By: Nghiinomenwa-vali Erastus
The quest for energy security is still a dream away for Namibia.
The current 20 Independent Power Producers only account for 8.6% of the country’s installed generation capacity.
This is equivalent to 167.9MW, increasing by 1.2% from the previous year, according to the Electricity Control Board (ECB) updates.
The country has, however system maximum (hourly demand) of between 617 to 688 MW.
Adding this to the NamPower installed generation capacity (3 power stations) of 489.5 MW translates into 657.4 MW of installed capacity which must not be confused with monthly generation.
Monthly contributions from NamPower stations vary every month, and some have also been reduced by the ageing infrastructure of the Van Eck Power Station.
From NamPower’s 489.5 MW installed capacity, 347 MW is from the seasonal Ruacana Hydro Plant.
The country has been lauded and endowed with renewable energy sources that can be enhanced to reduce its import dependence. However, much is yet to be done to realise the potential of abundant resources.
Of the 167.9MW renewable energy installed generation capacity, all utilise solar radiation for generation, and only one is wind generated (Ombepo Energy).
Another observation is that most of the 20 Independent Power Producers have installed a generating capacity of 5-7 MW. Only two IPPs have more than that.
The only and biggest IPP currently generating beyond the majority is Alten Solar Power in Hardap, with an installed generating capacity of 45.45 MW, followed by GreenNam Electricity which has two projects in the south with 12.636 MW installed capacity.
The country’s Energy Policy defines the security of energy supply as a situation where the country’s generation fully meets the expected demand with appropriate reserves maintained sustainably and at an acceptable risk level.
As of June 2021, NamPower imported 50% and 60% of the country’s energy requirement.
The country’s small generating capacity and slowness in taking advantage of the abundant renewable energy cost around N$3,4 billion in electricity imports in 2021.
This is, however, not in keeping with the White Paper on Energy Policy’s target, which stipulated that some 75% of electrical energy and 100% of peak electricity demand was to be supplied from local resources before reaching 2030.
THE BRIGHT FUTURE IS CONDITIONAL
According to ECB, the aspiration of the White Paper are not too far-fetched because there are 37 generation licences issued to IPPs with a total installed capacity of 1 037.49MW, more than what the country needs.
However, 17 of the 37 issued generation licenses are not operational yet- with massive capital required to reach the operational stage.
These projects include the Nathanael Maxuilili Power, which will be gas-fired with a 586 MW installed in Erongo Region.
Another big license is issued to the Schonau Solar Project in Karasburg, which plans to have 124.9 MW of installed capacity.
Diaz Wind Power License has various projects at Okatope, Spergebiet, and Luderitz, with a total installed capacity of 44 MW, followed by Access To Aussenkjer Solar One, which plans to generate 25 MW IN Usakos.
While Sino Investment in Gerus plans to add 19.31 MW to the grid.
As for ISPS Solar Operation, Solnam Energy and CGN Energy plan to utilise the abundant solar radiation and generate 13 MW, 12.3 MW, and 12 MW, respectively.
However, no dates are attached when the projects will be operational due to various factors that investors must manoeuvre and solve to get the projects off the ground.
THE STRUCTURAL ISSUES
As documented by the Energy Policy, Namibia’s electricity generation subsector is faced with the situation that existing generation capacity is well below peak demand, resulting in reliance on imported electricity in terms of energy and capacity.
The most promising local renewable electricity potentials are often intermittent, and the development of base-load generation from local energy resources has proven difficult.
The country still relies on Anixas and Van Eck as base-loads in case the Ruacana river flow does not come through and on imports.
The development of key large-scale generation projects has proven challenging.
The country has made some strides in policies and on the regulatory sides with Modified Single Buyer, net metering and others. However, the insufficient local generation capacity to meet peak demand persists.
As a result, the lack of local base-load generation capacity increases the country’s reliance on imported electricity.
