A Review of the Nigerian Energy Industry

Zimbabwe: Better pay more than be in the dark

Power transmission grid29 March 2014, Harare – Zimbabwe desperately needs more power stations and bigger power stations. We cannot continue having half our people living in the dark each night, nor can we expect our businesses to make money when they have to power their factories with expensive generators consuming thousands of litres of diesel a month.

Plans have existed for decades. Even while Hwange Power Station was being finished in the 1980s, the planners were looking at the next power station, upgrades to existing stations and regional power schemes.

And nothing happened, except the building of the Southern African power grid and the formation of a power pool.

South Africa and Mozambique could export all the power we needed at a lower price than it would cost us if we built our own stations. So we built nothing.

Now there is very little power available in Southern Africa for export and Zimbabwe is going to have to build, extend or renovate power stations.

This is going to cost us money, especially as for some projects we need an external investor, for after all we do not have massive national savings, who will want a profit.

At least three projects are moving beyond the drawing board: upgrading the old thermals for some extra power very quickly, and extension to Kariba South so we can have more power at peak times, in return for less in the middle of the night, and a large thermal station at Gwayi.

The Zimbabwe Power Company, the entity responsible for owning power stations created when the old Zesa was commercialised, is moving fast to issue tenders for renovating the Bulwayo and Munyati stations. The bits that are still working were built in the 1950s and closed when Kariba South came on stream.

While the machinery might be a bit ancient, the civil works, like generator halls and cooling towers, are still there, so we get more power for modest costs.

The tenders are vital and need to be assessed very carefully; we need the best deal, which may not be the cheapest deal.

Two Chinese investors, Sino Hydro at Kariba and China Africa Sunlight Energy at Gwayi, are fairly committed to huge investments. Not being charities they will want a return, but contracts can be prepared, again with help if necessary, that are fair to both sides. But as these are non-tender deals we need to be assured that they are fair to both sides.

Since China is commissioning a new power station almost every week and has the world’s largest hydro station, we all know that these companies can do it, and do it probably cheaper than anyone else.

But making sure will cost little and reassure the public, who almost certainly will have to pay more for electricity.

The higher price comes from the fact that final prices are a mix of the costs, plus a margin, of all the power stations on a grid.

If there are a lot of older stations, with most capital charges paid off, then costs will be lower.

Unfortunately, Zimbabwe is going to have to put a lot of new stations on the grid very quickly, so the cheap Kariba power will be diluted. Having an endorsement from a reputable consultant will help Zesa sell the deals to its customers.

We agree totally, since we – like everyone else – are sick of sitting in the dark or spending a fortune on fuel for generators, that we need new power sources fast.

ZPC’s commitment to tenders, and hopefully a lot of care in assessing prices charged by external investors building stations, will be the only proper solution: more power at a fair price.


– The Herald (Editorial)

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