PHILLIMON MHLANGA
Zimbabwe’s industries have plunged into extended darkness following the move by ZESA Holdings to pull them off the grid for seven continuous days as power outages intensify.
Daily power cuts lasting as long as 16 hours have become the order the day after Zesa lurched into a new crisis due to low generation capacity at its hydro-powered station and failure to service debt owed to two regional power utilities that hitherto supplied electricity to Zimbabwe to cover its huge deficit.
Zimbabwe has a daily peak demand of 1800MW but is currently generating less than 1000MW from its five power stations. Local firms have now turned to diesel powered generators but the fuel is currently in short supply.
Low output from the manufacturing sector could increase demand for foreign currency as many would now rely on imported goods.’
Business leaders at a breakfast business meeting this week said that they were increasingly becoming frustrated by the intensified load-shedding.
Anthony Mandiwanza, the chief executive officer of food processor Dairibord Zimbabwe expressed dismay over the move by ZESA saying this has severe consequences for companies.
“Last week, a harbinger of bad news from the power utility came to my office to notify me that ZESA is going to take Dairibord off the grid for seven continuous days,” Mandiwanza said.
“I thought it was a bad joke but they (ZESA) quickly put it into motion (pull Dairibord off the grid). We are in milk production, and if we don’t get milk, we will die.”
Mandiwanza’s sentiments were echoed by several business leaders, all of whom declined to be named as their organisations have not publicly commented on the matter. They all said they have been compromised and forced to run operations on expensive diesel generators. The situation has been worsened by the fuel shortages, particular for diesel, due to
its growing demand.
The impact of unstable electricity supply in Zimbabwe, which is one of the country’s most critical challenges at the moment, has come at a time when government is on a drive to lure investment into the country amid fears the power cuts will adversely affect investor confidence.
Manufacturing processes rely on electric machines that require power to perform the precise and repetitive tasks to increase production.
Now, the chronic shortages of electricity, is starting to damage the economy. The costs vary from direct economic costs, the indirect costs and the social costs. Indirect and social costs are equally important components when considering the impact of power interruptions.
Confederation of Zimbabwe Industries president, Henry Ruzvidzo said industry has suffered extensive losses due to power cuts.
“For the past two weeks it has been bad for industries because we could go day to day without production because there was no electricity. If we count the costs, it’s extensive. We hope ZESA will get on top of the situation because the past two weeks have been bad,”
Ruzvidzo told Business Times yesterday.
Hospitality Association of Zimbabwe president, Innocent Manyera, yesterday said the sector was “caught unawares”.
“It’s an inconvenience on its own for travellers especially in the current era where there is also a shortage of fuel. It’s difficult also for players to fill and operate generators that have been used as back up,” he said.
No comment could be obtained from Chamber of Mines chief executive officer, Isaac Kwesu and the chamber’s president Elizabeth Nerwande as their contact numbers continuously went unanswered.
Miners who spoke to this publication said they were concerned by the move. They indicated that mining operations are required to maintain conditions hospitable to human life underground and it’s a 24 hour business.
Asked if the exercise to take companies off the grid was widespread, ZESA acting chief executive officer, Patrick Chivaura told Business Times: “We stick to our load shedding schedule but we are working and talking to companies that use bigger loads. Before we do anything we speak to them first to reduce their load.”
Intensive load shedding has been mainly caused by a reduction in water allocation for power generation at Kariba Dam. The Zambezi River Authority was forced to reduce water supply due to a drop in water levels in the dam.
Kariba South Hydroelectric Power Station has been supplying the cheapest electricity in the country at a cost of $0,02 per kilowatt hour (kWh). Thermal power stations Hwange, Munyati, Bulawayo and Harare, produce electricity at a cost of between $0,08 per kWh and
$0,16 per kWh. Kariba has reduced its output to just less than 500MW from about 1050MW due to dwindling water levels.
Another problem is aging machinery at the four thermal power plants. ZESA’s legacy infrastructure has approached an age at which it needs to be replaced because they are operating beyond their maintenance window.
They have been in operation for more than 25 years, which is past their design life span. As a result, their capacity has significantly been reduced. Only life extending measures or replacement of equipment will help ramp up their generation capacity. The situation has been exacerbated by constraints in diesel supply.
ZESA is struggling to access foreign currency to pay its foreign debts, resulting in the two main suppliers of electricity to Zimbabwe, Eskom of South Africa and Hydro Cahora Bassa of Mozambique heavily curtailing supplies to Zimbabwe.
The power utility received foreign currency from the RBZ, for the first time in eight months last week amounting to US$10 million to pay part of Eskom debt.
ZESA, which owes the regional power utilities more than US$70 million, used to get more than 500MW from Eskom and HCB. But due to foreign currency constraints, the power utility has not been able to import enough power from the two neighbouring countries. Zimbabwe is now getting at most 50MW.
Government is trying to find a quick fix to the ZESA crisis with President Emmerson Mnangagwa meeting his South African counterpart Cyril Ramaposa for Eskom to bail out ZESA. Energy and Power Development minister Fortune Chasi is currently in South Africa to
negotiate with Eskom.
This comes as the power crisis worsens by the day exposing government’s failure to invest in power generation.
Finance minister Mthuli Ncube said demand and supply considerations should make up discussions between ZESA and government. He said ZESA should turn to clean energy as well.
Development in the solar industry appears to be sluggish at the moment with only a few projects taking shape. Government backed solar projects like the Gwanda Solar Project are still mired in court battles with Wicknell Chivhayo, and may take time to take off.
ZESA has also been operating with sub economic tariffs which financial experts have said has further declined in real terms due to inflationary pressures.
This means that ZESA is now selling electricity at ZWL$0,0986 per kWh, a price which is well below the true cost of generation. This has led to ZESA being unable to recover the full cost of capital invested and unable to finance further capital investments to meet demand.
