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The sleeping energy giant

THIS time two years ago, Zimbabwe faced a torrid economic period — from runaway exchange rate to skyrocketing prices then to drought.

Zvikomborero Sibanda

Electricity outages became the order of the day making the Shona phrase “hakuna magetsi” (there is no electricity) to be more pronounced. Somehow, having power during the day became a perfect proxy to measure the national happiness index.

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a subsidiary of the Zimbabwe Electricity Supply Authority (Zesa), implemented load-shedding averaging 18-hours per day in some other areas to ration scarce electricity. Local production which over relies on Kariba South hydropower plant severely plummeted as Kariba Dam water levels dwindled to near 50-year lows.

A Zambezi River Authority (ZRA) report showed that as of the end of September 2019, water levels were at 17%. The hydropower plant with an installed capacity of 1 050 megawatts (MW) was producing way below 200MW.

Apart from Kariba, Zimbabwe Power Company (ZPC) operates six units of thermal (coal) plants in Hwange with other three coal power plants in Harare, Bulawayo, and Munyati.

These thermal plants boast a combined installed capacity of a staggering 1 110MW enough to cover 69% of the daily average national demand of about 1 600MW. The country is also sitting on enough coal deposits but thermal production also nosedived in 2019.

This was attributable to frequent breakdowns as most of the nation’s coal plants have outlived their life-span.

Generally, a coal-powered power plant should run for at most 30 years. However, the Munyati coal plant was built between 1946 and 1957, the Bulawayo plant was commissioned between 1947 and 1957 though it was refurbished in 1999 and the Harare plant was commissioned in 1955.

The country’s largest thermal plant in Hwange was commissioned in phases with the first plant commissioned in 1983.

Most of these plants are now costly to operate and are in dire need of a complete overhaul.  The breakdown impact was felt more in 2019 since the country was perturbed by acute forex shortages thereby limiting the importation of key repairs like generators and turbines.

Unlike in other countries, most Independent Power Producers (IPPs) in Zimbabwe produce mostly for their consumption. Statistics show that 15 major IPPs were operating nationally including Triangle (bagasse), Hippo Valley Estates (bagasse), Green Fuel (bagasse), and PGI Group which owns Pungwe (hydro).

With improved foreign currency flows, imports began to recover thereby augmenting subdued domestic generation in 2020.

The Zimbabwe National Statistics Agency (ZimStat) data show electrical energy imports mounting 192% to US$192,24 million in 2020 from a paltry US$65,77 million spent in the prior year. Power supply started to stabilise helped by low demand which is attributable to the Covid-19 pandemic with reduced business hours.

Granular analysis of trade data shows Zimbabwe importing electricity to the tune of US$49,64 million in the first five months of 2021 down 21% from US$62,55 million realised for the comparative period last year.

In my view, the decline in import demand reflects growing local generation thanks largely to improved dam levels. For the first time in more than two years, ZPC generation breached the 1 500MW mark last week. This is helping to subdue power outages during the high electricity consumption season.

The winter period is the wheat farming season in Zimbabwe using more electricity to power irrigation. Also, household use for heating purposes increases in winter.

With the vast energy resources, I am convinced that by now Zimbabwe should have been electricity self-sufficient with excess for export markets (deficit nations) in the region.

This will generate foreign currency which is critical in supporting the value of the local currency. Here is a brief rundown on untapped electricity production opportunities:

Even though the future is green, fossil fuels will not be completely phased out in the energy mix in the medium term. According to the Mines and Mining Development ministry, there are 29 coal localities with known reserves of more than 29 billion tonnes enough to sustain the country for more than 100 years. The full potential is yet to be exploited.

Zimbabwe has an estimated 600 billion cubic meters of coal bed methane in Beitbridge, Lupane, Hwange, and Chiredzi. Although the initial investment needed in setting up a drilling plant is huge, it is another completely untapped source of energy.

Lazard, a financial firm, posited that the cost of producing 1MW hour using coal is huge compared to all other renewable sources with a low of US$60 and a high of US$143.

The country is not yet at full capacity of its hydropower potential though there are existing challenges from changing climatic dynamics. Hydro potential on Zambezi River is estimated to be around 37TWh per year with only 10TWh per annum already utilised to date.

Inland hydro projects are also estimated to have the potential to add over 150 MW per year. The combined hydro potential is estimated at 18 500 GWh per annum with 17 500 GWh technically feasible and only 19% of the technically feasible being already used.

It is reported that hydroelectric power is the cheapest source of RE globally at an average of US$5c/kWh.

Zimbabwe solar radiation is available at an average of 2 000 kilowatts per hour per square kilometre per year and spread over 3 000 hours per year. Photovoltaic cells could generate total energy consumption of 1 000 GWh with an estimated 10% efficiency and by installations covering 1,3% of total surface area.

There is great potential for use of solar water heaters and solar PV which is yet to be exploited. It is estimated that technically solar PV has a potential of 300 MW. Albeit this potential, the country has less than 50MW of installed solar capacity.

The potential of bagasse co-generation from sugarcane is estimated to be around 633 GHh or 1 000MW per annum. It is also estimated that wood waste has the potential to generate power with the country producing over 140 000 tonnes of biomass per year.

There exists a potential for power from sing biogas from animal waste. Through the expansion of sugarcane plantations in Zimbabwe, there is a great potential of substituting 20% of fuel requirements through biofuels and save hardly generated hard currency.

If the government continues with the liberalisation of the energy sector, more private players will participate, increasing local generation.

Electricity is a key production enabler hence its shortage is an albatross to national output growth as it fuels the cost of doing business.

Sibanda is an economist at Equity Axis. He can be reached at zvikomboreros@equityaxis.net.

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