Power Cuts Are Plaguing Southern Africa. The Region Needs Renewable Energy.

Since his appointment in May, Zimbabwe’s energy and power development minister, Fortune Chasi, has frantically shuttled between South Africa and Mozambique to negotiate and procure the much-needed power required to plug crippling electricity shortages gripping the country.

Zimbabwe is enduring an unprecedented electricity crisis which has prompted up to 18 hours a day of so-called load shedding, because the grid can’t generate enough energy to meet national demand or pay for adequate power imports, owing to foreign-currency shortages.

The country has an installed generation capacity of just over 2,000 megawatts (MW), but at the time of publication Kariba South Power Station, which generates more than 50 percent of the country’s electricity, was producing a mere 238 MW, while Hwange Thermal Station, the second-biggest power generator, was producing 374 MW, leaving the country with a massive power deficit that can only be mitigated by expensive imports from Mozambique and South Africa.

But for all its electricity shortages, Zimbabwe is endowed with abundant renewable energy resources such as solar and hydropower near natural landmarks such as Victoria Falls—not to mention biomass, geothermal, and to a lesser extent wind power—that present a major opportunity for investment. But these resources have remained largely untapped.

Zimbabwe is endowed with abundant renewable energy resources that present a major opportunity for investment.

Since independence in 1980, no meaningful investments have been made in developing new power stations or establishing significant renewable energy projects. This has left the country reliant on two power stations. Although Kariba South was recently expanded to generate 300 additional megawatts, the station has become vulnerable to climate variability and can’t generate enough power due to lower water levels in the lake next to it, occasioned by drought.

Aging equipment at Hwange Power Station, which is currently being expanded to feed an additional 600 MW, has also caused the station to produce less power. The much-hyped Batoka Gorge Hydroelectric Power Station on the Zambezi River near Victoria Falls, on the radar for many years—and to be developed jointly with Zambia to generate 2,400 MW—is stuck at the feasibility stage thanks to years of government red tape. While it’s still in the feasibility stage, the Zambezi River Authority announced that construction will begin in 2020.

As power shortages persist, with no coherent government strategy to deal with the challenge, it has become clear that the problem is self-inflicted. It stems from many years of poor planning and lack of strategic thinking. Zimbabwe’s population has been growing rapidly (from 7.4 million in 1980 to about 14.6 million in 2019), and with it the demand for energy, but there has been no corresponding growth in energy generation.

While the 2002 Electricity Act opened up the electricity sector to private-sector participation, many of the independent power producers licensed every year since then have failed to attract investment or secure the necessary capital, largely due to country’s political risk profile.

Corruption has also been a major barrier to energy development. The 100 MW Dema Diesel Power Plant set up in 2016 to provide emergency power to the country was abandoned in 2018 after it proved too costly to operate. And in another brazen case of corruption, a local company, Intratrek Zimbabwe, that was awarded a contract by the Zimbabwe Electricity Supply Authority in 2015 to build a 100 MW solar plant—and was paid $5 million for precommencement works—has failed to develop the project. If the two projects were functional, the country would not be spending at least $19.5 million every month to import 150 MW and 400 MW from Mozambique and South Africa, respectively.

The Zimbabwean government’s electricity generation strategy has also been too focused on the grid through expansion of old stations. Advocates of distributed renewable energy argue that the solution to the country’s power challenges lies in new renewable energy investments, considering the grid is expensive and takes years to develop.

Over the years, they say, the costs of renewables have come down and they are much cheaper and faster to install, particularly solar panels. Solar and wind power have witnessed some of the most rapid declines in costs, which are now competitive with conventional power generation sources: Solar panel costs have declined by 90 percent since 2010, while onshore wind has achieved around 60 percent cost reduction.

Expansion in generation is expected to increase in Zimbabwe since the government finally approved the National Renewable Energy Policy and recommitted to the National Biofuels Policy in August, following many years of indecision. The two critical and long-awaited policies could catalyze renewable energy investments and diversify the country’s energy mix. Through the policies, the private sector is anticipated to play a leading and complementary role in electricity production. 

But while policies are good, they will not be enough. Zimbabwe will need to work hard to implement new policies, resolve the currency crisis, and work to improve its risk profile, which has been a major deterrent to foreign investment into the power sector.

Zimbabwe is not alone. Countries such as South Africa, Zambia, Namibia, and Botswana are rationing energy as demand outstrips supply owing to poor investments in the energy sector.  Indeed, lack of electricity is one of the biggest constraints to the region’s prosperity.

