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Shedding light on Namibia

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NamPower FOCUS ENERGY

The Namibian economy is steadily growing and so is the demand for electricity, representing a challenge for power utility NamPower. Managing director Paulinus Shilamba tells us more. By Ian Armitage

s Namibia facing an energy crisis? That was the question on our lips when we talked to NamPower Managing Director Paulinus Shilamba recently. Namibia and the region are experiencing severe shortages in terms of power supply. Three key drivers can be cited for having led to the need for Namibia to increase its domestic electrical generation capacity, namely: reduced availably of electricity imports from neighbouring countries through the SAPP; increasing costs of electricity imports; and increasing domestic demand. Namibia needs to establish a reliable and flexible base load power plant in order to meet the shortage in supply capacity as well as to enable the introduction of cleaner and renewable options, all of this requires a base load power plant to fill the gaps during times of no supply. Namibia has limited options for a base load plant. A coal-fired power station will provide Namibia with the flexibility it needs on the one hand and the certainty it needs on the other. Namibia has a shortage of about 80MW of electricity and that deficit will continue to increase year-on-year. By 2015, according to some reports, a shortage of 300MW is likely. By 2016 Namibia could be left “in the dark”. “Namibia needs additional capacity,” Shilamba said. Over half of Namibia’s energy demand is satisfied by imports. The main supplier in the past was neighbouring South Africa. But since around 2008 capacity constraints have forced Eskom to reduce its exports to Namibia. In all countries of the Southern African Power Pool (SAPP) - which includes SA, Namibia, Botswana and the

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NamPower FOCUS ENERGY

Consolidated Power Projects (Pty) Ltd (CONCO) CONCO has earned a formidable reputation over more than 25 years as a leading electrical infrastructure developer across Sub-Saharan Africa. With its head office in Midrand, CONCO is wholly-owned by JSElisted Consolidated Infrastructure Group Limited, and has an extensive footprint extending to more than 18 countries. CONCO is privileged to partner with leading electricity utility NamPower, working on projects that range from modernising substations with cutting-edge protection automation technology, to installing 220kV filter banks, to the development and construction of an 80 kilometre overhead power line. CONCO’s attention to detail, skilled staff and strong focus on safety and quality, makes it an ideal partner to NamPower.

DRC, amongst others - energy demand has grown by an average of three percent a year over the last six years. Existing generation and transmission capacities can’t meet the demand. NamPower has initiated a number of short-, medium- and long-term transmission and energy generation projects are being planned in order to meet the looming power supply challenges in the country and the region at large. According to Shilamba, NamPower continues to negotiate for new Power Purchase Agreements and re-negotiate existing PPAs with neighbouring power utilities. “These agreements are important given the fact that Namibia will continue to rely on imports still for the next four to five years, while we are working on the implementation of our own generation projects,” he said. Negotiations on these PPA’s are currently ongoing specifically with Eskom, ZESCO, ZESA and BPC. 4

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“ZESA sends electricity via Botswana to SA before it reaches Namibia. In the past transmission breakdowns meant we didn’t receive all the electricity we should have had and the extension delivers on a shortfall of a year’s electricity that did not reach Namibia,” Shilamba added. As part of the original agreement NamPower gave ZESA millions to refurbish the Hwange power station and in return ZESA was supposed to deliver 150MW of power daily to Namibia over five years. “We’re doing all we can to address the current and future power supply challenges.” National demand for electricity in Namib has increased to 580MW from 451MW recorded in 2009, higher than the combined installed capacity of NamPower’s Ruacana, ANIXAS, Van Eck and Paratus power stations.

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In response, NamPower’s board of directors approved a number of projects that will be implemented under the Short-Term Critical Supply Project (STCS) including the rehabilitation of the Van Eck power station by extending it’s life by five years. Shilamba said work on that project had started and will take a year to complete, at a cost of N$350 million. “We rely a lot on imports, so we’ve looked at our own generation projects.” That’ll help in the shortterm. But what about further down the line? Many have suggested that Namibia should look to renewables. Energy experts claim it is the only country in the world that can go 100 percent renewable energy – being blessed with sunshine and wind. “You have to be mindful,” Shilamba told South Africa Magazine, “it is expensive technology, and there are shortcomings. Take solar for example - you can only generate power in the day and only when it is sunny. “The main concern would be the cost of the electricity generated and that would impact consumers.” It seems then that the most realistic option in the short- to medium-term might be coal a coal-fired power station. Reports in August suggested that the planned Erongo coalfired power station could be 6

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Large-scale medium and long-term projects like Erongo, the Kudu Gas projects or even the Baynes Hydropower Project are important

NamPower FOCUS ENERGY

“fast-tracked” to begin commercial operation by 2016. According to Shilamba, the proposed project will be located about 10km east of Arandis, located midway between Swakopmund and Usakos, and will be divided into four work packages. Thirteen prequalified contractors have been identified for ‘Tender Package A’, which relates to the boiler, turbine, generator island and balance of plant related to the island, including a number of Chinese firms, Engineering News recently reported. “The Erongo Coal-fired project is earmarked for development ahead of the muchdiscussed 800 MW Kudu Gas-to-Power plant proposed for development north of Oranjemund, and is underpinned by rising demand in the Central Namib region,” the report added.

The final environmental-impact assessment study has been submitted to the Ministry of Environment, it said. “Large-scale medium and long-term projects like Erongo, the Kudu Gas projects or even the Baynes Hydropower Project are important,” Shilamba told us. “But we have to put up a baseload power plant soon and we’re leaning towards Erongo Coal in the short-term. It won’t solve all the problems but it will provide for our power we needs in the short-term. “With Kudu, we don’t think it would be up and running in time. The situation is the same with Baynes. But they remain on the agenda.” Shilamba said Kudu, which will have the capacity to generate 800MW of power, remains strategically important. “It has challenges, but is still important.” Namibia’s white paper on energy requires the country to be able to generate 100 percent of its peak demand and 75 percent of its annual energy demand from local sources. End users will ultimately be affected by the investment in new generation resources. “There will be pressure on tariffs as a result of the capital projects,” Shilamba concluded. One thing is for sure – NamPower is doing all it can to secure the country’s energy future. END To learn more visit www.nampower.com.na www.southafricamag.com

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NamPower Center 15 Luther Street, Windhoek PO Box 2864 WINDHOEK Namibia Tel: (+264-61) 2054111 Fax: (+264-61) 232805