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NamPower Partners With IPPs To Boost Internal Generation Capacity … IPPs rake in almost a billion in revenuein two years

By:Nghiinomenwa-vali Erastus
For the past two years, the country’s power utility NamPowerhas sourced electricity from local Independent Power Producers (IPPs) worth N$920 million.
According to updates received by The Villager from NamPower, the power utility has indicated that it has signed 19 power purchasing agreements (PPAs) with local IPPs to enable more local electricity generation beyond NamPower’s generation capacity, which is insufficient and largely supplemented by import.
Currently, local IPPs contribute about 9% of the annual power consumption,of which 0.6% is from wind sources while the rest is from solar, the company said, adding that local IPPs’ contribution is expected to increase in the next two years.
IPPs generation is desperately needed to supplement NamPower generation and to increase the country’s internal generation capacity.
Local IPPs are not only limited to selling electricity to NamPower but they can also supply electricity (30%) to other big consumers or export to the Southern Africa Power Pool (SAPP) by utilising the wheeling services under the Modified Single Buyer Model.
NamPower through the MSB office has received 15 applications from eligible generators with the intent to export power to the SAPP market, but none of them are operational yet.
The wheeling tariffs are set on an annual basis by the SAPP coordination centre and the tariff for exporting/wheeling through the NamPower network for 2023 is 0.520 USc/kWh, depending on whether one is wheeling from south to north or vice versa.
Currently, NamPower indicated that it only makes money through wheeling when there is a transaction for power flow between Zambia and South Africa since Namibia is interconnected to the two countries through the NamPower network.
However, there has been no such transactionin the past two years.
The power utility has also updated The Villager on the renewable projects that are being constructed.
NamPower intends to develop six renewable energy generation projects under its strategic pillar of “Ensuring Security of Supply”, as well as fund the projects from its balance sheet.
So far there have been two projects developed as IPP projects where NamPower will only procure the energy from theproducers.
These projects are the Khan 20MW Solar PV IPP Project and the 50 MW IPP Wind Project.
The Khan project’s construction activities have already commenced in March 2022.Basic engineering and designs have been completed, whereas detailed engineering is in progress. The commercial operation date of the power plant is expected in Q2 of 2024.
For the 50 MW IPP Wind Project, the procurement process has been completed and the bid was awarded to the successful bidder, which is China Energy International Group and Riminii Investment Joint Venture. The project is expected to achieve commercial operation at the end of 2025.
The four remaining projects will be owned and operated by NamPower and funded from NamPower’s balance sheet.
One of these projects is the Omburu 20MW Solar PV Project whose power plant was successfully completed in March 2022 and is currently under commercial operation.
The second is the 70 MW Solar PV Project which is planned for completion in 2025. This project replaces the 40 MW Rosh Pinah Wind Project, which has been discontinued because the wind resource at the Rosh Pinah site is lower than anticipated, thus making the project not commercially viable.
The third project is the 40 MW NamPower Biomass Power for which the final investment decision is expected to be taken by April 2023.Construction is expected to start by Q3 this year and commercial operation by end-2025.
The fourth project is the 50 MW NamPower Anixas II, Firm Power Project. The procurement and construction of the power station was successfully concluded and the contract was signed in March 2022 as planned. Construction-related activities will continue throughout 2023, with completion of the power station expected by Q2 of 2024.

Nghiinomenwa-vali Erastus

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