Does Econet’s Solar Power Plant Plan Make Business Sense?

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Econet wants to construct a solar power plant at their Data Centre in Willowvale. Let’s look at the notice concerning their application for an electricity generation licence first and then look at possible reasons why they are going that route. Does it even make sense for them to do that?

NOTICE OF APPLICATION FOR AN ELECTRICITY GENERATION LICENCE

– Econet Wireless (Private) limited –

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Electricity Act (Chapter 13:19) of 2002

Notice is hereby given that the Zimbabwe Energy Regulatory Authority (ZERA) has received an application from Econet Wireless (Private) Limited to construct, own, operate and maintain the proposed 0.45 MW rooftop solar photovoltaic power plant at 8 Earl Road, Willowvale, Harare. The purpose of the generation facilities is for own consumption. The project will also entail connection of the proposed solar system to the Highfield 132/33/11kV substation.

This notice is issued in terms of Section 65(2)(c) of the Electricity Act (Chapter 13:19) of 2002 as read with Sections 3 and 4 of Part II of Statutory Instrument 103 of 2008 [Electricity (Licensing) Regulations 2008]

The licence application by Econet Wireless (Private) Limited was done in terms of the provisions of Sections 40 and 46 of the Electricity Act (Chapter 13: 19) of 2002.

Any person desiring to make representations on this application for a generation license as advertised may within 14 days from the last day of this publication lodge a written representation with the Zimbabwe Energy Regulatory Authority (ZERA) whose offices are at 45 Samora Machel Avenue, 14th Floor Century Towers, Harare. The written representations can either be handed over to ZERA offices or emailed to admin@zera.co.zw.

Any objections or representations received after the 14-day period shall not be considered by the Authority.

Firstly, if anyone knows of any reason why Econet should not be allowed to proceed with this venture, you have two weeks to rain on their parade or forever hold your peace. What could you possibly have against the deal though, I wonder?

Why is Econet building their own power plant?

As mentioned above, they want to build their solar power plant in Willowvale, where their data centre is located. Data centres require a lot of power, hence the strategic positioning of the solar power plant.

Google consumes over 5.7 million megawatts, compare that to the Zimbabwean electricity demand of 1,400 megawatts. Econet’s 0.45 megawatt or 450kW power plant does not sound significant in comparison but consider that it is 3.2% of Zimbabwe’s peak electricity demand.

Power costs

But what does data centres consuming a lot of power have to do with Econet building their own power plant? Well, firstly power has to be paid for and by having their own solar plant that leads to cost savings. You might be wondering how they save, especially considering the capital outlay required in building the solar plant. ZESA energy is expensive, charging US9.8c/kWh compared to a regional average of US6c/kWh.

Despite ZESA charging over 60% more that the regional average they actually want to increase their charges to US12.8c, a good 113% more than the regional average. ZESA has had two tariff increase applications turned down in the last two years but who knows when they will finally get their wish. Econet cannot sit idly by hence the power plant.

As mentioned in the notice, the solar power plant will be connected to the Highfield substation. This probably means any surplus power from the Econet plant would be fed to the ZESA grid. Not being sure of the data centre’s power consumption we do not know what kind of surplus there will be.

The question is, will ZESA pay or at least offset with Econet’s other ZESA bills the electricity which Econet feeds into the national grid? It won’t be much initially I presume because the average Zimbabwean household consumes about 10-15kW. The data centre will probably use up much of the 450kW but if there is a surplus of 50kW, that can power a small number of households.

That’s not exactly much for Econet or ZESA right now but who knows how many such solar power plants Econet intends to construct. In just a few years it could be a totally different story.

Reliability and availability

These days load shedding is not that common in Zimbabwe. This state of affairs is not to be celebrated because it is only so because peak demand has fallen from about 2200MW in 1999 to about 1400MW currently. This is because of the slowdown of economic activity in the country.

Econet could be anticipating an upturn in economic activity which will see an increase in demand for power. Higher demand will lead to erratic supply from ZESA who currently cannot even supply the low 1400MW.

Not only can Econet not depend on availability from ZESA, they also cannot trust ZESA to be reliable. Even in these times when demand is low, there is a frustrating number of faults, which to the end user is as good as load shedding. I know of neighbourhoods that went for more than two months without electricity in 2017.

By constructing their own power plant, Econet would have control over their own power needs, for the data centre at least.

What do you think about this move? Do you think this is great foresight by Econet or is it unnecessary capital expenditure? Let us know in the comments below.

EconetZesa

Econet Wireless Zimbabwe, a subsidiary of Econet Wireless International, is the first and largest mobile network services provider in Zimbabwe. The telecoms giant became popular with its products and services such as Buddie. It has established branches in different corners of the country and enjoys... Read More About Econet

The Zimbabwe Electricity Supply Authority Holdings is the country's biggest power producer and regulating company. It operates under the Ministry and Energy and Power Development and it runs a number of subsidiary companies with various specialities in power regulation and communications. Read More About Zesa

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23 Comments

  1. Anonymous says:

    That’s Vision

  2. Tonderai says:

    Good move by Econet, hopefully they don’t decide to recover the investment via service price increases.

  3. BT says:

    Soon all there base stations will be solar powered and they might want stake in the lucrative power solar generating market ..thinking out loud

  4. 2018 says:

    Own consumption damn right econet ZESA charge way to much for unreliable electricity so produce your own spit on!

