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NampowerÔÇÖs darkest hour

Mon, 14 December 2015 16:12
by Charmaine Ngatjiheue
News Flash

The year 2015 will always be remembered as the year that power utility Nampower sold dreams to the nation by failing to extricate the country from the looming power deficit, with all projects touted as the way out of darkness not taking off.

While Nampower has been able to create the illusion that the power situation is under control by setting up projects which never lifted off the ground, it has not been able to hide the challenges caused by poor supply from South Africa’s Eskom.

NamPower had initially applied for land from the Walvis Bay municipality to set up a coal-fired power plant, but that also never materialised.

The power utility’s first attempt at failure came through the hastily-arranged 250 MW power plant which was given to Xaris, only for Government to pull the plug in the nick of time. Currently, Namibia sits with a power deficit of 225 megawatts.

Nampower had endorsed the construction of the 250 MW, which could cost taxpayers N$7.8 billion. The power plant was set operate in a base-load mode till 2017, and in mid-merit/ peaking or stand-by mode after 2018.

NamPower, in collaboration with the National Petroleum Corporation (Namcor) of Namibia were also set to develop the 800MW (nominal) Kudu power station, which led to the discovery that it may cost taxpayers about N$32b. Once again, the Kudu gas-to-power project has been postponed indefinitely.

Namibia has an over-reliance on imports, averaging 60% per year and up to 80% during dry seasons. Thus, until 2017, the country is believed to remain vulnerable in terms of power supply.

NamPower’s Manager of Corporate Communications and Marketing Tangeni Kambangula confirmed an upcoming meeting, without divulging what exactly would be discussed, citing that the sole purpose is to discuss any power projects to come.

“NamPower and the Ministry of Mines and Energy (MME) are meeting this week to discuss any power projects to come, and only then can we divulge more information,” Kambangula stated.

Once NamPower had its eyes on constructing an 800MW coal-fired power plant, for which land was identified in Arandis as the town council of that town approved it.

The then-proposed coal-fired plant was discarded after a Cabinet decision that NamPower should focus on the Kudu power project as a priority.

However, the commissioning of the Kudu power project has been delayed due to challenges which come with the implementation of large power projects.

In an earlier interview with The Villager, NamPower also mentioned that the idea of a coal-fired power plant was found not to be viable anymore because such plant works well in base-load mode, but not in mid-merit/peaking or stand-by mode (as is needed with the station which is being planned now).

A base-load power station operates 24-hours-a-day, and is shut down only when routine maintenance is required, or due to unforeseen circumstances.

NamPower’s Power-Purchase Agreements (PPA’s) with other neighbouring power utilities with the combined capacity of up to 750MW have also expired, and re-negotiations for these agreements have proven to be challenging.

These include the expiry of the Zimbabwe Electricity Supply Authority (ZESA) agreement in October 2014, the Supplementary Eskom agreement in April 2015, the Aggreko agreement in August 2015 and the Eskom Off-peak agreement, which will expire in April 2016.

Although there are many Independent Power Producers (IPP’s), they still are not able to operate properly without Government support through implementation agreements. However, this matter is currently under consideration by Government.

NamPower continued to negotiate new PPA’s with neighbouring power utilities, especially with Eskom, EDM, ZESCO and ZESA, as it negotiated for the import of additional 100MW from ZESCO, 100MW from EDM and 80MW from ZESA.

NamPower has negotiated for PPA’s with IPPs such as Omburu Sun Energy (Pty) Ltd, which wrapped up its final work, such as transmission connections and financing, for the setting-up of the 4,5MW solar PV power plant at Omburu near Omaruru.

PPA negotiations were in the process with other IPPs, such as Diaz, Arandis Power and Greenam, but could not be concluded until Government had pronounced itself about their request for protection against political risks through the Implementation Agreements.

In aid of assisting with the power deficit, Standard Bank will finance three renewable energy projects in Namibia for N$2billion under the auspices of the bank’s Renewable Energy Independent Power Producers’ Programme (REIPPP) next year.

The envisaged power plants are the 3 x 10MW solar power plants, which will sell power to the Namibia Power Corporation (NamPower), as well as further 14 x 5MW envisaged solar power plants as part of the interim REFIT program and an additional unsolicited 20MW solar power plant.