I have been saying “this is the strangest thing I have ever seen” too often here lately. Every time I say it I think, “Well, this can’t be topped” but Zimbabwe has a way of bringing up something new to better what has come before. I am sure we have all seen the circular from Meikles Hotel by now, that says that they have been operating on generator power for about a week now and they are now offering guests buckets of hot water to bath with.
If you haven’t seen it then cast your eyes on this:
Please be advised that the hotel has been operating on generator power since Saturday, June 11th, 2022, due to a fault that developed within the CBD. The Zimbabwe Electricity Supply Authority is working around the clock to try to fix the problem.
Considering the above, the air conditioning in the rooms and public areas is not working, and there is no hot water. If you require hot water for bathing, please contact our housekeeping department on extension 82, and a bucket will be delivered to you.
We sincerely apologize for the inconvenience caused.
Tinashe Munjoma General Managervia Pindula News
This is a really sad state affairs for such a prestigious facility. The fact that ZESA has taken so long speaks volumes about the scale of the problem we have with electricity infrastructure in Zimbabwe as well as the nation’s power authority’s ability to respond to issues in a timely manner.
This isn’t to say that ZESA isn’t doing everything in its power to rectify the problem. But they are usually complaining about aged equipment and infrastructure to the point that whenever a fault happens, we all imagine the line was laid before Zimbabwe was a country.
For Meikles Hotel this problem underscores something about Zimbabwe that was brought to light in a conversation I had with Distributed Power Africa CEO Norman Moyo last week.
Energy Security is paramount for any business in Zimbabwe
Businesses in Harare are leaving the CBD to set up in surbabs or on the outskirts of the city because at least there they have some control of water and energy supply as well as run away from the lack of parking and atrocious traffic. If you have seen any of the new enterprises that are opening shop away from the CBD, you would have noticed the impressive solar installations that they are putting up.
The scale to which they are putting up solar is scary and I can imagine the folks at OneStopSolar, Nation’s Hardware, Samansco and many others are laughing to the bank.
Local businesses are doing this because (as mentioned earlier) they can sink boreholes for consistent water and guarantee energy security through solar. Norman Moyo said something similar in the conversation we had last week on our podcast Technikari (link here) because his company DPA specialises in giving companies the capacity to generate electricity from the abundance of the sun.
DPA has put up a 1MW installation for Schweppes Zimbabwe, 1.8MW for tea producer Tanganda Zimbabwe, 118KW for Luxaflor Roses Farm and many others locally and across Africa. This initiative was birthed not by an Econet Group company but by the Zimbabwe Energy Regulatory Authority (ZERA) allowing Independent Power Producers (IPP) to register and generate power locally for private and public players.
These IPPs are meant to help offset the growing demand for electricity that ZESA, with its import-heavy circumstance, cannot meet. However, there are legacy debts and issues with ZESA that are unattractive for IPPs to make an investment outside companies that have the space and money for a standalone or grid-tied solar system.
Obviously, I’m not saying Meikles should leave the CBD
If you for a moment thought that I was going to suggest that Meikels should leave the CBD then you are sorely mistaken. It would be difficult to build another hotel elsewhere or justify it cost-wise. However, what would help guarantee some energy security for companies like Meikles Hotel is if there was a choose your own energy supplier program in Zimbabwe.
If that term took you some time to wrap your head around then we are the same because, in Zimbabwe, all we know of in the energy sector on the national scale is ZESA. It appears that in other countries there are multiple energy producers to choose from with different prices depending on how they make their power.
In New Zealand for example, households and enterprises can pick from a number of energy retailers that are owned by power generating companies. Transmission of power is handled by a state-owned distributor that handles getting the electrons from the supplier to the customer.
“Generation companies own and operate power stations across the country. Most of New Zealand’s electricity is generated at remote locations and requires an efficient transmission system to transport it to the main centres. More than 200 generation plants are able to supply electricity to the national grid. Some of the smaller-scale generation is ‘embedded’ and feeds directly into local distribution networks.Ministry of Business, Innovation & Employment
In the local context, we have a similar model that didn’t work out so well for ZESA:
- Zimbabwe Electricity Transmission and Distribution Company (ZETDC) deals with the distribution and retailing of power
- ZPC (Zimbabwe Power Company) – generates electricity
As you are all too well aware there those entities don’t really have any substantial competition and it’s essentially one company with subsidiaries doing both jobs.
So what does this have to do with Meikles Hotel?
Imagine for a moment if Meikles could, as they do in New Zealand, switch from one power provider to another if the service or cost doesn’t meet their satisfaction? New Zealanders can choose from five energy producers Genesis Energy, Mercury and Meridian Energy (who have mixed ownership comprising the govt and private players) while Contact and Trustpower are private businesses.
The cost of electricity is judged according to the cost of the power supplied as well as charges for transmission and distribution. This results in a variety of pricing regimes for differing needs and circumstances to the point that if you are dissatisfied with your current plan you can switch from one provider to another.
Once you’ve decided on the best power company and plan, you can start the switching process while you’re still on the Consumer Powerswitch site. Your new power company will then arrange the transfer for you. It’s usually free to switch. On average, it takes just 3–4 days for the switch to take place.Energy Authority of New Zealand
Additionally, it means that a company like the ZETDC would have multiple revenue streams from different energy producers who want to get their power to the end-user. This is something that Norman Moyo touched on and said that his company DPA and others would be more than happy to pay for the ZETDC’s impressive transmission capacity.
“ZESA’s transmission capacity is a white elephant if there are no electrons flowing through the lines”
Moreover, the ZETDC would probably have more money to upkeep its transmission infrastructure which would probably result in fewer cases of downtime like the one we are witnessing in Harare’s CBD.
Why can’t Meikles Hotel just put up its own solar?
There is a notion of “do it yourself” in Zimbabwe that I absolutely detest. I say this because we end up wasting time developing things that we could easily contract another firm in the ecosystem that already has the product or tech ready (competencies permitting). We fail to create effective ecosystems locally because everyone is in their silo trying to be, in this case, an IPP.
Meikles could easily put up it’s own solar, like most of the other businesses in Zimbabwe, but that means they will also need to bear the costs of storage of that solar by way of batteries. Additionally, a hotel consumes a lot of energy and solar would be complementary to traditional sources.
However, if there were multiple IPPs tapping into various forms of energy generation to get to end-users through ZETDC and ZESA then we would be better served because we won’t only have one point of failure for power generation in Zimbabwe.
Won’t this drive up the price of power?
We are currently facing the reverse problem in Zimbabwe because power is not being priced effectively enough to meet what ZESA needs to properly function.
“In addition to aging infrastructure, the obtaining electricity shortages in the country is being caused by a combination of factors which include non-cost reflective tariff, high debtors book, and liquidity challenges,”Sydney Gata, ZESA Chairman (via The Herald)
As Norman Moyo said in the podcast I had with him last week, there is a myth that the price of power is too expensive. The problem is the government subsidy on power and the lack of IPPs to generate power from other sources. The status-quo means that whenever ZESA has a shortfall in finances, the taxman comes with a punitive tax. Why not just pay the cost of electricity to the supplier and not have to do it with extra steps through taxes?
And for those who think New Zealand is a far-off example of what is possible in Zimbabwe. To them, I say, they have a population of just around 5 million. We are almost triple that but we are still relying on a single power producer when they have five?
Would you be happy if Zimbabwe’s sole Internet Service Provider was TelOne or Econet was the only mobile network operator in the country?
P.S it looks like power has been restored at Meikles Hotel