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PROJECT REPORT TITLE: THE IMPACT OF LOAD
SHEDDING ON MANUFACTURING INDUSTRIES IN LUSAKA,
ZAMBIA
STUDENT NAME: LUBINDA NGENDA
STUDENT ID: 002-585
COHORT: BSc. ETM
SUPERVISOR: Mrs. T. CHIRWA
A research proposal submitted in partial fulfilment of the requirement for the
award of Bachelors in Energy Technology Management with Cavendish University
Zambia.
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ABSTRACT Hydropower is a natural resource of energy, clean and dependable. Able to provide a continuous
supply of power for 24 hours in a day, provided there is sufficient water available, which is known
as the base load.
Alternative energy sources such as solar, wind, usually face a problem when their source of energy
is not available at the moment such as long hours of no sunshine or no wind blowing.
Other options such as coal are environmental pollutants and are globally becoming a serious threat
to our health and environment hence there is need to examine its usage to ensure the damage to
the environment and health are reduced.
Zambia is blessed with many natural resources, and is one of the few African countries to host a
large number of rivers. Most of the country’s power is from hydro (water) facilities, which were
constructed a few years after independence.
The increasing numbers in population in the recent years has caused a significant increase in the
power demand, the water levels in rivers being low. It is important to ensure that the power supply
meets the demand in the near future. To ensure this we need to critically examine how we are using
electricity currently and implement energy conservation and efficiency measures.
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ACKNOWLEDGEMENTS All thanks are to the almighty God for making it possible for me to reach this far in my program
of study. I would like to express my sincere and honest gratitude to all the people who made it
possible for me to carry out this research. I would like to show appreciation to all my lecturers at
Cavendish University Zambia more especially Mrs. Thandi Chirwa for the endless and unfailing
commitment towards my course and for the development of this document in particular.
Lastly special thanks go to my parents Mr. and Mrs. Lubinda Ngenda for endless support,
financially, encouragements and prayer, my siblings Rita, David, special friend Bwalya Besa and
my fellow Energy Technology management students who shared their ideas with me as well as
their endless support.
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DECLARATIONS I hereby declare that this piece of work is the outcome of my own research carried out under the
supervision of Mrs. Chirwa under the partial fulfillment of the award of Bachelor of Science in
Energy Technology Management. With the expectation of the references made of other literature
which has been duly acknowledged, no part or whole of the work is the reproduction of another
person for the award of the university or any other university.
Author Name: Lubinda Ngenda Supervisor Name: Mrs. T. Chirwa
Date: …………………………………… Date: …………………………….
Signature: ……………………………… Signature: ………………………
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List of Acronyms
ZAM Zambia Association of manufacturers
ZESCO Zambia Electricity Supply Company
ERB Energy Regulation Board
SBR Statistical Business Report
IPP Independent Power Plant
MI Manufacturing industries
CSO Central Statistical Office
GDP Gross Domestic Product
GNP Gross National Product
GWh Giga-Watt hour (1,000 Mwh)
CEC Copper belt Energy Co-operation
NWEC North-West Energy co-operation
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List of Tables
Table 5. 1 Distribution of response according to the effects of load shedding on the operation
cost, productivity and profitability. Source. Lubinda(2019). Field-work ..................................... 46
Table 5. 2 Distribution of response according to whether load shedding had led to reduction in
profits/production. Source. Lubinda(2019) field work ................................................................. 47
Table 5. 3 Distribution of respondents according to whether they incurred a loss as a result of
load shedding. Source. Lubinda (2019). Field-work .................................................................... 47
Table 5. 4 Distribution of respondents according to the number of hours of operation after the
load shedding exercise began. Data source: lubinda. field-work .................................................. 48
Table 5. 5 Distribution of respondents according to the impact of load shedding on their on their
employment number. Data source: lubinda (2019) field work ..................................................... 48
Table 5. 6 Above shows the total annual expenditure on electricity by the 30 manufacturing
industries Data source: lubinda. Field-work ................................................................................. 49
Table 5. 7 showing in percentage the rates over labor practices i.e overtime labor and idle labor
Data source; lubinda (2019)field work ......................................................................................... 50
Table 5. 8showing the total cost incurred on the damage on the material as results of load
shedding Data source: lubinda (2019) fieldwork ......................................................................... 51
Table 5. 9 showing in percentage the number of industries that use generators as an alternative
source of power ............................................................................................................................. 52
Table 5. 10 showing mixed mode of strategies being used during load shedding........................ 53
Table 5. 11 shows the number of times fuel was purchased in a day. Data source: lubinda (2019).
Field work ..................................................................................................................................... 55
Table 5. 12 shows the comparison in percentages between the costs of buying fuel against Zesco
power for their day to day operation. Data source: lubinda (2019). Field Data ........................... 55
Table 5. 13 showing in percentages the cost of using solar energy. Data source: lubinda (2019)
fieldwork ....................................................................................................................................... 56
Table 5. 14 shows in percentage the comparisons in cost between solar and Zesco power. Data
source: lubinda (2019) fieldwork. ................................................................................................. 57
Table 5. 15 showing the comparisons between the different strategies’ vs Zesco costs. Data
source: lubinda (2019) fieldwork .................................................................................................. 57
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List of Figures
Figure 2. 1 shows the single buyer model assumed by the vertical integration Data source: Zesco
ltd .................................................................................................................................................. 22
Figure 2. 2 above show in percentages the rates of power generation and transmission ............. 23
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Table of Contents
ABSTRACT .................................................................................................................................... 2
ACKNOWLEDGEMENTS ............................................................................................................ 3
DECLARATIONS .......................................................................................................................... 4
List of Acronyms ............................................................................................................................ 5
List of Tables .................................................................................................................................. 6
List of Figures ................................................................................................................................. 7
CHAPTER 1 – INTRODUCTION ............................................................................................... 11
1.1 INTRODUCTION ............................................................................................................... 11
1.2 BACKGROUND ................................................................................................................. 12
1.3 SIGNIFICANCE OF THE STUDY .................................................................................... 13
1.4 PROBLEM STATEMENT ................................................................................................. 14
1.5 GENERAL OBJECTIVE .................................................................................................... 15
1.6 SPECIFIC OBJECTIVES ................................................................................................... 15
1.7 STRUCTURE OF THE PAPER ......................................................................................... 15
CHAPTER 2 – OVERVIEW OF ZAMBIAS MANFUCTURING INDUSTRY ........................ 17
2.1 INTRODUCTION ............................................................................................................... 17
2.2 OVER VIEW OF MANUFACTURING SECTOR IN ZAMBIA ...................................... 17
2.3 INVESTMENT POTENTIAL OF THE MINNING SECTOR .......................................... 18
2.3.1 INVESTMENT INCENTIVES IN THE MARKET .................................................... 19
2.4 OVERVIEW OF THE ELECTRICITY (ENERGY) SECTOR IN ZAMBIA .................... 20
2.4.1 Generation Capacity ..................................................................................................... 20
2.4.2 MEGA WATT GENERATION ................................................................................... 21
2.4.3 POWER UTILITIES .................................................................................................... 21
2.4.4 ELECTRICITY GENERATION MIX ......................................................................... 23
2.4.5 Transmission and Distribution ...................................................................................... 24
CHAPTER 3 - LITERITURE REVIEW ...................................................................................... 25
3.1 Conservation hypothesis ..................................................................................................... 25
3.2 Growth Hypothesis .............................................................................................................. 26
3.3 Neutrality Hypothesis .......................................................................................................... 27
3.4 What Really Causes Load Shedding ................................................................................... 28
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3.5 Other causes of load shedding ............................................................................................. 28
3.5 Empirical literature from developing countries .................................................................. 30
3.6 Empirical Literature from Developed Countries ................................................................. 31
3.7 Empirical Literature from Grouped countries ..................................................................... 32
3.8 Empirical Literature from Studies that used questionnaires as a technique for their
research...................................................................................................................................... 34
3.9 Zambian perspective and previous studies .......................................................................... 35
CHAPTER 4 METHODOLOGY ................................................................................................. 41
4.1 APRAOCH AND METHODOLOGY ................................................................................ 41
4.2 DISCUSSION OF KEY VARIABLES............................................................................... 41
4.3 RESEARCH DESIGN ........................................................................................................ 42
4.4 RESEARCH SCOPE .......................................................................................................... 43
4.5 STUDY AREA .................................................................................................................... 43
4.6 SOURCE OF DATA ........................................................................................................... 43
4.7 SAMPLING STRATEGY .................................................................................................. 43
4.8 SAMPLE SIZE .................................................................................................................... 44
4.9 DATA COLLECTION ........................................................................................................ 44
4.9.1 Ethical Consideration ................................................................................................... 45
CHAPTER 5 – DATA ANALYSIS ............................................................................................. 46
5.1 Effect of Load Shedding ..................................................................................................... 46
5.2 Effects of Load shedding on the Industry’s productivity and Profit ................................... 46
5.3 Business Working Hours ..................................................................................................... 47
5.4 Effects of Load Shedding on Employment in the Manufacturing Industries ...................... 48
5.5 Electricity Expense (bill) per month ................................................................................... 49
5.6 The Impact on Labor Costs ................................................................................................. 50
5.7 Equipment Damage and Maintenance Attributed to load shedding .................................... 51
5.8 COPING STRATEGIES PUT IN PLACE IN THE INDUSTRIES TO SURVIVE THE
EFFECTS OF LOAD SHEDDING .......................................................................................... 52
5.9 The use of generators .......................................................................................................... 52
5.10 Fuel purchase per day ........................................................................................................ 54
5.11 Comparison between buying fuel to the cost of buying power from Zesco for their day to
day operation ............................................................................................................................. 55
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5.11.1 Comparison between buying fuel to buying zesco for operation ............................... 55
5.12 Solar energy....................................................................................................................... 56
5.13 Comparisons between the use of solar energy vs Zesco power ........................................ 56
5.14 Comparison between the overall coping strategies with the use of Zesco power. ............ 57
CHAPTER 6 – RECOMMENDATION AND CONCLUSION .................................................. 59
6.1 CONCLUSION ................................................................................................................... 59
6.2 RECOMMENDATION ...................................................................................................... 60
6.3 Energy generation mix ........................................................................................................ 60
6.4 Policy Implications .............................................................................................................. 61
6.5 Further Research ................................................................................................................. 61
REFERENCES ............................................................................................................................. 62
Appendix ....................................................................................................................................... 66
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CHAPTER 1 – INTRODUCTION
1.1 INTRODUCTION
The Republic of Zambia is a landlocked country surrounded by eight (8) neighboring countries, it
is located in the southern central part of Africa and has a surface area of 752,618 square kilometers.
It accommodates a total number of sixteen (16) rivers and out of these rivers, four (4) Are used for
power generation. Hydropower is Zambia’s main source of power generation besides other smaller
generation facilities that use resources such as coal for thermal power generation and solar power
generation.
Zambia just like any other developing country heavily depends on a constant and ample supply of
power to boost its manufacturing output and sector, which has a direct proportional impact on the
country economy.
Just like most of the developing country in Africa, Zambia has had a problem of higher demand
than supply and power shortages, which brings about load shedding and other power quality
problems. Almost all the sectors in a developing country heavily rely on a constant stable supply
of electrical power for their day-to-day operation and running. The availability of electricity has a
significant role in the country’s economy, which boosts production and the consumption of goods
and services, as well as in a country’s growth prospects (Ferguson, Wilkinson and Hill, 2000).
