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ECB issues 17 IPP licenses

Mon, 1 December 2014 16:48
by Timoteus Shihepo
Business

 

The Electricity Control Board (ECB) is
on the verge of breaking the electricity
monopoly that NamPower has reigned
over for 20 years, after it issued 17
Independent Power Producers’ (IPPs) licenses
The Villager can reveal.
The licenses which will be effective as early
as next year includes two for Conventional
Energy which include one for gas and other
for Heavy Fuel Oil (HFO), 12 for Renewable
Energy, one for Biomass, one for Consulate Solar
Power (CSP) and one for Solar Photo Voltaics.
In an interview with The Villager, ECB’s
Chief Executive Officer, Foibe Namene
confirmed the issuing of the licenses saying that
such practice will break NamPower’s monopoly
and help the electricity sector in the process.
“We have issued out licenses already
and there are those that have already been in
discussion with Nampower for a period of time
and they are in the process of negotiating those
contracts. Apart from the big licenses we have
just also issued about 26 small power plants
licenses of 5megawatts and as we speak there is
already one of those smaller ones in Omaruru
which is operational,” she said.
She added that, “One single benefit that I can
point out is that you are not exposing the market
to the single source supplier which currently
is only NamPower you will have a number of
suppliers basically coming in and that sort of
bring in price competition, you will find the best
technologies coming in and the best market price
will then be put on the table where the consumers
can benefit.”
Apart from the licenses that have been issued
Namene also said there are a number of them
that are currently being assessed.
The news is likely to calm fears after it was
thought that there was no place for IPPs in
Namibia but Namene has however said all along
there has been no law that has been preventing
IPPs from coming in, “Currently the law is such
that it doesn’t prevent any IPP coming on board.
What people find it very difficult is that the
IPPs through certain circumstances find it very
difficult to negotiate with Nampower but there is
nothing legal preventing the IPPs from coming
in.”
She said such difficulties will however change
as from next year when the new Electricity Act
in the bill that is currently in a formalization
stage comes into effective. She said currently
there are draft rules but they have to wait until
the time they have got the bill promulgated so
the provision is made in the new electricity act to
ensure that there is full competition in generation
in terms of single buyer market.
“The new rules will make it much easier as it
will make it much clearer so that everyone would
know what is expected of them. Who is doing
what, at what time and by when? That’s what the
rules will clarify. This will create a conducive
environment,” she said.
She said they have made provision for what
the market must look like and for that they have
set the modified selling buyer will be the market
that Namibia will be following.
“Once that bill has been enacted into law
and then the market rules as of how the market
should behave and what investment needs to be
planned for generation and transmission in what
manner according to the rules we will follow.”
She added that, “We are hoping that this will
be passed by next year and also hoping by this
time next year we have a new body. Obviously
we have to follow the government program but
our hope as regulator come next year we have a
new bill on the table.”
Meanwhile Nampower’s Managing Director
Paulinus Shilamba told The Villager that the
popular perception that his institution is snubbing
IPPs is wrong.
“There is a wrong impression that we don’t
welcome IPPs, but even last year we had an
agreement with one of them (IPPs) to set up an
electricity box for Nampower.”
He however said that as much they welcome
IPPs, “They must just not put Nampower in any
political risks, because those are the risks that
Nampower cannot resolve.”
The Kudu factor
Much has also been said about the Kudu
gas project with many expressing doubts about
the N$7.8b project but Namene said ECB as a
regulator said they have vested confidence in the
project calling it a national project of strategic
importance to every Namibian.
“Obviously there will be a lot of other
sentiments around Kudu and everyone is entitled
to their opinions but we are not here to answer
those opinions. For the regulator every project
is analysed on merits. The Kudu project like any
other project is also analysed on merit to see
whether if it’s a good project for the country,
whether it’s a strategic project for the country,
are the tariffs affordable for the country and will
it create benefits for the country,” she said.
She said they will gladly be happy for those
that are advocating for otherwise so that they can
bring the evidence forward for them to analyse
saying they are, ‘an open office and everyone is
welcome to bring evidence’.
“For us at this moment in time we do not
have any other evidence to show to the contrary.
We are not saying that the people who are saying
that don’t have evidence. The evidence at our
disposal, the analysis which has been made we
are with the government and Kudu still remains
the strategic project for Namibia until we have
got evidences that states otherwise which we
don’t have now,” she said.
Setting the record straight
Namene also used the opportunity to set the
record straight regarding NamPower’s apparent
snubbing ECB to contact the Ministry of Mines
and Energy.
“We are not here really to answer allegations
or rumours of which we have no evidence. What
we know is that obviously there is nothing wrong
preventing NamPower from discussing with the
ministry don’t forget that NamPower as a utility
reports to the ministry so there is really nothing
in that line from preventing NamPower to
discuss with the ministry. In terms of regulation
however there are no regulatory issues that
they can bypass the regulator and communicate
directly with the ministry. We are also in contact
with them as we are with other licences or
utilities,” she said.
Namene then said they are a regulator and
their role is to ensure that there is a level playing
field created for all players in the industry
throughout the whole value chain of electricity
to come in
“We are in the process of basically
establishing certain codes, rules, regulations
and standards in terms of our mandates those
are the projects that we are embarking on.
The ECB’s mandate is not to bring up power
stations our role is to ensure that the environment
exists in which investors can have the ability
to come in and invest in the country in terms
of the power plants to ensure that the country
gets the correct technology and to ensure
that our business remains sustainable but the
consumer gets protected in the form that the
tariffs that consumer pays at the end of the day is
affordable,” she said.