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NamPower stopgap could make Kudu a white elephant

Mon, 7 April 2014 02:23
by Linekela Halwoodi
News

NamPower’s stopgap measure plan, from which a 250MW independent power plant is to be built, will put a dent in the implementation of the much-anticipated Kudu Power Plant, estimated to produce 800MW by 2018.
The proposed plant, which is expected to cost millions to implement, comes as a costly solution to an envisaged power deficit from 2016 to 2018. This, after South Africa, which supplies the bulk of Namibia’s electricity imports, informed NamPower in 2012 of its plans to embark on a concerted effort to reduce its generation maintenance backlog. As such, it would not cater to Namibia’s power needs at the expense of its own.
The planned power plant, to be located in areas surrounding Walvis Bay, will have a 25-year lifespan and utilise natural gas and liquid fuels as its sources of fuel, excluding cheaper alternatives, such as coal, according to insiders.
Questions is, therefore, on the timing of the project, which is expected to take at least two years to be realised. This, after the selection of tenders and commencement of the construction. This begs the another question of when the fruits of this project are expected to help the country’s power situation and whether or not Kudu Gas plant should already be running by the time the latter project is complete.
According to NamPower, the unit will operate as a base load power plant before the commissioning of the Kudu Gas plant and as a mid-merit power station, post commissioning of the project.
The project, which is already being implemented, with an expression of interest (EoI) recently flighted, has, however, not been provided for in the recent national budget announced by the Finance Ministry. As such inside sources say it is widely expected to tap into funding provided for the Kudu Gas project.
The Kudu Gas project, which is expected to cost a staggering US$1.6b (N$16b), will initially require US$850m (N$8.5b) for the downstream construction, which will involve the actual building of the power plant.
Phase 2 of the upstream project is expected to chew up to US$800m (N$8b), before it provides for the transportation of oil and gas to the plant.
Tullow Oil, a British multinational oil and gas exploration company headquartered in London and the National Petroleum Corporation of Namibia (Namcor) will be the main suppliers of fuels to the planned station.

Panic Solution
Ministry of Mines and Energy minister, Isak Katali, says the new project has been in the pipeline for a while now and is not a panic solution, because of a looming power cut-off deadline in 2016.
“We have been planning on how to electrify the country for a long time now and a power station of this magnitude is long-life,” Katali told The Villager this week.
He said NamPower does not have to solely fund the project but can engage investors onboard.
“The ministry does not budget for the generation of electricity in the country. NamPower is the entrusted body that deals with that and the financial year of NamPower is ending only this June,” Katali said.
He, however, failed to shed light on the funding modalities of the proposed 250MW Power Plant, neither could NamPower, referring The Villager to a planned media briefing scheduled for the 15th of April, where it will reveal further information about the project.
Namibia has a power demand of about 500MW, which it has struggled to meet, pushing the goal post to the realisation of the new base load power station in 2018.
Last year, Paratus Power Station, which has a generating capacity of 24MW was downgraded to 12MW due to the age of the power plant.
Van Eck, located in Windhoek, with a generating capacity of 120MW, has been out of service since 2012, due to an ongoing rehabilitation programme meant to extend its lifespan by 10 years, at a cost of N$300m.
“At the moment, due to the availability of water at Ruacana, we are running the Ruacana Power Station 24/7 and full supply is available from ZESA (Zimbabwe), Zesco (Zambia) and Aggreko (Mozambique). This means, we are able to fully sustain ourselves,” says NamPower’s marketing and corporate communication manager, Tangeni Kambangula.
When the Kudu Gas plant gets off the ground, it is expected to generate 800MW, which will supply far more than Namibia’s 500MW demand. The excess power is expected to be sold off to Eskom (100MW), Zambia’s copper belt company, CEC Liquid Telecom (300MW), leaving Namibia with 400MW for its requirements, hence creating another 100MW deficit.
South Africa’s Eskom and Zambian CEC Liquid Telecom have stakes in Kudu. Ruacana Hydro Power Station experienced a decline in output from 2012 to 2013, because of last year’s drought and currently, it generates 332MW constantly and 624MW consistently at its peak.
Namibia imports 30MW from Hwange Power Station in Zimbabwe and 90MW from Aggreko Power Station in Mozambique, to be increased to 115MW from 2016.
NamPower has also proposed for the construction of the Arandis Power Station that will utilise both solar and heavy fuel oils and is expected to generate 60MW, although this will have to be funded by [private] independent power producers (IPPs).
The project will be possible through the mergers of Anixas in Walvis Bay, which runs on heavy fuel oil and produces 22MW and a solar power project in Arandis, which generates 30MW.
Currently, NamPower runs a 20 000 solar water heater campaign aimed at exchanging 20 000 electric water heaters (EWH) with solar water heaters (SWHs) over the next five years and contribute to the reduction of a national peak demand of 10MW.
NamPower is also part of the Zizabona Project, which is an electricity transmission interconnector directly connecting the power networks in Zimbabwe, Zambia, Botswana and Namibia.
 Zizabona is meant to help decongest Sadc’s only existing central transmission corridor from Zambia through Zimbabwe, Botswana and into South Africa.
How the 250MW power plant will be powered
The proposed power plant will run on liquefied natural gas, which is transported using a floating gas storage and regasification unit and is expected to cost up to U$800m (approximately N$8b) to build.
Liquefied natural gas (LNG) is methane, CH4) converted into liquid form for ease of storage or transport. A vessel used only to store oil (without processing it) is referred to as a “floating storage and offloading vessel (FSO)”. Floating liquefied natural gas (FLNG) vessels extract and liquefy natural gas onboard.
An LNG floating storage and regasification unit receives liquefied natural gas (LNG) from offloading LNG carriers and the onboard regasification system provides natural gas exported to shore through risers and pipelines.

