eBusiness Weekly
Kudzanai Sharara
Zesa’s power monopoly is coming under serious challenge as firms offering consumers alternative power sources continue to grow.
For years, the Zimbabwe Electricity Supply Authority (ZESA) has been the country’s sole supplier of electricity to individuals and companies.
With very limited options, power consumers had to contend with load shedding and power outages among other inefficiencies that contributed to the erratic power supplies from Zesa.
But with the country and the world on the cusp of an energy revolution towards renewable energy, including solar, Zesa might have to step up.
Distributed Power Africa (DPA), is one company that has come to the market to offer commercial, industrial and residential product offerings.
The company has already put together a $250 million facility for solar power projects at a time State-owned Zesa and its partners are struggling to put funds together for solar power plants.
ZESA’s solar power projects have been stalled on the back of failure to access funding as well as faulty tendering processes.
Speaking to Business Weekly on the sidelines of the CEO Round Table last week, ZESA chief executive officer, Josh Chifamba said the power utility’s solar projects, which have been on the pipeline for quite a while now, had been affected by failure to access funding.
“It’s all to do with arranging the necessary funding that’s required for those projects; that’s where the challenge is. But we hope that with the new dispensation we will be able to access new credit lines and we will be able to do those projects,” said Chifamba.
Last week Business Weekly reported that China’s Exim Bank had frozen loans going towards energy projects to Zimbabwe including Insukamini solar project. The other Zesa project in Gwanda has been mired in controversy with the company that had been awarded the tender, Intratek, having done very little to commence the project.
Zesa’s seemingly timid, sloppy and slow pace of execution into a lucrative technology, opens the market to other players with DPA declaring that it can easily build solar power systems anywhere in the country.
DPA’s solar system promise to provide anything from as little as 10KW up to 10MW, making it easy for companies and individuals to wean themselves away from the national grid.
DPA’s head of marketing Vuyisile Ndlovu said her company was initially focusing on large corporate and industrial users, including mining, manufacturing, and telecoms infrastructure companies.
The move towards solar is not peculiar to Zimbabwe, with energy giants such as Shell Energy also taking steps away from fossil fuels towards renewables.
Shell is building an offshore wind farm in the North Sea; it’s part of consortia installing solar farms in Oman and California; and it has bought one of Europe’s biggest electric-car-charging firms and a major British electricity provider. In the UK, Shell recently entered into an offtake agreement for the Bradenstoke solar park.
The solar plant has 269,000 panels, and a maximum capacity of 69.8MW. Completed in 2015, the plant is the largest in England and the second-largest in the UK.
And Shell isn’t the only company making changes, many major oil and gas companies, BP included, are staking similar claims to ensure they play a growing part in the renewable sectors.
With such energy giants showing interest, it seems renewables, particularly solar, will in the not so distant future, play an increasingly prominent role in the provision of energy.
Chifamba is, however, not worried, saying the utility is comfortable with its diversified technology of thermal, hydro and possible solar.
“You have to have a diversity of technology. Last year there were challenges with water levels in Kariba, and Zambia, which largely depends on hydro power, suffered a lot. We were able to cushion ourselves better than them because we have thermal.
“So there is need for us to continue on a diversified path. It’s an important planning criteria that we have hydro and any other new technology. The different technologies will be complementary,” said Chifamba.
But given water level challenges at Kariba, and the perennial issues at Hwange, where coal supplies are sometimes inadequate or wet, the solar technology should be high on Zesa’s priority list or it risks losing out to new players.
The surge in energy alternatives is upending established industries all across the global economy. Major electricity producers have been forced to restructure in a bid to stanch losses as material numbers of customers put solar panels on their roofs and thus buy less power from the grid.
If Zesa continues on this slow pace, failing to effectively invest in this energy landscape, it could wind up saddled with massive stranded fossil-fuel infrastructure.
The issue of funding is also another huddle that the utility has to deal with, to avoid been crowded out by cash rich institutions such as DPA, whose investment, the company said, could eventually dwarf its investment in telecoms of almost $2 billion over the last 10 years.
