Zimbabwe has large renewable energy resources yet their exploitation is negligible due to prevailing economic challenges and a lack of regulatory incentives. Zimbabwe’s national energy policy has not been updated since 2013, and no substantive new energy capacity has been added in 2015 and 2016. The lack of a clear regulatory framework to support the procurement of renewable energy from IPPs and the adoption of energy efficiency measures remains a barrier for investors looking to finance small and large infrastructure projects.
Zimbabwe needs to procure generation capacity and diversify from its increasingly variable hydro resources. In 2015, tenders were awarded to three solar companies for 100MW each. These will be the country’s first utility-scale PV projects. ZPC also plans to develop 1.72GW in large hydro projects alongside a 30MW small hydro project between 2016 and 2022. These will help diversify the country’s power mix which is dominated by coal. Zimbabwe also imports power from neighboring countries to compensate for changes in the availability of its hydro plants. ZPC fossil fuel generation development plans consist of 1.8GW of coal and 600MW of gas.
Large hydro accounted for 37% of domestic capacity in 2016, thanks to the 750MW Kariba hydroelectric dam , while small hydro assets added another 1%. Drought conditions in 2015 led the government-owned utility Zimbabwe Electricity Supply Authority to announce a generation reduction at Kariba from 750MWh to 475MW h , running from September 2015 to January 2016. Water levels in the Kariba Reservoir, which straddles Zambia and Zimbabwe, have improved in 2016 compared with 2015.
At the end of 2015, Zimbabwe had 21 licensed independent power producers (IPPs) and three licensed state-owned power generators. Three power generation licenses were cancelled after the project promoters failed to demonstrate any progress towards the commissioning of the projects. These projects were the 600MW Essar Hwange power plant , 60MW Essar Redcliff power plant and the 0.75MW Rusitu hydro plant. The 6% of renewable energy capacity in the country’s capacity mix are all privately-owned. Triangle Sugar, Hippo Valley Estates and Green Fuel each operate a biomass plant, amounting to 96MWh of electricity produced in total utilizing the sugarcane by-product of bagasse.
Nyangani Renewable Energy is the most active small hydro developer in Zimbabwe, and the only independent power producer generating exclusively for the grid. As of 2016, its portfolio had 27MW of installed capacity for a total investment of $51.25 million. Its largest installation is the 15MW Pungwe B plant and the newer 3.72MW Pungwe C plant that came online in March 2016. Several other small hydro projects have been granted piecemeal IPP licenses but have not yet started construction. These include the 5MW Great Zimbabwe Mtirikwi project, the 2.5MW Manako hydro plant, the 3.3MW HT Gen project, and the 1.6MW Kupinga hydro plant.
In December 2015, ZERA received and reviewed a tariff application from Zimbabwe Electricity Transmission and Distribution Co. for an increase of retail rates by 49% from $0.99/kWh to $1.47/kWh . The tariff determination was meant to be finalized in 1H 2016 , but no announcement had been made as of 2Q 2017.