With NamPower facing the crisis of coming up with solutions to the power deficit in Namibia, Government exhibits reluctance, albeit considering approving implementation agreements with independent power producers (IPPs).
When NamPower gave its update on the power supply situation and progress of its projects last week, it explained the planned 250MW thermal power station was found to be less costly than using diesel generators to combat the power deficit.
NamPower also said the country’s power usage could be reduced by 10%, if every consumer carefully managed their consumption by reducing the use of electricity during peak hours (6h00-9h00 and 18h00-21h00).
But with Namibia getting up to 80% of its power from neighbouring countries during the dry season and facing challenges with the Power Purchase Agreements (PPAs), the more N$3b 250MW thermal power station to be situated in the Erongo Region and expected to be operational by mid-2016 is the only source to keep Namibia lit till 2018.
“The Final Investment Decision (FID) is expected around June/July 2014. Financial close (FC) towards the end of 2014, if positive, would lead contractor to commence in January 2015,” NamPower managing director, Paulinus Shilamba told The Villager this week.
A year from now, Namibians will start to feel the deficit, although not severely, yet NamPower claims it has put “adequate measures in place to address the situation and therefore, no serious power supply disruptions will be expected during this period”.
Between 2016 and 2017, more power supply deficits will be experienced mainly because of the new step load.
Also, the expiry of a number of existing PPAs with Eskom, Aggreko and Zesa will contribute to the increasing deficit, as the current contracts will all have expired by August next year.
And Shilamba reiterated this week, “As I have indicated on a number of occasions, the power supply situation in Namibia will remain critical until the commissioning of a base-load power station in 2018. This will be particularly so, as one of our key suppliers, Eskom, has been experiencing serious challenges in managing the power supply situation in its own country”.
Interesting, however, is; without a guaranteed import from Eskom, it will be difficult to keep Namibian lit.
Last week, chairperson of the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration, Ben Amadhila, expressed concern towards the power challenges expected to rise by 100MW next year. According to recent local reports, the deficit will increase by 300MW, if Namibia does not entice investors to pump money into its projects.
But even with this, NamPower is still adamant it would be able to manage the situation despite the obstacles faced.
Shilamba thus suggests Namibia stays at the centre of power export when Kudu Gas becomes operational, which is a good suggestion, except during this period, NamPower claims Namibia shall also experience power tariff stability, compared to the current period where electricity tariffs are expected to rise sharply at an average rate of approximately 15% per year.
The rehabilitation of Van Eck Power Station, which has been out of service since 2012, will cost up to N$330m to adjust its functions to produce 90MW more. This means by the end of its rehabilitation, it will be able to generate 210MW for 10 years.
Ruacana Power Station is also undergoing installation of turbine runners, which will improve the current turbine efficiency levels from 81% to 94%. The replacement of the turbine runners and other turbine components will cost N$55m. This will increase its generation capacity to 347MW. The first installation will take place next month while the final one will take place early next year.
On paper, it all looks good but the question, which still goes unanswered is; will the 250MW thermal power station be fully operational by 2016 when the power situation is expected to become dire? Well, especially since the technology to be used in the development of the plant has not even been identified yet.
Turns out, the technology will only be identified during the request of proposals (RoPs) process, to come after the pre-qualification process. Oh Namibia!