Nampower to Spend N$7 Billion to Keep Lights On Till Kudu

During the next five to seven years NamPower will be embarking on an extensive N$7 billion transmission expansion plan to ensure that electricity is reliably delivered to all parts of the country.

However, NamPower Managing Director Paulinus Shilamba has warned that given the absence of guaranteed future power imports from South Africa’s utility Eskom, keeping the lights on can only be achieved if all electricity consumers play their part.

“I would therefore, once more, like to appeal to all our customers, small and large, to meet us halfway by reducing their electricity usage by a minimum of 10 percent, especially during peak hours, in the morning from 06h00 to 09h00 and in the evening from 18h00 to 21h00. The possibility of load shedding can only be avoided if we all work together as a country, with each player including customers playing their part in contributing to the solution,” cautioned Shilamba. ,

As part of the N$7 billion programme a number of transmission projects are currently under implementation, including the Environmental Impact Assessment for the KuneneOmatando and RunduQuito projects, construction of the OtjikotoGerus line and upgrading of coastal transmission infrastructure.

Shilamba has on numerous occasions sounded the alarm bells that the power supply situation in Namibia would remain critical until the commissioning of a base load power station in 2018. The current situation is attributed to an over-reliance on imports, as Namibia’s imports average 60 percent of total power consumed per year and up to 80 percent during a dry season.

“As such, until 2017, Namibia will continue to be vulnerable in terms of power supply as any negative development in neighbouring states will have a corresponding negative effect on electricity supply,” Shilamba said.

To deal with these challenges the national power utility has split the remaining time into three parts until the Kudu base load power station comes online around 2018. Adequate measures are in place to address the situation and, therefore, no serious power supply disruptions are expected between 2014 and 2015 when the power supply situation is expected to be challenging.

From 2016 to 2017, NamPower expects serious power supply deficits mainly because of the new step loads and expiry of a number of existing power purchase agreements (PPAs) that will be difficult to re-negotiate or to extend, due to shortages in the domestic markets where the PPAs originate. NamPower however continues to negotiate new PPAs with neighbouring power utilities, especially with Eskom.

In the past NamPower indicated that emergency diesel generators would be the solution in the face of serious power supply deficits. However, upon further investigation the utility, with the assistance of the consultant, concluded that emergency diesel generation would prove to be a more expensive option to the national economy.

“On the basis of professional aice from our consultant and on recommendation by the NamPower executive management a decision was therefore made by our Board of Directors, and endorsed by government through the Ministry of Mines and Energy, to rather develop a 250MW long-term generation facility at the coast (Erongo Region).

The plant to be procured through a transparent bidding process will operate in a base-load mode till 2017 and in mid-meriteaking or stand-by mode after 2018.

A special purpose vehicle (SPV) in which NamPower will have up to 30 percent equity will be created to develop the project in order to tap into the private sector’s capital, innovation and expertise to achieve its goal. The plant is expected to cost approximately N$3 billion and be operational by mid-2016,” explained Shilamba

Thirdly and finally, as of 2018 and beyond, Namibia is expected to be a net exporter of electricity, as the Kudu power station will have come online.

During this period tariffs are also expected to stabilise compared to the current period where electricity tariffs will be expected to rise sharply at an average rate of approximately 15 percent per year.

Source : New Era