Renewable Energy Development “An Analysis of Investment Models” Case of Zimbabwe
MetadataShow full item record
Zimbabwe is endowed with a vast renewable energy resource base that is currently under-utilized presenting a big scope for investment opportunities. Faced with a growing population and an increase in energy demand, it is crucial that the country integrates renewables in the total energy supply mix for sustainable development. Zimbabwe has experienced fluctuations in its policy formulation processes which affected renewable energy investment. The country is lagging behind in terms of Renewable Energy Technologies due to slow uptake of these technologies in the energy sector. The country has a national electrification rate of 42%, coupled with an average demand of 1700MW against actual generation averaging 1000MW. The energy deficit averaging 700MW is an indication that more effort needed to finance energy projects in Zimbabwe to meet demand as well as transition to clean energy. In that respect, the general objectives of this study were to investigate policy issues that act as barriers to unlock investment in Renewable Energy Technologies in Zimbabwe and to identify innovative models that can be used to fund renewable energy projects in Zimbabwe. Innovative financing models comprise mechanisms of raising funds in support of renewable energy development and this involves new approaches for pooling private and public revenue streams to scale up or develop renewable energy projects. The models also highlight new revenue streams and incentives earmarked to the sector’s development. The population of this study was the top management of Ministry of Energy and Power Development, Ministry of Finance, Rural Electrification Agency and Independent Power Producers. A sample of 59 was reached by employing both stratified and systematic sampling. A semi structured questionnaire was used to collect primary data and analyzed by descriptive analysis. The LCOE model was developed to test the effects of government subsidy on the net value of Solar PV and Hydropower projects. The study established that inconsistency government policy has retarded investments in new renewable energy projects. The author recommended the introduction of time-bound subsidies whereby Output-based Aid is given to community projects or IPPs on providing evidence of installation of a renewable energy system. BOOT (Build, Own, Operate & Transfer mechanism) Models were also recommended for the development of mini grids; where private sector entities design, construct, operate and maintain the power plant for a predetermined time frame and transfer ownership to the community were recommended. During this period, they recover their investments from the project outputs.