Wed, 07 Jun 2017 11:58:21 +0000
By BENNIE MANDANDO
MILLERS should consider investing in solar energy in order to avert costs associated with the 50 percent increase in electricity tariffs. says Energy Forum Zambia chairperson Johnstone Chikwanda.
Mr Chikwanda said the move would also reduce the cost of production because it was not possible for Government to grant them special tariffs as that will mean subsiding their operations.
The Energy Regulation Board (ERB) has approved a 50 percent upward tariff increase proposed by Zesco effective May 1 this year while another 25 percent will be effected on September 1 to complete a total 75 percent overhaul.
This is aimed at making the electricity tariffs cost-reflective to attract investments in the sector as well as make Zesco more effective and lessen the burden on the national Treasury which had been constrained as most of power consumption was subsidised by Government for up to a tune of over US$500 million annually.
In the wake of the adjustments, some millers have appealed to Government to consider offering milling companies a special tariff as the case was with the mines in order to maintain the cost of production as the adjustment could see a sharp increase in the price of mealie meal and other products.
But in an interview with the Daily Nation yesterday, Mr Chikwanda said reducing electricity tariffs by Government for millers would have the same effects that the country had been grappling with – as it will entail that Government will have to spend to meet the difference.
Mr. Chikwanda advised millers to consider investing in solar energy as a long-term solution to exorbitant electricity tariffs they have been subjected to after the adjustment by Zesco as it was cheaper and user-friendly.
He said while the request for special tariffs by millers was genuine, it was not feasible as it would continue to drain the national coffers, hence the need to look to other sources of energy in order to maintain or reduce the cost of production.
“The request from millers for a special electricity tariff is genuine. However, it is not possible for Government to grant this request as it will mean Government sliding back in consumptive subsidies.
“Millers and indeed other adversely affected electricity consumers are strongly advised to consider various energy options and invest in alternative, more efficient, energy-saving and cheaper solutions.
‘‘This may mean installing own solar energy solutions to fully or partially power their milling plants instead of thinking to pass the cost to mealie meal customers,” Mr. Chikwanda said.
He said there was need for thinking outside the box in order to cushion the challenges that came with the changing tide in the business environment and advised millers to consider signing energy lease agreements with service providers in an instance that they did not have readily available cash needed for solar plants.
“In addition if they have capital challenges to invest in solar energy they can discuss with solar energy solution providers to enter into solar energy lease agreements so that a service provider installs solar energy at a miller’s premises and leases it to the miller.
“The service provider owns the installation and the miller pays a rental fee which can be structured to be cheaper than paying Zesco. Due to the challenging times we have entered into, there is need to ignite extraordinary thinking and innovation in order to remain afloat,” he said.
