Energy

US$14bn renewable power projects on the cards

STAFF REPORTER


Zimbabwe is set to roll US$14 billion renewable energy projects after Cabinet adopted an ambitious plan which could see Zimbabwe producing up to 2 100 megawatts (MW) of electricity by 2030.


Energy and Power Development Minister, Fortune Chasi said several
international investors have expressed interest in renewable projects in Zimbabwe.


“We have received huge expressions of interest from reputable investors from around the world and this gives us optimism that programme will give us the results we need,” Energy and Power Development Minister,
Fortune Chasi said.


“The national energy policy seeks to provide an overall framework for optimal supply and utilisation of energy in general and ensure access to
modern energy services for the country’s socio-economic development. It is an initiative aimed at securing the longterm energy needs of the
country in a sustainable way.
“So basically, the policy was developed by my ministry to promote and drive investment into the sector by overcoming a number of barriers that
currently exist in the energy sector. The whole undertaking should cost around US$14 billion spread over the next 10 years.”
Government in March this year launched the National Renewable Energy Policy (NREP) and the biofuels Policy of Zimbabwe (BPZ), two documents that are expected to guide the investment and production of clean energy
alternatives in the country.


It is believed these will be key to economic development in Zimbabwe,
which is experiencing limited grid electricity, a rampant destruction of the forest cover in search for fuel wood and the impact of climate change.
Government is seeking to invest heavily in solar, gas and wind energy generation projects. The policy document, which has since been presented
to Cabinet, also seeks to give national project status to all renewable power projects to facilitate their exemption from customs and excise regulations.


This would, in turn, allow developers to import certain renewable energy systems used in power generation plants at competitive rates.
The policy document also seeks to ease the regulation of power production to allow for independent power producers to participate in small hydro
power plants, biogas and solar, who will sell electricity to ZESA.


Zimbabwe requires about 1,800MW a day but produces less than 1,000MW. To cover for the short fall, Zimbabwe’s power utility, ZESA imports
from regional power utilities, especially Eskom of South Africa and Hydro Cahora Bassa of Mozambique.


According to the energy document, the policy is in line with guidelines set by the United Nations Convention on Climate Change (UFCCC) and seeks to respond to the demand-supply ratio, grid absorption capacity and the
ability of utilities to pay for renewable electricity.


The country currently relies mostly on non-renewable fossil fuels like wood, coal and petroleum which are globally condemned for their
high emission of greenhouse gasses that severely damage the
environment.


“The policy aims to achieve installed renewable energy capacity of 1,100MW (excluding large hydro), or 16,5% of the total electricity
supply by the year 2025 and 2,100MW (26,5%) of total electricity supply by year 2030,” the policy document reads.


“Other additional alternative energy programmes include institution and
domestic biogas, mini solar grids and solar water pumping systems. These targets will enable the country to meet the current and projected energy
supply deficit as well as meet the greenhouse gas emissions reduction objectives.”


The targeted main source of funding is the cash-rich insurance sector.
“The policy aims to promote investment in the renewable energy sector by
providing specific incentives.


It recommends providing national project status to all renewable energy projects,” the document states.


“The ministry will recommend renewable energy projects on a case-by-case basis to the ministry responsible for finance for according prescribed asset status so as to unlock insurance and pension funding.”


It further recommends the setting up of a separate fund to be administered by the Infrastructure Development Bank of Zimbabwe (IDBZ).
“The policy recommends to explore both domestic and foreign financing resources.


The policy also recommends the setting up of a separate fund called Green Energy Fund of Zimbabwe,” the document reads.


“This fund will be used in promoting, developing and extending financial
assistance for setting up of projects relating to new and renewable sources of energy and off-grid sources. It shall be managed by the IDBZ.
It also encourages renewable energy projects to tap funding from pension funds, insurancefunds and bond markets through prescribed asset status
mechanism among others.”


Currently, Zimbabwe has a national electricity rate of 42%, according to official data obtained from the Ministry of Energy and Power
Development Ministry.


While electricity has reached 83% of the urban households, rural electrification is still around 13%.


Zimbabwe has an installed capacity of about 2 800 megawatts (MW), with the Zimbabwe Power Company, a power generation unit of ZESA, owning about 95% of this.
More than 50% of electricity in Zimbabwe is generated from hydropower at Kariba South Power Station while the remainder is from thermal power plant at Hwange, Bulawayo, and Harare stations.


Bagasse, mini hydropower and small sized grid connected solar systems have an installed capacity of about 130MW.


Against this background, the actual power generation capacity in 2019 averaged below 1 000MW against a peak demand of about 1 800MW.
The limited generation capacity is attributed to water availability issues
at Kariba Dam, old equipment which needs rehabilitation and limited coal
supplies.


The policy aims to promote investment in the renewable energy sector by providing specific incentives. It recommends providing National Project Status to all the renewable energy projects.


It encourages the Ministry of Energy and Power Development to recommend renewable energy projects on case to case basis to the
Ministry of Finance and Economic Development for according Prescribed Asset Status so as to unlock Insurance and Pension funding.


It also recommends specific incentives for promoting third party
sale of power. Further it recommends reduction in licensing fees and,
relaxation in licencing requirements for renewable energy projects.
Favourable tax incentives and rebates are also recommended in the NREP
in addition to the existing Statutory Instruments.


The policy also aims to address the development risks associated
with the promotion of the uptake of renewable energy in the country.
It outlines and suggests welldefined approval timelines for the
administrative processes.


The policy thus also aims at addressing the barriers to the uptake
of renewable energy in the country through different provisions and
programmes.


Primarily, the renewable energy sector in Zimbabwe consists of solar, hydro, wind, geothermal and biogass which include sugarcane
based bagasse, biogass, forestry and sawmill waste.


Zimbabwe has vast renewable energy resources that are presently
underutilized and present a big scope for investment.


Now, the NREP, which was developed under the overall framework laid out by the National Energy Policy of 2012, is expected to be a game changer as off-grid energy has the potential to increase electricity access in rural areas.
However, off-grid application needs to be incentivised n in order to
make them a viable option for rural electrification, according to several
analysts.


The policy therefore provides the necessary guidelines, incentives
and provisions related to standards, procurement, financing mechanisms
and others for promoting the development of off-grid projects
The latest policy also recognised that an upper middle income
economy of 2030 needs to be driven by clean, sustainable energy sources.


Apart from improving the share of renewable energy in the overall
energy mix and addressing issues of climate change, the policy also
focusses on driving cost-effective implementation of sustainable
energy sources, social uplifting through community involvement,
gender equality and employment generation as laid out in other
various government Acts and policies.


The NREP focuses on establishing market oriented measures and
regulatory instruments for the renewable energy sector in
Zimbabwe.


Zimbabwe seeks to achieve a 33 percent reduction in greenhouse
carbon emissions by 2030.


Launching the policies in March this year, President Emmerson
Mnangagwa said the blueprints will give guidance towards achieving
Sustainable Development Goal number 7 that ensures affordable
and sustainable energy.


However, the government has been criticised for coming up with
excellent development plans which are either never implemented or
are often derailed by bureaucratic corruption.

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