Imagine this. Right now there are 350 000 households in Zimbabwe that have not yet been connected to the grid. Me included. I read this headline and I thought, wait a minute. What if ZESA as an enterprise could capitalize on this problem? What if the solution to this problem could be a win for everybody? Power As A Service.
About a year ago we had a podcast with the CEO of Distributed Power Africa and 2 things in that podcast struck me. First, there is a reality that as a consumer you’re not really interested in where the power comes from. Electricity is just electricity. The second point is that the most reliable and most ideal electricity situation is a mix of energy sources.
Every roof as a source of power
The average area of a household roof is 100 square meters. 60% of such a roof area is enough to fit 10KVA or 10000W in solar panel capacity. So in theory, the 350 000 households will be able to collectively generate 3.5MW of electricity. That is 27% of what the Harare power station is generating right now.
Now, this is a best-case scenario. Obviously, we will have some technicalities within these 350 000 homes. Some of them are flats so multiple households are under one roof. Some roofs will have complicated designs and so fitting a 10KVA solar array can be difficult but look at it this way.
For pre-built houses in brand-new developments, ZETDC can set up 10KVA solar systems for free. Then recoup the cost by selling this power to these same households the same way they do for power on the grid. Same rates even. Meaning as a customer I not only get power but it’s power that is most reliable when I need it. During the day when I am awake and productive. A good number of us are still working from home too so it’s a win.
On the side of ZETDC, they earn some revenue from the cheapest energy source around when looking at running and maintenance costs, less load on the grid which means less load shedding, and also making household roofs power generating infrastructure to add to the energy mix of the grid. And because it’s infrastructure set up on top of someone’s roof and not an installation in the middle of nowhere, it’s a more secure installation reducing costs from vandalism.
The right energy mix
There are 3.8 million homes in Zimbabwe. Let’s take just half of those and say every roof has a 10KVA solar system. That’s 190MW of free energy or about 17% of the current national supply at the time of making this video. 17% might not seem like a big number but let’s put it this way.
Zimplats, one of the biggest mining companies in Zimbabwe is planning on building a 185 MW solar farm so it can get reliable power delivery for its operations, reduce downtime and save costs. Half of the households in Zimbabwe can easily cover that. And it’s still a win because it’s energy that’s supplementing the grid with much less risk and cost.
And even if it’s an expensive investment to fit every roof with a solar system, the savings on running costs and maintenance alone are pretty big that breaking even will not take long. And the downstream effects are pretty big on the economy and here is why.
Production
Energy is the biggest and most important resource for the industry. It does not matter whether it’s agriculture, mining, processing, or manufacturing, if there is no energy the industry cannot strive. It’s very unattractive for an investor looking to invest in industry to realize that the market they wish to invest in cannot guarantee a supply of power. And that is one of the chief reasons why very little industry is present in Zimbabwe.
To see how bad it can go, recently the Zambian Kwacha edged out the South African Rand on value against the US dollar. One of the biggest reasons is that the waves of power outages in South Africa were very frequent and of substantial duration. This had a knock-on effect on productivity. Lower productivity meant they sold and exported less but some fixed costs remained the same and there came the recipe for inflation.
Retail
Put yourself in the shoes of the retailer. You have products that you sell that require capital. You have a premise you operate from that requires rent and your power is billed in estimates. If power is unreliable and you run, say, a supermarket, you are going to have to set up redundant power solutions to ensure load shedding does not disrupt business operations.
However, this redundant power solution which in a majority of businesses right now is a diesel or petrol-powered generator, it’s added running costs on top of the ones already existing. And you are essentially paying for the same thing twice because if load shedding happens during operating hours you are still paying a monthly electricity bill plus fuel for the generator. That cost is added onto the selling price of these goods and the customer ends up paying more than they would if that unreliable power supply didn’t exist.
What I am saying is that if the cost of alternative power or backup power for this business is 10% of all the costs involved, solving that problem will mean customers save 10% on those goods. Extra income they can spend on other things which helps stretch their dollar even further.
Economy
At the moment ZPC and the government are in the middle of a drive to refurbish some thermal power stations so we can import less electricity. Until that is sorted, the short-term plan is to buy electricity from our neighboring countries. There are deals in place to buy 100MW from Zambia and another 100MW from Mozambique to supplement our power deficit. That is foreign currency leaving the country that citizens will end up paying for either through an increase in electricity tariffs or more taxes.
Half of the roofs of Zimbabwean households can meet that 200MW demand easily and save the economy millions of US dollars whilst providing a reliable power supply that costs a lot less than other available energy sources.
ZETDC also states that they are losing 9 million USD annually from vandalism and theft of electricity infrastructure. The security aspect of putting solar panels on people’s roofs gives the house owner an incentive of ensuring the security of that infrastructure because that is where their power is coming from. And as much as it might not completely eliminate the cost of damage to infrastructure, it will bring a significant reduction to that 9 million USD figure.
It’s no silver bullet but the right mix can be
Even if we were to slam solar panels on the roofs of all 3.8 million Zimbabwean homes with a 10KVA system, we would only be generating 380MW of energy which is less than a quarter of Zimbabwe’s peak energy demand of 1700MW. So it’s not going to single-handedly solve Zimbabwe’s energy crisis.
A more viable solution is one where a mix of all the energy solutions work together in harmony to ensure that energy production is sufficient, sustainable, reliable, and affordable. Sufficient enough to meet the nation’s demand. Sustainable enough that it can be a usable source for a long time. Reliable enough to deliver consistent supply with world-class uptime which should be 99.99% or no load shedding. And affordable to produce and transmit thereby making it affordable for the consumer.
No economy can thrive without energy and until we get on top of that, the state of the economy will remain as it is. And as seen in South Africa if it gets worse, so will the economy.
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