Independent analysts Frost & Sullivan, which produced a report on power generation, transmission and distribution in Zimbabwe, said the expansion or the starting up of new power projects in the country will be depended on the resurgence of the economy.
They said the Kariba hydro power station had the potential to generate 5 400 Megawatts a year while the Hwange thermal power station can improve its generation capacity to more than 1000 Megawatts. kariba currently produces about 750 Megawatts.
The analysts are anticipating that the country’s economy will significantly grow from 2010 to 2015, after going through a 10-year period of economic contraction and hyperinflation. Demand for electricity is expected to increase as the economy grows and spur investment in the power sector.
“The future of the electricity industry is heavily dependent on the outcome of future elections, economic growth and the adoption of policy that promotes local and international private sector investment. There are several electricity industry projects in the pipeline that have not secured funding, and the development of these projects could improve the electricity demand and supply situation within the country,” Frost & Sullivan analysts said.
“Furthermore, Zimbabwe has copper and ferro-chrome deposits, which can be used in pylon and cable manufacture and maintenance.”
Frost & Sullivan said the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) must charge viable tarriffs which allows the electricity companies to break-even. Currently electricity charges in the country range an average tariff of 7.5 c/kWh which is 25 percent less than an estimated cost recovery tariff of 10 c/kWh.
In order to operate viably and minimise the seeking of short-term debt to cover operating expenses, Zimbabwe Electricity Supply Authority (ZESA) holdings needs to charge cost-reflective tariffs, they said.
The poor state of existing electricity industry infrastructure presents a major challenge to sustained market expansion with the bulk of Zimbabwe’s electricity industry infrastructure is outdated or dilapidated due to theft, vandalism and neglect.
“The country’s two major sources of electricity, Hwange Thermal Power station 1and 2, and Kariba hydro-electric power station were commissioned in 1972 and 1959, respectively. They are in need of technology upgrades to maximise efficiency,” Frost & Sullivan said.
“Generation projects that are likely to lead to a considerable increase in installed capacity are the Gokwe North Power Project, and expansion to Kariba and Hwange power stations. Transmission capacity expansions for the rural electrification projects are also anticipated in the long term.”
Zimbabwe authorities have been battling to improve the power generation capacity in the country while the ZESA has said that it is owed over US$ 500 million by households and industry.