Power crisis deepens | Business Times

LIVINGSTONE MARUFU

Industry is suffering from debilitating power cuts lasting more than 18 hours daily, something which is affecting companies’ activities, with production being severely curtailed, business lobby groups have said.

They said local companies were suffering mostly as a result of rolling blackouts, which have compelled businesses to use costly backup diesel generators, increasing production costs.

Zimbabwe needs about 1 700 megawatts (MW) daily during peak hours, but the State-owned power utility, ZESA, which supplies the vast majority of Zimbabwe’s electricity, is generating  just over 1000MW  because of receding water levels at Kariba Dam and inefficiencies  experienced at the country’s largest coal-fired power plant, Hwange Thermal Power Station. As a result there is nearly 600MW electricity shortage.

Apparently, ZESA is procuring very little from the Day Ahead Market, which is a market for trading power by regional players.

The Confederation of Zimbabwe Industry (CZI), the country’s largest business lobby group, declared yesterday that the situation was dire.

“Industry members have reported going for between 12-18 hours without electricity and report that power is being restored between 11pm and 7am in the majority of cases,” CZI said.

It continued: “The absence of a load schedule that is strictly adhered to has exacerbated the effect of the power cuts as affected companies cannot plan employee deployment resulting in redundant working staff for periods when power is unavailable.

“The other consequence of unscheduled power cuts is that machinery require a systemized shut down process in order to ensure raw materials are fully utilized and the machinery itself is properly shut down.

“Sudden power outages result in loss of raw materials and equipment damage.

For some machinery, it is necessary for them to undergo process heating which is the application of heat during industrial processes. This can take between 3-5 hours before production can commence. It then means that effective production is only for 3-5 hours in a situation where electricity has been available for 8 hours. “However, the electricity bill will reflect usage of 8 hours against actual production of only 3-5 hours. In sectors that heavily rely on electricity such as plastics and cement industry this can mean failing to achieve the economies of scale necessary to cover production costs.

“This situation is particularly severe for companies that do not have dedicated power lines which are normally found in the small to medium sectors.

Companies have sought to mitigate the effects of power outages through the installation of solar energy and battery storage for use at night. However, this is often very expensive and requires significant funding that many firms struggle to secure.”

The Zimbabwe National Chamber of Commerce CEO, Christopher Mugaga told Business Times, a market leader in business, financial and economic reportage, power outages would have a significant impact on the country’s economic performance in 2024,

“Power cuts are an issue to the industry and the economy at large.

“As the Chamber of Commerce we anticipated that the current rolling power cuts will cut the headline Gross Domestic Product by 0.6 points for 2024.

This is a significant number by an stretch of imagination,” Mugaga said.

He added: “Running on generators is expensive and companies are running them for 14-18 hours a day.

This will also push away investments into the economy.

Also foreign direct investment is lost through lack of power.

Probably we are losing between US$120m and US$150m annually of FDI through lack of power.”

The CEO Africa Roundtable chairman, Oswell Binha  weighed in saying: “I can tell you that power cuts are going  for 18 hours or more.

In certain instances, the quality of power is poor such that businesses are unable to run even when it is available,” Binha said.

He added:”The situation is dire, some companies are using generators which are very expensive to run.

This will leave businesses with two options, either to continue increasing prices or there will be serious shortages in shops.”

Economist Vince Musewe  told Business Times: “Power cuts disrupt business plans and profitability. I think Zimbabwe companies should seriously consider off grid solutions if they are to protect their business interests and remain viable.”

Tony Hawkins, another economist, added his thoughts, saying: “Following rolling power cuts, there will be production cutbacks, labour short time working, higher costs and especially higher unit costs,  quality deterioration and reduced consumption .”

This week, ZESA Holdings Executive Chairman, Dr Sydney Gata,  stated that the power utility  has a  strategy to  deal with the power crisis.

According to him, the plan focuses on local manufacturing, international partnerships, and streamlined operational efficiency.

“With the measures we’ve taken, we now have positive investments across the energy sector. Our goal is to shift the energy supply burden from the government to competent large-scale consumers, such as mining companies, who can invest in their own power sources,” Dr. Gata said.

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