There is no way electricity prices will go down: Shilamba

WINDHOEK; There is no way the price of electricity will decrease unless Namibia finds a cheaper way to generate electricity, NamPower Managing Director Paulinus Shilamba said on Thursday.

He was speaking in the capital during the one-day Namibia Energy Policy Forum, which was aimed at discussing the country’s electricity supply and demand balance for the period 2015 to 2020, amongst other issues.

The foreseeable future does not appear to hold much relief for electricity users. This year, NamPower announced a minimum 15 per cent annual increase in costs for the next few years.

Shilamba explained that the cost of electricity will increase due to investments in new generation and transmission projects.

The price of electricity will also continue to increase due to the devaluation of the Namibian Dollar against the United States Dollar, and the interruptible electricity supply from South Africa’s Eskom.

Namibia imports more than 60 per cent of its electricity from Eskom.

Shilamba also attributed the increase in electricity prices to the high cost of importing electricity.

Besides South Africa, Namibia also imports electricity from Zambia, Zimbabwe and Mozambique.

He indicated that NamPower will spend N.dollars 2.4 billion on electricity imports in 2015 alone. This figure will go up to N.dollars 10 billion over the next four years.

The company is also expected to spend N.dollars 30 billion on the development of the Baynes hydro-power project, while the Kudu gas-to-power project will cost about US.dollars 1.2 billion (N.dollars 123.9 billion).

The Kudu gas-to-power project is set to increase power production in Namibia when it kicks off in 2018.

The main elements of that project are the development of the Kudu gas field and the construction of an 800 megawatt (MW) combined cycle natural gas-fired power station near Oranjemund in southern Namibia.

When completed, this power station will feed the Namibian, Zambian and South African power grids.

NamPower will take up 400 MW to be consumed in the country, while 100 MW will go to South Africa and Zambia will take up 300 MW.

The Baynes Hydropower Project, situated along the Cunene River, 200 kilometres downstream of Ruacana, is one of the long-term projects in the feasibility phase, and essentially emanates from initial studies conducted on the Epupa and Baynes sites along the Cunene downstream of Ruacana between 1995 and 1998.

As Imports of electricity became significantly more expensive, especially during peak hours, both the Angolan and Namibian governments agreed to study the Baynes option further.

The Baynes Project will take six years to complete and has an installed capacity of 600 megawatt.