NamPower engages the region over power supply
Windhoek – Although the possibility of Namibia facing blackouts is not expected at least until next year in August, NamPower’s Managing Director Paulinus Shilamba has said Namibia needs to act as soon as possible if it’s to prevent these challenges from happening.
He said the power supply shortage in the SADC region has forced most power utilities to implement Demand Side Management (DSM) programmes, including load shedding. “These measures have to some extent succeeded in restraining overall electricity consumption in those countries. Load shedding, however, has also had a negative impact on the socio-economic development in those countries, a situation that NamPower shall do its utmost to avoid,” he said.
He said in the long term, however, there is hope that the regional and domestic power supply shortages will be alleviated when capital intensive power plants will be commissioned to enable the generation of sufficient capacity to meet and to hopefully exceed future demand.
The Namibian power utility has since started to renegotiate existing and new power purchase agreements (PPAs) with neighbouring power utilities which include the recent new 80 MW agreement with the Zimbabwe Power Company (ZPC) which came into effective on the April 1, 2015.
“This agreement is structured to supply up to 350 GWh (gigawatt-hours) in a calendar year and is prohibited to supplement the seasonality of Ruacana.
The term of this agreement is 15 years, with the option to reduce the capacity to 50 MW after 10 years from the date of coming into its operation,” said Shilamba.
NamPower also said negotiations with Mozambique’s Electricidade de Mocambique for 80 to 100 MW mid-merit power have been concluded and the new PPA should be signed between the two utilities within the next few months.
“The existing 90MW PPA with Aggreko will expire in August 2015 and is currently under renegotiation. Furthermore the existing Supplementary Agreement with Eskom for up to 200 MW which expired in March 2015 is also under renegotiation,” said Shilamba.
NamPower is implementing short and long term generation power projects, including the 250MW Erongo Gas power station in Erongo region, which the company’s boss said is progressing well.
The project was endorsed by Cabinet in March 2015 and subsequently, the NamPower Board of Directors resolved to approve the commercial agreements in principle, to appoint Xaris Energy as a successful bidder and to make a Final Investment Decision (FID) on the project.
According to Shilamba the negotiations with Xaris Energy and the project financiers under the leadership of Standard Bank Namibia will commence soon with a view to conclude all commercial agreements and to reach Financial Close (FC) by the middle of this year.
“This project, in which NamPower will have 30% equity shareholding, will cost approximately N$7, 66 billion (including power station, floating storage and regasification unit and pipe line infrastructure) and will reach commercial operation by August 2016,” he said.
The long term generation projects include the much talked about Kudu Power Station, the Baynes Hydro Power Project and several renewable energy projects.
Shilamba said following the delay over the past few months, the Kudu Power Station project was now firmly back on track.
This followed a Cabinet resolution last month to approve government support which was also announced by the Minister of Finance, Calle Schlettwein in his budget last month.
Shilamba said the Techno-economic and Environmental Impact feasibility Studies for the Bayness Hydro Power project were concluded by the consultants, approved by the PJTC (Permanent Joint Technical Commission) and endorsed by both governments of Angola and Namibia.
The next course of action will now be the creation of the permanent Bayness Project Offices in Windhoek and Luanda to coordinate the outstanding work.
“Construction of the Bayness Hydro Power Plant, at a cost of approximately US$1, 3 billion (excluding associated infrastructure) is expected to take 6 to 7 years, with commissioning by 2024.
The next stage in this regard will be the final design, tendering and procurement process which can take up to two years to complete,” he said.
Shilamba said without necessarily sometimes feeling the effects, the power supply situation in Namibia will remain critical until the commissioning of a base load power satiation in 2018.
He appealed to all consumers to support their new power supply strategies and programmes, and meet them half way by reducing their electricity usage by a minimum 10%, especially during peak hours – from 06h00 to 09h00 in the morning and from 18h00 t0 21h00 in the evenings.