By Jeff Kapembwa
Innovation to fight El Niño induced drought in Zambia, has heightened with players in the energy sector, including the regulator, applying ingenuity to plug the deficit buffeting the sector and drive the wheels of the economy.
Zambia, like many other Southern African countries, are grappling to reduce the drought that has ravaged the region, scaling energy capacity by almost half.
This disaster has affected many other sectors, agriculture included leaves about 68 million people in the more than 300 people grappling with the suffering of the effects, which has wiped out crops across the region.
The region is not devoid of other challenges though, including unpredictable developments including cyclones that have further left indelible damages to many people in member states, what with food availability dwindling, a fear for fajmine.
In Disaster Risk Reduction the SADC is grappling with multiple disasters-droughts, tropical cyclones, floods, wildfires, and sea level rise in its member states. Malawi, was recently devastated by a myriad of problems, including cyclone Chido.
Another harsh weather effect was the cyclone Freddy which hit the country, resulting in the humanitarian assistance in excess of US$300,000 being extended towards humanitarian assistance to those affected by tropical Cyclone Freddy.
Zambia, has had its share of challenges in energy after drought ‘dried out’ most of the water sources to drive the hydro generation plants and generate in excess of 2,700MW.
This, resulted in the deficit, which caused power outages after an energy suck. This reduced production in industries, watering down profitability in productive sectors.
The Energy Regulation Board, set up by Parliament under Act Cap 436 of the Laws of Zambia has stepped in to regulate the energy sector in Zambia and ensure to give direction on the sustainability of the energy sector, one of the country’s life-blood to keep the industry running as the economy faltered to 1.5 percent of Gross Domestic Product (GDP).
The ERB, admittedly, as espoused under its mandate sought to step in and ensuring stable and affordable energy supply and enhancing the regulatory framework to adapt to the evolving energy landscape in the past 12 months when the climate induced challenges heightened creating deficit in excess of 1,000MW, prompting load management by power utility, ZESCO.
Director General Elijah Sichone said the climatic shocks prompted the agency to initiate proactively nurtured a more efficient and adaptive regulatory environment that is responsive to these unique challenges in the quest to promote sustainable energy solutions and energy security for all.
Various effective and cross-cutting policy guidelines were applied to reduce the impact of drought on the sector including energy pricing framework and strike a balance between encouraging investment in the energy sector, ensuring sustainability of supply and promoting affordability for consumers.
The regulator considered and approved an emergency tariff application by ZESCO, premised on the regulator’s declaration of an emergency in April last year.
This is due to the utility’s inability to meet the national electricity demand the decision came into effect on 1 November and will be reviewed by end of January this year.
The consideration by the regulator on the utility and affects; residential consumers; commercial customers and maximum demand customer categories. ]
To alleviate the potential high cost of electricity on low-income households and small businesses, the ERB approved a reduction in tariffs for households consuming less than 200 kWh per month and businesses, consuming less than 100 kwh per month.
Effectively, a measure that benefited approximately 530,000 households and 57,000 small scale businesses such as salons, barber shops and small-scale welders.
The emergency tariffs were meant to enable the utility raise revenue amounting to US$15 million from retail customers to contribute towards the importation of power meant to reduce the power deficit, which currently is in the order of about 1,300 MW.
Further, the emergency tariffs were meant to ensure that the utility provides up to 7 hours of predictable electricity supply on a daily basis.
Power Purchase Agreements and power supply agreements were also reviewed during the period under review, resulting in the approval of 21 power supply agreements, 26 power purchase agreements and fourteen 14 power agreements relating to importation of power, arguably to bolster power supply.
“A majority of the power purchase agreements approved involved the proposed development of new Power plants with a potential to bring in over 5,000 MW of power once completed.” Eng. Sichone, one of the key policy implementers for sustained energy supply in SADC said in the end of year review report.
Power imports from various solution providers in SADC to curb the prevailing power deficit were initiated aimed at reducing the impact on industry and other consumers with 700 MW imported and wheeled in by ZESCO and other power traders in the electricity market, a relief that helped ease pressure.
“These agreements also play a critical role in promoting renewable energy technologies, by providing a stable and predictable revenue stream and achieving a sustainable energy future.”
Net metering regulation during the period under review, was included, and application guidelines were issued and approved with the tariffs subsequently implemented.
The operationalization net metering allows consumers producing excess power from renewable energy sources such as solar to feed the excess power they produce back to the grid thereby enabling them to offset their electricity bill with their utility or earn revenue based on the outcome of the reconciliation process.
The practice, a new innovation in Zambia helped and encourage consumers to invest in own electricity generation and excess power sold to Zesco for supplement on available energy to drive industry and domestic consumers.
However, the low energy production entailed the Zesco failing to meet export obligations to various countries as espoused under the Zimbabwe-Zambia Botswana-Namibia (ZiZaBoNa) interconnectivity.
This prompted the power utility to lose in excess of $110 million revenue from cancelled power exports.
The government has announced a gradual withdrawal of ZESCO’s 120 Megawatt (MW) power exports to mitigate the ongoing electricity shortages in Zambia, according to data.
And Zesco Acting Managing Director Justin Loongo attributed the utility’s poor performance since 2023 to drought which sucked water in Zambia’s main reservoirs, affecting hydro generation
Water inflows to major reservoirs have been considerably below the historical averages. Typically, during favorable rainy seasons, the Kafue River basin, serving the Itezhi-Tezhi, Kafue Gorge, and Kafue Gorge Lower stations, receives ample inflows to sustain adequate power supply.
By December 27, 2024, the inflows remained critically low. The Zambezi River basin, supporting Victoria Falls and the Kariba Complex, has seen no significant improvement either.
“Consequently, Zambia has turned to power imports and Independent Power Producers (IPPs), emphasizing the urgent need for resilience and diversification in our energy mix.” Loongo said.
Electridade de Moçambique (EDM), Eskom of South Africa, and the Southern African Power Pool, remain key power providers and helped mitigate the current power supply deficit.