Online Reporter
FOR several years, it has been recognised that a full rebuild of the six older units at Hwange Power Station was the most cost effective path to adding significant generating capacity to Zesa and its subsidiaries.
There were companies able to do the work competently, as this sort of rebuild is not unique around the world and the estimated price tag of around US$450 million was not excessive when everything from the coal feed to the final transformer links to the national grid were included.
The one problem was raising that money, especially since Zimbabwe was cut off from the global financial institutions and markets that would normally be tapped.
However, there was a general clean up of the nation’s finances under the Second Republic, plus Zesa’s new-found solvency largely created through the prepaid meter systems coupled with realistic tariffs charged to users, and the practical success of other financing schemes for major Zesa infrastructure.
This meant that a reasonable funding model would be viable and would answer the case, so what was needed was a joint venture with a suitable supplier and investor who could both do the work and invest the necessary capital.
A subsidiary of India’s giant Jindal Steel and Power, one of the fastest growing private-sector businesses in India, saw the partnership as a fit for its own investment thrust into Africa.
The public-private partnership is built around the concept of the rehabilitation, operation and transfer of the original six Hwange units, a model that means there will be enough time to spread the large financial load, while ensuring that the investor will have a say in operating the power station and making sure that all is going well.
The original six units at Hwange were all commissioned during the 1980s.
The first phase of four 120MW units was commissioned between 1983 and 1986 after Zimbabwe and the new Zesa authority picked up the work started under UDI, but stopped because of sanctions against Rhodesia.
This was sufficiently successful that a second phase of two 220MW units was added at the end of the decade, using a fair amount of the already installed civil engineering and infrastructure to give a 920MW power station at very reasonable cost, although full power would still require extra investment in the cooling system.
But this was not seen as a problem as frequently one of the six units would be under maintenance, since thermal stations require a great deal more maintenance than say a hydro station such as Kariba South.
There was then a great deal of debate over the next steps to meet capacity for Zimbabwean economic growth.
At the time there was a significant surplus of generating capacity in Sadc, so imports were always a realistic option, at least for a while. An extension to Hwange was another obvious solution, that would also bring the earlier phases into full output.
And there was a strong lobby for extensions to Kariba South, the cheapest option that would at least allow more flexibility between peak-hour and other times with some engineers also seeing some unused water flows, although there was growing data that this would not be the case.
But an extension that would allow a surge of power in the early morning and evening, while cutting right back in the middle of the night, would pay for itself.
Unfortunately other problems intervened, including the financial crises of hyperinflation and Zesa’s own viability and that led to cut backs in maintenance and the dropping of the normal replacement schedule that a major power station, especially a thermal, needs to remain fully operational.
That in turn saw Hwange output fall.
Starting in the 2010s, Zesa started getting its finances in order with the decision to go for pre-paid meters, meaning that it would never again have to worry about whether customers were defaulting since unless they paid in advance they did not get power.
There was still the need for the larger commercial customers to pay in arrears, but effective pressure could now be brought to bear on this small number of users.
The Second Republic saw a general upgrade in administrative competence as well as tighter management. A decision was taken to copy the recent Zambia decision to extend Kariba power stations to give flexibility in times when peak power supplies in Sadc were now in deficit rather than surplus.
Severe droughts made these upgrades less useful.
The actual increase in generating capacity came with the decision to build and commission the two new 300MW units at Hwange, adding 600MW of assured power to the grid, plus encouraging businesses, schools and households to add solar systems.
The smarter pricing of power and access to a range of new technologies allowed customers to make significant savings in consumption to cut costs and also reduce some demand.
This left the major immediate project of restoring the first six units of Hwange to 920MW, work that will require a fair amount of new equipment although obviously using the existing civil engineering structures and much of the infrastructure means the work will be a lot cheaper than starting from scratch on a new station.
The work now agreed by Zimbabwe Power Company and Jindal will be spread over four years, with the equivalent of a brand-new unit after all the maintenance and rebuilds coming on line every eight months or so, giving continual improvement as well as ensuring rising revenue streams.
With Zimbabwe’s present economic growth, let alone the generation deficiency, selling every kilowatt hour of extra power is not a problem, so as soon as extra capacity is on the grid it is sold.
So we are getting a rebating space, but that is all. This four year breathing space also needs to be used to get the next stages of rising capacity actually generating.
Already it now appears that new solar power is cheaper than brand new coal power, although obviously not the rebuilt Hwange, and that our private sector needs to start delivering on its own investment plans, preferably in co-operation with Zesa so that an integrated system is developed as quickly as possible using the maximum range of sources of new power.