The energy policy has admitted that the available local energy resources are not sufficiently utilised, with a lack of quantification of potential additional local energy resources and a non-optimal focus on certain resources.
Moreover, despite uranium riches, the country has not formulated regulatory frameworks for developing nuclear energy.
As for now, the country is comfortable being just ranked the 4th biggest producer of yellow cake, then shipping it to France and China to power their reactor. At the same time, internally, it faces energy insecurity.
Another issue is that the existing market structure poses certain challenges to the market entry of IPPs- with the struggle to get off-takers and Nampower taking only solicited bids.
Moreover, certified bulk sellers and buyers can only trade 30% of energy.
It has been documented by the Energy Policy that to achieve energy security and unleash IPPs efforts, significant investments are required to serve growing demand.
However, the level of available funding and tariff impacts remain a concern- few institutions, such as banks, have issued some green bonds as they hope to channel capital to green projects.
At the same time, new large-scale generation projects require significant additional transmission investments, as are required to rehabilitate and upgrade the country’s extensive transmission networks.
As it has been assessed that the country transmission losses are significant.
THE HYDROGEN PLANS AND THE ENERGY INSECURITY
The assessment shows that an industrialised Namibia, as envisaged by Vision 2030, can only be realised provided secure, sufficient and economically priced energy supplies are available for domestic, commercial and industrial use.
Africa, specifically Namibia, has been assessed as the right place for hydrogen and ammonia production.
Namibia is stepping up with the assistance of big global players on hydrogen production, given the conducive environment and abundance of raw materials such as renewable energy sources.
The world is embarking on unlocking the potential of hydrogen as a fuel source and one of the main targets needed to achieve a carbon-reduced economy.
Green hydrogen (H2) is produced via electrolysis, utilising renewable electricity (wind, solar, etc.) and water- these resources are abundant in Namibia. However, the country has not unlocked their potential yet.
Namibia’s geography, climate, large open spaces of uninhabited land, and strong government leadership underpinned by entrenched democratic values makes it uniquely positioned to be one of the world’s largest and lowest-cost green hydrogen producers, according to available assessments.
The Namibian government conceived the Tsau //Khaeb National Park, Southern Corridor Development Initiative (SCDI) Hydrogen Project in 2021 as part of its national growth and economic recovery plan.
As a result, 20% of the park was awarded to Hyphen to fulfil the country’s hydrogen aspiration.
The Hyphen project plans to produce 300 000 tons of green hydrogen per annum before the decade’s end for regional and global markets.
According to plans communicated to the government, this is through 5-6 GW of renewable generation capacity and 3 GW of electrolyser capacity.
According to Hyphen’s plans, the first phase of 125 000 tons of green hydrogen production will come online at the end of 2026.
Their ambitious schedule, proposed by Hyphen, construction is planned to commence in January 2025, with the commissioning of the first phase by the end of 2026.
The total investment of the US$10 billion project is roughly the equivalent of Namibia’s annual GDP.
Since Namibia has not developed or yet aligned and restructured its economy to utilise hydrogen as a fuel, most of the hydrogen produced will be shipped to the ready countries.
However, according to literature, this requires a convention of hydrogen to Ammonia for better transportation.
Ammonia is a more efficient transport vector for the hydrogen molecule, thus unlocking more opportunities on the world market for green hydrogen.
However, the issue is Namibia’s power insecurity and weak or unexplored generation capacity.
The just-ended Hydrogen Conference has reminded Namibia that when it comes to hydrogen and ammonia production- power Generation (Wind, Solar), transmission and distribution make ~70 % of the total investment cost.
Moreover, 55kWh of electricity is needed per kg of green hydrogen production.
On top of this, Namibians still need affordable electricity, better transmission lines, electrification of rural areas, and to earn foreign reserves by exporting to various southern African countries.
This highlights what needs to be done for the country to realise energy security, enabling industrialisation and reducing the country’s carbon emissions and energy costs at the household level.
Email: erastus@thevillager.com.na
