Mangoma statement on power generation

Press statement by Elton Mangoma, the Minister of Energy and Power Development on initiatives to boost the power situation

In view of the current challenges besetting the efficient supply of power nationwide and the need to enhance the financial position of the electricity utilities, the Ministry of Energy and Power Development has come up with a number strategies to mitigate the power situation in the country.

The measures being taken are divided into Generation capacity and supply side activities, Demand Side Management and Institutional changes. The supply side is further split into short, medium and long term measures.

The strategies include;

STATUS OF GENERATION

The generation capacity of the Hwange Power Station has improved significantly with an average of five units (580MW). This has allowed the Zimbabwe Power Company (ZPC) to carry out upgrade works and preventive maintenance at the Kariba Power Station without causing major power shortfall to the system. The Kariba Power Station has continued to maintain a steady power generation.

PREPAYMENT METERS

The smart/prepayment metering is a valuable short term strategy which seeks to improve revenue collection by the utility and influence behaviour change on how consumers use electricity. The system also assists ZETDC to recover accrued debts by deducting 20 percent on every electricity purchase going towards servicing the debt, among other benefits.

As of yesterday, a total of 150 000 prepayment meters had been installed for both domestic and commercial users. Government issued a Statutory Instrument 44A on Electricity (unpaid bills, prepaid meters and smart meters) regulations, 2013 which aims, among other things, to speed up the implementation of the prepaid/ smart metering programme.

The Statutory Instrument compels all electricity consumers to purchase and install smart meters with the exception of high density customers, rural customers and light load agricultural customers. The Statutory Instrument also deals with outstanding bills on the date on which the prepaid meter is installed as these will be transferred to the property at which the prepaid meter is installed.

In order to ensure efficiency, ZETDC this week commissioned a new Vending Platform supplied by Itron of South Africa. The new Platform can accommodate both smart and prepaid meters.

Medium Term Power Generation

• KARIBA SOUTH EXPANSION – The Zimbabwe Power Company (ZPC) and Sinohydro have concluded negotiations for the 300MW Kariba South Expansion Project. As a result, Sinohydro has commenced work at the site.

• HWANGE POWER STATION – adjudication process for the 600MW Hwange Expansion Project has been completed and the project was awarded to CMEC. Work is expected to commence before the end of the year.

• 84MW DIESEL GENERATOR – A diesel plant (84MW) that has operated for 100hours has been identified at a capital cost of €37 million. This about 50% of the cost of new plant. The ZPC has made a technical analysis and that diesel generators are suitable for our system and have the capacity of reducing load shedding by 80MW.

• 30 MW GAIREZI SMALL HYDRO POWER PLANT – The project is now at design stage following completion of feasibility studies and official launch is expected this month.

• 500MW CBM POWER STATION- ZPC has also floated a tender for resource mapping of coal bed methane. The tender was awarded to WAPCOS of India and it is ready to carry out the work. However, ZPC is awaiting CBM special grants documentation from the Ministry of Mines and Mining Development.

Instead there are two grants awarded to one company Shangani Energy and another to China Africa Sunlight by the mines ministry. The grants are overlapping with the desired ZPC concession area. These concessions were granted after Cabinet granted ZPC concession but the Mines and Mining Development ministry is refusing to effect Cabinet decision.

• 1000MW WESTERN AREA POWER STATION – China Railway International (CRI) and China International Fund (CFI) have signed a Memoranda of Understanding (MoUs) with the government to develop a 1000MW thermal plants.

China Railway International came for site investigation in December 2012 and has submitted a draft contract for the project development. The finalisation of reinstating the Western Area coal concession to the ZPC by the Ministry of Mines is important. Again the Ministry of Mines and Mining Development is not cooperating, causing a delay in the commencement of this project.

• 100MW ON-GRID SOLAR POWER – Some suitable sites for the 100MW solar power plant are being identified. The ZPC has engaged the Plumtree Town Council for land to construct the power station. A tender for the 100MW power plant is expected to be floated soon. The tender will cover BOT, IPP, PPP and pure debt basis.

LONG TERM PROJECTS

• THE BATOKA HYDRO ELECTRIC POWER PROJECT –Zambia and Zimbabwe have agreed to undertake this project on a BOT basis. This was after Zimbabwe agreed to honour the EXCAPCO assets debt of $70.8 million. So far a total of US$40 million has been paid towards the US$70, 8 million. The Zambezi River Authority called for Expressions of Interest to develop the Batoka on a Build Operate and Transfer basis. The response was extremely good -25 companies showed interest and the majority from credible international organisations.

• THE GREAT INGA HYDRO PROJECT – is proposed on the Congo River in the DRC. This can produce around 100 000MW. This project is too big for the DRC and requires a regional approach. If this is constructed it will change the economic fortunes of the region. Hydro power is cheap and it is worth the time spent on promoting it.

INSTITUTIONAL CHANGES

• RESTRUCTURING OF THE POWER SECTOR – The restructuring of ZESA Holdings has been approved by Cabinet. This is to make ZESA more efficient and responsive to the consumers, whilst at the same time, setting up a mechanism to make it easy for Independent Power Producers to have a level playing field.

These developments will result in the following.

• ZESA Holdings be collapsed into a National Grid Services Company (NGSC) and move all the legacy debts to this company. It will be 100% Government owned and it will not be privatised. NGSC will be responsible for Transmission, Market and Systems Operation. It will have the “reserve supply” responsibility.

• ZETDC will transfer the transmission functions to NGSC and transform to Zimbabwe Distribution Company (ZEDC) and be responsible for Distribution of Electricity.

• SUMMARY – Measures to consolidate the power availability and reliability will continue. Such measures will include taking out plant for preventive routine maintenance and equipment upgrade. Negotiations for firm power imports from the region will be pursued by both Government and the power utility.

The implementation of all power projects continue to be a critical success factor for securing self-sufficiency and reliability in power supply to the nation. To this end the Ministry is continuously evaluating project risks and working on mitigatory measures to ensure the projects are realised.