The country’s main power utility is monopolized. In which one institution does the activities of
power generation transmission and the government runs distribution. Zesco is the utility employed
to carry out the power generation, transmission and distribution in Zambia. Recently private
companies have come along and play a minor role in the generation of power known as
independent power producers/plants (IPP). Lower tariffs have resulted from the monopoly system
in which consumers have benefited and the utility losing out. This brings about problem to the
utility such as poor technical development, management and financial management problems due
to it making less money. The united National Development Program (UNDP) is of the view that
state owned (monopolized utilities) have resulted in little investments and poor maintenance of
infrastructure leading to power shortages and brownouts and load shedding becoming common in
most monopolized countries in Africa (UNDP, 2016).
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In the 2015/16 rain season, the country received a reduced amount of rainfall than the normal
amount. A problem attributed to global warming, the total power generated from Zesco and
independent power plants stood at 1.013 GWh at a reduced rate of 7.0%. The power being sent out
to consumers had reduced from 14,453 to 13,440 GWh in 2015. This was as a result of the low
water levels in the rivers used to generate power caused by the little rainfall received (Boniface
Mfula, 2019).
2018/2019 rain season Zambia was affected with another drought, which was a result of low
rainfall received. This saw most of rivers in the country drop in levels of water, and the rivers that
are used for power generation have been heavily affected such as the Kariba dam. which was
standing at 486.64 meters and 11 meters above operating levels recorded at the start of the drought
and is currently standing at 478.66 meters, 3.16 meters above the minimum operating level)
(Boniface Mfula august,19,2019.
As a result, this has greatly affected the country’s manufacturing sector negatively through long
hours of load shedding which has reduced production of goods and services.
1.2 BACKGROUND
In modern economics, the need for energy cannot be over emphasized. Empirical evidence shows
that, there is a close correlation between economic growth and energy in both developed and
developing countries (Adom, 2011. IN this century energy, namely electricity has become an
integral part of economic development in any country and its demand the primary driver of
economic growth (IEA, 2004). According to the international Atomic agency (IAEA2005). Energy
is essential for development but only a means to an end. Energy on its own cannot be the driving
force of economic growth but impetus in economic sectors such as agriculture, industry, transport
and commercial businesses. Hence, energy has become a necessary pre-requisite for economic
development and achieving some economic objectives including the Millennium Development
goals (Economic Commission for Africa, 2006, UNDP,2007).
In sub-Sahara Africa, research has revealed that annual economic growth is minimized due to weak
power infrastructure which causes frequent and erratic power outages (Anderson and Dalgaard,
2012). Poor energy infrastructure has become a barrier to performance of power sector in the sub
Saharan region, these barriers include high system losses and financial constraints of power
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utilities due to low electricity consumption, lower electricity access and tariffs levels which limit
revenues and investments into the power sector (UN-Energy Africa, 2011). Energy is considered
as a direct input to production, any disruptions from either voltage fractuations or voltage outages
affects industrial productivity (UNIDO), thus frequent and erratic power outages impact negatively
and significantly on production efficiency and competitiveness (Moyo 2012, et al,2014) according
to UNIDO (2009), countries that are rich become so through access to sustainable energy
(improved energy infrastructure) which facilitates industrial development. Even though Africa is
a cradle diversified energy resources (oil, gas, solar hydro, geothermal, etc.) sufficient generation
power generation and supply still remains a huge challenge (Economic Commission for Africa,
2006).
Zambia is currently experiencing an energy deficit which is as a result of the low water levels at
its hydro power stations. The national utility instituted a load shedding program in June 2015 to
reduce energy consumption. Eight hours of load shedding was the normal experience for
residential and industrial sectors. However, the efficacy of the program at reducing consumption
is not apparent, as customers may shift or otherwise adjust their energy use in response to load
shedding. This paper investigates how load shedding has affected (impact) the consumption of
electricity by manufacturing industries in Lusaka, one of the highest electricity consumers in the
country. The energy consumption of 30 Thirty manufacturing Industries where collected and
analyzed. A statistical comparison in consumption before and after the load shedding exercised
commenced. From the data collected, highlight the change in industrial energy consumption and
provide information to help utility companies optimize their load management. It may also help
the government to make proper plans for the country’s economic and energy needs of the growing
population.
1.3 SIGNIFICANCE OF THE STUDY
The current load shedding exercise has gained popularity on the Zambian media for the past few
months and as a result of this power crisis there has been a lot of heated debates on both public
and private platforms discussing the effects of load shedding, its causes and suggestions on
solutions to the problem
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A number of peaceful protests have been held in Lusaka as a way of reacting to this power crisis,
for example the demonstration in Chilenje which took place on the 12th of November 2019 (Salim
Dawood, 2019), in which people complained over the 15 hours a day of black outs and this
inconvenienced their lively hood and means of survival as many lost their jobs from industries,
while others their businesses collapsed.
Despite the complaints about the power crisis and its effects i.e. loss of employment, loss of
revenue, damage of equipment. most of these industries and businesses are still in operation, and
it is for this reason why this research is carried out to investigate the impact of load shedding on
manufacturing industries and their coping strategies put in place for them to survive and prevent
the business from collapsing.
This information is will be useful to businesses and industries that are suffering the same effects
of power cuts, it can also be used for future reference by companies or countries that may affected
in a similar manner.
On the effects on employment this research also gives valuable information to policy makers to
help them understand the problems they face in order to put measures that would help them better.
The research also contributes to the literature on the effects of power crisis such as load shedding
based on Lusaka as a study area, using recent data to analyze the coping strategies used by
industries.
1.4 PROBLEM STATEMENT
The drop in the rainfall pattern has caused a low level of water in rivers as a result causing
consistent and persistent long hours of power outage. This has greatly impacted manufacturing
industries in their business operation and financial viability. The objective of this study is to
ascertain the extent to which load shedding has an impact on the manufacturing industries in
Lusaka Zambia. This study is of great importance because manufacturing industries are
instrumental in the development of any countries economy given their contribution to employment
creation, improves incomes for the low earners and improves the tax base.
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Therefore, load shedding for such an important and strategic sector can cause very serious threats
to the country’s economy, it then becomes important to understand the financial and operational
impact it causes on manufacturing industries in Lusaka, who are presumed to be the most affected.
Understanding the impact, it brings upon manufacturing industries can bring vital information for
the government to make proper investments and diversification planning. It can also provide
consumers information necessary for them to put in place mitigation measures such as investing
in buck up systems diverse energy sources and in insurance. For regulatory this would help
enhance regulatory tools like the performance indicator framework, tariff determination and
development of regulatory framework for alternative energy while for electricity utility it would
help in managing load shedding through enhanced communication mechanisms.
1.5 GENERAL OBJECTIVE
The overall objective of the study is to ascertain the operational and financial impact of load
shedding on manufacturing industries in Lusaka, Zambia.
1.6 SPECIFIC OBJECTIVES
The following are the specific objectives:
1. Ascertain the impact on number of employments.
2. Ascertain the effect of load shedding on production and profits.
3. Ascertain the impact of load shedding on labor cost.
4. Ascertain the measure put in place by the industries to tackle load shedding.
5. Ascertain the cost of equipment damaged and maintenance incurred during the load
shedding phase.
1.7 STRUCTURE OF THE PAPER
This paper is structured as follows chapter 1 provides the background of the study, justification of
the study research, problem statement and the objective of the study.
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Chapter 2 discusses the theoretical framework of the overview of Zambia’s manufacturing
industries and Zambia’s energy sector.
Chapter 3 discusses the methodology used in the study, method used to collect information from
the target object to ascertain the impact that load shedding has on manufacturing industries and on
their business operation.
Chapter 4 discusses the research finding while chapter 5 concludes and makes recommendations
based on the problems found during the study.
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CHAPTER 2 – OVERVIEW OF ZAMBIAS MANFUCTURING
INDUSTRY
The aim of this chapter is to discuss the overview of the manufacturing industry in Zambia and the
over view of the electricity sector in Zambia.
This chapter is divided as follows 1 the introduction 2.2 which discusses the overview of the
manufacturing sector in Zambia 2.3 discusses the overview of the electricity sector in Zambia 2.4
concludes the chapter.
2.1 INTRODUCTION
2.2 OVER VIEW OF MANUFACTURING SECTOR IN ZAMBIA
In 1992, Zambia adopted an open market economic policy framework this was a strategic or
deliberate move to arrest the prolonged decline that had characterized the country’s economy since
the mid-1970s. UNIDO contends that like many other countries in Africa, Zambia’s economic and
industrial performance was poor due to the policy inadequacies in the form of overvalued rates,
interest rates controls, over emphasis on industry at the expense of agriculture and trade
protectionism.
The change in policy was characterized by deregulation of interest rates, trade liberalization,
privatization of state owned companies, withdrawal of government subsidies and currency
devaluation. The measures were aimed at improving the competitiveness and hence the growth of
the Zambian industry and economy.
Following the adoption and implementation of liberal economic and trade policies, the government
focused more on creating an enabling macro-economic legal and regulatory environment. As a
result, in the second half of the 1990s the country started achieve macroeconomic stability against
the relative stability, the economic stagnation that was experience earlier in the early 1990’s it
started to gradually give way to growth averaging 3.9 per cent per year by the 1998.
In the year, 2000 the government of Zambia developed and adopted a national long-term planning
instrument called the vision 2030. The vision 2030 reflected the collective understanding,
aspirations and determination of the Zambian people to be a prosperous middle-income country.
It also outlined in broad terms interventions to be taken towards the achievements of the country’s
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long-term objectives and targets. The vision 2030 was to be operationalized through 5-year
medium term planning instruments which were contain specific policies program and project
predominantly targeted towards wealth creation and poverty reduction.
Currently the manufacturing sector accounts for about 11 per cent of the country’s Gross Domestic
Product (GDP) (ZAM,2018). The industry has been growing at an annual average growth of 3%
in the last five (5) years.
The growth in this sector is largely driven by large Agro processing (food and beverages) textiles
and leather subsectors secondly processing of metals is another main activity sector. The smelting
and refining of copper is an intense and this has led to the manufacturing of metal products. Other
activities include wood products and paper products.
About 80% of the manufacturing activities in the country are undertaken by the private sector with
the government playing proactive role in the industry of about 20% of the manufacturing activities
in the country.
The activities in the manufacturing sector are of vital importance in relation to the country’s macro-
economic strategy for encouraging broad based economic growth. With this in mind the
government has, government has put in place measures to support manufacturing activities such
as establishments of the Multi-facility Economic zone (MFEZ) and industrial parks (these are
individual areas for industries with necessary support infrastructure installed) and provisions of
sector support infrastructure incentives. Government also promotes small and medium enterprises
in rural and urban as to enhance labor-intensive light manufacturing activities in this area.
The sector has attracted significant investment in recent years (foreign direct investment stock in
the sector totaled to about $1,200 million as of the output from other sectors such as agriculture
and supplies input into other sectors such as mining and construction.
2.3 INVESTMENT POTENTIAL OF THE MINNING SECTOR
Zambia’s manufacturing sector has considerable potential as the economy is relatively well
endowed with resource factors such as raw materials required factors such raw materials required
labor force abundant land, water and rich minerals.
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Zambia has a high prosperity for consumption of manufactured goods. Domestic demand factors
provide ready local markets for manufacturing goods while the country’s membership to
COMESA provide export market in the region for value Added Manufacturing Products.
