Zimbabwean firms and households this week woke up to escalated power cuts after demand outstripped generation capacity as it emerged that there is no quick fix to the crisis.
The power cuts are running at most 10 hours leaving companies on a lurch. For companies that are finding their feet after the twin crises of the Covid-19 pandemic and the effects of Russia’s invasion of Ukraine, this is bad news at a time there is an aggressive push for cost cutting measures.
They will be forced to pass on the cost to the consumer who is at the end of the channel. At a time when there is an influx of imports, especially on basic commodities, there is instant competition. Local firms could be forced to sell at a loss.
They are forced to invest in diesel-powered generators to keep production running.
Power cuts have become the biggest threat to the growth of capacity utilisation
It is bad news when interest rates are high, making it difficult to borrow, invest and get a good return.
For households, they are at the deep end. Power cuts are aggravating the already dire situation caused by the deteriorating economic environment.
As of yesterday, the Zimbabwe Power Company was generating 588MW from its three power stations—Hwange (322MW), Kariba (244MW) and Harare. Munyati and Bulawayo thermal power stations did not generate anything.
Even at its lowest ebb, Kariba is coming handy as Hwange had been bogged down by breakdowns due to ageing equipment.
Hwange has failed to operate at its installed capacity of 920MW. A silver lining is coming from an unlikely source: increase in water levels at Kariba.
Companies and households have been waiting since the power utility said in December that Hwange 7 would be switched on soon. There was no Christmas holiday for ZESA executives as they were camped at Hwange, ostensibly, to see to it that the process is done meticulously. However, three months on, they are still waiting.
Energy and Power Development minister Zhemu Soda recently told Parliament Hwange 7 would add 300MW to the national grid from today and Hwange 8 would come on board a month later. Experts say, today’s event is just synchronisation which means companies and households have to wait.
The demand for electricity will be high this year as miners ramp up production in line with the government’s thrust to attain a US$12bn mining economy this year.
This means that Hwange 7 and 8 will not be enough if they come on board this year. The independent power producers (IPPs) that got licenses should come on board if the government puts in place a favourable environment for them to operate.
About a fifth of the licensed IPPs are operating. The nation waits for a day in which they won’t be subjected to daily power cuts of over 10 hours.