Editorial Comment: Independent power producers now building their stations

FOR the last few years, independent power producers — private power stations connected to the national transmission and distribution grid — have been seen as an essential pillar of building up Zimbabwe’s electric generation capacity to cope with the rapidly rising rates of growth in many sectors.

While the Second Republic was perfectly aware that the then six units at Hwange Thermal needed to be renovated or even rebuilt, that new units needed to be added, and that plans needed to be made for a third major station, the capital constraints meant that additional investment beyond what Zesa could find would be essential.

When the concept of private independent power producers was announced, there was a burst of applications for licences, but nothing much was done on the ground in building private thermal and solar stations. And even the large amount of hot air generated by some of the talk from licence holders was no substitute for a real station generating real electricity for sale.

There was a growing trend for many businesses without heavy machinery to install solar panels on their roofs to cope with load-shedding and other outages, largely replacing the smaller standby generators at first, but then seen as a useful way of cutting energy bills.

But these, while reducing demand for grid power from businesses whose most power-hungry equipment might be a modest data-base server and a chain of computer work stations, were in a separate category from what was needed and wanted — multi-megawatt power stations supplementing the big power stations owned by Zesa, which were being expanded and renovated.

It was soon clear that while a large proportion of the applications from would-be independent power producers were simply speculative, someone getting the paperwork done so that the licence could perhaps be sold later to an investor with actual money, there was also a group of genuine applicants who were worried about the business details.

So the Government worked out a far more detailed policy that would in effect guarantee sales at a fair price for serious investors, or at least those putting in their money while Zimbabwe was short of power.

At the same time investors in mining, mineral processing and nascent heavy industry, all with very heavy power requirements, were offered a high level of flexibility if they built big power stations. They would be able to reserve output for their own power-using investments, and be able to transmit that power over the national grid for very modest fees, and still be able to have the contracts a pure power station investor was getting so they could sell the surplus.

This sorting out of contractual arrangements has provided the spark that was needed to get the serious independent power producers to start building and producing.

Already, the independents are moving towards 100MW in total, and have more than replaced the three very old small thermals that saw their last new equipment in the 1950s and now are not viably worth being completely rebuilt from scratch.

But we are on the cusp of a major jump in output with work in advanced levels of progress or just completed on almost another 500MW of mostly thermal but some commercial solar generating capacity.

Cabinet saw the list on Tuesday: Construction of the 120MW Maximind thermal in Buhera completed; construction of the 100MW Prestige thermal in Beitbridge on course; construction of the 20MW thermal at Manhize on course; construction of the 240MW Zhongzhing Heli thermal in Hwange on course with the first 20MW already commissioned; the 2,5MW Guruve solar on course, the 10MW New Glovers solar in Kwekwe on course; the 45MW Zimplats solar in Chegutu 45 percent complete.

There are other power stations in the pipeline from investors who are considered serious. Besides the presently installed capacity plus the 500 MW coming reasonably soon from thermal and solar stations now under construction, these investment certainties are expected to add around 1 000MW.

Zimbabwe is now looking at economic growth rates predicted to be around 6 percent a year and that requires a lot of power. The sort of growth we are seeing outside the mining sector was also displayed at the Cabinet meeting.

This includes more than US$3,2 million in new manufacturing plants in the first three months of the year. There is also the building of new business and industrial parks, plus hundreds of new smaller businesses.

All of these require electricity. Some can thrive, let alone cope, with a modest solar array on the roof. But some will require grid power. Some of the increased demand for residential and small business purposes, especially in rural areas, will now be met by the community solar mini-grids now being installed in a five-year programme, which will help push up standards of living and, incidentally, make the expansion of reasonably priced data connections and the data backbone, now a priority with Government, important to ending the rural-urban divide.

Building a power station, or expanding an existing power station, is not an instant process.

We are talking about construction, installing equipment, wiring everything up, testing and the commissioning process for each new project.

So what is important is that engineers and contractors are on site, that work is being done, that equipment is being ordered and delivered, in other words action rather than talk or displays of intent or even applications for licences.

And we now have an ever greater flow of such activity in the projects pipeline, thanks to a pro-investment set of specific and detailed Government policies and some serious investors responding to these certainties and prepared to back their plans with hard cash.