Intensive energy User group
Intensive Energy User Group
Lessons from 2023
the IEUG began trading power in the second quarter of 2023 – we now have 9 months of experience and a small group of clients who receive power from us continuously. One of these clients, a major gold producer has a 3.5-megawatt solar power system and is supplied with the balance of its requirements by the group.
The major problem of this particular client is the poor quality and low voltage of the power delivered by ZETDC. This is being addressed by ZETDC and the IEUG and solutions are being implemented. Based on this undertaking of continuous energy supply the holding company of this particular mine has announced a 250 million expansion programme which will make it the largest gold producer in Zimbabwe.
More recently, we have started supplying another major gold producer in the lowveldt, who in 2023 only received electrical energy to operate at 60% of its capacity. This mine is now in full supply from the IEUG and is expecting to increase its gold sales in 2024 by 18$ Million without any other significant investment. The major lithium producer currently in production is now producing at maximum and has become a major exporter. It has been in full supply from the IEUG and ZETDC under a co-supply agreement which was initiated at the start of this arrangement by the client. Difficulties were experienced when the ZETDC demanded immediate settlement on outstanding balances and when the customer could not comply, they were cut off. The IEUG negotiated a resumption of power and also made the point that where such clients were being supplied by the group, the ZETDC should give us good notice so that we could make arrangements for the continuation of supply while the payment program is agreed upon. This was finally achieved by negotiation and no further problems have been encountered.
It is slowly becoming understood by both industry and the mining sector that the possibility of securing continuous supply from the IEUG is possible at a negotiated tariff, the group is in the process of taking on additional clients at present and the need to secure additional power from regional power producers is under active consideration. The group is securing power under 3-5-year power supply agreements at negotiated tariffs. It is hoped to be able to secure significant power supplies from domestic and regional producers in the next year. The commitment of the group to operate exclusively in hard currency is an essential business for this operation which is the key to securing adequate supplies of power to meet the growing needs of the Zimbabwe economy
About us
Intensive Energy User Group (IEUG) is a Private Voluntary Organization (PVO) for Zimbabwean companies consuming a baseload requirement of at least one megawatt of power.
during daily activities to solve the looming crisis in electrical energy supplies that is threatening the growth prospects of the whole region as we advance. To this end, the IEUG has negotiated with the Zimbabwean authorities to conduct independent negotiations with regional and domestic power producers and to import power via the regional system through ZESA Holdings infrastructure.
The establishment of the IEUG in Zimbabwe is seen as a real game changer, it allows the private sector to procure reliable, secure, predictable, and uninterruptable power at competitive prices. It also brings the financial capacity of the private sector in support of energy investment to meet the need to fund the many billions of dollars that have to be invested in the energy sector to meet current and future demand. This in no way diminishes the role of the public utilities in the region, it rather strengthens the system and enables the utilities to optimize their own operations. The IEUG represents the transformation of the electricity supply industry by the participation of the private sector.
2024
Solar revolution
Globally the electricity industry is witnessing rapid change and development. This is partly driven by the need to reduce emissions from power plants using carbon based resources, particularly coal. This transition is not proving easy, Germany has had to go back to coal following problems with natural gas supplies and China, although she leads the world in alternative energy programs, is still building coal fired power plants.
But it is proving to be more difficult to find the financial resources for traditional technologies and Africa, in particular, is turning to solar energy for its needs.
The reasons are many: –
• It is a standalone source of energy that you can install anywhere, on the roof of a hut, a store or a factory.
• It is becoming so cheap that even the rural poor can afford a panel to light their homes or pump water.
• It is becoming more efficient and batteries are beginning to make solar more reliable.
In South Africa, where the State owned utility has almost collapsed due to poor management, planning and corruption, the private sector has turned to solar in a major way and this is starting to make a real difference. In many ways Zimbabwe is ahead of South Africa as our market has been liberalised and we have removed taxes on solar components and batteries.
How much solar has already been installed is impossible to tell as there is no record of just what is going on. However, all companies that are installing solar report that they are flat out and even have difficulty in meeting demand. A 5 kilowatt system of panels and a lithium battery now costs less than US$4000 to install. On a plot, a similar cost is incurred on a solar powered pumping system for water.
In the agricultural industry, farmers are installing solar systems that use solar panels for daylight power, battery storage to extend the periods that power is available and control systems that allow them to draw power from the grid when it is available or at night when tariffs are lower. Industry and mining are following them and these installations are becoming more and more sophisticated.
But it is proving to be more difficult to find the financial resources for traditional technologies and Africa, in particular, is turning to solar energy for its needs.
The IEUG is on a dispersed basis and we are considering how to maximise this investment on a long-term US dollar-denominated Power Purchasing Agreement and this will help with funding. But again, we need to consider balancing the welfare of the grid. We are also considering installing large industrial-scale batteries to manage power delivery as most of our clients want reliable, continuous base load.
Announcements
As of 29/11/2023 our offices are now running wholly on clean, renewable Solar Energy!