Zimbabwe Dairy Industry Struggling with Electricity Shortages

ZIMBABWE - Zimbabwe is battling its worst electricity shortage in years with hospitals, mines and army barracks that were traditionally exempt from disconnection, now going for up to 18 hours without power like all less strategic energy users, writes Ian Nkala.
calendar icon 27 October 2015
clock icon 6 minute read

For the first time since the power crisis started in 2007, electricity generation has dropped from an average 1,300 megawatts to 984 MW against a daily demand of 2,200 MW.

Power utility company, ZESA Holdings, published a load-shedding schedule that took effect on September 1 and has seen most parts of the country going without power between 4am and 10pm every day.

Dairy farmers, who need electricity for milking cows and refrigerating the perishable product among other key operations, are feeling the pinch.

“It is down in every respect,” said Morgan Ncube, a small scale dairy farmer in Douglasdale, Umguza district, just outside Bulawayo.

“We must milk very early in the morning but at exactly 4am, we are cut off. They bring us back on around 10pm. We have a generator so we get it up when we are milking and make sure immediately after that we are on the way to the processor to save on refrigeration costs. This is really disruptive in terms of operations and expenses.”

Mr Ncube farms on a small holding where he keeps 68 cows and also does horticulture.

“The processor insists on specific standards on milking and milk handling, which is a dairy industry norm wherever you go. The way a farmer milks and takes care of the product has health and financial implications.

"We can’t afford to hand-milk or to fail to refrigerate. Doing that would mean loss of our market. You don’t want to lose business because you have compromised standards,” he said.

He invested about $5,000 in buying and installing a diesel generator in 2013 but did not use it as often as he now does. Last month, he spent about $500 on diesel. To cut costs, he now only starts it up when it is absolutely necessary.

Zimbabwe's energy crisis

Lack of investment in new electricity generation plants, failure to diversify from hydropower and low water levels on Kariba, the dam where Zimbabwe produces much of its electricity has plunged the southern African country into its worst power crisis since independence in 1980.

The crisis is only expected to start easing in 2017 when the first new plants being built and old ones being refurnished come on the grid.

The Zimbabwe Energy Regulatory Authority recently announced that it licensed 13 independent power producers to build hydro, thermal and solar energy plants worth about $10 billion.

If the investments materialise, the authority projects power generation would be 6,000 MW by 2020, enough to meet domestic consumption at current demand and the surplus for export.

China is investing in extending the Kariba South Hydro Power plant likely to generate its first 150 MW of power in December 2017 and the remaining 150 MW in March 2018, Zesa said in a statement.

On Monday 12 October the government awarded tenders for the country’s first large scale investments to harness solar energy to generate 300 megawatts.

Intratrek Zimbabwe will invest $171 million to harness solar energy at Gwanda in southern Matabeleland South province, ZTE Corporation will pour in $160 million at Insukamini in the Midlands Province and Number 17 Metallurgical China $180 million at Munyati, also in the Midlands. Each of them will generate 100MW.

A contract was recently signed, also with China, for the $1,5 billion 600MW Hwange Thermal Power Plant expansion project. Work is projected to be complete in the next 18 to 24 months.
Zesa acknowledges the adverse impact of the power crisis on the economy, including reducing agricultural production.

“Apart from the huge inconvenience to customers,” said the power utility, “the situation will also have a negative impact on the national economy as a whole. Companies, including Zesa, will suffer from reduced revenues, agricultural output will be similarly affected and this will in turn affect revenue flow into the national treasury.”

Power crisis leads to dairy import increase

With regard to the dairy sector, said Zimbabwe Association of Dairy Farmers president Emmanuel Zimbandu, the power crisis will reduce output lower than the 20 per cent that local production contributes to domestic consumption. About 80 per cent of the 240 million litres of milk consumed locally is imported, much of it from South Africa.

“You can’t milk 200 to 300 cows by hand,” said Mr Zimbandu. “When Zesa power is cut, we resort to generators, which is expensive because you need diesel to power them. Milk is very fragile. It has to be kept at a certain low temperature to prevent losses when quality deteriorates.

"We are facing a challenging situation particularly for the large operations. Smaller ones can milk by hand when power goes, but still they have to keep the product cool. We foresee a further drop in output and an increase in the cost of production.”

A July 2014 study by the Zimbabwe Economic Policy Analysis and Research Unit said the local dairy sector was losing $100,000 in potential revenue annually or 2.5 per cent of production due to power cuts. Then Zimbabwe was producing 1,300 MW of electricity, which has now fallen further to 984 MW.

The prevailing power crisis comes as raw milk production increased by 3.4 per cent in the first eight months of this year, according to the Dairy Services Unit in the Ministry of Agriculture, Mechanisation and Irrigation Development.

Between January and August local farmers produced 37,568,582 litres, up from 36,323,971 last year. The figures show producers retailed 21 per cent more milk in the eight months to August than last year. In 2014, 3,859,441 litres were retailed by producers compared to 4,680,562 litres this year.

Monica Chinamasa, the president of the Zimbabwe National Farmers’ Union said Zesa Holdings rarely sticks to its published load shedding schedule, which impacts negatively on farmers’ planning and operations.

“There are certain operations that cannot be switched on and off without notice,” she said.

“When power comes without notice, there is often a power surge that blows up your motors, and causes other damage to machinery. The cost of repairs is huge and unplanned. You have to take it by the day because everything has been compromised. That extra cost, someone has to pay for it. Regrettably it is the customer.”

Already, milk and milk products in Zimbabwe generally cost more than in neighbouring countries, the Dairy Services Unit said. This suggests that the deterioration in power supply could push production costs and prices higher. Local processors pay $0,60 per litre, significantly higher than their counterparts in South Africa where farmers are paid $0,40 per litre.

In Malawi, the Zimbabwe government unit says, dairy farmers get about $0,41 per litre while in Zambia and Mozambique producers earn $0,35 and $0,31 per litre respectively. Ugandan farmers are paid the lowest price in southern and eastern Africa at $0,26 per litre with Kenyans earning $0,27.

Mr Ncube is unsure if he will last the distance.

“They say electricity supplies will normalise in 2017. I don’t see how small producers like us will get there with generators. We are exploring the cost of installing a solar system here. It looks like it’s a better alternative to diesel. If that fails, we will switch to cattle fattening. Given the size of our farm and that you don’t need much electricity on a feedlot, it can work.”

TheCattleSite News Desk

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