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A new analysis titled ‘Power crisis and consequences for solar energy in the Zambian mining sector’ by the Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ) GmbH shows that the investments in solar have become more attractive for the mining industry
The mining industry, being the biggest consumer of electricity in Zambia, has been badly hit by the power crisis in the country. Frequent load shedding and power outages have affected production and the cost of production has shot up as power from diesel and grid for mines is expensive. At the beginning of the year, the rates for miners were raised to US¢10.35/kWh, with further increases expected.
The analysis reported that 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 US¢6.02/kWh, which is a significantly lower price than what mining companies pay for either grid or diesel electricity.
According to the analysis, local solar-diesel hybrid microgrids are being considered as an alternative for the mining industry. Zambia has excellent sun irradiation, which has a positive effect on electricity prices from photovoltaic (PV) power plants. “The recent PV tender comes at the right time,” said THEnergy founder Thomas Hillig, adding, “It shows what development solar energy has made in the past few years; US¢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 allows for a robust power supply in off-grid or weak-grid areas. 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.
The analysis has was presented by GIZ in its role as facilitator of the project development programme (PDP), which along with THEnergy are offering to accompany companies in the transition phase as they switch to hybrid microgrids.