Strong political interference and policy setbacks in
Zimbabwe’s energy sector threaten the country’s bid to generate an estimated
6,200 megawatts in the next decade
The country’s sole power utility only generates 1,300MW
against a national daily demand of 2,200MW.
The Zimbabwe Electricity Supply Authority generates power
from three local suppliers - Hwange Thermal Power Station, Kariba Hydro Power
Station - and imports energy from Mozambique’s Cahora Bassa Hydro Power Plant.
As the nation reels under massive power cuts and load
shedding, that cripple commerce and industry and make life a misery for
residents, desperate calls have been made for the increased generation of
power.
Moreover, Zimbabwe has grown and developed while the
generation capacity has not increased. Government through REA has electrified
7,350 rural institutions thereby increasing the need for power.
Political interference
During the inclusive government, whereby the SADC brokered a
power-sharing agreement between MDC and Zanu (PF) after the violent 2008
elections, the Ministry of Energy and Power Development, headed by MDC’s Elton
Mangoma, was expected to generate over 6,200MW. This was made possible by the
licensing of 18 Independent Power Producers (IPP) – who would ultimately make
Zimbabwe a self-sufficient energy producer and an exporter of energy.
Mangoma was replaced by Zanu (PF’s) Dzikamai Mavhaire
following the contested July 2013 polls, which returned Zanu (PF) to power.
Since Mavhaire took over the energy portfolio, very little
development has been experienced. Only five of the 18 IPPs are operational.
Instead of creating a conducive environment for IPPs, which
were cited as the panacea to the energy crisis, Mavhaire has been pre-occupied
in solidifying the patronage system in the energy sector. He has dissolved all
the boards that fell under ZESA and appointed Zanu (PF) stalwarts as heads of
the boards - at the expense of a long list of technocrats.
The parastatals in the energy sector operated for four
months without any boards at all. The affected entities included the Zimbabwe
Power Company, Zimbabwe Electricity Transmission Distribution Company,
Powertel, Zesa Enterprises, National Oil Infrastructure Company, Petrotrade,
Zimbabwe Energy Regulatory Authority and the Rural Electrification Agency.
Prior to this the Zanu (PF) government ordered ZESA to
write-off a $170 million debt it was owed by electricity consumers in unpaid
rates as a token of appreciation from the party for being retained in power.
This further plunged the cash-strapped power utility in a
financial crisis that has intensified load-shedding and frustrated efforts by
energy experts, who have been lobbying government to provide a conducive
operating field for IPPs to venture in renewable energy production.
The licensed IPPS specialise in solar, biomass, biogas,
geothermal and hydro power. China Africa Sunlight Energy has a project that is
expected to generate 600MW. We hope to connect 300MW onto the national grid by
December 2016.
Mining conglomerate RioZim expects to produce 600MW from the
planned 2,400MW Sengwa Coal Power Plant while De Green Rhino Energy is set to
invest $5,2 billion for its 2,500MW solar project by 2020. There several other
small projects.
Policy setbacks
However, IPPs are still facing policy challenges despite the
deregulation of the Electricity Act and adoption of the Energy Policy in a bid
to lure private players to invest in energy, thereby easing the pressure from
ZESA.
Some of the projects have suffered from government
bureaucracy, which led to some investors pulling out.
“Our license has been delayed and fears are that they might
lose interest and pull-out,” said De Opper Trading chief executive office
Francis Gogwe.
Their funding is a combination of equity and borrowings in
offshore accounts as capital remains scarce in Zimbabwe due to high interest
rates against loan duration of capital required.
Also, it has been established that for the hydrological
conditions pertaining to Zimbabwe, for run-of-river schemes, a capacity factor
of between 35 and 40 percent optimises the trade-off between the natural
resource potential and the capital investment required to develop the resource.
Much higher capacity factors are possible if smaller capital
investments are made but this is at the expense of the total annual electricity
generated and this is clearly not in the national interest.
This is further worsened by the fact that the new generation
plants being built - because of inflation – tend to cost more.
Solutions
Ian McKersie, executive director of Nyangani Renewable
Energy, said though the national policy and the regulatory structure were
conducive to IPPs, the application of these in a clear, coherent, consistent
and objective manner was required to attract investment.
“Government has set the scene for a vibrant IPP sector by
the implementation of the Electricity Act of 2005 and the adoption of the
Energy Policy. As producers of clean electricity we would like to see a
Renewable Energy Policy developed that backs up government’s commitment to
underwriting the viability of this form of energy,” said McKersie.
Environment Africa director Banarbas Mawire said government
should adopt a policy framework biased towards renewable energy producers. This
should involve lowering taxes and duty on the importation of the necessary
equipment.
“Renewable energy could turnaround the energy crisis - but
there is a great challenge in the sector as it requires high investment, due to
the high cost of the equipment. If we are to fully embrace it, then government
needs to reduce duty and tax for the investors who are importing their
equipment into the country to erect such power stations,” said Mawire.
Energy experts also called for the politicians appointed to
ZESA boards to be replaced by technocrats in order to bring sanity to the
operations of the parastatal.
The energy regulator has since announced its intention to
revise laws governing the industry to encourage investment in renewable energy
in order to mitigate intermitted power outages.
However, the deputy Minister of Energy Engineer, Munacho
Mutezo, recently revealed in the media that government is contemplating
withdrawing some of the licensed IPPs as they have failed to take off – despite
having been licensed for some years.
No comments:
Post a Comment