times .
“Some companies are using generators and the cost is double the charge of using electricity hence this pushes up the cost of production. At the end of the day, businesses are left with no option but to pass the costs to the final consumers.”
Added Kamungeremu: “There are two possibilities here which are to see goods disappearing from the shelves as the manufacturers don’t afford generators or the goods will have to come at a higher cost where manufacturers sending workers home because there is no power and it’s a huge problem.”
According to Kamungeremu, some companies have cut their production capacity by 30% owing to crippling power outages.
The Confederation of Zimbabwe Industry president Kurai Matsheza said electricity was a key enabler for industrial growth and power cuts were detrimental to the industry and the economy.
“The economy experienced stability in the past month or so due to the tight monetary and fiscal policy stance. But, these rolling electricity outages are a threat to those gains,” Matsheza said.
“We had growth targets as an industry. But, with power outages wreaking havoc, there is a likelihood that we are not going to achieve these.”
Added Matsheza: “This means production together with capacity utilisation will go down resulting in shortages of some local goods on the shelves.”
The Zimbabwe Power Company, a power generation unit of ZESA, yesterday produced 878 megawatts (MW) against a national demand at peak period of 2 500MW.
The country’s largest coal-fired power plant, Hwange Power Station and Bulawayo Power Station did not generate electricity yesterday due to breakdowns while Kariba South Hydroelectric Power Plant generated 853MW.
Munyati Power Station and Harare Power Station generated 14MW and 11MW respectively.
To cover for the gap, Zimbabwe imports electricity from South Africa power utility, Eskom , Mozambique’s Hydro Cahora Bassa and ZESCO of Zambia.
However, Zimbabwe is not getting adequate imports as ZESA entered into non-firm contracts with the regional power utilities, meaning they can only supply electricity if they have surplus.
Exacerbating the situation is that Eskom and other regional power utilities are also suffering from electricity insufficiency, making it difficult for them to supply Zimbabwe.
Zimbabwe’s industry capacity utilisation was expected to remain flat at 56% this year.
But, with power outages, it is expected to go further down.
Manufacturing processes rely on electric machines that require power to perform precise and repetitive tasks to increase production.
Now, the chronic shortages of electricity are starting to damage the economy.
The costs vary from direct economic costs, indirect costs and social costs.
Indirect and social costs are equally important components when considering the impact of power interruptions.
Business Times can report that businesses have lost millions of dollars in potential revenue, threatening the viability of companies.
“Power outages are costly to many businesses in the country as many are experiencing damages of expensive equipment and this has hit many, resulting in huge losses to the companies,” said an industrialist.
“This is a huge cost to the companies which was not planned for. Even if you have backup generators, they may take a few seconds to turn on, and you likely won’t have enough time to unplug sensitive equipment before that happens.”
He also said most businesses today rely on the data they collect while operating for planning, forecasting and even generating leads for future business but sudden power outages can affect a business’ data pipeline by losing hours’ — or even days’ — worth of valuable data,” an economist told Business Times.
“When the power shuts down, your employees have to as well. And since they’re still on the clock in most cases, the downtime is a direct loss of revenue. Power outages will also have an effect on your business’s remote workers. And if that worker is collaborating with others who are not experiencing the outage at their location, work for the entire group may stop, and productivity will suffer.”
