NamPower, will put some of its Independent Power Producers (IPP) projects on hold indefinitely, after government failed to guarantee a 180 MW power plant in Arandis, Nampower Managing Director Paulinus Shilamba said.
Diaz and Arandis Power are some of NamPower’s IPPs which will be struck from the list of projects according to the power utility’s Managing Director.
Government has refused to take a risk to fund Diaz and Arandis Power sourcing with the fear that they might not benefit anything if things go wrong with the implementation of these suggested power sources the Managing Director of NamPower, Paulinus Shilamba, revealed this week.
Shilamba said the power demand is at its peak with 524 MW recorded on March 2015, which exclude the Skopion Zinc Mine, against a peak supply of 300 MW recorded from local generation sources. “The shortfall between demand and supply continues to be supplemented by inputs from various power utilities in the region as part of standing power purchase agreement,” he said.
Shilamba said there is and there will not be any imminent threat to the power supply security before August 2016, because of the re-commissioning of the Van Eck power station this year. He said this will be ensured by free distribution of 1 million bulbs and the subsidized installation of 20,000 solar water heaters later this year. He said at least 250 MW will be needed in additional generation capacity to ensure security of supply for the country from August 2016. “Amongst the challenges during that period will be the expiry of the bilateral agreement with Eskom in 2016, lower output from Ruacana due to lower level, and the Expiry of Skorpion and Eskom contract in 2017,” he said. He also added that the procurement of the 250 MW gas power project in the Erongo region, which is carried out through a transparent bidding process, is critical and beneficial to the national economy.
Furthermore, he mentioned that the commissioning of Kudu and 250 MW projects will also transform Namibia from being a net importer to a net exporter of electricity.
He said NamPower will continue to renegotiate existing and new Power Purchase Agreements (PPA) with neighboring power utilities; a new 80 MW PPA, signed with Zimbabwe on 16th October 2014 that became effective on 1 April 2015, the concluded EDM with Mozambique for 80-100 MW mid-merit power, the existing 90 MW PPA with Aggreko that will expire in August 2015 and the expired 200 MW supplementary agreement with Eskom.
He also mentioned the construction of Baynes Hydro Power Plant will cost approximately US$1, 3 billion (roughly N$16,9 billion) excluding of the infrastructure. He also said that NamPower together with the ECB have embarked the Renewable Energy Feed in Tariff programme to accommodate small medium sized businesses in the generation of power from various renewable energy sources up to the maximum of 5MW.