HARARE – Government must close the troublesome Hwange thermal power station and build a completely new facility on the site, some 700 kilometres north west of Harare, if it is serious about ending a decade – old electricity crisis ravaging the country, according to a report by Econometer Global Capital.
The power crisis has reached catastrophic levels, with mines and manufacturing sector firms reporting rolling blackouts of up to 20 hours a day.
Results of the energy crisis came to light this week, when several firms reporting earnings for the third quarter said volumes had significantly declined because of extended down times, compounded by foreign currency shortages to import raw materials.
Econometer, which advises the private sector and government on strategy, said the 920-megawatt (MW) Hwange plant, where authorities are currently undertaking a $1,5 billion refurbishment and expansion programme, has been overstretched by old equipment that have led to frequent breakdowns.
It said Hwange required urgent, decisive action to build an environmentally friendly, efficient operations to complement electricity from the Kariba Hydro Electric Power plant.
But Kariba itself, upgraded at a cost of US$553 million in 2018 to add 300MW on its 750MW capacity, has had its far share of challenges associated with climate change.
Low water levels at the plant throughout this year after the Zambezi catchment experienced one of its worst droughts in a decade, have seen the power plant operate at less than 20 percent of its installed capacity.
There are fears the plant may be shut down unless the region receives enough rainfall to replenish Lake Kariba this season.
Lat month, Finance minister Mthuli Ncube allocated the Hwange power plant $8,4 billion for the ongoing expansion project, one of many that the country is undertaking through loans and grants from China.
“In our view, Hwange thermal is not only environmentally unfriendly but also long overdue to be mothballed,” Econometer said in an analysis of the 2020 National Budget, which was released on Monday.
“The frequency of breakdowns on the country’s second largest power station calls for an immediate action to build a new plant,” the report noted.
But the crisis is Zimbabwe, battling falling industrial production and exports due to a long drawn economic crisis, does not have the capacity to raise funding to build a completely new plant, while its Chinese partners may be discouraged by reports of frequent raiding of trust funds that have been committed for ongoing projects.
These include the $153 million expansion of the Robert Mugabe International Airport in Harare that will increase annual handling capacity to six million, from 2,5 million.
“The Chinese are now overstretched and may not be ready to commit. With exports falling, pressure on the little foreign currency reserves will escalate in the coming year as government will continue to rely on imports from the region. While we acknowledge that Kariba hydro may return to near optimal levels by mid-December, we are of the view that the current power crisis will continue in the coming year due to underperformance of other plants.
In the past government has splurged millions into projects that turned out to be monumental blunders. Thanks to cronyism, the Dema emergency diesel power plant is lying idle and no one seems to care,” said Econometer.