Namibia imported more than 70% of its required power in 2022, as supply from the crucial Ruacana hydroelectric power project declined.
The Institute for Public Policy Research (IPPR) announced this in its Namibia quarterly economic analysis for the first quarter of 2023.
The report included a section that provided a brief assessment of where Namibia stands in terms of energy supply, bringing together information on the current situation in Namibia as well as two main regional providers, South Africa and Zambia.
According to IPPR, Namibia has long been a net importer of power from the Southern African Power Pool and has struggled to establish additional domestic generating capacity and become more self-sufficient over the years.
“Despite greater renewable energy capacity, primarily REFIT IPP solar PV plants, in 2022 Namibia imported more than 70% of the power required as power supply from the key Ruacana hydroelectric power station dwindled,” IPPR said.
According to IPPR analysis, the imported power was primarily supplied by South Africa’s Eskom and Zambia’s Zesco .
Despite the fact that both countries are experiencing internal power shortages that are unlikely to be remedied in the near future.
IPPR said while Namibia is making headway in creating additional producing capacity, it is not moving quickly enough and will not be enough to totally replace imports.
“This precarious situation is likely to last several years until the end of the decade,” it said.
IPPR said NamPower’s generating capacity has been confined for many years to Ruacana, Van Eck, and Anixas.
Furthermore, Omburu, which is located on a 42ha location near Omaruru, was commissioned on29 March 2022, becoming NamPower’s first entirely owned and operated renewable energy power station.
Hopsol Africa and Tulive Private Equity built it for N$340 million, and it is estimated to create 63GWh of sustainable energy per year.
Furthermore, NamPower is working on the following additional producing capacity as part of its Integrated Strategic Business Plan 2020-2025, according to IPPR.
“The Omburu Battery Energy Storage System will be the first of its kind in Namibia and the subcontinent,” it said.
A €20 million (N$403 ,illion) tripartite grant funding agreement was signed in December 2021 between NamPower, the National Planning Commission, and KfW, and the prequalification stage for the procurement of an Engineering, Procurement, and Construction (EPC) contractor was completed in January 2022.
The report said the EPC contractor was due to be appointed in the first quarter of 2023, with project commencement planned for mid-2023 and completion towards the end of 2024.
Meanwhile, another 40MW Rosh Pinah Wind Power Project was planned to provide renewable energy outside of the typical solar PV dispatch profile, with a maximum export capacity of 40MW and a ten-year P50 annual energy production of 122,000 MWh including losses and plant availability.
It added that the plant was required to have 97% availability with a guaranteed lifetime of 25 years and most of the project costs were to be financed via a concessional loan agreement with KfW.
“NamPower was to fund approximately 20% of the project from its balance sheet. KfW/BMZ completed its project due diligence in April 2022.”
However, the project was cancelled because the wind resource at the Rosh Pinah site was lower than anticipated, according to the report.
Furthermore, the N$1.2 billion Anixas II Power Station will be built to supply backup power to the grid in the event that renewable energy sources fail.
A contract was struck with FK Namibia and Joint Venture on 4 March 2022.
Simultaneously, IPPR stated that NamPower expects the project to be finished in December 2023, adding that the N$1.6 billion Otjikoto Biomass Power Station will employ encroacher bush as fuel and provide dispatchable baseload power, improving supply security and stimulating the biomass fuel supply chain.
“Fichtner GmbH have been appointed engineers for the project. A grant funding application was submitted to the Nationally Appropriate Mitigation Ambition Facility to reduce the tariff to the end consumer.”
IPPR added that the preferred project financier, Agence France de Développement (AFD) is carrying out the final due diligence on the project.
It said NamPower expected a final investment decision in April 2023 with construction starting in Q2 2023.
“The plant is expected to commence operation by the end of 2025,” it stated.
NamPower signed an exclusive 25-year PPA with CERIM Lüderitz Energy in April 2023 and currently anticipates the facility to be operational by July 2025. CERIM will be in charge of the entire development, which will be done on a Build-Own-Operate basis.
According to IPPR, NamPower may trade power through the Southern African Power Pool using its Energy Trading System, allowing it to supplement supply and fulfil demand.
“To meet demand at all times, NamPower supplements its energy requirements with power from the region through SAPP long-term bilateral agreements (PPAs) and short-term trading markets (STEM),” IPPR pointed out.
Despite a slew of new domestic producing capacity that has come online in recent years, the IPPR displayed that Namibia was more reliant on power imports than ever in 2022.
NamPower delivered 816GWh of the total supply of 4,097GWh into the system throughout the year, while domestic REFIT and Other IPPs supplied the remaining 364GWh.
“South Africa’s Eskom supplied 1,253GWh, Zambia’s ZESCO supplied 1,018GWh and Zimbabwe’s ZPC supplied 390GWh. A further 256GWh was purchased from the SAPP expensive short-term energy market.”
Finally, according to the research organisation, overall imports accounted for 71.2% of total electrical supply, rendering Namibia severely exposed to changes in the rest of the region.