Higher Power Tariffs Projected

Outgoing CEO of the Electricity Control Board (ECB), Siseho Simasiku, yesterday said electricity prices in Namibia have been increasing gradually to prepare Namibians for anticipated electricity increases expected to emanate from new power plants such as the Kudu Gas Power Project.

According to Simasiku, the higher tariffs will result from higher prices of new infrastructure and new technology necessary to exploit the Kudu gas field and other new electricity generation options. The Kudu Gas Power Project is expected to go online by the first quarter of 2018. Simasiku, whose last official working day at the ECB was yesterday, said current bulk electricity prices of just over one Namibia dollar per unit could increase to reach levels of between N$1.50 and N$1.70 per unit by the time the Kudu Combined Cycle Gas Turbine Power Station is completed in about four years.

The national power utility, Nampower, says the Kudu Gas Project is crucial to secure electricity supplies for Namibia and the region. The project, which was initially halted in 2007 due to commercial challenges, has now aanced to an extent that a Joint Development Agreement (JDA) was signed during February this year. During the signing ceremony, Nampower board chairperson, Maria Nakale, said the development of the Kudu project has come a long way, and noted that the JDA is a historical milestone, since it was the first time Nampower signed a JDA with a potential off-taker and investor in Kudu. “Starting in 2000 experts have warned government that by 2007 electricity demand would have exceeded supply. And, with South Africa’s economic development over the years the surplus power generated by Eskom has gradually eroded. Despite these warnings, new electricity generation projects have not been forthcoming,” said Simasiku. To make up for the reduction in power received from South Africa’s Eskom, Nampower has been hard at work negotiating new Power Purchase Agreements (PPAs) with neighbouring countries for constant and reliable power supply. Negotiations took place for the import of an additional 100MW from ZESCO (Zambia), 100MW from EDM (Mozambique) and 50MW from ZESA (Zimbabwe). The PPA with ZESA, which was to end last year, was also extended for another year until the end of 2014.

Simasiku has been at the helm of the ECB since its establishment in 2000. Before that position he was actively involved in the regulation of the electricity supply sector since he joined the Ministry of Mines and Energy in 1993.

“Even the best actor leaves the stage. I am now leaving the stage for others to take over. It is high time that others take over to bring new ideas to the industry,” said Simasiku. As the ECB’s first CEO, Simasiku was instrumental in establishing a favourable environment in which the electricity regulator could operate. He was also a major contributor in the establishment of the Regional Electricity Regulators Association (RERA), which covers southern Africa. According to the outgoing CEO, the ECB Board of Directors appointed Foibe Namene, currently at Nampower, to take over as CEO of the ECB as of June 1, this year. In the meantime, current ECB employee Rogers Manyame is expected to take up the position of acting CEO until Namene takes over. According to Simasiku he has now formed a consulting firm that will focus on activities in the mining and energy sectors. “During my time at the ECB I have focussed 100 percent on developing the energy sector in this country,” Simasiku said.

Source : New Era