Zambia's Head of State Takes Bold Steps to Curb Loadshedding

Following the emergency meeting held at State House on Saturday 7th January 2023 to discuss Zambia's energy crisis, Republican President Hakainde Hichilema undertook a trip to the Kariba North Bank Power Station and Maamba Collieries on Sunday 8th January 2023 on a fact-finding mission to establish the specific challenges that the two power plants are facing, and to find lasting solutions to the crisis.

On 4th January 2023, ZESCO Ltd commenced 12-hour-long blackouts owing to the drastic reduction in water available for electricity generation at Kariba North Bank Power Station. This is due to critically reduced water levels in the Kariba reservoir.?

The blackouts sparked a public outcry, forcing the Head of State to constitute an Energy Taskforce comprising key stakeholders in the sector, to find lasting solutions to the challenges that the electricity sub-sector has been facing since 2015/16 when the country faced the first mega electricity crisis.

Due to the low water levels, Kariba North Bank Power Station's generating capacity has been reduced to 400 MW, down from its installed capacity of 1,080 MW.

This inability to meet the power demand has been compounded by the planned outage of a 150MW generator at Maamba Collieries Limited Power Plant which is undergoing routine annual maintenance scheduled to take place from the 4th to the 20th of January 2023.?

On Sunday, the President began his tour by visiting Maamba Collieries where he held discussions with management "to understand their maintenance schedules, which have greatly contributed to the disruptions of power generation during times when water levels are low in the Kariba Dam."

Prior to the August 2021 elections, the 300MW coal-fired power plant at Maamba was operating at half capacity owing to long-outstanding debts by the national power utility.

However, in early 2022 ZESCO set out to resolve the various challenges that it was facing with IPPs such as Maamba and Itezhi Tezhi Power Corporation, and key customers such as the Copperbelt Energy Corporation (CEC). This resulted in Maamba resuming operating its 300MW plant at full capacity, while a new 13-year Bulk Supply Agreement (BSA) was signed with CEC.

In December 2022 ZESCO agreed to liquidate the Maamba debt amounting to US$518m by August 2023 following a Consent Award made by an international Arbitrator.

During the visit to Maamba yesterday, the President urged Management to speed up the maintenance processes so that they can resume normal operations within the shortest possible time. The President also stated that he and his team hold the view that maintenance schedules should be planned in a manner that does not impede normal power generation on the national grid.

Thereafter, the President proceeded to Kariba Dam, where it was obvious that "systems and processes had been neglected to the point where there was no proper monitoring, evaluation, and sharing, of critical information by different stakeholders at the right time."

Considering that the Kariba Dam is a shared resource between Zambia and Zimbabwe, the President promised to engage his Zimbabwean counterpart to discuss water levels in the dam, and ensure optimization and effective use of the reservoir.

From the trip, it was clear that apart from the adverse effects of climate change, noncompliance with water management guidelines was part of the main problem why Zambia and Zimbabwe were facing the current electricity crisis.

Following the trip, the President announced that he has directed ZESCO to consider splitting the 12 hours of load shedding per area into a six-hourly schedule in order to mitigate the impact on small businesses so that they can maintain their operations.

Further, he stated that his government will not shy away from taking responsibility where challenges are being faced, as that is key to addressing them.

"In addressing these problems, we shall not take politically convenient, populist routes; our decisions shall be based on building sound foundations that will last for generations to come." Said Mr. Hichilema.

Zambia generates 85 % of its electricity from hydro sources (mainly large hydro), with only 3% coming from solar. Coal accounts for 8.5% while Heavy Fossil Fuels (HFO's) account for 3%.

The country has not been spared from the adverse effects of climate change. Over the last 8 years, the country has been experiencing variable rainfall, with the 2015/16 El Nino-induced drought having disrupted hydropower generation significantly. This put pressure on the Kariba dam, and the reservoir has failed to reach full capacity since then.

Considering that this crisis is happening at a time when the world is experiencing an energy transition to greener solutions, Zambia must take advantage of developments in solar technology, whose costs have significantly gone down over the last decade, to diversify its energy mix.

Specifically, the actualization of the 150MW solar plants under the GETFiT programme, a product of the Renewable Energy Feed-in Tariff (REFiT) programme must be expedited.

Once debt restructuring is achieved, the government should support respective developers to obtain the necessary funding required for them to implement the projects. Additionally, regulatory, legal, and institutional impediments that hamper IPPs must be resolved.

The diversification should also include geographical diversification of hydro plants to exploit the immense potential for small hydro in the northern and northwestern circuits. These areas are less prone to droughts when compared to the southern part of the country where the large hydro plants are located.

President Hichilema's effort to understand and manage the electricity crisis is welcome and must be applauded.

The country is optimistic that the right steps, bold steps, will be undertaken to deal with this problem once and for all.

The author is a Renewable Energy Finance Expert. He holds a Master of Philosophy in Development Finance