• Mon. Jul 22nd, 2024

With no investment, blackouts are here to stay

ByEconomic Times

Dec 6, 2022

By ETimes

The country has been plunged into hours of darkness extending to upto 16 hours of loadshedding, and the country does not seem to have a solution to the problem we are in.
Increased investments in alternative energy sources have been identified as a solution to the country’s ever increasing demands of power for household and industrial usage.
Victor Utedzi, the director of African Transmission Corporation, “There are no quick fixes in the power sector and if it is true, and it seems it is the case that we would be forced to shut down Kariba, then our domestic generation would be hovering between 500 and 600MW.
“It all depends on the daily output at Hwange, which would be the anchor of domestic generation. Hwange has been averaging with 150 and 350MW.”
This stands in stark contrast to our current maximum demand which now far exceeds 2,000MW. That’s not a gap that can be filled only by exports for various reasons. There simply isn’t that much capacity available in the region. Even if it was, we would need to secure transmission capacity and routes to wheel all that power into the country.
According to Mr Utedzi, that will not be possible in the short term and to import all that power, the annual bill would easily be USD1.5 billion. “We just won’t be able to afford it,” he added.
Reality is the nation has to brace for deeper power cuts and we have to compete harder for excess generation capacity in the region, particularly in Mozambique and in Zambia in the face of increasing completion for the same electricity from South Africa.
“We have a number of generation projects under various stages of development and some in construction. It is time that those projects are actively supported to avoid costly delays that would hurt the country even further,” Mr Utedzi said.
It has been said that households and industry should consider solar PV installations as we are likely to see more diesel generators coming on stream.
In the medium to long term, the country needs to improve conditions for both domestic and foreign investors to support domestic generation as no country can do it alone due to high initial capital outlay in power generation projects.
Commenting on the issue of investment, Mr Utedzi said, “Investors have increasingly advised that a precondition would be power sales in USD in order to hedge against currency devaluation, inflation and address other risks such as currency convertibility.”
The country is facing industrial growth at a rapid pace, but power investment is lagging. Zimbabwe Energy Regulating Authority (ZERA), has already licensed more than 200 companies with a combined capacity of about 7000MW.
A tiny proportion of the licensed capacity has translated into electricity fed into the national grid. At the end of it, experts say it all comes down to the conditions that foreign partners are seeking in order to finance domestic generation.
“Capital is looking for the safest and most profitable investments throughout our region. We have to compete for business with our neighbors,” Mr Utedzi said.
As long as IPPs are paid in Zimbabwe dollars, funding would be limited to a small window available from domestic institutional investors. It is a tiny window of financing and real growth in generation is only possible when we have created conditions to attract both domestic and especially foreign financing – Harare


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