By: Nghiinomenwa Erastus
Only less than 20% of the Tsau //Khaeb National Park will be allocated to Hyphen to develop the country’s hydrogen project, explained the hydrogen commissioner James Mnyupe last week.
The first concession gave less than 20% to Hyphen Energy, as announced earlier by the Southern Corridor Development Initiative.
Tsau //Khaeb National Park is assessed to have a world-class renewable energy resource which presents an opportunity for more renewable energy generation through solar for Namibia.
This is due to the country’s aspirations through its renewable energy policies to become a net exporter of green electricity by 2030- currently, the government is a net importer of energy.
Mnyupe explained that the government of Namibia availed an opportunity to develop roughly 20% of the potential area in Tsau //Khaeb National Park, which has a world-class renewable energy resource.
He said the plan is to craft a Master Plan of how to develop best the announced and potential future projects that respect the flora and fauna of that area and maximise its potential to combat climate change.
According to the assessment done by the country investment board, many of Namibia’s solar power generating plants installed capacity are below 5MW.
The hydrogen project plans to unlock 2GW of renewable electricity generation, which will require producing green hydrogen with other phases designed to scale up to 5GW and 3GW of electrolyser capacity.
The Tsau //Khaeb National Park stands crucial in building the 2GW of renewable assets.
Currently, Namibia has a generation portfolio of about 650MW but imports 70% of its power more significantly in the dry season.
Mnyupe explained that most of the 650MW is based on Ruacana Power Station, “which leaves the country massively exposed to rainfall when climate change tests our ability to forecast weather patterns”.
Mnyupe added that it would be hard to plan and industrialise a country in such an environment when most of its energy needs are imported mainly from the struggling Eskom, which is undergoing a significant transition.
He highlighted that availing the Tsau //Khaeb National Park to more developers will depend on the progress of the negotiation with the current bidder.
Mnyupe updated that much work has to take place to finalise the negotiations with the preferred bidder.
According to him, the Green Hydrogen Council focuses on delivering a sound and sustainable outcome from those negotiations for all parties involved.
The outcomes of those negotiations will impact when any future announcements are made.
THE PROMISED JOBS AND OTHER PROMISES
The numbers from the preliminary assessment and estimation of the hydrogen project are currently the topic of discussion in the country if they are doable and feasible.
The hydrogen commissioner explained that the number of jobs quoted in the request for proposals received by the government was made on the back of a required professional Corporate Social Plan.
The information contained in the Corporate Social Plan was used to evaluate the overall bid.
He said to estimate the Full-Time Equivalent (FTE) number of jobs created during construction. During operations, the South Africa renewable energy sector benchmark for solar and wind and the Namibian Social Accounting Matrix was used.
Based on the above modelling, the Corporate Social Plan concluded that 93% of the jobs would be absorbed by Namibia-based labour, mainly in the construction sector.
The latest estimates from the developers note that they expect that 15,000 direct jobs will be created during construction and 3,000 during operation.
The feasibility study to be conducted over the coming 18 to 24 months will further concretise these estimates, Mnyupe stated.
The initial plan is to industrialise the economy of the ǃNamiǂNûs constituency and the broader //Karas region. The project is also expected to contribute N$3,7 billion to the government per annum.
The payment will be through the contributions towards the Sovereign Wealth Fund and through royalties that are expected to amount to N$627 million per annum once full production capacity is reached.
The majority of government revenue contributions will be made through the corporate tax, which assuming a 32%, would amount to about N$3,1 bn per annum, revealed Mnyupe.
He, however, highlighted that “it is useful to bear in mind that all of the above figures are preliminary and will be subject to the final negotiations between the preferred bidder and the government and of course commodity prices, in particular prices for green ammonia once production commences”.