HomeEnergyZambia power tariff must increase drastically to become cost reflective

Zambia power tariff must increase drastically to become cost reflective

Zambia – Zambia’s Energy Regulation Board technical regulation director Yohane Mukabe told delegates and media at the annual Copperbelt Mining Trade Expo & Conference (CBM-Tec) in Kitwe, Zambia this week, and highlighted how this would affect the country’s mining industry.

New generation capacity not taken into account

Zambian power utility Zesco’s national average tariff currently stands at US¢ 5.7/kWh, with current residential tariffs at ¢ 6.52/kWh and current average mine tariffs ranging between ¢ 3.4/kWh and ¢ 4.6/kWh.

Mukabe explained to delegates that this tariff is not cost reflective, especially when considering that the country’s new generation projects are expected to push the tariff upwards.

The progression towards cost reflectivity in Zambia, in light of the several power generation projects expected to come online to ensure security of supply and sell power back to Zesco – is expected to increase the power-purchase agreement tariffs as follows.

  • Project 1: ¢83/kWh
  • Project 2: ¢5/kWh
  • Project 3: ¢83/kWh
  • Project 4: ¢23/kWh
  • Project 5: ¢ 14/kWh

Significant future tariff increase

The average price of generated electricity from the above projects is about ¢ 12.67/kWh, Mukabe says.

“With Zesco’s current national average at ¢ 5.7/kWh and all the above projects expected to sell to Zesco, Zambia’s power tariffs will be required to increase significantly over the coming years, compounded by the long term marginal cost at which electricity was supplied,” he adds.

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.


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