KABANDA CHULU, Lusaka
ZESCO managing director Victor Mundende says the company has projected to spend US$502 million in 2017 for the purchase of 519 megawatts of electricity from independent power producers (IPPs) to mitigate load shedding.
Mr Mundende said the sector needs regular tariff adjustments to secure reliable electricity and reduce load shedding.
He said Government cannot continue subsidising Zesco Limited because the company is capable of meeting its obligations if it is allowed to operate as a business.
“To ensure continued supply of electricity, we have to buy from other producers to supplement what Zesco generates, and the average cost of these purchases is US$11.04 cents per kilo Watt hour [kWh], against an average selling price of US$3.3 cents per kWh
“The high cost of power from IPPs needs to be supported by an adjustment in tariffs so that Zesco can continue to make these purchases. In 2015 and 2016, Zesco received support from the government for purchases of power from IPPs and imports. However, Government now expects tariffs to be cost-reflective as this level of support [subsidies] is not sustainable,” Mr Mundende said.
He said the recent increase in tariffs approved by the Energy Regulation Board will result in increased national access to electricity aimed at improving the standard of living of the people.
“This positive development will also help to attract investment from the private sector in all the economic sectors. There will also be increased access to electricity to minimise use of other energy sources that impact the climate adversely for example, the use of charcoal,” he said.
Mr Mundende said Zesco needs regular tariff adjustments in order to invest in the new generation, transmission and distribution infrastructure required to meet demand for electricity, and expand its customer base and mitigate the continued rise in operational costs to result in better provision of services.
Zesco this year intends to buy 26MW from Lunsemfwa Hydro at a cost of US$18 million, 51 MW from Kariba North bank Extension at a cost of US$71 million and 72MW from Itezhi Power Corporation at a cost of US$58 million, and 100MW from Ndola Energy US$123 million and 270MW from Maamba Coal at a cost of US$232 million.