Source: REEEP Policy Database (contributed by SERN for REEEP)
Total installed electricity capacity (2008, source: ZESCO): 1,967 MW
Total primary energy supply (2009, source: IEA): 7,856 ktoe
Crude Oil: 6.6%
Petroleum Products: 1.0%
Electricity Imports: 0.2%
Coal and Peat: ~0.01%
Zambia has a range of primary energy sources, including hydropower, coal, forest biomass and renewable sources of energy. Proven coal reserves exceed 30 million tonnes; however, the resource contributes negligibly to primary energy demand. In terms of household energy consumption, 95% of energy consumed by households is supplied from biomass energy sources, in comparison with 11% supplied by electricity nationwide, in all sectors. In 2009, Zambia generated 10,308 GWh of electricity, with over 99% of this coming from hydroelectric sources.
Zambia is self-sufficient in all its energy sources with the exception of petroleum, which is wholly imported, especially from South Africa. Petroleum products supply approximately 26% of the country’s commercial energy needs, the balance being provided by hydroelectricity and coal. The volume of imports of crude oil for petroleum products has declined during the past few years due to high crude prices on the international market and poor performance of the economy. Total oil imports, estimated in 2009, were 17,570 bbl/day. In 2009, Zambia imported a net total of 661 ktoe of energy resources, or 8.4% of the total primary energy supply. For the same period, net electricity imports were 179 GWh.Close Reliance
In 2009, approximately 18.8% of the Zambian population had electricity access. In 2008, the urban access rate was 44%, with the rural access rate being just 2.2%.
Only 16.7% of households in Zambia have access to electricity. The majority of the population relies heavily on charcoal and firewood for heating and cooking, whilst candles and kerosene are used for lighting.
The major power stations are linked via a transmission and distribution network of 2,008 km of 330 kV lines, 548 km of 220 kV lines, 85 km of 132 kV lines, 704 km of 88 kV lines, and 3,014 km of 66 kV lines. Further distribution occurs on over 6,500 km of 33 kV and 11 kV lines.
Zambia’s total demand currently exceeds internal generation as a result of the thriving mining sector. Zambia is also faced with the challenge of satisfying the demand of more than 80 percent of its population for modern forms of energy. Inadequate investment in recent years in generation and transmission infrastructure has led to deterioration in the power network. Sub-economic power tariffs have been blamed as a reason for lacking financial mobilisation. Sale of electric power tariffs in Zambia are amongst the lowest in the region. In 2008, 450 MW were unavailable from the country’s generating infrastructure, leading to a peak-period deficit of 280 MW. Load-management has been practiced since, in order to maintain the balance of supply and demand.
Transmission and distribution losses in 2009 were 23.0%, or approximately 2,407 GWh
Average solar insolation is roughly 5.5 kWh/m²/day, with approximately 3,000 sunshine hours annually, providing good potential for solar thermal and photovoltaic exploitation. Solar power has previously been proposed as a cost-effective method for rural electrification and a compliment to existing auto-generation in the country. NAPS, a Finland-based company, is planning to set up a solar energy plant in Zambia to provide cost-effective solar kits for people in various parts of the country, in an effort to remove barriers between local solar dealers and manufacturers. Development of the country’s solar resource is still slow, although numerous past projects have proven the effectiveness of solar technology, for example European Union-funded installations in healthcare centres.
Wind speeds average 2.5m/s at 10m above the ground, a speed which is mainly suitable for mechanical applications. Seven areas have been identified as viable for off-grid wind power generation, although little development has occurred.
Woodlands and forests are estimated to cover about 50 million hectares or 66 percent of Zambia's total land area. 341,000 units of biogas digesters are currently operational in the country. With ample forest coverage, and dedicated support from the government, an integrated household-level biogas program is a possibility in the country. Bio-gasification is most common in urban compounds. Sugar cane is being grown in three provinces, and processed by three different companies with a projected capacity of 483,000 tonnes of sugar per year. At present no ethanol is being produced by the main sugar growing companies, but Lee Yeast Ltd in Kafue (Lusaka Province) produces ethanol from molasses purchased from Zambia Sugar Plc.
Zambia has geothermal energy potential, although it has not been examined in great detail. Geothermal power installations have been constructed, totalling some 200 kW, but only as a means for assessing potential, and never on a large scale. Over 80 hot springs exist at the 200 kW Kapishya Plant, located in Sumbu on the shores of Lake Tanganyika. More recent surveys were carried out by KENGEN, the Kenyan electricity generation utility.
