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Tuesday, 30 July 2013

Electricity Watch (Konkola Copper Mines)

Konkola Copper Mines is exploring for coal and may build a power plant to reduce electricity costs. KCM started exploration in Sinazongwe (Southern Province) earlier this year. It hopes to build a power station to generate as much as 300 megawatts, provided it finds enough coal with the necessary energy levels.

KCM's Business Development Director Brad Gnanasivam says, "It's an option that we are trying to develop for ourselves so that we’re not stranded...if power rates continue going where they are going, at some point it will become very unsustainable, especially at the kind of power that we consume.”

Konkola Copper Mines is the biggest power consumer in Zambia, using as much as 250 megawatts, or about 13 percent of the country’s total generation capacity. Zesco has applied for a 26 percent average price increase, and the ERB is yet to decide on the request. KCM would want to have its own power station producing by 2020, when an electricity supply contract with CEC expires.

This is welcome development. We need more investment to exploit the coal reserves underneath our feet. Maamba Collieries, jointly owned by Singapore's Nava Bharat and ZCCM-IH is making great progress with the construction of its 300-megawatt coal power plant in Sinazongwe. While EMCO Energy Zambia plans to build a thermal power plant twice that size in the same area.

It is important to increase electricity prices to cost reflective levels so that such investments can take place. CEC Energy last year observed that power prices may need to double by 2015 to make it viable to build new generation capacity and end a supply shortage. 

Of course increase in investment in coal power naturally raises some local environmental concerns. Specifically, the local air quality issues. The key to these challenges is to ensure that sound regulation and planning. Zambia Environmental Management Agency (ZEMA) needs to up its game on the regulatory front so that air, soil and water quality around power plants is continuously monitored and any negative effects are mitigated.

What I do find laughable are objections against coal power based on climate change impacts. Zambia's share of global emissions is negligible. The issue of climate change is one for rich countries and the BRIC to worry about. It is morally irresponsible to expect Zambia and other African nations to mitigate climate change impacts when it is not the source of our current predicament. As long as the private sector is willing to invest in coal as a energy source we should support it at full speed, alongside hydro, bio-fuels and clean energy. We need as much power as possible. 

Chola Mukanga | Economist | Writer
Copyright © Zambian Economist 2013

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