CHALLENGES AND INVESTMENT OPPORUNITIES: THE CASE OF ZESA

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CHALLENGES AND INVESTMENT OPPORUNITIES THE CASE
OF ZESA

• By Mr Ikhupuleng Dube, System Development Manager
  Zimbabwe Electricity and Transmission Company
  (ZETDC), a subsidiary of ZESA Holdings (Pvt) Ltd

Presented at the Worldbank CCS Workshop Johannesbu
rg 31st May 1st June 2011
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Presentation Content

• Electricity Sector Policy, Governance Structure
  and Players
• Importance of Electricity in Promoting Economic
  Growth
• Current Challenges
• Security of Supplies
• Reliability of Supplies
• Investment Opportunities
• Generation
• Grid
• Other

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Electricity Sector Policies

• Ensure availability and accessibility of
  electricity to all consumers (current and future)
  at competitive prices and
• Facilitate electricity investments and access by
  Independent Power Producers (IPPs), Public
  Private Partnerships (PPPs), Private Public
  Associations (PPAs) and other forms of joint
  ventures into the sector.

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Electricity Subsector Structure
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ZESA Holdings

• Holds shares of the successor companies on
  behalf of the Government
• Have four subsidiaries
• Zimbabwe Power Company (ZPC)
• Zimbabwe Electricity Transmission and
  Distribution Company (ZETDC)
• Powertel
• ZESA Enterprises

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ZESA Main Mandate

• To supply all sectors of the economy with
  adequate, safe, reliable environmental friendly
  and least cost electrical energy.
• Strong linkages between electricity supply and
  economic growth.

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Linkages between Electricity and Economic Growth
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Linkages between Electricity Supplies and
Productivity
Sector Unit US per un-served unit of electricity Proposed Tariff (US/kWh)
Agriculture kWh/US 0.689 0.13
Construction kWh/US 0.070 0.12
Mining kWh/US 4.643 0.079
Manufacturing kWh/US 0.656 0.084
of basic materials kWh/US 0.498 -
of machinery and equipment. kWh/US 1.371 -
non-durable goods kWh/US 1.506 -
of miscellaneous goods. kWh/US 1.937 -
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Main challenges

• Lack of investment in generation leading to
  demand outstripping supply
• Vandalism of infrastructure
• Ageing equipment limited maintenance and
  refurbishment challenges
• Reliability of supply and customer connection
  challenges
• Power wheeling challenges
• Power quality challenges (need for compensation
  equipment)
• Low tariffs, revenue collection and financing
  challenges
• Inefficient usage of electricity
• Access to electricity challenges

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Domestic Supply and Demand Challenges
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Supply and Demand Challenges Summer Day
Item 1 Kariba 750 MW
Item 2 Hwange 500 MW
Item 3 STP 60 MW
Item 4 Imports 150 MW
Item 5 Total 1 to 4 Total Generation Available 1460 MW
Item 6 National Average Unsuppressed Summer Demand 1860 MW
Item 7 Capacity Committed to Essential Services 750 MW
Item 8 Available Capacity after commitment to Essential Services 710 MW
Item 9 Nampower Exports 150 MW
Item 10 Available Capacity after Nampower Commitments 560 MW
Item 11 Item 6-Item 7-Item 9 Public Demand Excluding after Exports and Essential Services 960 MW
Item 12 Item 10 -Item 11 Deficit -400
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Supply and Demand Challenges Winter Day
Item 1 Kariba 750
Item 2 Hwange 500
Item 3 STP 60
Item 4 Imports 150
Item 5 Total 1 to 4 Total Generation Available 1460
Item 6 National Unsuppressed Winter Demand 22100
Item 7 Capacity Committed to Essential Services 750
Item 8 Available Capacity after Commitment to Essential Services 710
Item 9 Nampower Exports 150
Item 10 Available Capacity after Nampower Commitments 560
Item 11 Item 6-Item 7-Item 9 Pubilc Demand After Exports and Committed Services 1200
Item 12 Item 10 -Item 11 Deficit -640
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Reduced availability of Imports Challenges
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Historical Trends of Electricity Import by ZESA
(MW)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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Factors Affecting Load Growth

• Suppressed demand due to load shedding (2591GWh
  in 2008)
• Investment due to large mining customers (almost
  800MW in the medium term)
• Resuscitation of production levels by large users
  (currently suppressed demand of 340MW)
• Access to electricity by urban households
  (estimated at 60MW yearly for the next 15 years
  starting in the medium term)
• Rural electrification (total load of 420MW)
• General economic growth (linkages between
  productivity and energy consumption)
• Demand due to services such as public lighting,
  water pumping etc.
• Resuscitation of production levels in the
  agricultural sector.
• Increase in demand due to improved consumer
  lifestyles

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Future Demand and Supply Balance
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Availability Energy Resources to Meet Demand -
Coal
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Coal Policy Issues

• To ensure adequate and reliable supplies of coal
  in a cost effective and sustainable manner
• To ensure environmentally friendly exploitation
  methods
• To explore the techno-economic feasibility of new
  coal technologies such as coal gasification,
  carbon capture and coal-to-liquid conversion

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Availability of Energy Resources to Meet Demand -
Hydro
Site Capacity (MW)
Batoka Gorge 1600
Devil's Gorge 1240
Mupata Gorge 1000
Small Hydro 300
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Other Available Energy Sources

• Coal bed Methane - estimated at more than 600
  billion cubic metres (further exploration to
  confirm amount of gas).
• Forest residues - almost entirely based on
  plantation timber70,000 tons of this biomass
  waste is produced annually.
• Energy Crops - in the next four years 150MW to be
  generated from energy crops.

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Security of Supplies Investments
Project Name Capacity MW Estimated Investments Costs (US Million) Indicative timing
Short Term Solutions Short Term Solutions Short Term Solutions Short Term Solutions
Hwange Improvements 200 US125 2012
Repowering of Small Thermals 200 US120
DSM Projects 300 US9 US 25 2011-2013
Renewable Energy Sources 200 TBA 2011- 2015
Bridging Imports 400
Medium Term Solutions Medium Term Solutions Medium Term Solutions
Kariba South Extension 300 US300 2016
Hwange Extension 600 US1000 2016
Long Term Solutions Long Term Solutions Long Term Solutions
Gokwe North Project 1400 US2240 2017
Batoka Project 800 US2200 2021
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Transmission and Sub-transmission Investment
Requirements
million
1. Transmission Network (330/420 kV) Power Plant Related Network Wheeling Related Network Substation Upgrade Sub-total 170 258.5 82.9 510.5
2. Sub-transmission Network (88/132 kV) 2.1 REA Related Network 2.2 Network Up-rate 2.3 Substation Upgrade 2.4 Control and Communication System 2.5 Spare and Tools Sub-total Total 106.8 97.1 17.4 59.2 79.4 359.9 870.4
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Distribution Refurbishment and Extension

• Cables and conductors US25 mil
• Transformers US169 mil
• Prepaid meters and MCBs US64 mil
• Tools and Equipment US4 mil
• Operational Vehicles US46 mil

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