Honeymoon over, Gata tells mining companies

Honeymoon over, Gata tells mining companies

Pretty Manyewe

Power utility ZESA has written to miners notifying them of an imminent increase in electricity tariffs from US 9.86 cents per kilowatt to US 10.7 cents per kilowatt effective August 1.
In a letter, ZESA Executive Chairman Dr Sydney Gata said the growing mining industry is increasing pressure on the grid, which is currently being sustained by expensive imported electricity, and have to pay cost reflective tariffs.
“The supply-demand gap is growing at unprecedented rates, aggregating to 2100MW of additional load by 2025. ZESA is under immense pressure to settle the ballooning power import debt and the debt is growing back exponentially, posing a threat on security of supply. At the current tariffs ZESA is failing to refurbish the generation, transmission and distribution network so as to improve on service delivery,” said Dr Gata.
ZESA has been charging an average tariff of USc9.86/kWh for exporting customers other than Ferrochrome smelters, which however is below cost and hence has been failing to capacitate the Utility to ensure security of power supply and efficient service delivery.
The increase in prices comes at a time where the country is also experiencing a surge in power cuts and load shedding.
However, this has been a common problem in the SADC region as evidenced by ESKOM’s current Stage 6 Load Shedding.
The region wide shortage poses a problem in that neighbouring countries are also bidding to buy electricity from countries like Zambia, which are currently experiencing surplus.
“Further to that, Hwange Stage 3 Project, which is expected to come in November 2022, will be coming in at USc10.7/kWh, translating to over USc12.0/kWh to end-customers after adding ZESA overheads and use of system charges. The exporter’s tariff will therefore be USc10.63/kWh with effect from 1 August 2022.”
ZESA hopes that the increase in tariffs will help cater for the current incapacitation of operations due to inadequate operational vehicles, machinery, and spares.