Titled, ‘Power crisis and consequences for solar energy in the Zambian mining sector’, the analysis was compiled by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, in its role as facilitator of the Project Development Programme (PDP), and consulting agency, THEnergy.
According to the GIZ, the Zambian mining industry is the single largest consumer of power in the country and in order to mitigate the effects on production, mining houses are left with no choice but to employ and operate diesel gensets at a high cost.
“Power from diesel is expensive, and so is grid power for mines. At the beginning of the year, the rates for miners have been raised to $10.35kWh, with further increases expected—and this in a country that used to have an abundance of inexpensive electricity from huge hydropower plants,” the German service provider said in a company statement.
A sustainable improvement of this situation is not in sight, as some new power plants will only be completed in the next few years. Yet at the same time, the output capacity of the Zambian mines is expected to double as significant investments have been made in past years.
Solar, a potential remedy?
According to the press statement, a recent solar tender by Zambia’s Industrial Development Cooperation for two 50MWp solar power plants has caught the attention of the mining industry.
“The best offer was at $6.02/kWh, which is a significantly lower price than Zambia pays for emergency solar power and than mining companies pay for either grid or diesel electricity.”
The analysis shows that local solar-diesel hybrid microgrids have become an interesting alternative. Tobias Cossen, Project Manager for Southern Africa at PDP said: “We have also observed in other countries of the region that industrial players, such as mining companies, lose large amounts of profit due to an unreliable power supply.
“In Zambia, the negative effects are twofold: severe production losses and higher electricity costs at the same time.”
This development drives mining companies to become more self-sufficient. Zambia has excellent sun irradiation, which has a positive effect on electricity prices from solar photovoltaic (PV) power plants.
[quote]Founder of the consultancy, Thomas Hillig, commented: “The recent PV tender comes at the right time. It shows what development solar energy has made in the past few years; $6.02/kWh is competitive with any kind of conventional energy, especially in a region that suffers from a lack of peak power during the day.”
Decentralised power generation in the form of solar-diesel hybrid microgrids has advantages beyond price, GIZ explained.
“It allows for a robust power supply in off-grid or weak-grid areas, such as Zambia, where the grid sometimes poses severe reliability issues. In microgrids, solar power, grid electricity and diesel back-up power can be integrated. Typically, solar energy has priority in these power plants, as hardly any direct cost is associated with the operation of a PV system.
“The mines can invest their own capital or can secure long-term solar power supply through power purchase agreements with investors who build a PV plant and sell the electricity to the mine.”