  5. Tofara Yaniso Dube says:

    Several errors make it difficult to enjoy reading this article.
    1. You can not convert MW into MW per year. MW is a unit of power but once you use “per year” you are no longer talking about power but about energy. The two are very different (consult your high school physics please) and have different units of measure.
    2. Even if it was possible to convert kW or MW into MW per year, as you have attempted to do in this article, your mathematics is orders of magnitude off the point, probably because of a mixup in terms of how many seconds or minutes or hours there are in a year or other assumptions built into your computation.
    3. Zimbabwe’s power demand is said to be about 3000 MW, but you are stating it as 511000 MW, which is several orders of magnitude out.
    4. You are not alone. A lot of Zimbabwean newspapers talk of MW per day etc, so I am now used to the fact that they cannot edit scientific, technical or financial news correctly.

    1. Anonymous says:

      nnnnn

    2. Tonderai says:

      True, correct measurements for electricity usage are kWh or MWh.

      1. Coulomb says:

        Electrical Power is measured in Watts (W) or kW or MW
        Electrical Energy is measured in Joules (J) or Wh or kWh or MWh or kWdays etc.

        Now you sell Energy not Power (power is the rate at which you use the energy)

    3. Anonymous says:

      Also, the last time I checked my bill, ZESA effectively charges 14c/kWh. The 9.8c/kWh (that many reporters quote) is only applied to the first few kWh (maybe enough for 2 LED light bulbs per month)

  6. Ash says:

    This is a good move Econet yakangwara hamawe

  7. Mwalimu says:

    The vision is towards cloud computing services.

  8. tiki says:

    Tofara the article does not refer to per annum. It just says 0.45mw or 450kw which seems right. Where is the per year you refer to? That said perhaps the article missed an opportunity to comment on the significance of the ZESA connection from this solar subsystem which is said to be for own consumption. Is there an intention to then on-sell power to ZESA during blackouts. May help. Writer could have also taken the opportunity to shed light on the contentious issue of power storage for these systems – when it happens to be at night or on a cloudy day – will there be adequate autonomy, how much. That is where the KWH discussion becomes quite hot and quickly translates into big $$. Brilliant idea though and we must all be doing it.

    1. Anonymous says:

      .45/1400 is not 3.2%. Also, it is rather meaningless to say Google consumes 5.7 million megawatts.

      1. Coulomb says:

        Yes that statement is meaningless, you don`t consume Power (kW) you consume Energy (kWh)

    2. Tofara says:

      I think you read the article after it had been edited. Some of the things that I commented on, when I checked again now, are no longer in the article. Techzim probably took account of our comments and revised or edited the article. For example, there was a peak demand of 511000 MW for Zimbabwe in the original article, which is now gone from the article. It’s a much better article to read now, and I think you came in after the edit. Thanks Techzim.

  9. @ed1 says:

    On another thought direction – if Econet is successful then others corporates may follow suit. As well as individuals who have solar systems can feed excess into grid. Some bright minds@ZERA must be drafting how this would work!

  10. chris hanyane says:

    Econet is part of a global eco-system. They will look good bragging about shifting from old

  11. Wengai says:

    Coupled with say 100MW tesla battery storage system, this could a great investment by econet. Hopefully they consider MW battery installation as well.

    1. how dumb? says:

      what are you saying dummy? MW battery installation? be serious, 100MW tesla, come on, be serious dummy! give us some calculations etc and then lets talk, otherwise shut up fool.

      1. Tofara says:

        It’s not right to refer to others as dummy. No need to insult others.

  12. Irvine says:

    You raise pertinent questions. Rooftop solar helps the customer reduce their bills, usually with payback periods of around 10 years bearing in mind a 25-30 year lifetime for solar panels. The panels can also be used to charge batteries and be used as a back up supply in the event of ZESA failure, although this ramps up capital costs and replacement costs of the batteries after a while.
    For a rooftop solar system, this is a reasonably big, considering that you need about 2000 solar panels for this size of system. You need plenty of roof. Solar systems take up space- eg for Sir Wicknels 100MW system you probably need 400 000 panels or at least 80-100 hectares!
    However, as pointed out by others, energy analysis cannot be done in MW per year as it somehow assumes a constant power generation for all hours of the year. A fixed solar system rated at 450kW only generates the peak 450kW power for the short time when the sun is directly above the panels. At all other times the system generates less power depending on the angle the sun’s rays are hitting the panels. Thus from sunrise, the amount generated rises to a peak (450kW in this case) at around “midday” and reduces to zero at sunset. This is where kWhours become useful. If during a period of one hour lets say between 8 to 9am the average power generated is 100kW, we have energy of 100kWhours. By repeating this in each of the sunshine hours of the day and adding up the total KWh we can have a good measure of energy generated per day or any period for comparison with any other energy systems.

  13. RsTade says:

    I laughed to myself when I read the headline to your article. Why would you think to question whether it makes business sense. Instead this move should be applauded for what it is. This is a calculated move to ensure econet is insulated against the poor and expensive service provided by ZESA. Yes the initial capital outlay is probably quite large but this is only if you think in the short-term in the long run this is might lead to some considerable cost savings with the added benefit of reducing Econets reliance on ZESA. Remember that even in this depressed economy ZESA is still failing to locally generate all the electricity that the country consumes,and that ZESA currently imports about 20% of the country’s electricity requirements . This is a serious drain on the little forex that the country has. So any move no matter how small to produce electricity locally should be applauded because in the end it is a good thing for the country….. Personally I would have thought that Econet would build a new data center with the solar power plant in the Bet Bridge area , that place is as close to a desert climate as you can get in Zimbabwe …. 🙂

  14. Koos says:

    Zesa is on the way down the Utility Death Spiral. (Google it)

    If you don’t take responsibility for your own power requirements, it is going to cost you in the future, ECONET is merely providing for their future needs.

Comments are closed.