Small hydro potential stands at 4 MW. An estimated 17,233 GWh/year was deemed to be economically feasible in 1991. Zambia has an estimated large-hydro power potential of 6,000MW, of which less than 2,000MW has been harnessed. Sites yet to be developed include Kafue Gorge Lower, Itezhi Tezhi, Kalungwishi, Mambilima, Batoka Gorge, Devil’s Gorge, Kabompo, and others.
The Energy Regulation Board is involved in Regional & Country Energy Efficiency, through:
- Promoting energy awareness and disseminating useful information on energy efficiency measures and on recommended procedures for all sectors of the economy,
- Carrying out technical audits on businesses such as farming, and advising business on the usage of energy,
- Developing appropriate license conditions on EE such as metering all customers, and
- Developing integrated regional & country-wide institutional frameworks, involving regulators & the Southern African Power Pool.
When taking into account biomass resource, the contribution of the country’s vast mining sector is significantly less than that of the residential sector, 71% compared to 22.7%. However, in 2007, approximately 50% of all electricity sales were to mining sector companies. In response to rising industrial consumption and stagnating infrastructure development, demand-side management is seen as a key short-term strategy, and ZESCO has identified the potential for several measures, including increasing CFL use in all sectors through tax breaks and retail partnerships; a prepaid meter installation program, as well as technical loss reduction measures; residential and commercial energy management, for example the installation of room sensors for lights/air conditioning and the installation of power factor correction equipment for industry; and public sector energy efficiency measures, for example energy audits for public buildings, and a metal halide street lighting program.
The Zambia Electricity Supply Corporation (ZESCO, www.zesco.co.zm/) is Zambia’s largest power utility, and is government-owned.
Copperbelt Energy Corporation PLC (CEC, www.cecinvestor.com) is a privately owned company that operates and maintains transmission, distribution and generation assets and a control centre on the copper-belt.
Lunsemfwa Hydro Power Corporation is a privately owned independent power producer (IPP) created after the privatisation of the Zambian mining conglomerate, ZCCM. Lunsemfwa has an installed capacity of about 40MW, and currently sells all its power to ZESCO under a power purchase agreement (PPA). SN Power ACA Holdings, a Singaporean branch of a Norwegian hydropower firm, has recently taken a 51% stake in Lunsemfwa.
Oil and Gas Market
With no known oil or gas reserves, the country does not currently have an upstream industry. In the downstream sector, one of Africa’s major inland refineries, the BP-operated Ndola refinery, is located in the country. BP Zambia plays a key role in the Zambian oil industry, and holds a combined retail and commercial/industrial market share of 58%.
In the electricity sector in Zambia, there are 3 operators, ZESCO, CEC and Lunsemfwa. ZESCO is engaged in generation (ZESCO 94%, CEC 4%, Lunsemfwa 2%) and transmission activities (ZESCO 69%, CEC 29%, Lunsemfwa 2%). ZESCO and the Zambian electricity market are vertically integrated, with the state company engaging in all sectors of the market. ZESCO is a state owned company whereas CEC and Lunsemfwa are privately financed and operated.
Since the dissolution of the former parastatal monopoly, the Zambian Oil Company, private sector participation in the sector has grown. Since the inception of the national regulatory authority, the number oil distribution companies operating in the country has risen from 5 to 19.
The development plans based on the Energy Policy 1994, and the succeeding policy in May 2008, have put more emphasis on grid hydro-electricity compared to other renewable energy technologies. These plans include the Poverty Reduction Strategy Paper (PRSP), Transitional National Development Plan (TNDP) (2002-2005), the Fifth National Development Plan (FNDP) (2006-2010), and the Sixth National Development Plan (2011-2015). The PRSP acknowledges the importance of harnessing renewable energy resources to meet the country’s energy needs. However, no investment strategy or targets for renewable energy technologies are defined in the PRSP and the main focus is on hydropower. The Sixth NDP sets out specific goals for the energy sector, including increasing capacity by 1,000 MW compared to 2010 levels, improving rural and national electrification to 15% and 40% respectively, and increasing the capacity of petroleum bulk storage facilities, to enable the storage of 30 days of strategic stock. Programme goals under the NDP include:
Also covered under the Sixth NDP are plans to further implement the Rural Electrification Master Plan (REMP), build capacity in the engineering sector for energy efficiency and develop an Energy Efficiency Plan, and further develop the environmental technology industry in the country, with an incentive framework.
