Policy options for the sustainable development of the power sector in Zambia

Master Thesis


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University of Cape Town

Many climate change studies project that occurrence of droughts (due to dry years) in Southern Africa will increase; this raises concerns over Zambia's electricity system. Currently, over 99% of Zambia's electricity is supplied by hydropower, which is vulnerable to droughts. With Zambia targeting to be a middle income industrialised country by 2030, it isimportant that the impacts of droughts on the electricity system are understood, and how the system's adaptive capacity can be improved. This is imperative if the system were to enhance economic development. The main focus of this research therefore, was to develop an understanding of how Zambia's electricity system would evolve in different economic and climatic scenarios. A comprehensive electricity model for Zambia was developed after reviewing literature on Zambia's electricity sector and energy planning in a developing country context. A Scenario planning approach was used to model and analyse the electricity system that would be required to meet demand in two climatic scenarios (average and dry year river-flows) and for different economic growth scenarios. The results showed that the supply system has to be increased in order to support economic development. In a dry year scenario, the availability of the hydro technologies reduces significantly and this leads to a considerable increase in the average generation cost of the system. The introduction of renewable energy and coal technologies into the system lessens the impacts of droughts. Carbon emitting technologies such as coal and oil are still viable supply options even with a carbon price of $50 per tonne. Only low and base-case growth scenarios need an explicit diversification policy since least cost policy in the high growth scenario (the middle income growth trajectory) leads to a diverse supply system. Implementing a diversification policy in the high growth scenario increases average generating cost without improving the system's adaptive capacity. The most cost effective way of increasing the system's adaptive capacity is by importing electricity and gradually increasing share of renewable and coal technologies in the system. Further research on how electricity trade in Southern Africa could be enhanced, should be done.

Includes bibliographical references.