Strong economic activity drives electricity demand

Source: Strong economic activity drives electricity demand | Sunday Mail (Business)

Martin Kadzere

ZIMBABWE has witnessed a significant increase in demand for electricity this year largely due to improved economic activity across key sectors, a Cabinet minister has said.

While admitting intermittent production at the 920 megawatt Hwange Power Station (HPS) had constrained supplies, Energy and Power Development Minister Zhemu Soda told The Sunday Mail Business that the level of production had not “deteriorated much”, arguing increased economic activity was pushing up demand.

“We have a growing economy and there must be a corresponding growth in power generation. Load shedding is partly because the demand has gone up and we have not done much in terms of improving our generation capacity,” said Minister Soda.

Zimbabwe’s economy is expected to grow by 7,8 percent this year, largely driven by agriculture, mining and construction across the country.

Local production has expanded, with capacity utilisation expected to reach 61 percent this year from 47 percent last year, according to the Confederation of Zimbabwe Industries.

A number of mines have been opened or reopened while production capacity has been increased in a number of mining firms.

Still, demand is expected to pick up on the back of investment projects lined up.

For instance, mining houses are planning to ramp up production in 2022 by between 3 percent to as much as 100 percent, according to the State of the Mining Survey Report 2022.

About 58 percent of mining executives surveyed indicated plans to expand capacity by up to 40 percent while 42 percent of the respondents are looking to scale up production by more than 40 percent, the report said.

“This will continue putting pressure on the grid, but we are hoping that when Hwange 7 and 8 comes on line, we should be able to mitigate power shortages,” said Minister Soda.

ZESA executive chairman Dr Sydney Gata said applications for new connections from commercial and domestic users were “so high”, they had grown “to levels that I have not seen before”.

This year, the power utility received 23 applications from mining and smelting companies, which will require 2 100MW, about 23 percent higher than the current demand, in the next five years. Backlog of connections for domestic customers stands at 305 000.

“In terms of new applications, what I am seeing is unprecedented,” said Dr Gata, adding that strategies would be put in place to ensure “strong supply capacity”.

ZESA is expected to commission unit seven at Hwange Power Station in July next year while unit eight would come on stream in August 2022. This will add extra 600MW to the national grid. Additional capacity is also expected to come from independent power producers.

Zimbabwe is negotiating new power supply deals with Zambia and Mozambique, which should see the country importing additional 280 megawatts from the two countries soon.

The country is looking to import power, ranging from 100MW and 400MW, from Electricidade de Moçambique of Mozambique and Eskom of South Africa.

Analyst Carlos Tadya said the increase in power consumption was a good measure of a growing economy.

“I think critics have been concentrating on zesa’s inefficiencies, which I also agree with,” said Mr Tadya.

“But that is not enough because we have a surge in power demand, which is resulting from increased economic activity.”

“What is now needed is power availability to ensure sustainable growth.”

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