In South Africa, underinvestment and a shortage of generating capacity have caused sustained power cuts. South Africa produces around 47,000 MW against an installed generation capacity of 52,000 MW, mostly from its coal plants. Indications are that the country is likely to face a power supply gap ranging from 6 to 10 gigawatts if it continues to rely on its aging coal plants—not to mention the environmental costs of relying on burning coal.

The delay in the completion of the Medupi and Kusile power stations with capacities of almost 10,000 MW and the state energy giant Eskom’s unreliability has worsened the situation. South Africa has also failed to move quickly to implement an energy strategy that includes a combination of wind, solar, gas, and oil—although politicians claim the country is well on course to diversifying its energy mix away from fossil fuels.

“The current polemical nature of the debate on which source of energy technology is better than another is not helpful. … It should not be about coal versus renewables versus nuclear, but rather about an energy mix that uses all available resources to achieve this mandate,” South African minister of mineral resources and energy Gwede Mantashe said at a meeting in December.

“South Africa has reduced its reliance on coal for generating electricity from over 90 percent to just over 75 percent over the past few years. … We are of the firm view that the country’s transition to cleaner sources of electricity should be systematic, and done in a manner that is mindful of social, economic, as well as environmental considerations,” he added.

Power cuts are taking place despite the fact the country is rich in primary energy sources, including a climate with the potential to produce an abundant supply of solar energy, as well as wind power. The current load-shedding program and the country’s overreliance on old coal plants show that South Africa desperately needs alternative energy sources to overcome existing power shortages and to diversify the country’s energy mix away beyond coal. 

The South African government claims that through its Integrated Resource Plan for Electricity 2010-2030 (IRP), it plans to add 42 percent renewable-based capacity to the grid by 2030, with 17,800 MW of new capacity expected from renewable energy sources and 9,600 MW from nuclear power.

According to Mantashe, clean energy’s share of South Africa’s power mix rose from zero percent in 2010 to 4.5 percent in 2015. The government hopes to raise 7,000 MW of clean energy by 2020 through its Renewable Energy Independent Power Producer Procurement Programme, which encourages investment by independent power producers into the national grid. Without IRP’s contribution, the current load shedding would be much worse.

But it won’t be enough to move the country toward clean energy. In October, Pretoria released a long-awaited updated Integrated Resource Plan that will provide for long-term solutions to the country’s energy needs through an energy mix that incorporates other sources of generation to boost capacity. While wind will contribute 18 percent (up from 13 percent in the earlier version of the plan) by 2030, solar power 7 percent, and hydropower 8 percent, coal will still be king.

Reports suggest this has been done to benefit two “preferred bidder” coal independent power producers, Thabametsi in Limpopo province and Khanyisa in Mpumalanga province. The other criticism is that many believe that nuclear power is not price-competitive in South Africa and that it can’t be financed.

While some coal power stations will be decommissioned, the plan projects that by 2030, about 60 percent of South African electricity will still be generated from coal. “Coal will continue to play a significant role in the electricity generation in South Africa … as it is the largest base of the installed generation capacity and it makes up the largest share of energy generated,” the government plan admitted.

In a world where everyone is moving toward the increased deployment of alternative energy sources, South Africa’s decision to allow coal to dominate the energy mix is not very progressive.

But in a world where everyone is moving toward the increased deployment of alternative energy sources, allowing coal to dominate the energy mix does not sound very progressive. The decision is not only environmentally unsustainable, but also uneconomical, considering that by 2020 the cost of renewable energy is projected to fall dramatically, making renewable energy less expensive than fossil fuels.

There is no doubt that the region’s rich endowment of renewable energy resources could be the catalyst for ensuring energy security. Besides ensuring investments into the renewable energy space, South Africa also needs to work on improving its legal frameworks by identifying and removing obstacles hindering increased levels of private-sector investment into energy. The government also needs to view new providers as complementing rather than competing with Eskom and coal.

Throughout southern Africa, the current power deficiencies offer enormous opportunities for investment and the harnessing of diversified sources of energy to meet the huge demand for modern forms of energy. Low energy costs and an enabling policy framework will be critical in building the power sector in the region. The fact that there is also very little energy trade between southern African countries because of infrastructure challenges and the power crunch underline the huge potential for intraregional trade waiting to be effectively exploited by bold investors.