Currently, Zimbabwe does not have adequate internal generation capacity and has to import up to about 40% of its power requirements to meet demand. There has been no investment in internal electricity generation since 1984 but demand for electricity has been increasing at an average annual rate of 2.5%. This has led to serious power deficits in the country, (94 GWh was load shed in 2000) and service delivery by the national utility has plummeted. Zimbabwe Electricity Supply Authority (ZESA) has struggled to service its imports debts and revenue have been going to partly cover imports and foreign exchange losses due to inflation and local currency devaluation. Any efforts by IPPs to invest in power generation should therefore be welcome and encouraged. An enabling and conducive environment should be fostered to remove all entry barriers for new players and offer incentives to innovative entrepreneurs.
Electricity supply is dominated by ZESA with the exception of a few small private generators. Electricity industry reforms are expected to enable resolution of some of the current problems. However, currently, IPPs enter a market dominated by ZESA. One such IPP is the cogeneration plant commissioned by Hippo Valley Estates in South Eastern Zimbabwe. Hippo Valley Estates (HVE) has commissioned a cogeneration plant that generates both steam and power for the sugar processing factory's requirements and an extra 11MVA (66GWh) of firm power for export to the national grid for six months. Potential of up to 210MW is available. As a result quality and reliability of power is expected to improve in the area. For example, the performance of Chiredzi network is expected to improve when the cogeneration plant is interconnected to the grid. The utility is also expected to realize tremendous technical, economic and environmental benefits from the introduction of the embedded generator in the network.
Reliability improvements are also expected since the HVE plant will operate in an island mode and total blackouts of the local network can be avoided. Quality of supply will significantly improve because the voltage profile of the Chiredzi network will improve, becoming more firm and hence improving voltage regulation. ZESA stands to benefit from HVE's electricity generation because the utility will avoid investing in new generation plant and reduce imports significantly. The avoided investment cost could, for instance, be about US$ 31.2 million for a 26 MW coal plant; reduced cost in uprating feeders and substations; US$ 2 million for the construction of 70 km of 33kV lines; and, about US$ 1 million for uprating a 15MVA transformer to 30MVA.
In addition, the reduction in system losses could lead to enhanced revenue. Also ZESA could avoid importing power and eliminate the construction and maintenance of interconnectors. A 330kV line costs about US$154,000-US$480,000 per km to construct and a further US$9,600/km per annum to maintain. In overall terms, HVE could save ZESA about US$1.32 million per annum.
During peaking periods, ZESA can avoid generating electricity from inefficient power plants saving the utility up to US$3.5 million if it is supplied by HVE. Load flow analysis reveals that peak power losses can be reduced by 7.8% and up to 4.5 MWh (or Z$ 13,905) can be saved annually. The utility can also reduce losses due to outages and unmet demand, and improve service to its customers. The use of bagasse in generating electricity provides an environmentally sound feedstock which effectively results in zero net emissions of greenhouse gases. Cogeneration has the added advantage that the same bagasse is used to provide steam for process heat and to drive turbines to produce electricity. For the same amount of energy produced, HVE emits only 2,682 tons of CO2 equivalent which is about 0.1% of Hwange's 2,574,000 tons of CO2 equivalent.
This paper concludes that deregulation of the electric power industry will force utilities to face new challenges and to evaluate the cost-benefit implications of providing an acceptable level of service. It is in the best interest of ZESA to welcome the entry of locally-owned small scale IPPs such as sugar millers that contribute significantly at local level, even if the national impacts are marginal. These IPPs must also be prepared to meet the stringent operating requirements of supplying power to a public grid. Electricity production using cogeneration technology should not be viewed then as a by-product or a seasonal venture. It should be supplied as firm power by augmenting bagasse with coal during milling off-season. The establishment of a regulator is expected to provide fair operating conditions for all stakeholders and should be expedited.
There are tremendous benefits that accrue to the utility when embedded generation such as cogeneration is introduced into an electricity supply system. This improves the quality of electricity supply to local consumers. System losses are reduced, saving the utility significant amounts of money.
The use of green or environmental funding can be used to bridge the commercial gap between ZESA and HVE. The Lowveld area has a huge potential of up to 210 MW which could be fully utilized if adequate incentives, conducive environment and enabling policies are in place. Additional potential of cogeneration exists in the timber industry in the Eastern Highlands where over 70,000 tons of wood waste is inefficiently disposed of.
It is in the best interests of both the utility and HVE as an investor to utilize this untapped renewable resource by engaging in progressive partnership. Borrowing from the successful experiences of such countries as Mauritius, India and Brazil will go a long way in alleviating power supply problems and allow investment in the power sector.
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