By Kalata News,

LUSAKA, August – ZAMBIA’s energy crisis is expected to continue for the next two rainy season till 2026, if the dependency on hydro power continues.

So far no major power generation activity is taking place, besides attempts at solar, that can meet Zambia’s electricity demand.

A Kalata News Magazine analysis of statements and meeting reports from energy players and policy makers in the past few months, show Zambia seems to be hoping for the return of the rains so it can increase production of electricity in the Kafue Dam and Kafue Gorge area to meet both domestic and international power obligation.

Announcing Zambia’s energy crisis in May, 2024, Minister of Energy, Peter Kapala said “As a result of the poor hydrology, current available average generation as dictated by water availability in the reservoirs is about 900MW against the average demand of 2,400M W resulting in a power deficit of 750MW as at May 2024.

The minister announced a series of load shedding measures aimed at keeping Zambia going during this energy crisis.

The minister said “Emanating from the low water levels, a planned load shedding and load management was necessitated to avoid a complete shutdown of the power stations. Needless to indicate that implementation of Eight (8) hours load shedding was effected on 11th M arch 2024.

“Further, after a critical review of the load management measures and low water levels in our major reservoirs, a decision was made to extend the daily hours of load shedding from Eight (8) hours to Twelve (12) hours, staggered in periods of Six (6) hours each day to ensure that power supply is available until the end of the year. The extension of 12 hours load shedding took effect on Monday, 20th May 2024.” Said Minister Kapala.

Zambia currently has an installed generation capacity of 3356.6 MW. The installed capacity comprises of 83 percent of hydro, 9 percent of coal, 5 percent of heavy fuel oil and 3 percent solar PV.

Zambia’s Zambia Electricity Supply Corporation (ZESCO) owns and operates a number of hydropower stations with a combined power generating capacity of more than 2900 Megawatts.

ZESCO is the main supplier of electricity to the nation, with a customer base of over 1,000,000. The utility is engaged in the whole power business chain, i.e. generation, transmission, distribution and supply. ZESCO produces most of its power from three main hydro power plants, namely Kariba North bank, Kafue Gorge and Victoria Falls power stations.

 

According to The Zambia Development Agency (ZDA) Energy Sector Profile (June 2013), Zambia has about 6,000 (MW) megawatts unutilized hydropower potential. ZDA says despite Zambia’s vast renewable and non-renewable energy sources, little of these have been utilized to improve the attractiveness of the energy sector and transfer the benefits for industrial expansion, employment creation and poverty reduction.

National Electricity Capacity vs Demand

The proportion of the Zambian population with access to electricity is 34 per cent.

The mining sector remains the largest consumer of power at 51per cent of total generated electricity, followed by the domestic sector at 33 per cent.  Among the domestic sector includes the manufacturing  and agro business sectors, whose total contribution is responsible for national food security and job creation in Zambia.

According to ZDA The energy market structure and consumption shows that traditional wood fuels (biomass), such as firewood and charcoal sourced from natural woodlands and agricultural lands dominant the energy market

Zambia’s electricity market is structured as a single-buyer market model with ZESCO acting as the unique off-taker and bulk retailer of electricity on the national interconnected system. Independent Power Producers (IPPs) contributes to electricity generation and operate their own assets but sell the electricity to ZESCO through Power Purchase Agreements (PPA)

Zambia’s electricity market is structured as a single-buyer market model with ZESCO acting as the unique off-taker and bulk retailer of electricity on the national interconnected system. Independent Power Producers (IPPs) contributes to electricity generation and operate their own assets but sell the electricity to ZESCO through Power Purchase Agreements (PPA).

Electricity Pricing

The ERB currently uses the Revenue Requirement, also known as a Rate of Return, pricing method to regulate tariffs of electricity utilities

The general principle is that the utility is allowed to cover prudently incurred expenses and earn a reasonable return on its investment. The utility’s costs are therefore reviewed, and those costs deemed to be unnecessary or unreasonable are eliminated or adjusted accordingly

According to Minister of Energy, ZESCO in its current form might not have enough cash to undertake any meaningful investment in electricity generation because they might be ‘broke’.

He said “This period has proved to be very challenging for the utility, ZESCO, as we have seen, the utility is losing revenue amounting to an estimated average of USD 300 million from standing contracts and market trading of electricity exports.”

Even if ZESCO decides to increase its power generation in all its assets, the Zambezi River Authority would not allow them to deplete the Kariba Dam waters.

The Zambezi River Authority is a Bi-National organization between the Republics of Zambia and Zimbabwe that manages the waters of the Zambezi through the most economical and effective means of providing water for generation of electricity and for other purposes.

It allocates Cubic Meters (BCM) of water to be shared equally between ZESCO Limited (ZESCO) and Kariba Hydro Power Company (KHPC) of Zimbabwe for their power generation operations at Kariba every year based on weather forecast and expected rainfall received per rainy season. It also monitors inflows of water into the Kariba dam and passing through hydrometric network for the control and day to day operations of the Kariba reservoir comprise of thirteen stations where water levels are monitored daily.

The Kariba Lake where ZESCO gets its water for power generation was designed to operate between dam water levels of 475.50m and 488.50m (with 0.70m freeboard). As of July 2024, the Lake level is steadily decreasing due to low inflow, closing the period under review at 477.04m (10% usable storage), compared to 479.69m (29.56% usable storage) recorded on the same date last year.

Despite the fact that this is not the first time Zambia is experienced reduced rainfall and subsequently low inflow of rain water into the electricity generation reservoirs, ZESCO does not seem to have any capacity besides managing the existing hydro power generation assets the company inherited from the federation of Nyasaland and Rhodesia.

Like the fear of genetically modified (GMO) technology, Zambia and ZESCO are averse to the idea of investing in nuclear energy claiming that this kind of energy was too expensive and too dangerous for the people of Zambia.

Invest In Power Generation For Yourselves And For Sale, Zambians Urged says Government.

In a desperate move to encourage sharing of little power from every genset or independent power generation taking place in Zambia, President Hakainde Hichilema announced in June,2024 that the Government had introduced net metering, a system that will allow anyone to invest in solar and other sources of energy not only for their own consumption, but also for sale to the national power grid.

“We have introduced a Net Metering system that will allow anyone to generate power on their rooftop, for example, for themselves and for sale to the national grid.  With this development, citizens can now trade in electricity. This has never happened in the history of the country and I urge citizens to take advantage of this opportunity and invest in power generation,” President Hichilema said.

He added: “Don’t spend all your time on Tik Tok. Roll up your sleeves for business in the energy sector. These are practical measures aimed at increasing power supply to the national grid in the face of the current power deficit we are facing as a country.”

The President further explained that under the Open Access policy, Zesco is now obligated to transmit power generated by private power producers, hence Government’s call for more private sector involvement and investment in power generation.

Another measure that needs to be implemented is the call to city planners and builders to include in their plans where the houses and industry they are attracting into their city areas will get their energy from. If cities have their own independent sources of energy without ZESCO, the demand for Zesco’s electricity may come down and may be mini nuclear power stations, wind turbines and other sources of energy might become possible in Zambia.

As it stands, industry and companies will have to also outsource their energy requirements outside ZESCO as they wait for 2026 to receive goods rains for ZESCO to get back into gear and shape.