Namibia’s Power Generation and its sustainable outlook

By Olga Chilombo and David Jarrett

There have been a multitude of articles, papers and commentaries surrounding Namibia’s future in relation to (electricity) power provision and its sustainable outlook for the country.

For some years now, electricity generation (supply) has been a big challenge for Namibia primarily due to the catch-up nature required after independence in meeting rapid growth, coupled with the long distances between towns and settlements. For long distances, electricity has to be transmitted at high voltages and through expensive overhead cables.

Alternative Energy or Renewable Energy is mooted as a solution that is sustainable and creates “security of supply”. This is not a new concept or policy thought, as the 1998 White Paper on Energy clearly saw the value and enshrined it as government policy. However, the very nature of renewable energy can be a point of contention for the power industry.

It is well accepted, that alternative energy is energy generated in ways that do not deplete natural resources or potentially harm the environment. Thus, these energy sources are good ways of substituting the use of fossil fuels and nuclear power. Alternative energy includes wind, solar, bio-energy sources, wave and tidal energy amongst others.

Generating electricity using such forms of alternative energy, ensures that the environment is safe from any harm and at the same time, national energy demand could be met. If I take the line of my colleague Harald Schutt, then 100% renewable energy power generation is potentially possible for Namibia. It is a fact that Namibia currently imports up to 70% of its electricity and this comes with its own inherent costs which was reported in February 2017 to be the reason for Namibia’s high trade imbalance with electricity imports of close to N$2.6 billion.

Taking a technical or even a scientific point of view, Namibia’s local generation of electricity is highly reliant on renewable energy via its well-known and celebrated Ruacana hydro Plant. Ruacana has since its initial operation in 1978 (or 1980), provided a chunk of the energy required to power Namibia’s economy. It started off with 3 turbines of 80 MW capacity totalling 240 MW, until its increase capacity of 92 MW due to the 4th turbine in 2012. This then provided Namibia with a Hydro Capacity of 332 MW. Apart from the new fourth component added to Ruacana in 2012 which increased its capacity, there has also been a number of Solar Power Plants built in Namibia over the past three years by different IPPs to reduce electricity import needs and provide secure energy to Namibia in a sustainable manner.

Recent developments

The introduction of the Renewable Energy Feed in Tariff (REFIT) programme in 2014 and its subsequent “over-subscription” by Independent Power Producers (IPP’s) gives the potential for a much higher penetration of renewable energy into the nation’s energy mix. These new alternative energy plants include; Osona, Omburu, Otjiwarongo and Grootfontein. There are currently more renewable energy projects being carried out.

Other developments to increase alternative energy usage resulted in the new Renewable Energy Policy, The Energy Policy and the gazetting of the Net-metering Regulation.

Financing also received a boost with the Development Bank of Namibia (DBN) providing debt funding to two Solar Power Plants with appetite to fund even more in the future. On the micro loan side, improved fund accessibility via loan packages made available by First National Bank of Namibia (FNB), provides individuals a “Renewable Energy Loan”. These loans are for renewable energy equipment such as Solar Water Heaters, Solar Water Pumping and Rooftop Solar PV systems.

Further support comes via the Environmental Investment Fund of Namibia (EIF) which has bridged the gap for sustainable developments, creating funding opportunities that have cross sector approaches for Green Technologies and low carbon development. The EIF has been active since 2012 and continues to increase its offerings.

Statistics such as the World Bank/SE4ALL sadly show that 51% of the Namibian population are without adequate access to electricity countywide. Namibia has made rural electrification a priority in recent years. So much so, that during the 2016/17 financial year 31 public institutions, 58 households and business centres were reported to have been electrified countrywide as per the Ministry of Mines and Energy (MME) Budget speech of April 2017.

Between the years 2000 and 2011, according to the NSA Profile of Namibia report of 2013, shows that there has been a 7.3% reduction of homes using wood or charcoal for cooking. The rate was at 54.3% in 2011 and it is expected to keep falling. As for electricity, gas and paraffin, it was recorded at 32.9%, 8.1% and 3.5% for cooking respectively. This only shows that more and more people have been switching to using more electricity than gas or charcoal, in turn, increasing national electricity demand.

All in all, despite efforts in increasing electricity supply, demand is still not being fully met locally and tariffs have been rising yearly. The question that remains is; “what is there to do next to improve this situation in the long term?” Given this notice of the existing issues, it definitely means that there is room for improvement in local generation capacity, through more investments in sustainable fuelled power generation – that is, Renewables. This will ensure sustainability and national energy demand satisfaction in the coming years.

office@rdjconsulting.co.za

July 2017
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