Recommendations

First, ZESCO and the Energy Regulation Board (ERB) should investigate why distribution and transmission losses have been increasing and seek to address these. Second, ZESCO should ensure that existing infrastructure is refurbished and rehabilitated to the extent that it can be economical. Next, ZESCO needs to improve its communication to customers on when they can expect power outages and what tariffs mining companies are paying. This will improve customer confidence in and comfort with paying higher tariffs that will allow for the financing of additional and climate-resilient power generation, or imported power. ZESCO and the ERB should consider offering premium services at premium prices to the food and beverage subsector and to export-facing manufacturing firms, since these are most willing to pay higher tariffs for more reliable energy. In evaluating its options for sourcing extra power supply, ZESCO needs to look beyond the financial costs of generation under scenarios which do not include drought: it should also be low-carbon and carbon resilient and minimally impact human health and nature. A more balanced portfolio of power generation assets would include gas-fired power from Zambia’s SAPP partners. To make renewable energy more viable, the regional power pool should seek to expand into other regions of Africa. Beyond charging system-sustainable tariffs, ZESCO should increase the differential between peak and off-peak tariffs so that the peak demand it needs to meet is reduced. It should also penalise consumers for reactive power, and incentivise the use of power self-generated by rooftop solar photovoltaic panels.