Zimbabwe short of 1000 MW, but exports electricity

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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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)