‘Zim has potential to produce 40GW from solar’
ZIMBABWE could become a net exporter of power within the SADC region should the country harness the concentrated solar power potential of 39,5 gigawatts (GW), which far exceeds the country’s needs.
A gigawatt is equivalent to 1 000 megawatts. The region is currently facing a power deficit, largely due to changes in hydrology issues, which have not spared Zimbabwe’s Kariba South Power Station in recent years.
According to the Zimbabwe Energy Regulatory Authority (ZERA), the country has a huge solar photovoltaic (PV) irradiation potential of 109GW and a concentrated solar power estimated potential of 39,5GW.
“On paper, ZERA has more than 100 IPPs (independent power producers) with a cumulative capacity of more than 8 000MW potential capacity installation, but independent power producers are currently contributing less than 2 percent to the grid.
“This is more than three times the current peak demand of the country, and we could be a net exporter of power within the SADC region if these projects had been commissioned,” said ZERA chairperson Engineer David Madzikanda.
He spoke during an IPP indaba held on Thursday.
Eng Madzikanda said these projects have failed to reach financial closure due to several reasons, including foreign currency shortages; and challenges relating to Government guarantees, the capacity of the main off-taker, Zimbabwe Electricity Transmission and Distribution Company (ZETDC), and the currency of transactions.
“We must overcome these challenges one way or another, and therefore, it cannot be ‘business as usual’ and that’s why, as ZERA, we are much more proactive and taking these initiatives, including taking a glide path to cost-reflective tariffs,” he said.
As part of the country’s grand strategy, President Mnangagwa has challenged players in the energy sector to be agile and innovative in addressing the country’s needs for power, without which there cannot be any meaningful economic development and quality of life for people, as envisaged in Vision 2030.
The indaba, organised by ZERA and the Insurance and Pensions Commission (IPEC), was attended by IPPs and officials of financiers such as CBZ Holdings and the Infrastructure Development Bank.
The meeting by strategic partners sought to address the bottlenecks being faced by IPPs in Zimbabwe and the subsequent power shortages the country has been experiencing for some time.
“This spirit of collaboration and partnership is not just appreciated but a requirement if we are to take the ‘bull by its horns’ and develop our own country by ourselves,” said Eng Madzikanda.
He said the power sector is one of the most capital-intensive industries in the country, requiring the participation of the private sector to complement Government efforts in addressing the country’s energy needs.
He added that there is need for clarity on the structure of the sector and how the private sector can participate.
“Huge opportunities lie in the implementation of IPPs at the power-generation stage in view of the huge capacity deficit, as well as the anticipated demand for electricity in the country.
“Even with a delayed policy scenario, the power demand is expected to double over the next 10 years to 4 176MW in 2033, and therefore, there is huge demand for power in the country,” said Eng Madzikanda.
He said, according to the study by Manitoba Hydro International, the total investment in the country’s base scenario is to the tune of US$10,6 billion over the study horizon, which cannot be wholly undertaken by Government alone.
IPEC pensions director Cuthbert Munjoma said the insurance industry is the largest domestic source of funding, hence, there is a need to leverage on these long-term savings given that the IPP projects are capital-intensive.
“There is competition for funds in the market, hence, there is a need to harness savings from both public and private occupational schemes,” he said.
Mr Munjoma said the development of the bond market is key, as no country can develop without it, adding that these can be Government bonds and parastatal bonds.
The Zimbabwe Association of Pension Funds (ZAPF) said most investors are concerned with return, hence, tariffs should reflect a cost-plus incentive structure to cushion IPPs and allow them to recoup their costs of production.
According to ZERA, renewable energy technologies now dominate the licensed power projects, in line with the country’s quest for increased cleaner and more sustainable power supplies by the year 2025.
Zimbabwe has a peak electricity demand of 1,800MW, against an average of 1,200MW it is currently generating, with the shortfall covered through imports.
According to the National Development Strategy 1 (NDS 1), energy is a key enabler in the acceleration of the country’s modernisation and industrialisation agenda, as well as sustainable socioeconomic growth.
To address perennial power shortages in the country, Government is undertaking several electricity-generation projects, most of which are funded by extra-budgetary funds, loans and the private sector.
In line with NDS 1, providing reliable and low-cost energy access is Government’s top priority. An efficient energy supply sector is in sync with Government’s intention to provide economic growth and stability.