Zambia’s annual domestic demand for manufactured products exceeds $25.87 million per annum
imports from COMESA region alone totaled $537 million over 3 years period 2007-2009 while
imports from SADC region exceed $5,600 million during the same period.
In the last 3 years totaled of us$ 906million worth of manufactured products have been exported
from Zambia to COMESA region while a total of 936 million worth of manufacturing products
have been exported to the SADC region from the country furthermore there are also opportunities
in other international market other than COMESA and SADC as (WTO) World Trade
Organization through various markets access agreement that the country has signed including
Economic Partnership Agreement (EPA) the African Growth Opportunity Act which provides
trade preference for quota and duty free entry into the USA.
Priority Area for Investment in the manufacturing sector
The major priority investment area sector is in the food processing, textiles and clothing mineral
processing, chemical products, engineering, leather products, electrical products and packaging
materials.
2.3.1 INVESTMENT INCENTIVES IN THE MARKET
Incentives in the manufacturing sector include
1. Investors who invest not less than US$ 500,000 in the multi facility Economic Zone an
industrial park an industrial park, a priority sector and investment in rural enterprise under
the ZDA Act are entitled to the following incentives;
2. Zero percent tax rate on dividend for 5years from the first year of commencement of
operation.
3. Zero percent on tax on profits for 5years from the first year of operation ( Qualifying
Projects should be in the manufacturing sector in an industrial park, MFEZ or rural Area)
4. Zero percent import duty rate on capital equipment and machinery for 5 years.
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2.4 OVERVIEW OF THE ELECTRICITY (ENERGY) SECTOR IN
ZAMBIA
Zambia’s main source of electrical power is from hydro-based energy, which accounts for about
85% of the total amount of electricity being generated in the country. The country’s installed
capacity of generation is about 2800 mw and the accessibility of the people to this power produced
is about 31% with 67% of the urban and 4% of the rural population have access to the electrical
power (USAID,2018).
In 1994, the government of Zambia set a goal for universal electricity access of which all Zambians
shall have access to electricity by 2030. Energy being an important driving force to the country’s
economic growth the government declared a commitment to developing and monitoring energy
infrastructure and services.
The main power utility (ZESCO) in the country is state owned or vertically integrated in which
the ownership and operations of the electricity in the country i.e. power generation, transmission
and distribution is all done by the state-owned utility, with minimal portion of power generation
being undertaken by the independent power plants privately owned.
2.4.1 Generation Capacity
Installed capacity 2,800 MW (85%).
Non-hydro (coal, heavy fuel oil, others 405Mw (15%).
Connections
Current access rate: 31%
Rural; 4%
Household without power; 7.2 million
Target; universal access by 2030
PA new off grid connections; 314,767
Power Africa’s engagement in Zambia in 2017 power Africa has progress to support sector
development power Africa assisted the Energy Regulation Board to enable ERB to set tariffs in
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advance over a 3 year period to allow conditional adjustments in tariff changes to be factored into
the utility, power Africa also called a Senior Energy policy Advisor in Zesco who works to build
systems and integration capacity of intermittent renewable energy sources (eg solar and wind) at
the end of 2016. USAID with ministry of Energy and Regulator developed a Renewable Energy
Feed-in tariff (REFIT) complete with a standard power purchase Agreement.
2.4.2 MEGA WATT GENERATION
In 2016, power Africa and USAID Zambia joint hands in providing $2million to support the
international finance co-operation (IFC) which scaled the solar program in Zambia which is
expected to result in up to100 mw of solar power.
The support helped finance the necessary costs needed to create and implement a transparent
competitive bidding process to attract qualified solar power developers and to build institutional
capacity and catalyze market growth in 2007 the US Trade and Development Agency (USTDA
2005) provided the feasibility finding for two private sector development that aims to advance
20MW of geothermal generation capacity and 130 MW of wind generation.
2.4.3 POWER UTILITIES
With many private players coming on board in the power generation, transmission and distribution
systems. The current electricity sector operates under the Buyer Model.
The main power utility in the country, which happens to be state owned, is the Zambia Electricity
Supply Company Limited (ZESCO), which is a parasternal company under companies act. Which
completes the function of the buyer model, by it being a vertically integrated utility.
it was established in 1970 after an Act in parliament was passed in 1969, Zesco controls the
majority of generation, transmission and distribution capacity in the country.
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industry
lunsenfwa hydro
zengamina hydr
northwest energy
consumer
Figure 2. 1 shows the single buyer model assumed by the vertical integration Data source: Zesco ltd
As of 2013 three independent power plants where in operational namely; Lunsemfwa
hydropower with an installed capacity of 56 megawatts,
The Ndola Energy Company Limited with an installed Capacity of 50 megawatts and
Zengeminal power Limited with an installed Capacity of 0.75 mw.
The copper belt energy cooperation which supplies power to mines.
The copper belt Energy co-operation (CEC) is a privately owned company which is responsible
for the transmission and distribution of electricity to the mines on the copper belt province and
mines in the neighboring countries’ such as Congo.
It also operates 80mw of standby gas turbines, which generate electricity just in case of interruption
with the Zesco supplies such as the load shedding currently being experienced (CEC 2014).
The Zengemina and the copper belt energy cooperation (NWEC) specialize in distribution of
electricity to the rural areas and mining communities from off grid mini hydro plants and the
national grid respectively.
Zesco ltdGeneration
transmission,
distribution
d
Exports,
Bots,nam,zim
Copper belt
mines
Ministry of energy.
Mines, water and
energy
CEC
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Zesco, Cec and lunsemfwa Hydropower Company are currently the major power generators with
94%, 4% and 2% respectively and in transmission the shares are 69%, 29% and 2% respectively
with other power plants coming on board the generation mix is set to change by the end of 2020.
Figure 2. 2 above show in percentages the rates of power generation and transmission
2.4.4 ELECTRICITY GENERATION MIX
The electricity generation mix in Zambia is dominated by hydro energy due to its availability and
its high-energy content i.e. energy potential (high-grade energy). It caters 90% of the total
generation capacity.
Of which 90% of this power comes from two hydro projects Kariba North and the Kafue Gorge in
the southern part of the country. Most of the hydro plants projects were done soon after the
independence of Zambia with a support from the World Bank (ECA,2010).
By the year 2014 the total installed capacity stood at 2396MW consisting of hydro 2,255MW,
thermal power at 80MW, diesel 11 MW, heavy oil 50MW and solar energy at 0.06 MW. Between
2015 and 2016 the total capital increased from 2,038 MW to 2,255 MW this was after the
commissioning of the kariba.N.Bank extension. The total power being generated was 14,453 Gwh
compared to the previous year.
The first 150 MW units of the country’s first coal fired plant, was from the mamba collieries with
an installed capacity of 300MWcapacity, was connected to the grid and commenced operation in
in July 2016.
90%
4%
6%
0
generation
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
70
30
10
1.2
transmission
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
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2.4.5 Transmission and Distribution
The Zambian national grid is composed of 330kilovolts main line that spans a total of 2241 km
across the country (Zesco, 2017) most of the electricity flow within the country go from hydro
power station in the southern part of the country to the copper belt province where the mines and
main consumption loads are centered.
The rest of the transmission network consists of 348km of 132kv lines serving as Interconnectors
with the neighboring countries such as Namibia and Zimbabwe 202km of 132kv lines and 754 km
of 88kv mainly in Lusaka area and 3033 km of load transmission lines and 66kv in the north-
western and western parts of the country. The loses in the Zambian grid was estimated at 13.8%
in 2011 (Zesco, 2011).
These numbers are very high when compared with developed countries but are but however when
compared with countries with the SADC region they are very comparable and relatable (IRENA,
2013), and are marginally below zesco’s key performance indicator of 5% and 15% respectively.
Zesco plans on upgrading existing transmission infrastructure and developing new ones to power
plants currently under construction and uninterred rural areas without power supply.
It also plans to further expands the natural grid to the northwestern province to the new mining
areas and develop new inter-connectors with neighboring countries to increase power trade.
The country also Identifies grid extension as the main strategy to expand the electricity access to
rural areas as highlighted in the 2009 Rural Electrification master plan (REMP).
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CHAPTER 3 - LITERITURE REVIEW
The main aim of this chapter is getting an in depth understanding on the topic under study.
Different views from different researchers who carried out a similar research study were used.
This chapter is sub divided into the following;
(i) the theoretical studies on load shedding, its relation on the economy
(ii) Load shedding its causes and effects.
(iii) Empirical literature from
Developing countries
Developed countries
Grouped countries
Zambian perspective and studies
Over the past decades, there has been a theoretical argument about the relationship between
electricity consumption, production and economic growth; different responses have resulted from
different studies contradicting one another. Four contradictions have been concluded, from the
different studies and are as follows
1. Conservation hypothesis
2. Growth hypothesis
3. Neutrality hypothesis
4. Bi-directional hypothesis
3.1 Conservation hypothesis
Among the four contradicting theories under the literature review between electricity consumption,
production and economic growth is the conservation hypothesis also known as unidirectional
causality from the growth of electricity consumption and supply.
(Ozturk,2010), suggested that the policies implemented may not have an effect on the economic
growth i.e. the developing or growing economies seem to fund the production of more electricity
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without relying on the feedback from the electricity productions to grow the economy due to
energy conservation efforts.
A study carried out by zhang and cheng, concluded to say this hypothesis is true due to their finding
that there is a unidirectional relation from consumption in their study to determine the relation
between energy consumption and economic growth in china. (Zheng and Cheng, 2019).
3.2 Growth Hypothesis
On another hand theorists suggests growth hypothesis also known as unidirectional growth from
economic growth (ozturk, 2010). This suggests saying that the decrease in electricity supply has a
negative impact on the economic growth, whiling an increase in positively impacts the economic
growth of a country.
The consumption of electricity compliments labor and it plays an indirect and directs the
production process. This is to say the supply and consumption of electricity play an important role
in the economic growth of a country’s GDP (Glasure, 2012).
A research done by Glasure found the relation between the GDP of Korea and its energy
consumption and supply lead to the increase of the country’s GDP.
Other theorist suggested to say that there is a bi-directional causality between energy consumption,
supply and economic growth in other words the GDP and energy consumption are simultaneously
determined have a positive effect on each other i.e. an increase In the energy supply and
consumption level leads to an increase in growth, and an increase in growth has a direct proportion
to the energy consumption and supply (has an increase in energy consumption and supply).
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3.3 Neutrality Hypothesis
Lastly, the neutrality hypothesis implies that energy consumption and economic growth have a
correlation with each other; no matter how much energy will be consumed, it has no direct or
indirect effect on the economic growth. A study carried out by Altinay and kaagal in determine
the relation between electricity consumption and economic growth discovered that there was no
relation between the two (Altinay and karagol, 2005).
All these studies are theories that have given the probability of the relationship between the
country’s GDP and electricity supply and consumption, this research study however determines
the relation between the two in Zambia due to the fact that manufacturing industries contribute
about 11% of the country’s GDP, and it has been clearly established that manufacturing industries
operation and production have been affected by the load shedding exercise.
Load shedding: In order to understand the impact load shedding has on manufacturing industries
it is important to understand what load shedding is, how it happens, what causes it and the effects
it leaves behind, and they types of load shedding.
Load shedding; is a way to distribute Demand for electricity power across multiple power sources.