The National Energy Policy 2008 also sets out a number of policy measures for renewable energy, including the investigation of RE potentials, the strengthening of the institutional framework for RE research and development, and the provision of financial and fiscal implements for the stimulation of RE deployment.
Energy & Environmental Concerns for Zambia (EECZ), a grouping of researchers, academics and policy makers have the following objectives:
- To contribute to the development, promotion and wider use of energy in a sustainable manner,
- To provide a forum for interaction and exchange of ideas between individuals and organisations involved in the planning, development and sustainable utilisation of energy,
- To foster education, scientific research and development and the nation-wide dissemination of information in energy and the environment.
The Global Village Energy Partnership (GVEP), in association with the Department of Energy, and the Ministry of Energy and Water Development, are working on a mechanism to increase access to reliable, affordable, and environmentally sustainable energy services as a means of enhancing economic and social development.
Major bottlenecks in applying renewable energy technologies (RETs) in rural settings relate to communities’ level of income, policy and planning implications, the nature of the supply networks, and information on RETs. Lack of information on these and other factors inhibits the drive towards application of RETS.
In August 2011, an agreement was signed between the Zambian government and the Lunzuwa Power Authority (LPA), a private energy firm, with the commitment of a total of US$ 650 million for the construction of a power generation plant, the first to be located in the north of the country. Also, the Energy Regulation Board (ERB) hosted the country’s first Renewable Energy Forum in Lusaka, from 24th to 25th of August 2011, with over 150 delegates from across the country attending. The Energy Regulation Board (ERB) has also granted regulatory consent for ZESCO and Maamba Collieries Limited (MCL) to enter into a Power Purchase Agreement (PPA), under which 265.5MW of the 300MW from the coal powered thermal plant will be sold to ZESCO for a period of 20 years.
The Zambia Electricity Supply Corporation (ZESCO) has completed feasibility studies for the development of two hydro power stations with a combined capacity of 870MW and construction is set to begin soon. In addition, ZESCO has received a report from KENGEN as to the geothermal resource of the country and its potential.
Zambia Rural Electrification Master Plan – CORE International, Inc., for USAID.
Both ZESCO and the CEC are members of the Southern African Power Pool (SAPP, http://www.sapp.co.zw/) for Zambia, an organisation dedicated to promoting integration in power networks, to further regional development. The members of the SAPP have undertaken to create a common market for electricity in the SADC region, and to let their customers benefit from the advantages associated with this market.
Ministry of Energy and Water Development
The Ministry of Energy and Water Development (MEWD) has the overall responsibility to develop and implement policy on energy.
Ministry of Tourism, Environment and Natural Resources
The Ministry of Tourism, Environment and Natural Resources (MTENR, www.mtenr.gov.zm) is responsible for the formulation of policy on forestry and the environment. The Ministry deals with forestry management and conservation, and works with the Ministry of Energy on issues of biomass, especially on the energy supply side.
Rural Electrification Authority
The Rural Electrification Authority (REA, http://www.rea.org.zm/) established through an Act of Parliament in 2003, is in charge of developing and implementing master plans for the systematic electrification of rural areas. The functions of the authority include: developing mechanisms for the operation of a grid extension network for rural electrification, as well as applying a subsidy for capital costs on projects designed to supply energy in rural areas. The rural electrification program also contemplates the use of solar technology that has been applied so far only in pilot projects, with encouraging results.
Energy Sector Advisory Group
The Energy Sector Advisory Group is a committee formed under the MEWD, containing representatives from government ministries and authorities, development agencies, and commercial enterprises. Its purpose is to encourage harmony between all sectors of the economy in terms of energy policy, and provide an informed opinion on energy matters to policy-makers.
Zambia Gender and Energy Network
The ZGEN is an organisation under the Department of Energy, engaged in the promotion of gender concerns in energy policy consideration. A 2011-2013 strategy has been developed to facilitate the mainstreaming of gender issues into energy policy.
From 2007 to 2010, the Zambian government and the UNDP implemented the Capacity Development for Sustainable Management and Utilization of Renewable Energy program. Its objective was to enhance national capacities for sustainable management and utilization of renewable energy. The programme aimed to develop and review policies and regulatory frameworks, and to develop and implement a strategy for promoting the production and use of renewable energy, with women and young people being special targets.
