On the 2nd of December Zambians woke up to a new development, a somber one. The country’s energy minister Peter Kapala alerted the country on the resumption of what for a short time has become a thing of the past that of ZESCO the state-owned electricity supplier and owner of the majority of the country’s electricity generation capacity planned load management by shedding off some of its electricity demand to safeguard its infrastructure.
This means that there will be reduction on the available electricity per day for some hours for a country which currently has an electricity demand standing at circa 2,300MW/year as per latest data . The development is said to be because of the low water levels in the Kariba dam, the country’s largest reservoir of the water that runs the Kariba North hydro power plant turbines which have a total installed generation capacity of 960 MW.
Impact on the Economy
This unfortunate situation will have a huge negative impact on the economy. Local enterprises which recorded an improvement in business conditions per the Stanbic PMI index in the month of September will experience a drop in productivity with those in the industry sector being the hardest hit. While operations costs might increase for firms that will try to sustain productivity with expensive alternatives like electricity generators which in turn might lead to increased prices of goods and services thereby leading to increased inflation currently standing at 9.9% derailing the central banks envisioned single digit inflation target.
Overall, this will be a big blow to a country which of recent has been trying to revive its economy which has witnessed subdued economic growth and undergoing a debt restructuring process with its creditors.
Call for Electricity Source Diversification
Zambia relies majority of its electricity supply on clean hydroelectricity totaling circa 85% of the installed generation capacity. This makes Zambia’s energy sector very vulnerable to climate variabilities in terms of change with rainfall patterns. Electricity is very important for a country’s development. It is the main fuel that makes a country’s economic engine move. Inadequate of that stunts development. It is with this regard that for Zambia’s economic engine to continue to move and sustain development it needs to reduce its reliance on one major source of electricity supply. This is necessary if it must maintain electricity availability, increased access, electricity security and sustained economic growth.
Talking of energy source diversification, there are some alternatives such as nuclear energy which have been implored in the past. Nonetheless despite nuclear energy offering to provide ample baseload electricity and nearly 90% availability rate it can be expensive for an economy like ours. Leaving us with three alternatives that are cheap and can be deployed in the medium term. These are green energy technologies like solar and wind energy. Renewable energy costs have continued to go down following the continued increase in green energy technologies R&D. The current solar and wind energy costs are estimated at $0.048/KWh and 0.033/KWh for onshore wind energy respectively. However due to the non-availability of scalable large scale renewable energy storage capacity. Renewable energy technologies like solar and wind can only provide intermittent energy which leaves a gap on the baseload electricity supply needed. For this case Zambia can also add a now global non favorite electricity generation source that of Coal. Zambia’s coal reserves stand at circa 49 million tons with production only standing at 138 thousand tons. Zambia’s only coal power plant is the Mamba thermal power plant which has an installed generation capacity of 300MW with a projected plan to add a further 300MW on hold. Coal, if well utilized can improve Zambia’s energy security and help the country provide vital electricity to its people and power its economy.
In conclusion, Zambia needs to improve its energy mix not only for sustained supply but for increased electricity security. Meeting this, investments in solar, wind and the unlikely coal will be important.