It is a way used to relieve stress on primary energy sources when the demand for electricity I is
higher or greater than primary power source can supply. (Margaret Rouse feb 2016).
When the demand for power on the customer side Is greater than the available source of power at
the power station or more than what the power utility can deliver it causes the utility to carry out
measure to prevent the utility equipment from damage due to overstress and over working, and
also to conserve the available energy resources (water, coal), there are two ways or strategies which
the power utilities executes to try and mitigate this problem
1. Load shed (black out)
2. Brown out
Brown out: This is an intentional or unintentional drop in the voltage supply on the electrical
power supply side.
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Intentional brownouts are a strategic method used for load reduction in an emergency the reduction
lasts for minutes or hours. The term brown out comes from the dimming experienced by
incandescent lighting when the voltage sags or drops.
The voltage drop may be as an effect of disruption or interruptions on the electrical or may
occasionally be imposed in an effort to reduce load and prevent power outage known as black out
(Burgos, Jr Nestor p, 2010)
Black out: Also known as power outage or power cut or load shed, this is the loss electricity
supply on the end user’s side. There are many causes of power failure in an electrical power
network such as faults at the power station, damage to the electrical transmission lines, substation
or other parts of the distribution systems]
Permanent fault: This is a massive loss of power typically caused by fault on the power line
power is automatically restored once fault is worked on
3.4 What Really Causes Load Shedding
90% of Zambia’s main source of power is from hydropower and in the recent years the country
has had a reduction in the amount of rainfall received and this resulted in a rainfall drought in the
2014/2015 Rain season and the current 2018/2019 rainfall drought, as a result the most of the
rivers such as the Kariba dam and Kafue gorge reduced in water levels making the insufficient to
generate electricity.
The low water levels heavily affected the hydropower generation as a result the country
experienced long hours of load shedding. The reduction of rainfall received is attributed to the
climate change.
Climate change is a change in global or regional climate patterns because of increase in the
levels of atmospheric carbon dioxide produced mainly by human activities such as combustion
of fossil fuels that result into direct greenhouse gas emissions. (Shaftel, 2016).
3.5 Other causes of load shedding
1. Inefficiency and lack of maintenance of generating and distribution systems
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Regular maintenance of the generating and distributions systems as well as other systems is a very
important routine to keep the systems functioning efficiently, luck of it causes the generators, and
transmission to malfunction and distribution losses which further leads to significant power losses.
As a result, the installed capacity at the user end would not be met due to the low output from the
supply side, however, if well maintained and the losses minimized the systems, the system can
supply extra power.
2. Increase in population
The increase in population in a country and urbanization of people from the rural areas to the urban
areas, as a result the demand for electricity increases rapidly and the generating utilities must
increase their supply to meet the demand. In most cases in developing countries fail to increase
their supply which causes the demand to exceed the supply hence causes instabilities in the power
supply and usually results into load shedding.
3. Lack of Planning
In most developing economies it becomes a challenge to meet the rising demand if the utilities in
charge of electricity does not factor in the feature growth with proper planning of the future load
shedding could only be used as a temporarily, in a case where nothing is done to improve the
capacity, load shedding becomes a permanent solution.
4. Technical Faults
Load shedding could as be as a result of a technical failure which may occur during the
transmission of electricity to the user end. The electrical fault could happen either at the
transmission phase along the transmission lines or transformers, or could happen in the distribution
phase.
Other factors that could cause the installed capacity to deliver less power to the consumers are use
of outdated facilities, inefficient installations that could degrade or reduce the power delivered to
consumers.
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3.5 Empirical literature from developing countries
Studies carried out to research on the relation between electricity supply and manufacturing output
have done such as that done by Husain and Lean (2015) carried out to study and determine the
relation between electricity consumption, output and the prices in the manufacturing sector in
Malaysia. Co-integration was found between electricity consumption, output and price. Evidence
was also found between electricity consumption and manufacturing output to be positive. Also
obtained was a long run of unidirectional relationship from manufacturing output to electricity
consumption. For the short run results received showed a relationship running from electricity
consumption to manufacturing output to be unidirectional, this is to say that a decrease of energy
use in production has a high chance of leading to a reduction in output growth in the short run.
A study conducted in Pakistan to assess the causal relationship between electricity consumption
and real output at the aggregate and sectoral levels by Tang and Shabbaz (2013), the main reason
and focus of this study was on agricultural sector, manufacturing sector and sectoral levels. An
annual time series data from 1972 to2010 was used for the study. At both sectoral level and
aggregate level co-integration was observed and a unidirectional causality moving to real output
from electricity consumption was found at aggregate level. While electricity consumption granger
causes real output in the manufacturing sector at the sectoral level. There was no evidence in the
agricultural sector of causality between real output and electricity consumption.
Another study carried out in Pakistan used Johansen cointegration approach done by Qazi, Ahmed
and Mudassar (2012) conducted a study to determine the relationship between energy usage and
industrial output. The study collected data from 1972 to 2010. The results obtained from the annual
analysis showed a relation between disaggregate energy consumption and industrial output to be
positive I the long run. Running from oil consumption to industrial output a Bidirectional causality
was observed and on the other hand evidence was discovered of a unidirectional causality which
was observed moving from electricity consumption to industrial output. From industrial output to
coal consumption a unidirectional was also observed. However, between the gas consumption and
industrial output no causality was observed
Bidirectional causality was found between industrial output and oil in the short run. There was
also Evidence of unidirectional causality in another short run test moving from electricity
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consumption to industrial output. Despite using a similar methodology by Qazi et al (2015) and
this research (VAR) the focus of attention on how the electricity consumption affects output of the
industry this study focusses on the supply of power
Soytas and Sarri (2007) did a research where they carried out a n investigation on the relation
between energy and the production on the manufacturing sector in Turkey electricity consumption
and value-Added Relation were examined using multivariate framework. Taken into account were
the labor and the fixed investment. An annual time series data was used from 1968 to 2002. A
three co integration vector was observed between the variable showing evidence of a long run
relationship among the variables. Unidirectional causality evidence was found moving from
electricity consumption to manufacturing value Added.
3.6 Empirical Literature from Developed Countries
Among the studies carried out from developing countries which focused on the relationship
between electricity and manufacturing sector output is that done by Bernstein and Madler (2015)
which was done to estimate the demand of electricity for eight (8) subsectors of the manufacturing
sector in Germany. Cointegration VAR approach was used and an annual data time Serie was used
covering a period from 1970 to 2007 was used. The results showed that five out eight subsectors
showed to have a long relation between the non-metallic mineral transport equipment sector, food,
pulp and paper, tobacco and chemicals. Electricity estimates in the short run were found to be
reasonable economically in terms of magnitude and sign. The function of impulse response was
used to trace the dynamic behavior of electricity demand in the study. Also observed was a
plausible behavior as the electricity demand responded to the shock in value Added positively and
negatively to electricity prices.
A study research conducted on china’s industry sector by Fisher-vander Mansur and Wang (2015)
o the electricity supply to the country’s manufacturing industry and the industries productivity
output. Electrometric technique was used to an unbalanced panel of firm level data consisting of
23000 of firms in chin that consume most of the country’s energy. A time data series was used
covering from 1999 to 2004. During the study, it was noticed that firms with greater shortages
factor share of electricity and share of material was increased. Evidence of self-electricity
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generation was not found. The impact factor substitution was the main reason why the cost for the
firm went up to 8 per cent.
A study done by Sun and Anwar (2015) who examined the relation between electricity
consumption and the industrial output of manufacturing economic sector of Singapore. The use of
a tri-variate vector auto-regressive vector aggressive framework that includes entrepreneurship
from 1983 to 2005 was used during the study. The results show that among the variables
cointegration was noticed, this means that between electricity consumption, manufacturing output
and entrepreneurship, long run relationship existed. It was discovered that the entrepreneurship
granger causes electricity consumption and this increases the production in industries.
Autoregressive distribution lag (ARLD) was used to confirm the results obtained by Sun and
Anwar (2015) from the Johansen cointegration approach.
Another study done by Sari, Ewing and Soytas (2005) who carried out an investigation in the
United States of America on the relationship between aggregate energy consumption I the industry
and the manufacturing out. One of the variables used in the study was employment and a monthly
time data series was used in the study from January 2001 to June 2006. The results obtained
revealed that the relationship between industrial production and energy consumption was positive.
In the short run the results from the analysis were consistent with the finding of the long run and
were significant between employment, industrial production and energy sources with the exception
of gas.
3.7 Empirical Literature from Grouped countries
Among the studies which focused on the impact of electricity on the manufacturing sector is that
conducted by Moyo (2015) who carried out a study on the impact of the quality of power
infrastructure on productivity in the mining sector in the African countries. Data from 2002 to
2005 was utilized using the annual data time series. From five sub-Saharan countries namely,
Tanzania, Uganda, south Africa, Mauritius and Zambia. The international standards industrial
classification (ISI) was used to draw firms from 28 towns and cities
To measure the total factor productivity of the plant level Cobb-Douglas production was used
while ordinary Least Square method was used for the estimates. The number of hours per day
without electricity and the output lost due to outages in percent was used to measure the quality of
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power infrastructure. The study accounted for individual country and sector heterogeneity by using
country and sector dummies. A cross-sectional model was also estimated. From the results
obtained it was observed that power outages had different impacts one each and every country
studied on their productivity depending on the electricity problem experience in each. Higher
percentages of outages lost as a result of disruption were expected to affect productivity negatively
as well as long hours without power would have a similar effect.
Results obtained from Zambia, Uganda, and Tanzania were negative as well as in the food and
agriculture sector, this concludes to say that the quality of infrastructure has a direct proportional
impact on productivity in these countries
A study done by Scott, Darko, Lema and Rod (2014), Scott et al (2014) carried a study which
investigated hoe insecurities of electricity affects business in the middle- and low-income
countries. The aim of the study was to asses and quantify the impact of electricity insecurities on
firm’s productivity and competitiveness and how it affects their investment decision for startup
and expansion is the main aim of the study. The results revealed that insecurities in the electricity
sector the labor productivity of manufacturing sector and total factor productivity was negatively
affected by the insecurities in electricity supply though this wasn’t the case in all of them, results
showed that some had higher productivity. Due to the difference, geography structure of the
economy and business environment there were variation in the countries as a result.
A study conducted to analyze energy-productivity by Miketa and Mulder (2005) across 56
developed countries and ten manufacturing sectors. Twenty-four countries from OECD countries
of North America, under Developing countries, the pacific and Western Europe while under twelve
countries of which from the non-OCED thirty-two countries were drawn. The international
standard industry classification was used in selecting of the manufacturing sectors that were
involved. Miketa and Mulder (2005) used the cross-country method in the study which took a
period from 1971 to 1995. The average annual growth rates of energy productivity were calculated
and conducted a convergence and analysis in order to examine the partners of international energy
productivity development at sectoral level. The production of energy was measured by the output
per final energy use, according to the results the cross-country differences in the energy to decline
with the sectors that are less energy intense with the exception for the sectors dealing with non-
ferrous metallic objects. Countries that seemed to lag behind in energy levels of productivity were
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found to have a higher energy productivity growth. Also observed was a country converging to
different steady states however other failed to catch up.
3.8 Empirical Literature from Studies that used questionnaires as a technique
for their research.
