ZIMBABWE IS developing a policy structure that makes it mandatory for energy companies responsible for operating the national grid to purchase electricity from renewable energy sources.
The Zimbabwe Energy Regulatory Authority (ZERA) is developing a renewable energy feed in tariffs, which is designed to encourage and support greater private sector participation in power generation from renewable energy technologies, through the establishment of an appropriate regulatory framework.
ZERA chairperson, Canada Malunga said the tariffs are to be developed for renewable energy technologies applicable such as solar power, hydro power, biomass, bagasse and biogas.
The tariffs would be at a pre-determined price that is deemed sufficiently attractive to stimulate new investment in the renewables sector.
The most prominent national grid operator in Zimbabwe is currently the Zimbabwe Electricity Transmission and Distribution Company, a subsidiary of ZESA Holdings.
The tariffs will also provide a guaranteed purchase price, differentiated by technology for a fixed duration, ensuring an appropriate return on investment for developers.
Permanent Secretary for Energy and Power Development, Patson Mbiriri, said the tariffs have been identified by government as a response to stimulate the uptake of renewable energy in the country.
“Our tariffs should be based on costs. This is on the assumption that it is better to have [renewable] power than have none at all,” he said.
“Government is committed to supporting renewable energy proposals and projects with minimal bureaucracy. The extent to which tariffs are affordable is the extent to which the economy is moving,” he said.
Zimbabwe’s tariff regime is pegged at an average of US$0.09 per unit, which investors have found to be not rewarding enough or providing a sufficient rate of return on investment.
Thirteen countries are currently implementing or investigating renewable energy procurement mechanisms in Africa, among them Kenya, Botswana, Namibia and South Africa. Feed-in tariffs are more common in developing countries, combined with tendering for larger projects.
The envisaged benefits of renewable tariffs include costs being pushed down, and financial risks reduced by providing certainty, thereby increasing private sector and other investment.
The downside is that there would be an increase in the retail price of electricity paid by consumers, due to independent power projects being compensated above avoided cost.
In addition, there may be poor back up service in remote rural areas, limited local experience and expertise with some technologies, lack of awareness and inadequate funding for the sub-sector. The Standard