14 August 2016, Harare — THE Zimbabwe Electricity Transmission and Distribution Company will not purchase more electricity from the Dema diesel power plant beyond 100 megawatts to minimise the impact of the tariff on the cost of the energy mix. The tariff for the Dema plant is blended with the cost of power from other local power plants and price of imported power to get an average price.
The project is being spearheaded by local firm Sakunda Holdings.ZETDC chief executive Engineer Julian Chinembiri said the company signed a power purchase agreement for the supply of 100 megawatts, as they do not have the financial capacity to absorb the full output of 200MW from the Dema plant.
The project is an initiative to ameliorate acute power shortage in the short-term. Zimbabwe is expected to generate surplus power by 2018 when new projects currently underway start feeding the grid.
Eng Chinembiri said the other output from the diesel powered power plant can be sold to other consumers in the region.
“We are getting 100MW (from Dema), as per the power purchase agreement. We have no plans to purchase more electricity from the plant as we will not be able to afford it,” Eng Chinembiri said in an interview.
ZETDC, the transmission and distribution unit of the power utility, Zesa Holdings, is buying power from the Dema diesel power plant at 15,45/KWh. Its purchasing power has been further constrained by the refusal by energy regulator, ZERA, to award a 49 percent tariff increase.
The Zimbabwe Energy Regulatory Authority declined the proposal for the tariff hike on grounds that it had considered the prevailing economic situation and efforts by Government to expand generation capacity.
The Zimbabwe Power Company, the generation unit of ZESA, produces power at Kariba at 4,11c/kWh, while that from Hwange thermal Station costs 6,97c/kWh, making expansion projects cheaper.
It is against this background that the Dema project was mooted as an emergency power alternative to allow Government, through ZESA, to complete the capacity extension of projects at Kariba South and Hwange.
The expansion, designed to resolve the country’s debilitating power deficit, will bring an additional 900MW to the national power grid. Zimbabwe requires 1 400MW against internal generation capacity of 1 000MW.
The existing demand gap is currently being met through imports from Mozambique (Cahorra Basa), Zambia (Lusemfwa) and South Africa (Eskom).
ZESA had requested permission to increase the electricity tariff from the current average rate of 9,83c/KWh to 14,69c/KWh to be able to generate enough revenue to meet operational and capital project needs.
*Golden Sibanda – The Herald