Among the studies carried out that focused on the impact of power supply to manufacturing
industries that use questionnaires method is that done by Braimah and Amponsah (2012) who
conducted a study that investigated carefully the effects and the causes of electrical outages that
happened without any formal announcements or according to the planned timetable on the
operations of the micro and small-scale industries on (MSI) in Kuma Ghana. 320 MSI were used
as target places to source most the information for the study, all these places were located within
Kumasi Township. From the results it was observed that those which were in deficit of the required
quantity electricity were 5.3%. 10.3 hours per month was the deficit caused by the frequent and
continuos unannounced power outages. Due to the luck of a backup system and alternative source
of electricity 44% of the MSI spent the time without power in redundancy as work was put on
hold, while 56% on the other hand incurred more costs as they used alternative power sources that
required GH 15 per month to operate.
A research study carried out that examined the impact of the quality of electricity supplied to the
industry this was done by Wijiayantunga and Jayalath (2008) who conducted the study which took
a period from 2001 to 2003. A questionnaire given to 208 industries, when they were visited. The
power supply interruptions and their economic impact on the consumers was also included in the
study. Self-generation cost estimations and the environmental impacts was also performed. From
the results it was observed that the losses from the industries was as a result of unplanned electricity
power interruption was at 0.83 US$/kwh while from planned outages 0.34U$/kwh was attributed
to it.94% of the total not served as a result of interruptions due to unplanned outages 6 were linked
to planned outages. Approximately 13.6% of the industrial sector could not be met of the majority
utilities that had much impact on the country’s economy.
A study carried out to examine the cost of electricity shortages a manufacturing sector of Nigeria
done by Adenikinju (2003). Who use questionnaire in their survey. The national wide survey
conducted in 1998 was were the information was obtained from, it outlines the various cost from
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the power outages and examined the response of manufacturers to the problem of infrastructure.
The impact of power failure on the manufacturing sector was also highlighted in their finding the
expense backup systems put in place to minimize the expected outage cost caused the high cost.
The cost were three times the cost of electricity supplied publicly.
Ketelhodt and Wocke (2008) carried a study on the impact of electricity on consumption behavior
on the medium to small enterprises in south Africa Likert type questionnaire was used for the
study. 2900 out of 4000 SME’s were randomly given who were registered with cape town chamber
of commerce. Out of those given 250 gave feedback. The results of the study revealed that
electricity crisis had seriously affected more of the business. 90% of the SMEs depend on stable
power supply and the results of power interruption cause the low production.
The study done by Braimah and Amponsah (2012) ketelhodt and WOrke (2008) Wajiyatunga and
Jayalath (2008) and Adenikinju (2003) used questionnaires as their technique.
3.9 Zambian perspective and previous studies
Zambia like many other countries in the world is being faced with a challenge of not generating
sufficient power to meet their electricity demand. In Zambia the rise of the electricity demand has
been as a result of the rise or increase in the economic activities in the country particularly in the,
mining, manufacturing and agricultural sector (Policy monitoring and research center (PMRC)
2013) the increase in the activities of the economy have resulted into an overwhelming increase in
the demand for electricity services which has put a great strain on the current existing electricity
supply capacity. Zesco had attributed the increased hours of load shedding to the water levels being
low in the rivers at the power and power generation deficit.
The current generation is at 2,178 MW of power of which hydropower produces the larger portion
of it through the state owned utility Zesco. However, the available capacity in the recent years has
been trickled down due to lack of upgrading of the station to a larger capacity and luck of
maintenance, this has resulted in a shortfall or deficit of 200MW during peak times, which is partly
the cause of load shedding (Anita Kruger 2013).
A press briefing was given by Mr. Victor Mundende in 2012 who was the then acting Director
said that the deficit was being caused by an increase in investments into the mining, industrial and
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agriculture sector which caused them to grow and increase their activities, this growth was not
supported by an investment in the utility company’s transmission and distribution systems (Lusaka
Times 2012). He added to say the exercise of load shedding was being exercised to protect the
generating equipment, which shut down automatically when there is an overload, a situation he
explained to be costly.
In the same year 2012, Mr. Cyprian Chitundu the managing director then, said that load shedding
was inevitable as there was a lot of pressure being put on the utility by the country’s growing
economy (Geraldo Pearson 2012). It is therefore right to think that load shedding is here to stay
and is part of us especially that new capacity is not to be generated as soon as things look. one
other reason for sure is poor planning luck of maintenance on the part of the power utility and to
larger extent part of the government.
According to the research by Collin Wood (Business Report, 2008) cited by Colldo (2008),
suspected the reason behind the electricity crisis in south Africa with Eskom in 2007 was due to
lack of planning. The country experienced widespread of consistent blackout as the supply fell
lower than the demand, a threat to stability of the national grid.
In a study carried out by Kaseke and Hosking (2012) they cited to say load shedding is an organized
form of electricity outages. However, the load shedding of Zambia in particular Lusaka does not
seem to be organized as power is switched on and off by the utility company without any time
table developed and communicated to stake holders.
Consequently, the business sector in Zambia has been hit by load shedding in the recent years,
which is seen be an immediate solution to the inability of power utility to supply electricity to meet
the demand. Which has consequently affected trade and production and business because of the
prolonged load shedding hours a result from the current power deficit. the effects of this problem
are seen in the number of reports seen on the media and news of the high rates out power outages
and the protests done by commercial, residential and industrial consumers. Other protests and
complaints were made by different industrial association and the chamber of commerce and
industry the production level in the majority of the industries had reduced greatly due to the
persistent and long hours of load shedding. Which have greatly affected negatively the normal
production rate in a large number of industrial units and other business sectors that are high
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electricity consuming sectors such as mining, leather products, rubber and plastic, iron and steel
manufacturers, beverages and water supply.
A study done by Attigah and Mayer-Tasch (2013) emphasized in their study the importance of the
quality and reliability of electricity supply as an important factor both for the impact of business
performance and for the decision to connect. They gave an argument that in some countries most
businesses that are electricity reliant have a very low reliability and invest in other alternative
sources of power such as diesel generators to keep their business in operation to keep them from
collapsing. A move I personally feel, results in a huge cost for the business to sustain, especially
for small businesses and upcoming business. In today’s market a business are striving to remain
competitive by lowering the cost of production and general operational cost and in turn
maximizing profits that hold the heart of the business.
One would still argue however, to say that why do businesses not invest in much more cheaper
sources of energy as opposed to the diesel generators in the era of load shedding? The most
probable answer to this question is the fact that Zambia as a country has not really untapped and
harnessed and also to the fact that most business lack the resources that are necessary to invest into
alternative energy sources.
The world Bank’s Doing report, states that (Attigah and Mayer 2013) stated that on an average of
18 times a month firms in low income countries are affected by electricity interruptions. The world
Bank interviewed various Business managers doing different projects in different countries in
Africa, estimated that the losses that resulted from load shedding amounted to an average of 3.2%
of the annual sales and as much as 22.6%.
In an analysis of investment climate surveys by Escribano et al. (2009) from 26 countries in
number it was observed that low quality infrastructure had an impact so negative on the total factor
productivity, the analysis indicated that poor electricity supply quality is the infrastructure element
with the strongest negative impact on the productivity of enterprises and more strongly on
countries that with a weak economy such as Ethiopia, Mali Senegal, Uganda and Zambia.
A number of studies have shown that access to electricity by small businesses leads to longer
operating hours which significantly leads to an increase in income to by these businesses (Attigah
and mayer 2013).
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The roles electricity plays in businesses and in increasing their incomes and more importantly
contributing to the economic growth and development is the significant part on the study carried
out by Attigah and Mayer-Tasch (2013).
During the electricity crisis in2005-2006 period a study was carried out by Katelhodt and Wocke
2008 and called the crisis ‘’the cape town electricity crisis’’, it was compounded by the economic
growth and this resulted into the supply being outweighed by the demand. following a survey
carried out the Cape Town Chamber of Commerce and Industry estimated the costs of the
blackouts to the Cape Town economy to be about $900 million. Other losses of about 12 days of
no production at the chevron refinery, where also a consequence of the blackout. A lot of foreign
investors that had intentions in investing in south Africa started questioned the idea of their
intentions in investing in the country. (katelhodt and wocke 2008).
Multinationals mostly put their investments in a particular country in order to either gain access
into the country’ domestic market or to gain profits as a result of reducing the production costs and
increasing productivity through cheap labor, raw material, energy and government policies.
In Zambia a story was issued in the Daily Newspaper titled ‘’ load shedding worries business
houses’’ which read to say ‘’ various stakeholders have expressed their concern over the ripple
effect of load shedding citing the loss of business amounting to millions of kwacha a day.’’ Among
other the Poultry Association of Zambia (PAZ), Dairy Association of Zambia (DAZ) and other
small medium enterprises such as restraints and barbershops all complained about the loss of
business due to the loss the prolonged electricity load shedding by ZESCO.
Ketelholdt and Wocke (2008) called ‘’the cape town crisis’’ gave z report to say that thre were
many reports that covered the extent of the damage that was caused to the business and households.
Taking for example the damage caused on computers, perishables damaged in refrigerators, non-
delivery to clients and an oil refinery unable to open. ‘’This investigation was important as it
brought as a variety of firms were brought into considerations. And due to the fact load shedding
can impact so many different sectors in different ways depending on the business size and level ‘’.
this is similar to the case of the case of the daily news paper under the title ‘’ load shedding worries
business houses’’ it was reported that DAZ had given a report that farmers were losing as result of
load shedding about k12.5 million a day considering the fact that they deal with fresh produce and
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products. The Poultry Association of Zambia reported to say that the industry of poultry had been
affected in one that is mainly centered on power and water usage in regard with hatching and
breeding, proceesing and storage. While ZEMA gave their concerns on the impact and effect load
shedding has on the environment (http//:geraldopearson.typepad.com/blog/2012/08/load-
shedding-worries-buisness-houses-zambia-daily-mail). Irene Chipili the spokesperson of ZEMA
gave a report to say apart from industries, restaurants and households are using charcoal as a source
of fire as other alternatives sources of power are expensive, having charcoal as a source of fuel
will in the long run will have a negative implication on the state of the environment.
In a study carried out by Kaseke and Hosking (2012) carried out an investigation on the mines in
Zimbabwe, to establish the cost of load shedding, it was deduced that there was a high cost on the
mining sector as a result of the electricity load shedding. It was observed that water flooded the
mines because of the poor pumping system of the water outside the tunnel and mine shafts this
cause a lot of delay in the productivity time. It was also noticed from the results recorded that the
high valued mineral mines (gold diamond and platinum mines) incurred a high load shedding cost
compared to the low valued mineral mines (vermiculite, graphite and phosphorous mines).
A study by Bose et al. (2013). Was carried out where he assessed and evaluated the impact of the
availability of electricity on the performance and operation of SME’s in the rural areas of
Bangladesh. He discovered that the changes in the production costs and margin, development and
development and modernization of businesses, women empowerment, quality of life and human
development due to the rural and urban electrification where very favorable. He also observed that
there were more products and produce from the organizations, operated for longer hours and where
able to sale a lot of their products making them have a high profit income. It was concluded to say
that the increase in earnings increased the quality of life and improved the health care services, a
rise in incomes, providing employment, empowering women, environment conservation, curbing
the rural to urban migration and stemming population and many more.
