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The current power crisis in Zimbabwe and available investment solutions
Zimbabwe has a power supply deficit and is currently facing an increasing demand due to the growth in economic activities especially in the mining sector.
To mitigate the current shortages there is need for concerted efforts starting from generation, transmission to efficient and consistent distribution. The country has a myriad of energy resources which need to be leveraged systematically.
Zimbabwe is endowed with natural energy sources for power generation. Currently it sits on 26 billion tonnes of coal reserves and approximately 40 trillion cubic feet of coal bed methane (CBM) gas. Coal has been fully exploited and it follows on that it should be the same for CBM albeit with environmental and sustainability considerations.
The Zambezi river basin and the abundant water reserves dotted around the country have a combined potential of more than 3 000 MW of hydropower. Added to this, hydropower potential is present in the Eastern Highlands’ perennial rivers, Tokwe-Mukosi
Dam and Lake Mutirikwi.
Furthermore, the country has not fully exploited solar energy. Solar potential of 16 to 20 MJm2 /day is untapped and can be harvested in several locales countrywide. In 2018, Zimbabwe had grid connected installed capacity of about 5 MW which is greatly below the existing potential.
Zimbabwe has a total potential of 1 000 MW from biomass in the form of bagasse, agricultural and municipal waste, forest residue and other forms. Forest residue from commercial forests has been estimated at 70 000 tonnes which has the potential to generate close to 150 MW of power.
Geothermal energy potential is estimated to be around 50 MW, but has not been harnessed and presents scope for future exploitation.
Investing in power from wind is another avenue for exploration and implementation. However, experts point out that winds with speeds of three meters per second are not significant for power generation, but can be used for pumping water.
The National Renewable Energy Policy suggests that assessment studies should be conducted at 80 metres hub height or above to understand the potential for electricity generation.
Renewables based off-grid systems and other clean energy solutions can provide access to electricity and clean energy sources in regions where traditional grid extension is not economically feasible. They provide affordable lighting, improve communications, and improve the quality of healthcare facilities and educational institutions in addition to other businesses and institutions.
There are a number of off-grid technologies and clean energy solutions that can improve energy access in the urban and rural areas of Zimbabwe. In the remote areas, power generation can be from mini-grids, microgrids and solar lighting, solar home systems and small hydro. Solar water heaters, clean cook stoves and renewable energy based water pumps and systems are other sources of power in off-grid rural communities.
Related to the various potential energy sources, is the issue of financing. ZESA Holdings indicates that there is scope for private investors to participate in the electricity sector by financing “power projects through debt or equity”. Private investors are also encouraged by the utility to generate power as Independent Power Producers and develop power transmission infrastructure as well. Centragid Power Station, Pungwe Mini-Hydro Power Station and Guruve Solar park are operational and have been licensed by ZERA.
Vandalism and theft of power transmission and distribution equipment has exacerbated the power crisis in Zimbabwe. It is therefore imperative that physical and remote surveillance of transmission and distribution assets be implemented.
Overall, key initiatives include plant and equipment maintenance, refurbishment and capacity upgrading as well as innovation to secure power supply.
These circumstances are informed by different assumptions on economic development and the structure of the economy and also take into account the impact of key policies such as energy policies and sector plans, transport, environmental and industrial policies amongst others. This will lead to determining the optimal mix of energy sources and technologies to meet those energy needs to the most cost-effective manner for each of the scenarios.
Technically, the ESRSP aims to improve the availability of reliable electricity supply through facilitating the creation of an enabling environment for promoting Independent Power Producers and to support further integration of renewable energy power generation capacity.
To complement the above, The National Renewable Energy Policy (NREP) “aims to promote investment in the renewable energy sector. It recommends providing National Project Status to all the renewable energy projects. It encourages the Ministry responsible for Energy to recommend renewable energy projects on case-to-case basis to the Ministry responsible for Finance 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 relaxations in licensing requirements for renewable energy projects. Favourable tax incentives and rebates are also recommended in the NREP in addition to the existing Statutory Instruments.”
The other expected outcomes of the ESRSP are the development of an integrated resource plan and resource assessments for wind power generation. Zimbabwe stands to benefit from coordinated protection schemes at Southern African Power Pool (SAPP) interconnectors with the ZESA grid. The country is at the geographical centre of the regional power pool and is inter-connected to its four neighbours. This positioning makes the Zimbabwean power utility the power transfer corridor in the region.
It is also expected that accounting regulatory frameworks will be highlighted. This includes reviewing the tariff methodology and regulatory framework to promote accountability and close any fissures.
It would seem that the direct beneficiaries of ESRSP are the MoEPD, The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) and the Zimbabwe Energy Regulatory Authority (ZERA); it cascades to the entire nation. These interventions will ultimately benefit private sector developers of independent power producing facilities and the broader electricity consumer.
In a nutshell, Zimbabwe will benefit from security of supply, lower energy costs and diversity of supply sources including amplified energy efficiency. Extra rewards will be increased promotion of access to energy, the reduction of environmental impacts and decelerated water consumption as well as job creation.
The project is scheduled for implementation over a 30 month period ending in May 2024 having commenced in November 2021.