Zimbabwe was short of 1 000 megawatts of power but was exporting 150 megawatts to Namibia to pay for the refurbishment of four plants at its Hwange Thermal Power Station.
The Zimbabwe Electricity Supply Authority entered into a barter deal with Nampower of Namibia to refurbish four of the six turbines and repay by supplying Nampower with electricity.
The initial payments in 2008 were for only 50 MW. However, in 2009 the payments jumped to 150 MW and were to remain in effect for the next five years.
Full cable:
Viewing cable 09HARARE967, ZIMBABWE, LITERALLY IN THE DARK
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|
Reference ID |
Created |
Released |
Classification |
Origin |
VZCZCXRO5469
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0967/01 3481533
ZNR UUUUU ZZH
R 141533Z DEC 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5216
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHDS/AMEMBASSY ADDIS ABABA 3319
RUEHKI/AMEMBASSY KINSHASA 0539
RUEHGP/AMEMBASSY SINGAPORE 0009
RUEHBJ/AMEMBASSY BEIJING 0107
RUEHKM/AMEMBASSY KAMPALA 0007
RUEHNR/AMEMBASSY NAIROBI 0009
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHAAA/NSC WASHDC
UNCLAS SECTION 01 OF 03 HARARE 000967
SENSITIVE
SIPDIS
AF/S FOR B. WALCH
EEB/ESC
DRL FOR N. WILETT
CA/OCS/ACS/AF M. RAUGUST
JOHANNESBURG FOR RCO K. MAY
NSC FOR SENIOR AFRICA DIRECTOR M. GAVIN
TREASURY FOR D. PETERS
E.O. 12958: N/A
TAGS: ENRG ECON EINT CASC PGOV ZI
SUBJECT: ZIMBABWE, LITERALLY IN THE DARK
REF: A. HARARE 000361
¶B. HARARE 000941
¶1. (U) SUMMARY: Zimbabwe produces about half the electricity it
needs, resulting in persistent blackouts that constrain industrial
output and economic recovery. Zimbabwe’s Electricity Supply
Authority (ZESA) struggles to operate and maintain a decrepit
national grid, which due to a chronic lack of coal, aging equipment,
vandalism, and general neglect routinely supplies only 750 MW,
against a national demand of around 2000 MW. Habitual load-shedding
has become the norm, with many rural regions without power at all.
Given the absence of scheduled capacity building projects and a
government-controlled tariff schedule that prevents revenue for
capital improvements, no improvement is in sight. END SUMMARY.
———————
Insufficient Capacity
———————
¶2. (SBU) David Chikowore, an electrical engineer with ZESA (a
government-owned parastatal and sole electricity supplier in
Zimbabwe) spoke openly about the country’s electricity woes during a
meeting with Conoff on December 2. Chikowore explained Zimbabwe’s
root problem is insufficient generation capacity. At the core of
the Zimbabwe national grid is the 750 MW hydro-electric plant at
Kariba. However, due to periodic maintenance and fluctuating water
levels in the Kariba Reservoir, this plant often operates at less
than full capacity. For example, in November 2009 the plant
underwent annual maintenance that restricted output to only 400 MW,
while the reservoir’s water level in the dry season often restricts
the amount of water that can flow through the turbines. Chikowore
estimated that the plant, on average, supplies about 550 MW.
¶3. (SBU) In addition to the hydro plant in Kariba, Zimbabwe has six
major and three supplemental coal-burning plants, which all suffer
from varying degrees of inefficiency and insufficient coal supply.
Hwange, Zimbabwe’s principal electricity generating facility is
comprised of six major coal-burning furnaces with a total design
capacity of 1220 MW. Four of the six are designed to generate 120
MW and two are designed to generate 220 MW. The three supplemental
coal plants, located in Harare, Bulawayo, and Munyati, each have a
design capacity of 100 MW. However, due to coal shortage and
disrepair, the three supplemental plants have been completely
dormant since 2007, while three of the six plants in Hwange are
normally down for service or refurbishment at any given time.
Chikowore explained that in 2009, Hwange has produced an average of
about 460 MW.
¶4. (U) Although Hwange is the site of one of the largest coal
deposits in the Southern African region, the Hwange Colliery Company
has been unable to meet demand, plagued by a series of conveyor
belt, dragline, and equipment failures (Ref A). Like other Zimbabwe
state-run enterprises, it suffers from a severe shortage of working
capital needed to repair and replace worn equipment. According to
MineWeb, a mining news reporting service, the Hwange colliery is
QMineWeb, a mining news reporting service, the Hwange colliery is
operating at less than 50 percent capacity and suffers from chronic
breakdowns of its heavy equipment. Unofficial estimates define
Zimbabwe’s monthly demand at approximately 400,000 tons of coal,
with Hwange supplying less than 180,000. Aggravating the problem is
the Zimbabwe National Railway’s state of disrepair. Chikowore
explained that coal for the supplemental plants must be trucked from
the colliery, as the railway lines are unserviceable, and that
trucking coal to the supplemental plants is neither feasible nor
cost effective. He said it was cheaper to buy power from
neighboring countries (Mozambique, Zambia, and DRC) than it was to
transport coal to the outdated and inefficient supplemental power
plants.
