Having no electricity is more expensive than expensive electricity, the Energy Regulation Board (ERB) Director General, Elijah Sichone, has said.
Sichone said Thursday night at the News Diggers-hosted public discussion forum on load shedding that the ERB carried out a study into the impact of load shedding on small-medium enterprises and households in 2017.
“The cost attributed to load shedding was K623 million. The impact was studied in Lusaka, Ndola, and Kitwe,” Sichone said.
He said that translated into electricity cost, this figure signified that the cost of having no electricity was higher than a unit cost of power.
While maintaining the hope that the current power shortage was not all doom and gloom because of the short and medium-term measures put in place, he admitted that the rate of implementing these measures was understandably a concern and needed to be scaled up.
In response to the crisis, Sichone said the ERB has adopted dynamic regulation, including processing power supply agreements (PSAs) in 48 hours rather than 20 days.
Further, he pointed out that the tariff path to cost-reflectivity was important as it sends a signal that investing in Zambia’s energy sector is efficient as investors could chart their return on investment based on the tariffs.
The ERB has approved a multi-year tariff framework for the migration of tariffs up to 2027. Zambia’s low electricity tariffs are roundly cited as a major reason the country has failed to attract, especially, private investment in energy over these many years.
“Investment is actually flowing in, contrary to what most of us are meant to believe. The ERB has approved almost 13 power purchase agreements and there are a few more that will soon reach financial close,” disclosed Sichone.
He pointed out that the market had changed and new players were coming in without the need for assets because, with open access, anyone could participate in the energy market.
Similarly, ZESCO Managing Director Victor Mapani said that despite open access now being available on the Zambian power market, only one Zambian company was participating.
“What has happened is that people from outside have come and are running on this market. I’m only seeing one Zambian company trailing behind to catch up. The market is open. You don’t need to be an engineer…you just need to trade, just the way you trade in other things you can trade in power also.”
Speaking on the same point, Zambia Association of Manufacturers president Ashu Sagar gave the government credit for the electricity open access policy, which he said had accelerated the medium to long-term action plan.
Sagar, however, decried the insufficient short-term response. “Let’s concentrate on the short-term measures that are available and we are able to do.”
