HOW GOVERNMENT AND PRIVATE SECTOR INTIATIVES HAVE SUPPORTED SUSTAINABLE ENERGY IN ZAMBIA

Transcription

1 HOW GOVERNMENT AND PRIVATE SECTOR INTIATIVES HAVE SUPPORTED SUSTAINABLE ENERGY IN ZAMBIA PRESENTED BY FRANCESCA ZYAMBO DIRECTOR PLANNING AND INFORMATION Ministry of Energy and W ater Development ZAMBIA

2 Presentation Overview 1. Introduction 2. Current Energy Scenario 3. Government Initiatives 4. Private Sector Initiatives 5. Challenges and Zambia s Experience 7. Future Energy Strategy 7. Conclusion

3 1. Introduction Zambia s average real GDP growth rate has been 5.1 % between 2001 to date. Growth in the economy and the need to be a middle income country by 2030 necessitates the development of new power generation plants and transmission lines. Source: group.net/research_ctry_africa.asp

4 2. Current Energy Scenario CONSUMPTION IN 2015: 12,553GWh CONSUMPTION BY SECTOR: Residential: 15% Commercial: 5% Social Services: 5% Industrial: 20% Mining: 50% Exports:5%

5 2.1 Electricity Generation Capacity Installed electricity generation capacity is 2,493.5 MW.

6 2.2 Electricity Demand Forecast ü Maximum Demand is now estimated at more than 1900 mw with projected growth of 3-4% p.a. ü National access to electricity: 31.4% with 4.4% in rural areas (2015)

7 3.0 Government Initiative's to Promote sustainable Energy in Zambia The Main objective of the Government in the Energy sector is to have Universal access to clean, reliable and affordable energy at the lowest total economic, financial, social and environmental cost consistent with national development goals by The following Governance frameworks are in place to drive the sector: I. Energy Policy 2008 II. Electricity and Energy Regulation laws III. IV. Power Systems Development Master Plan Rural Electrification Master Plan V. Vision 2030 Energy Chapter VI. Revised Sixth National Development Plan 7

8 3.1 Government Initiatives to Promote Private sector participation in the Energy sector in Zambia Removal of Tax on Technologies The Government has zero rated and removed taxes on all renewable energy technologies in Zambia. This is in the quest to encourage more investment in other alternative energy sources. Cost reflective tariffs Government has agreed in principle to move towards a cost reflective tariff to encourage a energy mix and diversification towards the sector. Banning of The use of incandescent Bulbs The Government banned the use of incandescent bulb as a new measure that will help relive the pressure that s being experienced on the National Grid. The Migration path is towards the use of Led lights for industrial and house hold use. Investment Incentives The Zambia development agency offers tax holidays and tax breaks of up to 5years to any investment in the energy with a minimum investment threshold of up to 500million dollars. 8

9 4.0 Private Sector initiatives to Promote Sustainable Energy in Zambia Establishment of the Energy Fund The Private sector through Stanbic Bank have established a renewable energy fund, that supports private renewable energy projects that are bankable. The Zambia Association of Manufacturers The Zambia association of Manufactures recently obtained a loan from the world bank and are currently installing solar energy technologies at all the association member premises. This is in a bid to diversify the private sectors energy mix and source of energy. 9

10 5.0 Challenges in Zambia s Energy Sector Historically the sector has faced the following challenges; Low energy tariffs Lack of investment in the energy sector Lack of diversity in generation sources Low Transmission Capacity to certain parts of the country Low electricity access rates especially in the rural areas Heavy dependence on biomass as the major source of energy especially for households

11 5.1 Zambia s Experience in the Energy Sector Cost reflective tariffs key to attracting investment Low tariffs have in the past discouraged investment in the energy sector. In the last few years the tariff has been increased with the aim of attaining cost reflective levels. The tariffs will continue to migrate upwards over the next few years. PPP implementation models could unlock investment opportunities. Inadequate Government resources are supplemented by Private resources. A casing point is the Itezhi Tezi project 120MW which has since been completed.

12 5.2 Zambia s Experience in the Energy Sector (2) Diversification of energy supply key to sustainable development Over reliance on one source of energy supply could spell catastrophic for an economy. Zambia relies on hydro power by over 90%. Lack of investment in the sector resulting in power supply deficit For a long time Zambia had power generation surplus and did not invest in additional generation capacity resulting in power supply deficit. Need to monitor economic and population growth and match with generation capacity.

13 6.0 Future Energy Strategy Diversify Electricity Generation Attain Cost Reflective Electricity tariffs Reduce dependency on Petroleum imports by substituting with locally produced biofuels Government has announced blending ratios of up to 10% Ethanol and up to 5% Biodiesel. Needs to work out implementation modalities Explore policy measures aimed at boosting development of nontraditional sources of energy such as renewable energy Increase the storage capacity for petroleum products by constructing fuel storage tanks around the country. 13

14 7. Conclusion 1. Even though there is a deficit in power generation, the Zambian power sector is vibrant with many projects at various stages of implementation expected to be completed by 2019 and opportunity for new projects are many. Completion of these projects will add more than 1700MW to the National Grid 2. Renewable energy development is still insignificant in Zambia. The Government will continue exploring ways of boosting its development. Investment incentives for renewable energy based developments are provided.

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