The phrase “load shedding” brings about trauma, nervousness, and edginess among many players in the manufacturing industry, especially small businesses that do not have adequate infrastructure to cope with power cuts. Normally, electricity supply companies around the world tend to limit domestic and industrial use of power through load shedding whenever demand surpasses supply levels. This is done to sustain the reliability of the grid and to avert prolonged outages for critical infrastructure customers. Taking such measures is crucial to create a poise between demand and supply for power as Well as to prevent would-be failures of the grid.
In Zambia, it should be noted that power generation is still predominantly hydro, which contributes about 81.5% to the total energy mix according to Energy Regulation Board, Energy Sector Report for 2021. In the past few years, the country has been grappling with the negative effects of climate change triggering a disruption in the rainfall patterns. This has led to the deterioration of water levels in some of the main reservoirs such as the Kariba Dam resulting in a reduction in electricity generation. This was exacerbated by the shutdown of 150 Megawatts units at Maamba Collieries due to maintenance works broadening the gap between supply and demand for electricity in the country.
In an effort to create a balance between the supply and demand for electricity in the country, ZESCO resorted to the implementation of load shedding. Load shedding came into effect on 3rd January 2023 with consumers experiencing a power outage of up to 12 hours daily for almost one week. Soon afterward, ZESCO announced a change in the power rationing schedule from 12 hours consecutively in a day to a 6 hours period break, which meant that power would be cut twice a day for a period of 6 hours each. How then does the implementation of load shedding affect manufacturers?
The manufacturing industry is energy-intensive making electricity one of the key inputs required in the production process. Thus, subjecting the manufacturing industry to load shedding increases the cost of production as manufacturers are forced to use alternative sources of energy such as generators, which are quite expensive, to continue production. However, the industry is largely comprised of small businesses that do not have the capacity to continue production during loadshedding hours leading to loss of working hours and profits. Additionally, load shedding could expose manufacturers to security risks, for instance theft and burglary.
The new power rationing schedule worsened the effect on manufacturing as some companies use machinery that takes time to heat up before they are used for production. Some companies use machinery that takes up to 4 hours to heat up prior to commencement of production, and with power only available for 6 hours per period, it means that production can only take place for 2 (two) hours per period and only 4 hours per day.
This adds to the hurdles that the industry is already burdened with such as the high cost of fuel, instability in the exchange rate, and the cost of obtaining licenses and permits among notable ones. If this situation persists, it may lead to the shutting down of some companies resulting in the loss of jobs for citizens. Additionally, the increased cost of production has the potential to increase the prices of goods on the market, thereby prompting a rise in the cost of living. This, however, threatens the growth of the manufacturing industry as increases in prices of locally produced goods may attract less demand on the market compared to imported products which are produced relatively cheaper.
Considering the importance of the manufacturing industry to the economy, it is imperative for ZESCO in the short, to reduce the number of hours that manufacturers stay without power to reduce the production costs incurred. Cutting down the cost will prevent manufacturers from passing on the increased cost to consumers, through higher prices of goods on the market and also safeguard jobs for citizens. In the long term, the Government should look into diversifying the energy mix by encouraging more investment in other sustainable sources of energy generation that will boost industrialization as hydro has proved not to be reliable.
