Decisive action critical to end power crisis

as part of ensuring private sector plays its role in dealing with the power shortage.
The fast recovering economy means demand for power is growing gradually and it is a matter of time before the country experiences catastrophic power shortages that could retard growth and development.
The current snail’s pace has started raising doubts on whether Government really appreciates the extent of the crisis at hand.
Government may be financially handicapped to deal with the power crisis, but there may never be a better time to solve the problem and solutions should be sought under the circumstances.
Zimbabwe currently requires about 2 200 megawatts a day, but constrained capacity means the country can only generate up to 1 400MW. When the economy fully recovers demand will be even higher.
While national power utility Zesa Holdings tries to bridge the deficit with imports from regional utilities, financial challenges due to unpaid bills and years of charging below-cost tariffs,limit the imports.
Zimbabwe imports about 16 percent of the power it consumes and this costs an average of US$5 million a month. The imports are not reliable as the contracts are on a firm and non-firm basis. The major source of the country’s power crisis is the fact there has been little investment in new power plants or expansion thereof.
Lack of financial resources hampered efforts to rehabilitate existing capacity resulting in weak and frequent breakdowns that interrupt supply.
Innumerable ideas were thrown around and intensive research carried out on what needs to be done and recommendations were documented.
As such, we cannot let all this effort and work go to waste. Considering that Government does not have enough money to set up new generation projects, the State should ensure private players who obtained licences put them to use immediately or lose them.
But for such an alternative to work, it is an open secret that Government needs to guarantee power tariffs that are cost reflective for investors to realise value from investing in the power projects.
Non-cost-reflective tariffs have over the years been touted as one of the reasons Zimbabwe has failed to attract meaningful investment into the power sector.
There is little option to dealing with crippling power crisis, but to seek foreign investors with deep pockets as most local investors do not have the kind of capital outlay required for the huge power projects.
It is time Government took decisive action on the problem of power shortages because further delays would compound the situation. This means putting time- frames on all projects the Government has approved thus far. The Confederation of Zimbabwe Industries has, and rightly so, advocated giving timelines on approved power projects to avoid amassing of licences by investors who do not intend implementing the projects.
CZI president Mr Joseph Kanyekanye said the Government should consider revoking licences of approved projects that were not being implemented.
He expressed fear that current power shortages could degenerate to a point where power will cease to be an enabler, but become a hurdle to production.
“We gave licences to people to develop power stations, but none of those people, as far as I know, has actually shown that work is on time. Take the licences back, get the other people that are interested to do it,” he said.
Allowing a free rein makes it possible for speculators to hold licences in the hope of striking lucrative deals in future from real and interested investors.
Zimbabwe cannot afford to dither around the issue of the energy crisis, especially electricity, because power consumption is not receding but rising.
Barring the macro-economic constraints the country is facing, the economy could grow by double digits as it is coming from a low base after 10 years in decline. This will increase the demand for power. Finance Minister Tendai Biti conceded his 9,3 percent growth forecast this year is conservative because of the challenges that the country is facing. As such, the bigger the economy grows and recovers from the decade of meltdown and hyperinflation the bigger demand for electricity will be.
If no investment goes into fresh generation and expansion of existing capacity there will be devastating power shortages in the next few years.
In an interview with the Herald Business, former Zesa Holdings chief executive Engineer Ben Rafemoyo said Zimbabwe only had one option to effectively deal with the power crisis – investing in new generation.
He pointed out that while rehabilitation of power infrastructure was critical to maintain current supply levels, the power stations were too old to guarantee reliable supply. Zesa Holdings chief executive Engineer Josh Chifamba also recently said options available included expanding Hwange Thermal Power Station units six and seven which would require an estimated US$2 billion.
Expansion of Hwange would add 600MW on to the national grid. Kariba South expansion, which should yield 300MW, requires an estimated US$800 million.
But expanding Kariba South would only be critical to carry peak loads. This means the plant would only supply power during peak demand periods.
As such, resources permitting, investing in new power projects would bring about better benefits in terms of output. This is because there is a limit in terms of the water Zimbabwe, which shares Zambezi River with Zambia, is allowed to use by the Zambezi River Authority for generating electricity at Kariba.
Options that would guarantee increased output include the Batoka Gorge project, also on the Zambezi River, and Gokwe North thermal power stations.
The need to deal with the power crisis is urgent considering the cost burden on consumers who have to resort to expensive options such as generators when there is no power supply from Zesa.
For manufacturers the cost of power rises to an average US45c per kilowatt-hour when using generators compared to US7,53c when using electricity.