The electricity outages have attracted interest from various stake holders including government
The government of Zambia had outlined in the poverty reduction strategy paper (2002) and in the
vision 2030 in its quest to improve the well being of its citizen outlined various objectives and
targets that should be realized. Among them are improve national productivity, reducing head
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count poverty, developing of economic structures, to have reliable transport and communication
that connects different parts of the country.
The Zambian government of Zambia has re-affirmed its commitment to promoting small to
medium enterprises due to the significant contribution they make to the GDP and employment to
the country. This gives much evidence that the government has made great strides to invest into
electricity, water roads in various parts of the country. However, there is still more to be done in
the energy sector in terms of investments.
In the development of any country there requires a microeconomic environment that is favorable
to the economic activities (Prest 1985). Key sectors involved in the production and manufacturing
should be supported as well.
Prest (1985) and the Zambian economist suggested the need for the government to foster
development plans that holistically provide guidance and policies for the development in the
economy. Zesco on the other claims that the country needs an investment of over $5 billion to fund
the supply shortage, yet Zambia is one of the country’s in the region that offers one of the lowest
tariff rates, and is the main reason as to why the is difficult for the funding to come by for
generation capacity upgrades and new projects. (Anita Kruger 2013). Any hike in the tariff
excludes mining tariff that have been negotiated through contracts since the onset of privatization
in 1990 only makes it worse.
The mining companies the government of Zambia tariff re-negotiations all depend on the
willingness of the mining sector to engage themselves into such talks, however the decline in the
copper prices, has put the mining companies under pressure on mining costs. This would mean
increasing the tariffs on the mines, the country’s economic backbone may lead to a wide spread of
job losses, a trade off that will be hard for authorities to justify by.
Due to load shedding the cost of doing business has obviously increased, and this has caused the
locally produced goods to be expensive compared to products being brought in from outside the
country, this makes the products less competitive on the market.
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CHAPTER 4 METHODOLOGY
4.1 APRAOCH AND METHODOLOGY
Overview and justification of the research investigated the impact of load shedding on
manufacturing industries in Lusaka Zambia and the strategies employed by the industries to deal
with the load shedding exercise and its effect.
This study employed a mixed method approach of both quantitative and qualitative method to
analyze the data collected. Qualitative research was used in the research because it was difficult to
quantify both the effects of load shedding on manufacturing industries and the copying strategies
that they use, as these are the key variables that they use.
Some aspects such as the impact it has on the employment numbers and the number of equipment
damaged requires the use of quantitative approach, which was also collected from the respondents
and was analyzed.
This chapter is divided into different subtopics as follows;
(1) discussion of the key variables,
(2) research design,
(3) research scope,
(4) sampling strategies,
(5) data collection and ethical consideration
4.2 DISCUSSION OF KEY VARIABLES
The key variables used in this research are as follows;
(i) the load shedding of electricity in Zambia
(ii) its impact on manufacturing industries in Lusaka
(iii) strategies that have been put in place by manufacturing industries to cop up with the
load shedding effect
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load shedding of electricity in Zambia refers to the interruption or the unavailability of
electricity from the national grid to consumers.
The impact of load shedding on manufacturing industries refers to the effects of how the
unavailability of electricity (load shed) has on manufacturing industries.
The coping strategies are the measures put in place by the industry to help them during
hours of load shed to prevent interruption in the operation or the prevent the business from
collapsing.
4.3 RESEARCH DESIGN
This refers to the technique or strategy used to immerge different components of study in an
integrate logical way, ensuring the research problem or aim is dealt with effectively (trochim
2006).
The type of research design used in this study is usually determined by the research problem.
There are three (3) types of research design;
(i) The exploratory
(ii) Descriptive and
(iii) Explanatory research
A detailed description of the different types is included in the appendix
This research in particular used the exploratory research design method to reach its objective. Such
a method is used where there are high levels of uncertainty or ignorance of the subject of study.
(wyk, 2012)
The primary goal of this research was to determine the effects of load shedding on manufacturing
industries in Lusaka and the coping strategies put in place for them to survive the power blackouts.
Due to the nature of this topic and research objective, the study used an explorative approach. This
aided in determine the key operational variables in the research and reduced the pressure of having
to make causal conclusion from unstructured quantitative data
The explorative research according to zikmund is the first step in a series of studies designed to
supply information used for decision-making (zikmund, 2003).
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Hence, this research thesis provides information about copying strategies based on which
subsequent research can be used to get additional information on the subject. The variables used
in this research were analyzed to find the relationship between the independent variables and the
dependent variable.
4.4 RESEARCH SCOPE
Study Population
The study population of this research was on manufacturing industries in Lusaka, Zambia. In
addition, the information needed for the study was readily provided. The target was the owner of
the industries, operation managers and the plant supervisor. The total number of manufacturing
industries in Lusaka could not be determined due to limitations on the record systems in Zambia
however for the purpose of this study it was estimated that the total number of industries in Zambia
is about 200 of which 90% are dependent on electricity from Zesco.
4.5 STUDY AREA
The study area for this research was done In the light and heavy industrial area (chinika area) in
Lusaka Zambia as this region is filled with a wide range of small to heavy (manufacturing)
industries.
4.6 SOURCE OF DATA
In order to obtain an in depth understanding on the topic of load shedding journal and books were
used.
However, in gathering the information from the target object, semi questionnaires were used
because it was easier and faster for the respondents to give feedback, to analyze the data collected
and it made it easier to get more information relevant to the study from the respondent.
4.7 SAMPLING STRATEGY
The non-probabilistic sampling was used in this study, which refers to the technique that does not
involve random selection of respondents (trochim, 2006). It ensures that the sample of study is
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selected based on the subjective judgment of the researcher and not by random selection (Laerd
Dissertation,2006).
There are five (5) basic types of non-probabilistic sampling. I.e. snowball, quota sampling,
convenience sampling, purposive sampling and self-selection sampling (Laerd Dissertation, 2016).
A detailed description of the different types of non-probabilistic sampling are provided in the
appendix.
In this research non-probabilistic sampling was used because the research objective required the
researcher to speak to the owner, operation managers and people who are in charge of the
operations and control of the industry, (and the industry must fully rely or partially rely electricity
from zesco) , people who fully understand the operations that take place and can help explain better
the impacts being faced by the manufacturing industries and the strategies put in place for them to
cope up with the problem and the reason for using them.
The method used was the best method because it ensured that all the information and responses
received were relevant to the study.
4.8 SAMPLE SIZE
The sample of thirty manufacturing industries were used for this research however due to some
limitation faced, the responses obtained were from thirty manufacturing industries. One of the
limitation faced was the availability of respondents that were visited, some responded negatively
because of their busy working schedule and operation while others could not be assessed because
their operation did not depend on the power from Zesco as a result they were not really affected in
terms of operations. Another constraint [t faced was the time given during data collection and high
cost of travelling due to the increase in fuel price.
4.9 DATA COLLECTION
Research instrument
The method of data collection used in this research was semi-structured questionnaire guide, which
was used to find out the effects of load shedding on industries during load shedding hours.
Data collection
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Secondary and primary data was collected and used in this research. Secondary data was used in
the development and in coming up of the literature review and acted as basis for confirming the
research findings from the primary findings. The secondary information was obtained from
journal, books and published materials. The primary data was collected from the field work by the
researcher from key players in the industries who are well familiar with the operations.
Data collection procedure
The following were the steps used to collect data;
(i) Decided the type of data required from respondents
(ii) Prepared questionnaires
(iii) Data analysis
Data Collection
On 13 November2019, the data collection process started in Lusaka’s industrial area (chinika).
The companies visited are as follows
Data Analysis
The data collected from the respondents through the questionnaires were gathered and grouped
under themes and then it was analyzed used content analysis method this was done to get an in-
depth of the data collected
4.9.1 Ethical Consideration
The BIT department of Cavendish University Zambia, to ensure that the method used in the
research and data collections were in conformity with International Ethical Standards, approved
the research proposal.
Confidentiality was observed on all the information received inclusive of those from respondents
who opted out of the questionnaire: of which they were told before the questionnaire that we would
stop the interview in a case where they felt uncomfortable.
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CHAPTER 5 – DATA ANALYSIS
The aim of this chapter is to analyze and discuss the data that was collected from the target subject
the manufacturing industries in Zambia.
The semi-structured questionnaires were used to collect data from 30 manufacturing industries.
The respondents range from small to large manufacturing industries, which include steel
manufacturing, mealie meal production, biscuit manufacturers, leather processing companies and
beverage producing companies.
The questionnaire carried out was mainly centered on the effects of load shedding on their business
operation and the measures put in place to address those effects and why. It also included whether
or not it had an impact on the employment number and equipment being used.
5.1 Effect of Load Shedding
Majority of the effects of the experienced by the industries were negative such as increase in
operation cost, loss of production time, loss of revenue, decrease in productivity, damage in plant
equipment, increase in expenditure, reduction in labor force and overnight shifts the following are
the ways in which the industries were affected.
5.2 Effects of Load shedding on the Industry’s productivity and Profit
The analysis revealed the impacts that load shedding has/had on the company’s productivity and
profitability. It shows that whenever load shedding is effected the manufacturing firms experience
reduction in productivity as illustrated in the table below. It was also discovered later that this led
to the reduction in profits of the firm as well.
Sample size Types of Response Frequency Percentage
30 Increased operation cost 30 100
30 Drop in supply and
production/ service
provision
30 100
30 Constant supply and
production/ service
provision
0
Total 30 100
Table 5. 1 Distribution of response according to the effects of load shedding on the operation cost, productivity and
profitability. Source. Lubinda(2019). Field-work
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Questions Type of Response Frequency Percentage
Whether load shedding
led to reduction in profit
Yes
27 90
No 3 10
Whether load shedding
led to reduction in
production/service
Yes 27 90
No 3 10
Total 30 100
Table 5. 2 Distribution of response according to whether load shedding had led to reduction in profits/production.
Source. Lubinda(2019) field work
This was further supported by the information released in the next table as revealed by the firms
that incurred a loss as a result of load shedding.
Sample size Types of response frequency Percentage
No 3 98
30 Yes 27 2
Total 30 100
Table 5. 3 Distribution of respondents according to whether they incurred a loss as a result of load shedding.
Source. Lubinda (2019). Field-work
It can be seen that the majority of the firms did incur losses and very few did make profits as a
result of load shedding. It was established that the cause for the industries to operate for less hours
was due to the reduction in hours of operation as will be discussed below. This meant production
and service provision was reduced and this in turn resulted in reduced sales which in turn had an
impact on the on the revenues and profits in a negative way.
5.3 Business Working Hours
Another operating factor that was greatly affected was the number of hours of operation due to the
load shedding exercise. The operating hours are cardinal as they are used as degerming factor in
the amount of goods and services to be offered by the company. So it was important that they
maximized on their operation as much as possible as they can whenever they could.
The table below shows the average number of working hours per day for the manufacturing
industries without power from Zesco (Load shedding hours).
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Sample size Average operating
hours per day
Average operating
days per week
30
Before load shed
started
After load
shed started
Before load shed
started
After load shed
started
Highest 24 10 7 7
Lowest 10 7 6 5
Table 5. 4 Distribution of respondents according to the number of hours of operation after the load shedding exercise
began. Data source: lubinda. field-work
Only about 14% representing 6 industries reported that they in operation beyond 22:00 hours this
means that only a few operate after 22 hours and that the majority of the plants’ operations are not
affected if the load shedding commenced after 22:00 hours because operation would have ceased
for the day.
