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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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For Zimbabwe's Consumers, Electrical Brownouts Beat Blackouts

According to the World Bank, Zimbabwe is Africa’s third-largest power consumer after South Africa and Nigeria.

If that’s the good news, the bad news is - Zimbabwe needs 1,900-2,200 megawatts but only manages to generate 900-1,200 megawatts.

So, what to do?

Well, Zimbabwe imports 35 percent of its electricity from Hydro-Cahora Bassa of Mozambique, Zesco of Zambia and Snel of the Democratic Republic of Congo, but the electrical imports leave a massive deficit, resulting in long and chronic daily power cuts and the imports have been problematic due to the shortage of electricity gripping the region, with only Mozambique able to give Zimbabwe guaranteed supplies.

Zimbabwe Electricity Supply Authority says that projected power demand for 2012 will increase by 29 percent. Zimbabwe Electricity Supply Authority spokesman Fullard Gwasira said that in 2011 demand rose 6.2 percent from 2010 levels.

But, not to worry – according to Finance Minister Tendai Biti, Zimbabwe’s economy is projected to expand 9.4 percent in 2012, as the nation attempts to recover from a decade-long recession that ended in 2009. Biti noted however, “power supply remains a major noose around the economy.”

Zimbabwe Electricity Transmission and Distribution, a subsidiary of Zimbabwe Electricity Supply Authority, said that increasing power demand from mines in northern Zimbabwe is expected to increase by 22 percent in 2012.

So, who’s to blame for the shortages?

Why, the consumers, of course.

Last month Zimbabwe Electricity Supply Authority Holdings said that it is owed more than $537 million in unpaid electricity bills by domestic, industrial, mining and agricultural consumers at the end of November and accordingly Zimbabwe Electricity Supply Authority spokesman Shepherd Mandizvidza said the power utility in consequence was unable to pay for electricity imports to supplement local generation because of the outstanding debts.

According to Mandizvidza , consumer default was also responsible for failing to pay for coal for thermal power stations, water for the Kariba Hydro Power Station and procuring spares for transmission and distribution infrastructure maintenance.

Mandizvidza solemnly informed journalists, "Electricity is a key driver of the socio-economic spectrum and the failure by some customers to heed the call to settle their electricity bills implies that there would be depressed electrical generation culminating in shortages as the power utility would not be adequately resourced to meet demand. Zimbabwe Electricity Supply Authority Holdings is determined to further revive the economy through adequate supplies of electricity and it urges customers to meet their side of the bargain by settling their bills. Some customers still remain adamant and the power utility would have no choice but to disconnect supplies to encourage them to pay their bills. To that effect, customers are urged to cooperate with Zimbabwe Electricity Supply Authority personnel as they approach their premises to discharge their mandate."

So, aside from pursuing miscreant customers, what is Zimbabwe Electricity Supply Authority doing to meet the nation’s energy shortfalls?

Well, last month the Zimbabwean government issued operating licenses to several Independent Power Producers (IPPs), despite media reports of capital challenges and low investor confidence in the country. The country's energy sector regulator, the Zimbabwe Electricity Regulatory Commission (ZERC) has so far licensed 13 IPPs and more companies have applied for licenses, which ZERC is vetting.

The downside is that most of the proposed power stations are small. Of the 13 approved so far, six have been completed and five are operational with a paltry combined capacity of 83 megawatts.

ZERC administrator Peter Mufunda was blunt about the relative failure of the government to attract foreign investment to the country’s energy sector, saying, "The major problem that is being faced is financing. Locally, financing institutions do not have the capacity to provide long-term finance as they can only do so on a short-term basis. Most foreign financial institutions still have a perception problem of Zimbabwe as a safe investment destination."

To address the power shortage, Zimbabwe’s government is pursuing a number of projects, including the Sengwa Power Station and the Batoka hydropower project between Zimbabwe and Zambia along with developing the country’s Lupane coal bed methane gas project, which has the potential to bring to the national power grid an additional 300 megawatts.

While all these projects have potential, until the government of President Robert Mugabe addresses the “perception problem of Zimbabwe as a safe investment destination," it would seem that for the foreseeable future Zimbabwe’s most important energy source will remain – wood.

By. John C.K. Daly of Oilprice.com




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