Sep 28, 2015

Dissecting the energy crisis in Zimbabwe

Africa
Admin
3 min
The country of Zimbabwe in southern Africa is currently undergoing an energy crisis, with deepened cuts in electricity generation. Accordin...

The country of Zimbabwe in southern Africa is currently undergoing an energy crisis, with deepened cuts in electricity generation.

According to our sister publication African Business Review, the drop in power supply is attributed to decreased water levels at Kariba Dam, leading to the country (and Zambia) generating around 474 MW instead of the 750 megawatts (MW) generated with optimal water levels.

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Power stations are also only generating 958 MW at a time when the daily demand for power regularly reaches 2,000 MW.

Hwange Thermal Power Station, the country’s other main plant, has also been faced with a shortfall of its own. While the facility was designed to produce 940 MW, power generation has fallen to 414MW as a result of the continued use of ageing machines and ongoing maintenance work.

Future projects at a standstill

Due to the power loss, most suburbs are going for almost 20 hours without electricity, leaving residents to live in complete darkness or resort to alternative energy sources such as solar, LP gas and generators.

RELATED TOPIC: Can South Africa become energy sufficient by 2019?

President of the Confederation of Zimbabwe Industries (CZI) Busisa Moyo issued a warning that the energy crisis could lead to decreased production and further job losses. In fact, CZI has estimated that capacity utilization in the manufacturing sector will decrease by the close of the year, from 39 percent to about 29 percent, due in no small part to patchy access to electricity.

The anticipated Batoka Gorge power project needs investments of over USD$3 billion for the dam construction and hydro-power plant, which is expected to generate at least 2,400 MW. The government, however, lacks the capital to fund the project.

Insider perspective

The country of Zimbabwe is still reliant on an energy infrastructure from 1980, despite the country’s population close to doubling from 7.2 million to more than 14 million.

RELATED TOPIC: Sustainable agriculture efforts come to South Africa through SAB

“Zimbabwe is suffering from the same problem as South Africa, except in this case the country lacks South Africa’s economic clout and will thus be much more hard pressed when it comes to providing a long term solution to the issue,” wrote Nye Longman, African Business Review Editor. “Whether the fall in water levels at the Kariba Dam came about as a consequence of climate change remains to be seen, but problems like this should be expected if the world continues its reliance on carbon.

“The poorest and least well-equipped countries in the world will be hit hardest by the onset of global warming; this is why it is essential, at the very least, that they are prepared for this.”

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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