A full-cost analysis of future technology options for electricity generation in Zambia

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Mwaala, Howard
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The University of Zambia
The aim of this research is to facilitate informed decision making for an optimal cost-based allocation of future electricity generation resources in Zambia. Such a study is cardinal in order to find out which energy technologies are economically viable from a long-term perspective for our unwarranted developing economy in Zambia that still bases its energy production predominantly on wood fuel, hydropower and coal. The research approach adopted in this dissertation is based on a profound literature review of Zambia’s electricity market, coupled with the development of a full-cost approach based on levelized cost of electricity. This approach is used to empirically evaluate the performance of new-build technologies that include coal, nuclear, natural gas, hydropower, bioenergy, geothermal, solar Photovoltaic, Concentrating Solar Power and wind with regard to economic, environmental and social criteria. In separate evaluation of several aspects of power plants multicriteria analyses based on hierarchically structured criteria is applied, so as to address the overall assessment of power plants according to the technological, economic and sustainability aspects. In this thesis, ten types of power plants are evaluated using nine end-node criteria structured under the Analytical Hierarchy Process. Moreover, pairwise comparisons are employed for accurate subjective criteria weighting. The findings from this research provide evidence that conventional power plants are not the optimal option for electricity generation in Zambia but that renewable energy power plants are to be preferred for new investments. According to the scenario based on the subjective criteria weighting, emphasis is laid on sustainability driving renewable energy power plants on top of the overall ranking, while nuclear and fossil fuel power plants rank in the last five positions. The other conclusion drawn from this study is that the inclusion of indirect costs and non-monetary aspects of electricity generation makes technologies more competitive in Zambia that otherwise seem expensive from a positive-economic point of view. The dissertation recommends that the structure of the Zambia electricity market should be adjusted constantly in order to facilitate the accommodation of higher shares of renewable energy, in the eyes of Sustainable Development Goals, to decarbonise the world energy system by the year 2020 hence the emphasis for Zambia to embrace renewable energy. Key words: Optimal, Levelized, Economic, Environmental, Sustainability
Renewable energy sources--Zambia , Electricity generation--Zambia