OPPORTUNITIES AMIDST ENERGY CRISIS

BUSINESS FOCUS WITH BALEWA ZYUULU  

AMIDST Zambia’s ongoing energy crisis, there exists a silver lining in the form of the newly approved Open Access and Net Metering Regulations. These regulations will enable households and businesses to become active participants in the energy market.

One of the primary opportunities presented by these regulations is the ability for households and businesses to generate their own electricity through solar panels or other renewable energy sources. This surplus electricity can then be sold back to the national grid under the net metering system. This not only helps reduce electricity bills but also provides a steady income stream. In a time of economic uncertainty, this additional income can significantly bolster financial stability for families and support growth for businesses.

The concept of open access ensures that all electricity producers, regardless of size or origin, have the right to use the national electricity network to reach consumers. Previously monopolized by one entity, this access fosters competition and innovation within the sector. Small-scale producers, such as community projects or local businesses investing in renewable energy, now have the opportunity to contribute to the grid and meet local demand. This democratization of energy production not only enhances market efficiency but also encourages localized solutions to energy needs.

Further, the shift towards renewable energy sources promoted by these regulations brings about environmental benefits. By incentivizing the adoption of clean energy technologies like solar power, Zambia can reduce its reliance on fossil fuels and mitigate environmental degradation. This aligns with global efforts towards sustainability and positions Zambia as a forward-thinking player in the global energy transition.

The growth of the renewable energy sector under these regulations also opens doors for job creation and attracts investments. Installation, maintenance, and servicing of solar panels and other renewable energy infrastructure create employment opportunities across various skill levels. Moreover, the transparent regulatory framework provided by the Open Access and Net Metering Regulations enhances investor confidence. Local entrepreneurs and international firms alike are now more inclined to invest in Zambia’s renewable energy sector, driving economic growth and development.

In tackling energy poverty, these regulations offer a strategic solution. By expanding access to electricity and reducing costs through increased competition, more Zambians can enjoy reliable power supply. This is particularly crucial for rural communities and underserved areas, where access to electricity remains limited. Reliable electricity supports educational institutions, healthcare facilities, and small businesses, thereby fostering socio-economic development and improving quality of life.

While Zambia faces challenges in its energy sector, the Open Access and Net Metering Regulations present promising opportunities for transformation. By empowering individuals and businesses to generate and sell electricity, promoting environmental sustainability, creating jobs, and attracting investments, Zambia can navigate its energy crisis towards a better Zambia for all.

Other short, medium and long term measures taken by the Zambian government announced by Energy Minister Peter Kapala include rhetoric following.

“The Government has noted the need for a lasting solution that fosters the provision of affordable and sustainable energy services.” Kapala said.

Short term measures

Power imports (firm and non-firm power): Currently, power import stands at 188MW. In addition, ZESCO Limited has also clawed back 160MW of power from export contracts.

Restarting of the 105 MW Ndola Energy Power Plant: Currently, the Ministry of Energy, ZESCO and Ndola Energy

Company Limited (NECL) are undertaking negotiations with a view to restarting the power plant by July 2024.

Development of a 100MW Solar PV power plant in Chisamba: The Government, through ZESCO is developing the project which is scheduled to be completed in December 2024.

Installation of 120 MW of Diesel Generators in Ndola and Mpika

The Government, through the Energy Regulation Board, has streamlined the licensing processes in order to apply light handed regulations on entities that would want to set up generation plants.

Tariffs and Power Purchase Agreements. ZESCO has been directed to speed up and on-board all Independent Power Producers with a lucrative tariff during this crisis.

Medium – long term projects

Renewable Energy Expansion:

* 120 MW Solar PV Portfolio: Implementation of a 120 Mega Watt portfolio of solar PV power projects under the Global Energy Transfer Feed-in Tariff (GET-FiT) program.

* Maamba Collieries Phase II:

Plans are underway to develop the 300 MW Maamba Coal Power Plant. We anticipate that financial closure will be reached by 30th June 2024 and construction is expected to commence immediately.

* Luapula site CX Hydropower Project: Plans are already underway to expedite progress on the development of the 271MW Luapula hydropower project on the Luapula River.

Strategic programmes and long-term projects:

The Government completed the development of the first Integrated Resource Plan (IRP) in 2023 which is aimed at providing sustainable solutions to Zambia’s challenges in the electricity sub-sector.

The IRP outlines a strategy for addressing these challenges through the implementation of sustainable solutions. The programme projects a need for additional generation capacity of 6,505 megawatts (MW) by 2026, requiring an estimated investment of USD 5 billion. To meet long-term demand, the IRP forecasts a total of 23,000 MW by 2050 with a corresponding investment requirement of nearly USD 31 billion.

“Therefore, the Government through the Ministry of Energy remains committed to seeking sustainable solutions to resolve the electricity crisis while enabling sustainable operations for our national utility.” Kapala said.

Embracing these opportunities not only addresses immediate energy needs but also sets the stage for long-term socio-economic progress and environmental stewardship.

The Author is an Economist and a multiple international award winning journalist.