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Power threat real without investment’

Eric Chiriga

THE forecast 2007 power shortage threats in the country will happen unless there is new investment in power generation, the Zimbabwe Electricity Distribution Company (Zedc) has said.

“Until we have new investment in the electricity sector, the threat that there would be no electricity in 2007 is real,” Ben Rafemoyo, one of the directors at Zedc, said at a press conference held in conjunction with the Zimbabwe Electricity Regulatory Commission (Zerc) this week.

Rafemoyo also said their debt levels were not tenable because of the low tariffs that the Zimbabwe Electricity Supply Authority was charging.

Recently, Zesa warned that the country would face serious power shortages due to lack of foreign currency to buy spare parts, shortage of coal at all stations and low levels of water required to drive the turbines at Kariba Power Station.

Experts have warned that the Sadc region could face critical power shortages in 2007.

Southern African Power Pool (Sapp) said power demand in the region has been increasing at a rate of about 3% per year in the last six years.

Sapp was created in August 1995 after member governments of Sadc signed an inter-governmental Memorandum of Understanding for the formation of an electricity power pool in the region.

Sapp has 12 member countries represented by their respective electric power utilities organised through Sadc.

“If nothing is done, no new generation project, it is anticipated that in the year 2007, Sapp will run out of generation surplus capacity,” Alison Chikova, Sapp supervisor of system studies, said.

He said there has not been significant investment in power generation in the last 10 years, despite the rise in demand.

According to statistics released by Sapp, Zesa has installed capacity of 1 990 Megawatts (MW) and a net capacity of 1 825 MW while the peak demand in the country as of 2004 is 2 069 MW.

Under its trading mechanisms, Sapp has bilateral contracts that cater for 95% of energy trading and Zesa is the greatest importer or dominant buyer.

Chikova said as at April 30, 2004, Zesa was charging the lowest average selling price for domestic electricity among power utilities like Zesco, Escom and Eskom and this, coupled with the deteriorating exchange rate, forced Zesa into greater debt.

In a bid to address the looming power shortage, there are plans to develop the Kariba South project expected to generate 300 MW, Hwange 7 and 8 project to generate 660 MW and the Lupane gas project to generate 300 MW.

Zimbabwe has only one power import contract for this year with Snel of the Democratic Republic of Congo (DRC). Snel only supplies 150 MW.

All its new import contracts are now under much tougher terms and conditions.

Zesa generates 1 440 MW of total national requirements from Kariba Power Station (750 MW), Hwange Power Station (590 MW) and a small thermal power (100 MW).

This constitutes 68% of the national requirements.

Imports account for 650MW representing 32% of national requirements through Eskom (300 MW), Hydroelectrica de Cahora Bassa (250 MW) and 100 MW from Société National d’Electricitie of the Democratic Republic of Congo.

Local funding for the Expanded Rural Electrification Programme (Erep) development is said to be inadequate.

Zesa is getting external financing from a loan facility from an Indian firm and supplier of credits from China, which translates to US$40 million and US$10 million respectively.

Zesa currently has a backlog of 12 716 customers who are paid-up but have not yet been connected. The number increased from 5 653 in 2002.

The severe shortage of foreign currency and suspension of regular annual tariff reviews in 2003 and 2004 have been blamed as the major causes of the increase in the backlog.

The power utility has also failed to meet its target for the rural electrification programme, managing 3 902 projects out of 5 000 planned.

Zesa is currently exporting tobacco and cotton to offset debts incurred during the rural electrification programme.

Zesa Holdings chairman and chief executive, Sydney Gata, said that the country was faced with serious “energy security threats”.

In a paper titled “Electricity Power Overview”, Gata said Zesa could also fail to meet increased power demand due to low pricing.

He cited six major “energy security threats” which could plunge the country into darkness.

Gata said there was a “hydrological risk” at Kariba Power Station due to persistent drought and shortage of coal at all stations.

He stressed that the power deficit to be caused by the anticipated power shortages was one of the biggest threats.

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