Funded by the IDA and the IBRD, from 2008 to 2013, the Increased Access to Electricity Services Project of Zambia aims to increase access to electricity and improve the efficiency and quality of the electricity distribution system in targeted areas. The project has three components:
(1) ZESCO efficiency improvements: including reinforcement of existing distribution networks, intensification within existing grids in peri-urban areas, and energy efficiency and demand side management measures;
(2) Access expansion: including grid extension to rural areas, isolated grids such as mini-hydro, and solar PV for schools, clinics, commercial establishments, and household market; and
(3) Technical assistance for both ZESCO and the Rural Electrification Authority (REA).
The Ministry of Energy and Water Development is elaborating a long-term Energy Strategy (2009 – 2030) focusing on electricity, petroleum, and renewable energy. In addition, there are plans for the formulation of a RE strategy with focus on solar energy, small hydropower, energy crops, biomass, and an environmental framework for biofuels.
Renewable energies have been investigated by the Government through a number of different plans. A position paper on feed-in tariffs is set to be published in June 2012, and ZESCO is currently working with KENGEN to rehabilitate the Kapishya geothermal plant in the north of the country. A MOU has been signed between the Brazilian and Zambian Governments, which will culminate in the production of a National Biofuels Strategy, and the MEWD is working with the Water and Sanitation Association of Zambia (WASAZA) to build capacity for biogas digester construction. Finally, in partnership with UNIDO, three mini-grids for rural electrification are being developed, powered by mini-hydro, a solar PV system, and a biomass gasification plant.
A 220 kV inter-connecting line has been built between the towns of Livingstone in Zambia and Katima Mulilo in Namibia. The line has a capacity of 200 MW.
The Chairman of the ERB is appointed by the Minister of Energy and Water Development. The Board consists of the Chairman and four Members. The ERB has autonomy of authority and action, as established in the Energy Regulation Act. Financing for the Board comes from government contributions, as well as licensing fees.Close Degree of independence
Currently, no specific regulatory framework for renewable energies exists in the country, and the Energy Regulation Act makes limited mention of renewable energy sources. Through the NEP 2008, the creation of a feed-in tariff system is nearing completion. Solar energy regulation is more developed than that for any other source. So far, a licensing regime for solar power operators has been developed, allowing the licensee to engage in the manufacture, supply, installation and maintenance of solar systems. Conditions for each license vary. In addition, four standards have been issued by the country’s Bureau of Standards for solar equipment, including on charge regulators, batteries, PV modules themselves, and fluorescent lights for PV systems. As of 2011, 17 licenses had been issued, with a further 14 awaiting approval.
In terms of biofuels regulation, some limited steps have been taken. The ERB issued technical standards for both biodiesel and bioethanol in 2008, although blending ratios have not yet been set. This is expected in 2012, as well as further improvements in the regulatory framework for biofuels.
The ERB is responsible for ensuring that utilities earn a reasonable rate of return on their investments that is necessary to provide a quality service at affordable prices to the consumer; ensuring that all energy utilities in the sector are licensed, and monitoring levels and structures of competition, including investigations and remedies if necessary. Tariff-setting for the sale of electricity is also the responsibility of the ERB.
The ERB safeguards the interests of the consumer, licences energy undertakings, and receives and investigates complaints from consumers on prices and services. The ERB also regulates the refining, marketing of, importation and transportation of crude and finished petroleum products. Some of the companies regulated include INDENI Oil Refinery, TAZAMA Pipeline and all Oil Marketing Companies such as BP (Z), Total (Z), Petrotech and Engen.
The Ministry of Energy and Water Development has the overall responsibility for power. ZESCO, which is responsible for the generation, transmission, distribution and supply of electricity, and the ERB, both report to the Ministry.
For competition in energy markets and the whole economy, the Zambia Competition Commission, established under the Competition and Fair Trading Act, is the competent authority.
Fourteen years on from the initial formulation of the Energy Policy, implementation has been limited with few demonstration projects to showcase the viability of renewable energy technologies in the country. However, progress is being made with the current NDP and the Government’s renewable energy programmes. The development of a dedicated regulatory framework for renewable energy, with a strengthened institutional framework, and an appropriate and effective financial regime, would significantly aid the development of RETs in Zambia.Close Regulatory barriers