By Chris Mfula
For almost one year now, Zambia has been rationing electricity after a scorching drought across the entire southern Africa hit hydropower generation, the main source of electricity in Africa’s second-biggest copper producer.
With energy as the lifeline of any modern economy, the electricity deficit now estimated at 1,000 megawatts (MW) has slowed down the country’s growth after cutting production in the mines and other industries, reducing government tax revenues and leading to job losses.
“The situation is not only affecting Zambia alone but the entire southern African region due to Climate Change,” Energy and Water Development minister Dora Siliya said at a recent energy conference in Lusaka.
Siliya said climate change was real and had not only affected hydropower generation but also other economic sectors like Agriculture, Tourism and Water.
“Considering that Zambia’s power sector is predominantly hydro based, there is need for concerted efforts to diversify the sector to new and renewable sources,” Siliya said.
With water levels in the Kariba dam, one of the main sources of hydropower, 26 percent full in the first week of May compared with 48 percent full last year, state power company Zesco Limited has reduced generation threatening economic growth.
Fuel subsidies and emergency power imports to ensure that the economy does not grind to a halt are estimated to be costing Zambia about $660 million annually, putting pressure on the budget.
Zambia’s budget deficit and economic growth are expected to remain largely unchanged this year as low commodity prices and electricity shortages continue hitting production, secretary to the treasury secretary Fredson Yamba said last week.
The fiscal deficit is seen reducing slightly in 2016 to below last year’s level of 8.1 percent and then decline further in 2017 to around 4 percent of GDP, Mr Yamba said, adding that growth will be restricted at around 3 percent this year from 3.2 percent last year.
Union Gold Managing director Mark O’Donnel said in an interview load-shedding is seriously hurting businesses, particularly when it comes during working hours.
“It’s causing a lot of factories to stop production or to resort to the alternative of using diesel generators, which is extremely expensive. It has the effect of increasing production costs and making things more expensive,” O’Donnel said.
The realities above have brought to the fore the need for Zambia to diversify its power generation mix.
President Edgar Lungu said during the launch of a $200 million 100 MW solar power plant in Lusaka on Saturday the government was keen to diversify the power generation mix by promoting renewable energy.
“If there is one area where diversification is so urgent, it is in the energy sector,” President Lungu said.
He said Zambia will be the first country in Africa to implement the World Bank Group’s programme to scale up the use of solar power which will enable the rapid development of privately owned, utility scale solar projects who capacity will ultimately rise to 600 MW.
“Solar, wind, thermal, and geo-thermal sources will be part of Zambia’s energy mix, and going forward, we will examine the nuclear option as part of efforts to ensure we are energy-secure,” he said.
In view of the current power deficit Zambia is facing, a number of unsolicited expressions of interest from developers of solar power to invest in Zambia have been received, Clement Sasa, the manager at the Office for the Promotion of Private Power Investment (OPPI) said.
Sasa said the current power balance cannot support significant solar power investment because the country is in a power deficit situation devoid of reserves to mitigate the fluctuations which will arise from solar power stations.
However, Zambia Development Agency (ZDA) Director-General Patrick Chisanga is optimistic that the issue of the power shortage will soon be resolved with 420 MW expected to be added to the national grid from new generation projects this year, almost halving the national deficit.
This should address the concerns raised by the OPPI above and enable the country attract investment in big solar power projects.
With over 300 days of sunshine per year, President Lungu said, Zambia has great potential to raise the rate of investment in untapped solar energy, which will not only enable it become an electricity exporter but also replace the need to import expensive power.
This will not only increase the country’s generation capacity and diversify the generation mix but ensure security of supply that will support the development agenda of the nation.
“The difficult realities of climate change have taught us over-reliance on hydropower won’t just do,” President Lungu said.