Online Reporter
THE conversion of permits for private power stations that will sell to the national grid into the actual power stations being built instead of talked about has moved up a full order of magnitude with the start of construction of a 720MW power station in Hwange by Titan New Energy.
A growing number of reasonably sized solar installations that sell surplus power when available to the Zimbabwe Electricity Transmission and Distribution Company, the Zesa subsidiary that delivers power to mines, farms, factories and homes, are already in place and provide between them around 50MW a day to ZETDC. This is a modest but useful addition to the little over 1000MW that comes from the Zesa-owned Hwange Thermal and Kariba Hydro-electric power stations.
There are also smaller private-owned thermal stations being built, one by steelmaker Dinson and another by the largest smelter of chrome ores, Afrochine, but the power from these, like much of the existing solar power, is largely earmarked to ensuring regular and adequate power supplies to those building the stations and installations.
Both Dinson at its Manhize steelworks and Afrochine in its conversion of chrome ores to ingots of ferrochrome need very large quantities of power without interruptions and load shedding, and so are building power stations as part of their investment programme. While some commercial sales are possible, the main contribution they are making is ensuring Zimbabwe’s industrialisation drive continues without troubling Zesa.
But we also need power for the full range of Zesa customers, from people living in cottages and small flats all the way to some of the mines and factories. While Zesa has plans to add to its capacity, with the refurbishment now of the original six units at Hwange Thermal bringing that station up from pushing 1000MW to something closer to 1 500MW, the rate of growth in mining and industry requires more than Zesa can raise easily in investment funds.
Hence the need for private investment into energy, both the company specific needs like Dinson and Afrochine and all those arrays of solar panels now becoming ubiquitous, and the large commercial stations like the one being built by Titan New Energy.
There have been several proposals by potential investors for the larger power stations designed to sell power to the national grid, or at least to have contracts with major industrial or mining users to sell them power transmitted for a small fee over the Zesa grid.
But the first really big power station in this pure commercial group actually being built is this one of Titan New Energy, a Chinese investor, with the construction of the largest solar station, a 200MW installation, starting soon in Gweru.
Titan have targeted the first unit at their Hwange station for commissioning before the end of next year with the rest of the units following at prompt intervals thereafter. But that first unit will be adding more than 100MW to the power ZEDTC has available for distribution to the host of regular customers who find load shedding tiresome at best and a major business cost at worst.
The importance of the new private stations, and the determination by the Second Republic to make sure investors understand that they are welcome to build such stations and tie themselves into the Zesa grid, was stressed by President Mnangagwa who personally went to Hwange on Monday for the ground-breaking ceremony at the power stations site.
His presence makes it clear that the Government is serious in its commitments to private investors and in its welcome to such investment, and this is important. The President has made it clear through his time in office that while talk can be cheap, what actually matters is action. Titan have committed US$1 billion for the Hwange station and the earth moving and construction machinery is there as the station permit starts being turned into a real power station.
Investors do have to follow a small set of essential rules when doing business in Zimbabwe, such as following the labour agreements negotiated by the relevant national employment council and the safety rules laid down by the relevant Government agencies. Of particular importance in the power station sector, are the environmental regulations.
Titan here must have a positive rating. The station is designed to use the lower quality grades of coal, usually the top layers of a coal seam and as all coal is mined in open cast mines, this has to be moved and dumped before the better grades can be dug out and used to supply the growing demand for coke and other higher grade coals.
Hwange Thermal can absorb a reasonable amount of lower grades, mixed usually with some better qualities, but the growth in demand for coking coal has meant that there is more lower-grade “thermal coal” available than is being used, so Titan’s orders will be welcome in the coal industry. It also means that coal that would be piled to one side and then used as part of the backfill of an open cast mine can now be sold. That cuts down the waste problems faced by mines and increases income.
Of importance to electricity consumers is that this grade of coal is cheaper, so reducing the costs faced by Titan and the price Zesa will have to pay to cover costs and the reasonable mark-up deserved on the Titan investment. When suppliers of energy are looking at affordability, even when the contracts usually have an agreed pricing formula, that usually ensures there is a market for the power they produce so they remain in full production and that again keeps costs under control as fixed costs are divided among more units sold.
While Titan will be building a 200MW solar plant, others are busy in the solar sector and this will, as time moves on, probably become the largest contributor to the electricity mix in Zimbabwe. There is a commitment for greener energy, hence the solar thrust, but there still has to be a basic core of thermal stations to cope when rainfall is low and Kariba stations are cut back, or when the sun does not shine very much.
daglous masveta
leeroy mupariri
