Power pool to become competitive

By Timo Shihepo

WINDHOEK-IN an effort to overcome the regional power deficit by 2021, the Southern African Power Pool (SAPP) is in the process of changing from operating in a cooperative pool to a competitive pool.

With the current installed generation capacity amounting to 58,000 MW, the region still faces a deficit due to the electricity demand and the reserve required.

The SAPP Coordination Centre is now busy advancing this cause, through the development of a competitive electricity market in the form of a Day-Ahead Market (DAM) and other products that will enable the pool to face new challenges head-on.

According to the centre, this will speed up the process of achieving its vision of facilitating the development of competitive electricity markets where utilities within the SADC region have a choice on the supplier.

NamPower Managing Director, Kahenge Simson Haulofu, said the SAPP faces the challenge of promoting this vision and managing the uncertainties that may be experienced during the transition period.

These challenges will come in various forms, and in some instances, they will differ from one utility to another, as the electricity sector is undergoing major reforms, he said.

To this effect, SAPP is looking at a number of focus areas to prepare for the future. These include work on improving power supply in the region, and electricity trading and competitive market development.

Other focus areas include the prioritisation of generation and transmission projects and environmental issues in member countries, raising awareness and marketing of SAPP projects to investors.

“The SAPP is well aware of the challenges it is facing and we know that we need to plan strategically to address these challenges,” said Haulofu during the recent 40th SAPP executive committee meeting at Swakopmund.

NamPower hosted the meeting on October 13, where representatives of power utilities in the SADC region met to deliberate on important power planning and development matters.

SAPP was created with the primary aim to provide reliable and economical electricity supply to consumers in the SAPP member states, consistent with the reasonable utilisation of natural resources.

The meeting was officially opened by Namibia’s Mines and Energy Minister Obeth Kandjoze.

Kandjoze told the attendees that the SADC ministers of energy continue to monitor the development of new power generation projects in the region.

He said the pace of commissioning new projects is still slow, but the electricity deficit will be overcome by 2021.

Kandjoze said various efforts being put in all SADC member states will result in 35,000 MW of new generation capacity being commissioned between 2016 and 2022.

Over U$66 million of energy was traded in 2015/16. Although Kandjoze says this is quite significant, he said there is a need to see the trading surpass these levels.

“The electricity trading that is taking place on the SAPP Competitive Market is complementing to meet demand from own generation resources in most countries. This platform is assisting member states to have an option to buy from the market,” he said.

Kandjoze reaffirmed that Namibia is very committed to contribute to energy sector development in SADC. He gave the hosting of the SADC Centre for Renewable Energy and Energy Efficiency in Namibia as an example. The Centre became operational last month.

Namibia is also working with Angola on the studies for the Angola-Namibia Interconnector Transmission Project. The Inter-Governmental Memorandum of Understanding on this has been prepared and is under evaluation by the two governments before signature.Other Inter-Governmental and Inter-Utility Memorandums under review are the Botswana-Namibia and Namibia-South Africa Interconnectors.

October 2016
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