Zimbabwe: “A sustainable tariff, key to reliable electricity”

Energy and Power Development Minister Zhemu Soda says Zimbabwe’s power situation remains “fragile” in the absence of an economic tariff regime, which continues to drive up “unproductive” demand and reckless use of electricity.

“The tariff has been severely eroded and what we are seeing now is growing demand for unproductive electricity, especially from domestic customers,” Soda told Business Weekly. “As long as there is no restoration of a viable tariff, the situation will remain fragile.”

Electricity has become the cheapest energy for households compared to other sources such as gas, with an average household spending only US$10 per month on electricity.

The last electricity price review was in January 2022 when the Zimbabwe Energy Regulatory Authority (ZERA) increased electricity tariffs by 12.3%.

Families with prepaid meters purchase 200 units per month for $1,265.11 ($5 on the parallel market or $9 at the official rate), including the 6% rural electrification tax.

There are five tiers of discounted pricing before the full $14.31 per unit kicks in on purchases over 400 units. The first 50 units cost $2.38 each, before rural tax.

The 50 units are considered the bare minimum a family needs for essential purposes.

Consumers of postpaid meters pay a similar fee plus $35.68 monthly flat fee.

The fixed fee covers additional administrative costs.

“We need a workable tariff and I understand that ZESA has requested a tariff review and I trust that the regulator (ZERA) is considering the request,” Minister Soda said.

Zimbabwe generates an average of 1,000 MW against a demand of 1,600 MW. It covers the domestic deficit through imports from Mozambique, South Africa and Zambia.

ZESA, the electricity utility, continues to have generation problems, particularly at Hwange Power Station, the country’s second-largest power station, whose generators are constantly out of service due to recurring outages.

Zimbabwe has a hydroelectric power station — Kariba — with a generating capacity of 1,050 megawatts (MW).

Two power generation units, with a capacity of 150 MW each, were commissioned in 2018, making it the largest power plant in the country.

The country also has four coal-fired power plants and Hwange, with a generation capacity of 930 MW being the largest. There are three other smaller ones are Bulawayo, Munyati and Harare with a combined capacity of 231 MW.

Hwange’s US$1.4 billion expansion is underway and commercial production is expected to begin later this year for the first unit and in the first quarter of 2022 for another unit.

The power station is being expanded by the Chinese company Sino Hydro to add another 600 MW.

Small power plants failed to produce primarily due to high costs of transporting coal to power plants

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