Thursday, 1 August 2019

GOVT HIKES POWER TARIFFS


GOVERNMENT has approved an electricity tariff increase to assist Zesa to mobilise more resources to cover the supply gap but maintained subsidised charges for domestic and agricultural consumers.

Finance and Economic Development Minister Professor Mthuli Ncube said this yesterday while delivering his 2019 Mid-Year Budget Review statement in Parliament under the theme: “Building a Strong Foundation for Future Prosperity”.

He said the short term solution to the country’s power crisis lies on importation from regional producers to cover the deficit while Government works on capacitating Zesa to improve on its generation capacity.

The country is experiencing severe power shortages owing to drastic decrease in water levels at the main Kariba Hydro Power Station and ageing equipment on thermal stations, which has seen consumers going for over 10 hours without electricity for almost three months.

Government is in negotiations with South Africa’s utility company Eskom on a deal to import 400MW.

“In the short term, power supply deficit can only be met through power imports and hence it is urgent that Government capacitates Zesa to mobilise requisite resources through appropriate and cost recovery tariffs implemented through a differentiated scale,” said Prof Ncube.

“Therefore, Government has approved the following electricity tariff measures for immediate implementation: the electricity tariff for non-exporting businesses be increased from an average of ZWL9.86c/kWh to an average of ZWL45c/kWh (approximately USc5/kWh), the electricity tariff for domestic consumers be increased from an average of ZWL9.86c/kWh to an average of ZWL27c/kWh (approximately USc3/kWh), which is subsidised. 

“The electricity tariff for agriculture consumers be increased from an average of ZWL9.86c/kWh to an average of ZWL27c/kWh (approximately USc3/kWh), which is subsidised.”

Prof Ncube said the tariff for ferrochrome smelters and other miners will be maintained at US$0.067/kWh and US$0.0986/kWh respectively with the foreign currency revenues obtained used for importing power. He said Zesa has been given the green light to charge other exporters and foreign currency earners in foreign currency and ensure that the resources were ring-fenced in a special account solely for purposes of importing electricity.

Prof Ncube said in view of the imminent changes the Ministry of Energy and Power Development and the Zimbabwe Energy Regulatory Authority (Zera) will make pronouncements fine tuning the changes.

He said Zesa should roll out energy saving mechanisms such as pre-paid meters and speeding up structural reform at the parastatal. While the power utility implements energy saving efficiencies, Government will continue to work on medium and long term solutions, which include expanding power generation at various power stations.

Prof Ncube said Treasury has also struck off duty on lithium-ion soar batteries to promote usage of alternative green energy.

“Honourable Members would be aware that Government, in 2010, provided for duty free importation of solar panels and other solar- related products, in support of the energy policy thrust on use of alternative, clean and renewable energy sources. 

“In order to promote investment in solar energy, thereby reducing power demand on the already constrained national grid, I propose to remove duty on lithium-ion solar batteries,” said Prof Ncube. Herald

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