- Hwange Unit 7 ameliorated power generation capacity but electricity supply remains inadequate
- Businesses must probe into alternative energy sources to circumvent the enduring electricity crisis
Harare - Zimbabwe continues to grapple with a protracted electricity crisis, which poses a considerable operational risk to numerous enterprises within the nation. Consequently, these companies find themselves compelled to rely on expensive alternative energy sources. Albeit the recent inauguration of Hwange Unit 7 has somewhat improved power generation capacity, the nation's electricity supply remains inadequate in meeting the economy's demand, which oscillates between 2000 MW and 2200 MW. The aggregate power supply from generation and imports fluctuates between 1000 MW and 1350 MW.
Specialists in the industry and business leaders concur that there exists no expeditious, short-term remedy to the prevailing power crisis. The unrelenting national power deficits have culminated in escalated costs of conducting business, adversely impacting a multitude of companies. For example, Old Mutual Zimbabwe's CEO, Samuel Matsekete, recently highlighted that the challenges with power supply have significantly disrupted the operations of more prominent players within the manufacturing sector.
As power outages are anticipated to persist into 2023, Zimbabwean enterprises must investigate alternative energy sources and strategies to circumvent the enduring electricity crisis. Financial analyst Ronald Joma from Equity Axis proposes that solar energy could constitute the optimal energy source for the nation, considering the relatively elevated fuel prices. Nonetheless, the installation lag for substantial energy consumers may deter continued production in the short to medium term.
Willdale, a brick manufacturing company, has disclosed that substandard electricity supply has hindered its operations, specifically in the extrusion and firing of structured kilns, culminating in diminished output. The firm's CEO, Nyasha Matonda, revealed that the electricity supply situation remains unsatisfactory, with load shedding averaging eight hours daily. This predicament places strain on product availability, efficiency, and cost per unit.
General Beltings, the nation's sole conveyor belt manufacturer, anticipates delivering enhanced performance in 2023 despite the ongoing power supply crisis. The company registered a total group turnover of $3 billion in 2022, a 53% increase compared to the previous year. However, the availability of power for industrial purposes remains a significant operational risk that imperils the growth momentum.
Masimba Holdings, a construction firm, noted that disruptions in supply chains have been exacerbated by the Russia-Ukraine conflict, resulting in imported inflation. Simultaneously, the power shortage issue continues to present a significant challenge. The forthcoming Hwange Unit 8 is projected to ameliorate the situation, but the precise timeline remains uncertain.
Zimbabwe's electricity crisis can be partially attributed to the ramifications of climate change, which have led to diminished water levels at the Kariba Dam, consequently reducing the Kariba Power Station's generation capacity. Moreover, persistent challenges at Hwange and the frequent non-functioning of small thermal plants serve to aggravate the situation further.
Economist and former Reserve Bank of Zimbabwe monetary policy committee member, Eddie Cross, posits that both the government and the private sector should collaborate in devising long-term solutions to the power crisis. He cautions that the crisis could yield severe repercussions on the economy, augmenting the cost of conducting business and potentially rendering numerous economic activities unfeasible.
Additionally, FBC Securities, in its Q1 2023 report, stated that Zimbabwe's macroeconomic stability remains precarious, attributable to a bleak global outlook, perennial power shortages, depressed aggregate demand, and uncertainty surrounding the upcoming elections.
To alleviate the ongoing electricity crisis, Zimbabwean companies should contemplate investing in renewable energy sources, such as solar power, and examine strategies to optimize energy consumption. Cooperation between the government and the private sector will prove instrumental in discovering long-term solutions to the nation's power challenges and ensuring a stable economic environment.
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