While 15 industries reported to say that they operate during the day, they try by all means to
maximize their operations whenever Zesco power is available. 15 industries that operate during
the day, reported that they operate for reduced number of hours, once the power is cut off their
operation is forced to stop. While the rest operation stopped for a while and continued later as
power was restored through alternative source of power. Those that couldn’t switch to alternative
power had to cease operation for the day, to be continued the following day.
5.4 Effects of Load Shedding on Employment in the Manufacturing Industries
One other important factor that was greatly affected by load shedding is the employment number.
According to the reports received from the respondents is that most of the industries had reduced
the number of worker while others the numbers had remained the same i.e. did not reduce the
number of workers as a result of load and a minority of them had increased the number of
employees.
Sample size Types of response Frequency Percentage %
Increased 2 6.6
Reduced 25 83
30 Remained the same 3 10
Total 30 100%
Table 5. 5 Distribution of respondents according to the impact of load shedding on their on their employment
number. Data source: lubinda (2019) field work
It can be seen from table 5.5 clearly in percentages the employment number, some decreased,
increased or remained the same. It can be observed from the chart that 83% of the respondents
representing 25 industries had reduced the number of their employers since the load shedding
exercise started. Out of these, some had reported it was because of low productivity and high
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operations cost, while others stated it was due to the reduction in the number of operation schedules
as a result they could not afford to pay all their workers and had to lay off some of them as a means
to decreasing their cost.
While 6.6% representing two of the respondents who reported that the employment number had
gone up due to the high demand of electrical equipment and because of high sales and installation
demands of alternative energy resources.
In addition, another 10% of the total respondent from the industries representing two of visited
sites reported that the employment number had remained the same, as their operations were not
entirely controlled by the load shedding exercise.
5.5 Electricity Expense (bill) per month
This refers to how the business spends money on the electricity bills. This questionnaire aimed at
finding out the impact or cost the load shedding exercise had on the bills to the manufacturing
industries by monthly bills (expenditure). It was discovered that most of their expenses on the
electricity had reduced. The average expenditure was K84,000 for this study the highest
expenditure was in October at K75, 000.00 while the least was in February at K30, 000.00.
Individual
electricity
expense (highest,
lowest) before
load shedding
Individual electricity
expense (highest,
lowest) after load
shedding
Electricity expense
per month before load
shedding
(30 industries)
Electricity expense
per month after load
shedding
(30 industries)
Highest K75,000 K55, 000 K2,100,000 K135,000
Lowest K30,000 K17,500
Total K1,965,000
Table 5. 6 Above shows the total annual expenditure on electricity by the 30 manufacturing industries Data source:
lubinda. Field-work
As it can be seen from the table the individual electricity expense refers to the industry that spent
the highest and the lowest on the purchase of electricity before and after load shedding
A cumulative figure of all the industries is also given account of before and after the load shed
ding exercise. It can be seen that most of the industries spent less on the electricity expense this
due to the fact that the industries were not producing much goods as they relied on alternative
sources. Hence they were not making as much as they are supposed to hence they spent less on the
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purse. Enough for their new daily target as a result of load shedding. ‘’It’s all about survival’’, as
one of the plant operators put it.
However, the effect load shedding had on the alternatives sources on the industries will be
highlighted later in this chapter.
5.6 The Impact on Labor Costs
In some cases, it was noticed that most of the industries experienced idle labor while others had
experienced overtime-labor costs and this is because they were forced to work longer hours than
the usual.
The costs arising from idle labor were defined as money paid to a worker otherwise not working
due to the power outage. While overtime-labor costs were defined as, the money paid to a worker
for the extra hours after load shedding.
The majority 80% of the total firm’s visited reported cases of idle labor and only 20% of them
reported 0vertime labor.
Sample size Types of response Frequency Percentage
Increased 0 0
Reduced 30 100
30 Remained the same 0 0
Total 30 100%
Table 5. 7 showing in percentage the rates over labor practices i.e overtime labor and idle labor
Data source; lubinda (2019)field work
At firm level labor costs on average ranged from K0.00 to K8, 000 per month. The average idle
labor per firm was K130.00 per month. Equally, at firm level overtime labor cost on average ranged
from K0.00 to K5, 800 per month. The average idle labor cost per firm was K90.50 per month
during load shedding.
Before the load shedding exercise, the companies were operating normally as scheduled or
planned, they had enough labor force as a result they made profit in surplus. They were able to met
their labor costs because they managed to produce goods and services as planned in their business
operation.
However, after the load shedding exercise began the industries were not in full operation and where
producing less products and services than their normal. The industries started making losses and
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this forced them to put in measures for them to survive one of them was to release some of their
workers and reduce the labor cost. The reduction on the labor costs varied from one industry to
another, some were reasonably reduced, other were greatly reduced, those that recruited did so at
a reduced labor cost.
5.7 Equipment Damage and Maintenance Attributed to load shedding
According to the information given by the respondents, about 30% of the industrial equipment was
damaged due to load shedding. The cost of the damage incurred ranged from as low as k20 to k10,
000 approximately. Majority of the equipment damaged were repairable while the minority of the
equipment damaged from the various industries were damaged beyond repair. The table below
shows the total cost associated with the equipment damage and maintenance cost, and equipment
loss.
Equipment cost Equipment lost Equipment maintenance Total
1,568,200.00 3,586,138.00 8,171,582.00
Total 13,325,920
Table 5. 8showing the total cost incurred on the damage on the material as results of load shedding Data source:
lubinda (2019) fieldwork
Truth of the matter is whether poor quality products or bad installations may damage even the best
equipment on the market, some even beyond repair, the main reason damage of most of the
equipment even beyond repair is the surge of current and voltage spikes that comes with electricity
whenever it is restored to the users.
The power and voltage surge lasts for a millisecond but leaves a big scar (damage) on the electrical
equipment and machinery.
Even the best quality equipment with the nest installations cannot handle these surges that happen
from time to time. They are built with some protection mechanism against the spikes but they are
designed in such a way that they can only handle surges that happen occasionally not a daily or
multiple time of load shed in a day as was the case with most of the industries.
Before the load shedding exercise commenced, the equipment damage was less compared to how
they are currently being damaged this due to the fact that less surge was being experienced when
power was readily available without any power cuts. There were a few damages experienced as a
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result of internal surge from within the electrical equipment and as a result of operational faults
and depreciation of the equipment.
5.8 COPING STRATEGIES PUT IN PLACE IN THE INDUSTRIES TO
SURVIVE THE EFFECTS OF LOAD SHEDDING
Defining the Variables
An electric generator is a device that converts mechanical energy to electrical energy, which
provide enough power to power-up different equipment’s of different size and equipment’s of
different sizes used in the manufacturing industry (revolvy.com, 2016).
An uninterrupted power supply device (UPS) is an emergency source of power that powers up
electrical devices or equipment’s during load shedding to keep them running for a short while after
the initial source of power cuts off (Rouse, 2015). It allows or gives more time to the user to
properly save and safely shut down equipment to prevent damage or loss of information.
5.9 The use of generators
The table below shows in percentage the industries that use generators as stand by or alternative
source of power during the load shedding hours.
Sample size Type of response frequency Percentage
Used generator 23 77
30 Other alternatives 7 23
Total 30 100%
Table 5. 9 showing in percentage the number of industries that use generators as an alternative source of power
It can be seen that 70% of the representatives reported that they use generators as an alternative
source of power as either their sole or coping strategies or combination strategy with other energy
sources
This is because of the ability it has to power up different load of different sizes at the same time.
In a similar study by (Alberto, 2014), suggests that at least 75% in developing countries rely on
generators as an alternative source of power due to power insecurities
While 30% did not rely on generators for their power source, they either used other alternative
sources of power or other coping strategies sufficient enough for them to sustain the operations of
their industry.
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Mixed modes of strategy used during load shedding
Sample size Types of response Frequency Percentage
Generator 6 20
Solar 5 16.6
30 Other 4 13.3
Mixture 15 50
Total 30 100
Table 5. 10 showing mixed mode of strategies being used during load shedding
It can be seen from the graph above, the other coping strategies in percentage being used by the
industries. It can be seen that 10 respondents representing 20% use electric generators only and
10% representing three (5) respondents used early closure method i.e.
Meaning during the hours of load shed they stopped operation during hours of load shedding, stops
before their casual closing times. It can be seen that 10% per cent representing five (25)
respondents reduced their labor force and the same number and percentage of respondents used
uninterrupted power supply devices.
It can also be seen that then inverter usage had the lowest usage with only two (2) respondents.
Three reported to use solar power of the total respondents.
While about 10% of the respondents stated that, they used strategies such voltage stabilizers and
reduction on the number of employees.
From the research carried out it was discovered that to survive the effects of load shedding the use
of combination of the strategies were used while others used only one of them
Some of the combination used; ‘’ generator and UPS’’, ‘’generator and voltage stabilizer’’,
‘’generator and early closure,’’, ‘’generator and solar power’’, generator and reduction on labor
force’’, early closure and cutting of some jobs’’, ‘’ solar power and UPS’’, ‘’generator, early
closure UPS and reduction of labor force and the early closure, inventory and voltage stabilizer’’.
This was done to help reduce the usage of each of them thereby reducing the cost of each strategy.
The responses gathered as to why respondents used these coping strategies were very similar to
one another of them responded saying the use of generator was that it was the best alternative
source of power better for running the kind of machines used in their operation.
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Other responded to say that generators were very reliable and convenient for them, helped the
operation, and retained customers.
Another reason given by a different respondent to the use of generator is it helped increase
productivity during hours of load shed and helped in the operation of their busy activities.
Respondents who chose early closure e as a way to protect their business from collapse due to the
log hours of no power cuts.
Another measure used was uninterrupted power supplies for the protection from uninterrupted
energy supplies they reported to say that it helps provide emergency power in case of power cuts,
in a case were power cuts the Ups provides a few minutes to keep the equipment on while
alternative source of power is being prepare for connection to the equipment and it gives time to
the user to proper power off the equipment and save the work that was being done.
Respondents who use inverters as a coping strategy usually charge them with power from Zesco
while it is still there and when power cuts, they use them to connect the power equipment to the
inverter.
Those who responded to be using solar power charge them during the day and during of power
outage supply ample amount of power-to-power up most of the equipment and machinery.
In addition to this measure mentioned other measures put in place to minimize the effects of load
shedding on their business such as use of voltage stabilizers, these are used in a way of protecting
equipment from damage because of unstable electricity or poor quality electricity and frequent
power outage and unstable electrical power
5.10 Fuel purchase per day
As a coping strategy with the use of generator another concern raised was the number of times fuel
was bought in a day to in order to operate the generator which can be seen from the chart below.
Sample size Types of response Tally Percentage
Bought once a day 2 6.66
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30 Bought twice a day 15 50
Bought six times a week 6 20
Total 23 76.66
Table 5. 11 shows the number of times fuel was purchased in a day. Data source: lubinda (2019). Field work
It can be seen that none of the respondents bought fuel to power up their generator for more than
twice in a day. However the majority (50%) of them reported to say they had to buy fuel twice a
day or at least used twice the amount of fuel that is used in a day due to their large operation and
mass production. while two (6.66%) responded that they buy fuel at least once a day every day to
power up their generators these were the small to medium industries. 6 of them representing 44%
said they bought fuel at least six times a week.