——————————————— —–
Zimbabwe Is 1000 MW Short, But Exports Electricity
——————————————— —–
HARARE 00000967 002 OF 003
¶5. (SBU) A principal factor in the depressed Hwange output is an
ongoing refurbishment of four plants. In a 2007 barter deal between
ZESA and Nampower (Namibia’s power utility), four of the six
turbines are being replaced and the corresponding generators
refurbished. In exchange for the refurbished plants, ZESA agreed to
repay Nampower by supplying electricity. Similar to a variable
mortgage, initial payments in 2008 were for only 50 MW. However, in
2009 the payments jumped to 150 MW and will remain in effect for the
next five years. Of note, the Hwange refurbishment only includes
the four smaller generators, with the 220 MW generators without any
prospect of repair.
——————————————— –
Decrepit National Grid and Daily Load-Shedding
——————————————— –
¶6. (SBU) Beside not generating enough power, ZESA is also unable to
equitably distribute the power it does generate. The whole grid
distribution system suffers from years of vandalism and inadequate
maintenance, resulting in large areas disconnected from the national
grid. Vandalism has included the theft of the transmission fluid
from the step-down transformers and theft of the timbers used to
string transmission lines. Chikowore estimated that over 900
transformers were in need of service or replacement in Harare and
Gweru alone.
¶7. (U) Aware of the gap between supply and demand, ZESA attempts to
distribute the pain through publication of a “load-shedding
schedule.” In theory, the schedule is designed to equitably supply
industry and neighborhoods with power, while providing advance
warning of blackout periods. However, in practice, the schedule,
built upon faulty assumptions, has become merely a starting point
for further cuts. November 15, a typical day, serves to illustrate
the dynamic.
¶8. (SBU) On November 15, due to annual maintenance, Kariba produced
only 450 MW, not the planned 500 MW. Hwange had one more furnace
out of service than planned, resulting in only 430 MW production,
vice the planned 550 MW. Together, the two plants supplied 880 MW
to the national grid, although 1050 MW were planned. From this 880
MW, 150 MW were diverted to Nampower, leaving 730 MW for domestic
consumption. The load-shedding schedule assumed a demand of 1170
MW, resulting in a 270 MW shortfall that was used to build the
load-shedding schedule (1050 supply, minus 150 Nampower, minus 1170
demand). Assuming an accurate prediction of demand, the ZESA
engineers at the control panels faced an additional 170 MW shortfall
(because actual production was below the expected level) before
anyone turned on a light. However, the 1170 MW demand was
inaccurate as well. Throughout the day, as “pulls” on the system
increased, nervous engineers watching their frequency panels shed an
additional 320 MW in addition to the published schedule of 270 MW.
Chikowore explained that this additional real-time load-shedding had
become a daily dynamic.
Qbecome a daily dynamic.
————–
Grim Prognosis
————–
¶9. (SBU) When asked about the future, Chikowore gave a pessimistic
prognosis. Lamenting the total lack of any capacity building
projects on the books, he said no real change to the daily
load-shedding dynamic could occur within the next five years. He
said that in the past, ZESA had purchased power from its regional
neighbors (Mozambique, DRC, and Zambia), but excess power was in
short supply and ZESA could not afford to buy it when it was
available.
¶10. (SBU) According to Chikowore, ZESA’s average tariff schedule
barely covers cost, leaving no revenue for capital improvements or
HARARE 00000967 003 OF 003
refurbishment. In March 2009, amidst a public outcry, the
government announced an increase in the average tariff from USD
0.041 to USD 0.075 (7.5 cents) per kilowatt-hour. Chikowore said
this increase was still woefully inadequate and did not provide for
capital improvements. He said ZESA had applied to the Ministry of
Energy Regulatory Committee to increase the tariff to 9 cents
beginning in January 2010, though he believes the tariff should be
approximately 11 cents to provide realistic funding for
refurbishment.
¶11. (U) A November 2009 World Bank report estimated the cost of
transmission emergency rehabilitation at USD 561 million. In a
November interview preceding publication of the new national budget,
the Minister of Energy and Power Development, Elias Mudzuri, said he
hoped that his ministry would receive between USD 70-100 million for
rehabilitation. As reported in Ref B, Finance Minister Tendai Biti
placed the power sector at the top of his public-sector priorities
when he presented the 2010 budget, allocating USD 53 million towards
refurbishment.
¶12. (SBU) COMMENT: The electricity utility ZESA is another example
of a bankrupt GOZ-owned operation. Like Zimbabwe’s rail, road,
medical, and telecommunications infrastructures, Zimbabwe’s
electricity power sector will require years and hundreds of millions
of dollars to repair. Although Minister Biti acknowledged the
importance of refurbishing the power sector, we anticipate a revenue
shortfall will compel him to abandon a large portion of this
priority in favor of an irreversible commitment for increased wages
in the public service. END COMMENT.
RAY
(409 VIEWS)