NamPower engages Brazil, Angola and Asia
NamPower executives over two weeks ago, after the publication of the EoI, according to insiders, travelled to Korea, China and Spain, to meet with shortlisted parties interested in the Kudu Gas project.
They also met with Brazilian firm, Excelerate Energy, which offers a full range of floating regasification services, from FSRU to infrastructure development.
 Excelerate Energy will be able to provide the floating gas storage and regacification unit.
NamPower was also in Angola to meet with a company that will provide the Liquefied Natural Gas, to be imported via Walvis Bay where the fuel will be delivered to the rest of the country through road, pipe and rail infrastructure.
The plant is expected to provide base load power when the Ruacana Hydroelectric Power Station fails to operate.

Solutions
The Villager has established, Namibia does not require a stopgap measure, if NamPower engages a competent partner to construct the Kudu Gas Plant.
NamPower could invest in rental power like Botswana, which receives services from American company, APR Energy. Botswana has a 70MW diesel power module deal with APR Energy, which provides solutions to electricity shortages driven by its demand growth.
This means, NamPower would have to import containerised rental power, which can provide up to 100MW and is cheaper to set up and remove, with the power utility only required to secure a site to set up the technology.

Diesel Power Module
The Diesel Power Module (DPM) is a rapidly deployable, containerised technology, which is powered by diesel and can incorporate either a one or two mega-watt industrial diesel engine generator set.
The technology can be rapidly deployed and does not require any special concrete foundations. The DPM employs a utility-grade switch gear, which enables automatic or manual paralleling to a utility power source and automatic synchronisation.
Additionally, the advanced control system allows for automatic operation and can be initiated locally or remotely by a supervisory control and data acquisition (SCADA) system, which is a computer system used to gather and analyse real time data.

Gas Power Module
The Gas Power Module (GEPM) is a rapidly deployable, containerised technology that is gas powered and typically incorporates a 1.5MW industrial engine generator set.
The set is based on an advanced reciprocating engine coupled with an alternator and supported by an advanced control and monitoring system. The modular design would enable APR Energy to react fast to customers’ emergency power requirements and provide significant operational flexibility. The unit has extended maintenance intervals, which enables a very high level of availability.