Vusumuzi Dube
Rutendo Nyeve, Sunday News Reporter
COMPANIES in the large industrial and mining sector have formed an Intensive Energy User Group (IEUG) that seeks to mobilise financial resources towards the procurement of electricity from within the Sadc and local power generating companies at competitive tariffs as well as invest in various power generation projects.
The group which commenced operations on 1 April with a base load supply of 40 megawatts secured from Zimbabwe Zhongxin Electrical Energy (Private) Limited (ZZEE) has now secured 600 megawatts of power supplies from regional and domestic producers.
Addressing delegates at the Annual Mining Conference in Victoria Falls recently, IEUG Board member Mr Caleb Dengu said the large industrial and mining energy users require a long-lasting mitigation measure to power supply challenges.
“With the support of the Government, the large industrial and mining energy users have formed a group called Intensive Energy User Group (IEUG) with an objective to pool financial resources towards financing the procurement of electricity from within Sadc, including local generating companies, at competitive tariffs.
The IEUG is a not-for profit voluntary organisation whose mandate is to pool financial resources and procure reliable, predictable and uninterrupted base load electricity from external and local generating companies at competitive tariffs,” said Mr Dengu.
He said IEUG was not a competitor to the Zimbabwe Electricity Distribution Company (ZETDC) but works closely with the company in the sourcing, evacuation and delivery of electricity to the IEUG members. The group has already set the ball rolling with power supply agreement and system operating agreement being signed.
“IEUG commenced operations on 1 April 2023 with a base load supply of 40MW secured from Zimbabwe Zhongxin Electrical Energy (Private) Limited (ZZEE). The power supply agreement (PPA) with ZZEE is for an initial term of five years at a fixed tariff.
“ZERA has approved a wheeling tariff of USc1,25/kWh payable to ZETDC. The wheeling charged will be reviewed annually. IEUG is in the process of finalising a System Operating Agreement (SOA) with ZETDC. The SOA governs the terms and conditions for balancing the electricity secured by IEUG to guarantee a reliable, predictable and uninterrupted supply to IEUG Members,” said Mr Dengu.
He said every IEUG member must have a dedicated feeder power line, a Smart Meter (as prescribed and installed by ZETDC and must be cleared and assigned to withdraw power from the IEUG by ZETDC.
The group has also rolled out an investment program that seeks to support various power generation initiatives and projects.
“In order to mitigate the current and projected demand for power, a Group Bankable Power Purchase Agreement is being used to raise international financing for regional power projects. A typical example is the new power plant at Mphanda Nkuwa on the lower Zambezi where IEUG has entered into an agreement to take 1 000 megawatts of power at a delivered price of 6,8 cents per kWh.
No significant investment has taken place in the regional and domestic power transmission and distribution system. Plans are being made to support a ZETDC programme to invest US$3 billion in the next five years,” said Mr Dengu.
He said IEUG was supporting the listing of ZETDC on Victoria Falls Stock Exchange to raise money to invest in the grid and transmission infrastructure as there was a need for a robust grid and transmission infrastructure which was critical to the national development.
“The IEUG has secured 600 megawatts of power supplies from regional and domestic producers. This resource is sufficient to supply the majority of our existing mining industry with uninterrupted power. We are now taking on larger industrial consumers. Our investment programme will accommodate growth in demand going forward,” said Mr Dengu.
Zimbabwe has an 800-megawatt deficit in power supplies. The problem is compounded by the increase in energy demand in the country which is a result of investment in the mining sector. -@nyeve14
Online Reporter