Zimbabwe Stock Exchange (ZSE) listed Powerspeed Electrical says its partnership with Swiss-based Meeco Group to set to solar power plants around the country has stalled because of improved electricity supplies and lower industrial demand.
In November 2014, Powerspeed and the Swiss clean energy firm’s Zimbabwe-based subsidiary, OurSun Energy signed a partnership to distribute solar energy products and solar power plants that would have produced five megawatts (MW) each, with a target of 50MW in 2015.
The deal was signed at the height of rolling power cuts in the country, with some parts of the country going for days without electricity, crippling manufacturing capacity.
However, the power situation in the southern African nation has stabilised of late, largely due to sustained imports and a drop in demand from 2 200MW to 1 450MW as industrial capacity continues to decline in a deteriorating economy.
Statistics from the power utility showed that the country was generating 1 056MW locally, augmented by imports of 350MW.
Powerspeed managing director Hilton Macklin said that improved power supplies had reduced demand for solar energy and hence the companies could not justify huge investment into the venture.
“There has not been a lot of progress on the solar front, for several reasons. Power has been relatively reliable, the anticipated electricity price increase did not happen and the current economic uncertainties have made most potential investors have a much shorter time view on investment and this is not compatible with solar which has a relatively long payback period,” he said.
He said the company, however, had just completed a solar project for listed crocodile company Padenga Holdings which reduces their reliance on diesel generation for water pumping and other needs at their crocodile farms in Kariba.
The Zimbabwe Energy Regulatory Authority (ZERA) last year shot down a proposal by Zesa Holdings to increase electricity tariffs by 49 percent, declaring the average power charge should remain at 9.86 cents per kilowatt hour.
The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) had proposed that the average tariff be raised to 14,69 c/kWh, a situation that would have attracted significant investment on power.
Recent reports have, however, indicated government was still keen on raising the power tariffs.
On Powerspeed, Macklin said the company is content to maintain its current branch network of 16 outlets.- The Source