5.11 Comparison between buying fuel to the cost of buying power from Zesco
for their day to day operation
The respondents from the industries were also asked to compare from their experience the cost of
buying fuel and the costs on buying power from Zesco and their responses are as follows in the
table below
5.11.1 Comparison between buying fuel to buying zesco for operation
This questionnaire was only done on industries using generator as a source of power
Sample size Types of response Frequency Percentage
Fuel cost more than Zesco 15 50
Zesco tariffs more
expensive than fuel
6 20
30 Fair difference (same) 2 6.66
Total 23 76.66
Table 5. 12 shows the comparison in percentages between the costs of buying fuel against Zesco power for their day
to day operation. Data source: lubinda (2019). Field Data
From the chart above it can be seen that 15 of the respondents concluded to say the fuel expenses
for their daily operations were more compared to the power from zesco one of the reasons is the
number of times fuel was bought in a day for their operations and the cost of fuel.
While 6 of the respondents reported to say that, the cost of electricity from zesco for their day-to-
day operations was more compared to the costs of buying fuel for their operations.
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The respondents who said fuel costs were more because they had to fully pay the zesco electricity
bill to prevent accumulation of bills at the end of the month and had to spend for fuel to power up
the generator.
Those who used solar power when asked about the comparison between zesco power and solar the
response is illustrated in the chart below collected from all the 30 respondents visited.
5.12 Solar energy
A questionnaire was carried out on the industries that use solar energy as part of their alternative
power for their operations and the following were the responses collected
Sample size Types of response Frequency Percentage
Moderate 2
30 cheap 3
Total 5
Table 5. 13 showing in percentages the cost of using solar energy. Data source: lubinda (2019) fieldwork
The table above shows the response from the five (5) respondents who use solar power as their
coping strategy. Three of the respondents reported to say the cost of using the power was cheap as
compared to that offered by zesco utility. It was cheap despite the high initial costs incurred, when
buying the full set of equipment’s, i.e. the solar panels, inverter, charge controller batteries and the
labor costs however the running costs are very cheap. Two of the respondents representing 60%,
responded saying that it was moderate for their business operations when used as a coping strategy
measure. Considering the fact that the system encounters some negative effects that come with use
of solar power, namely generating power in bad weather and storage challenges. Not mentioning
that after the payback period the cost to use power is free with profits being made.
5.13 Comparisons between the use of solar energy vs Zesco power
This questionnaire was carried on all the industries to get their view on the subject
Sample size Type of response Frequency Percentage
moderate 7 15
30 Cheaper 20 80
Not certain 3 5
Total 30 100%
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Table 5. 14 shows in percentage the comparisons in cost between solar and Zesco power. Data source: lubinda
(2019) fieldwork.
It can be seen in the chart above that none of the respondents thought solar power was expensive
while 20 representing the majority, said solar power was cheap compared to power from Zesco.
Although the initial costs are very high when setting up the solar plants, the running cost are much
are cheaper.
While 7 of the respondents said the costs from solar power were moderate compared to that from
Zesco due to the initial costs, lack of power during bad weather and after the payback period the
power costs is free. However, 3 respondents representing the minority said they could not make
comparison because they did not use solar power.
5.14 Comparison between the overall coping strategies with the use of Zesco
power.
The respondents were also asked to compare their costs experience of using overall coping
strategies to the use Zesco power. The information collected is illustrated in the table below
Sample size Type of response Frequency Percentage
The strategy more
expensive than zesco
20 66.7
30 Zesco more expensive 7 23.3
Fairly the same 3 10
Total 30 100%
Table 5. 15 showing the comparisons between the different strategies’ vs Zesco costs. Data source: lubinda (2019)
fieldwork
From the chart above it can be seen that twenty (20) out of the respondents representing (66.7%)
reported that their overall coping strategy was very expensive compared to that from Zesco. seven
(7) of them representing 23% stated it was expensive for them using power from Zesco compared
to the alternatives they are currently using. Three (3) of them representing 10% stated that the price
of coping strategies was moderate compared to that from Zesco.
From the coping strategies, it can be seen that positive and negative effects were derived
from them
The Positive Effects
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Some of the respondents said the strategies used improved the revenue they made during periods
without power. This because the strategies helped them curry out their duties when they were not
supposed to during hours of no power.
Other responses from the coping strategies suggested an increase in production during periods of
load shed because without these strategies’ workers would have been idle during hours of no
power. Therefore, this prevented them from being inactive and kept them busy to increase on their
productivity
Another advantage received was that the damage on the Equipment was reduced; the number of
employees was improved due to the strategies that brought back power to enhance proper operation
hours which aided work load, which required more workers for the task.
The quality of goods and services was another positive outcome the coping strategy majority of
the industries that used different strategies to mitigate the load shedding effect reported that they
had restored back to their normal (good and quality) services that they offered to their clients.
This gives evidence to the fact that the availability of power in very cardinal to the operations of
an industry and this in turn gives a boost to the country’s economy.
The negative effects; incurred because of the strategies put in place are as follows;
Some reported that the use of these strategies incurred more costs in purchasing or adopting these
strategies
Workers were laid off because of this cost incurred and because of the losses incurred from a
stoppage in operation due to the high cost of production and labor
Two of the respondents representing 6% reported that had experienced negative effect as a means
of addressing the problem they opted to have early closures and did not operate on days when was
no power from Zesco.
However in spite of the negative results there were some who reported some good results in their
favor from the from the negative effects such as working efficiency was improved as many of the
workers did not want to lose their jobs
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This finding is similar to that of Cissokho and Abdoulaye in Senegal 2013 a research to determine
the impact of load shedding on power outage on firms productivity, it was discovered that load
shedding helped improve the workers efficiency due to the fear of loss of jobs.
In addition, others stated to say that the load shedding hours provided enough time for them to rest
due to the overtime hours worked before the load shedding exercise commenced.
CHAPTER 6 – RECOMMENDATION AND CONCLUSION
6.1 CONCLUSION
Load shedding is a load management strategy done when the demand is higher than the available
energy resource or when the demand is higher than what the utility can supply, a power cut then
becomes inevitable. Zambia just like most of the developing countries in Africa experience load
shedding often due to the increasing population, which in relation increases the demand for
electricity, which later results into load shedding because of the limited resources.
As if this is not enough the country received less rainfall than the usual in the 2018/19 rain season
this saw many rivers used for power generation reduce in water levels making them insufficient to
generate power as a result the country experienced 15-20 hours of no power.
It was discovered during the research that the load shed has a great impact on the operations of the
manufacturing industries. The effects on the thirty manufacturing industries visited were negative;
loss of revenue, loss and damage of equipment, increased expenditure, Reduction of labor force,
despite of this a few gave some positive feedback, such as improvement the work efficiency, and
enough time to rest.
Some industries used copying strategies to be able to survive during the period of the load shedding
exercise such as the use of generator, reduction on the labor force, early closures, shut down of
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operation, use of inverters and voltage stabilizers, UPS, while others used a combination of one or
more of these strategies.
The strategies also had their own merits and demerits such as increase in revenue, less damages
on the plant equipment, increase in labor force the negative being; cost of production was high
depending on the strategy being used. The use of these strategies incurred more costs in purchasing
or adopting these strategies and Workers were laid off because of this cost incurred and because
of the losses incurred from a stoppage in operation due to the high cost of production and labor
80% of the respondents reported that they would switch to other alternatives or other coping
strategies if the load shedding exercise continued or persisted while 10% said they would shut
down operation if the problem persisted for a very long time.
6.2 RECOMMENDATION
Having established that there is a direct relation between electricity supply and consumption to
economic growth and that electricity supply. It is significant for operation and growth of industries
and countries GDP. it must be ensured that the electricity generation is constant at all times making
sure the generation equipment i.e. generators, turbines, power plants and dams are always kept at
their best operation condition to operating at their highest capacity.
However, in case of a failure or disturbance in the natural cycle i.e. drought, long days of reduced
sunshine etc. The load shedding exercise will be adopted in order to prevent complete failure of
the electricity system and the industries will be affected negatively as reported in this research. In
order to survive on individual level, companies may adopt the coping strategies discussed in the
research while at national level the government and the Ministry of Energy and Energy Regulation
Board may use the following may strategies
6.3 Energy generation mix
Increase the energy generation mix where different types of energy resources are used for
generation purposes, to be specific renewable energy resources such as solar energy, wind and bio
mass energy to produce electricity and connect them to the Zesco grid to reduce the over
dependency on hydro power.
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6.4 Policy Implications
Due to the positive relation between electricity supplies, consumption to the economic growth,
expansion of electricity sector leads to an increase in the manufacturing output, therefore policy
makers should implement policies that are aimed at expanding the electricity sector.
Would recommend the promotion and sensitization of the of energy efficiency and efficient
equipment throughout the country especially in manufacturing industries, mines, malls and other
high energy consuming sector as this improves the rate of energy consumption,
Such as the use of
(i) Energy saving bulbs instead of incandescent bulbs,
(ii) Use of timers during manufacturing processes which stops and turns machines off after
completion of work.
(iv) Use of motion sensors and other types, which automatically starts or stops operation
of a specific equipment due to response to external stimuli.
(v) Replace of old inefficient machines and equipment’s such as television, fridges stoves
air cons in domestic setups and replacement of old inefficient machinery and
equipment used in industrial operations
Would also like to recommend the government through Zesco and ERB to revise the tariffs for
the large energy consumers as their tariffs are just too low. They should increase them slightly
higher. This will help them with enough savings to finance more power generation projects
(power plants).
Would also suggest that the energy regulation board should reduce the tariff difference between
its off peaks, peak and standard tariffs to reduce on the pressure of rebuilding reliable installed
capacity to meet the peak demand
Another recommendation is for the government to remove import duties on generator imports, as
this is one major method used to mitigate the load shedding exercise in more than 90% cases.
6.5 Further Research
Would like to encourage further quantitative and qualitative research to be carried out, on the
impacts of load shedding on manufacturing industries.
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Appendix
Types of Non-Probability sampling
1. Quota sampling refers to a non-probability sampling technique in which the assembled
sample has the same proportion of individuals as the entire population with respect to their
known characteristics (explorable.com). The aim of the quota is to ensure proportionality
between the starters being studied with the populations.
2. Convenience sampling is a strategy used by the researcher in which he selects a sample
that is already available or that can be accessed easily. On the opposite hand is the snowball
sampling which refers to a technique in which the researcher seeks for help from the
respondents to help identify the population being studied (Laerd Dissertations 2016).
Snowball is usually used when the population under study is hard to find and identify.
3. Self-selection sampling technique is one used by the researcher, in which he allows
individuals and organizations to take part of the research based on their accord through
voluntary actions (Laerd Dissertation 2016). Lastly is the purposive sampling, which is a
technique in which the researcher selects a sample based on their knowledge of the research
problem. The main aim and focus of the purposive technique is to focus on a particular
characteristics of the population that will help explain and answer the question (Laerd
Dissertation 2016).
Types of validity
1. International validity, this is the type of validity that refers to whether it is able to establish
and make a good conclusion or not, concerning the relationship between two variables,
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with the purpose of definitely stating that the effects that were observed on the dependent
variables is caused by the independent variable.
2. On the other hand, construct validity deals with the extent to which a study can appropriate
inference from the specific study to the broader concept, on which the study was based
operationalized measures for the theoretical construct on which they are based.
3. External validity deals with the extent to which the conclusion drawn from a study can be
generalized to the entire population.
