Over 30 idle power companies to loose license in Zimbabwe
London, June 4, 2019 (AltAfrica)-Over 30 independent power producers (IPPs) with licences to generate up to 5 000MW, stare the prospect of losing the licences for continuously failing to resume operations, at a time the country is contending with acute electricity shortages.
This comes as Energy and Power Development Minister Fortune Chasi last Friday assured productive sectors of the economy adequate electricity and fuel to power their operations.
Minister Chasi said the Renewable Energy Policy, which will allow for competitive procurement selection processes unlike the current scenario where potential investors solicit for bids but cling on to licences without executing the projects, would be launched soon.
“The ministry is set to launch a Renewable Energy Policy once all approvals have been achieved, which will promote the uptake of renewable energy projects and allow for competitive procurement selection processes for the development of future projects,” said Minister Chasi while addressing delegates during the Zimbabwe Annual Mining Conference in Victoria Falls.
“This is opposed to the current situation where potential investors solicit for bids and hold on to licences. At the moment, more than 30 entities have been licensed for power generation with capacity in excess of 5 000MW.
“Those currently not demonstrating capacity to execute their projects will have their licences revoked to avoid rent-seeking tendencies.”
He added that Government has begun carrying out a review of all licences issued to potential investors to establish if the projects will be implemented in the short to medium term.
Government sees IPPs as critical in playing a significant role in addressing the power challenges facing the country.
About 13 IPPs are already generating up to 13,2MW of power, which is being fed into the national grid.
Some of the operational IPPs include Duru, Nyamingura, Pungwe A to C, Hippo Valley Estates, Triangle Estates, Green Fuels, Hauna Power Station, Kupinga Power Station, Claremont Power Station, Riverside Power Station, Nottingham Estate, Econet and Padenga Holdings.
Minister Chasi said other strategies to deal with power shortages include encouraging mining companies to set up photovoltaic solar plants to reduce power demand especially during peak periods.
He said mining companies can enter into supply contracts with IPPs or execute the projects alone.
Minister Chasi added that the electricity demand by ferrochrome smelting companies also means the country needs “more investment in generation especially renewable energy and base-load to ensure future energy security”.
“I would like the (mining) industry to consider very seriously investing in solar so that we shed off a lot of power demand in the peak period which has resulted in load shedding,” he said.
Further, mining companies can enter into a prepayment agreements with the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) on a “back-to-back” arrangement with regional utilities to enable the local power utility to secure more imports.
Foreign currency shortages, and arrears with Eskom of South Africa and Mozambique’s Hidroelectrica de Cahora Bassa (HCB) amounting to US$83 million, have meant that Zimbabwe can only import 100MW from the two regional utilities.
Previously, Eskom and HCB used to avail 450MW to Zimbabwe but failure to pay the arrears since October last year had complicated matters.
In the medium term, Government is working on the expansion of Hwange Thermal Power Station to add two more units, 7 and 8, each with a capacity to generate 300MW.
The first unit will be switched on in 2021 with the second expected online in 2022.
The Batoka Gorge power project is also expected to share equally with Zambia the 2 400MW to be generated.
The Zimbabwe River Authority (ZRA), which is the implementing agent of the US$5,2 billion project, is set to identify the project developer before end of year.
Minister Chasi said Zimbabwe has taken “active interest” in the project.An Energy Efficiency Policy to ensure use of power sparingly was also on the cards.
Minister Chasi also wants miners to pay the $200 million they owe ZESA.
But Minister Chasi said miners will get steady supplies of diesel and electricity.
“The ministry is aware that the mining sector consumes large quantities of diesel. Regrettably, supplies of the product to the productive sector have been constrained, thus adversely affecting your operations,” said Minister Chasi.
“However, the ministry remains committed to availing adequate supplies of energy and is doing everything possible to ensure that the situation returns to normalcy.
“We have identified that there is need for rationalisation of distribution of fuel across the country to ensure that productive sectors that are key, are assured of fuel and power.”
Minister Chasi’s remarks come at a time when the country continues to contend with fuel and electricity shortages due to low water levels.
The Zambezi River Authority (ZRA) is rationing water for power generation at Kariba, with both ZESA and Zambia’s power utility, Zesco, now producing 375MW.
Zambia is also reeling from load shedding of up to five hours.