New Era senior business reporter Edgar Brandt had a one-on-one interview with the outgoing CEO of the Electricity Control Board (ECB) Siseho Simasiku. The interview took place against the backdrop of recent electricity price increases and gradually preparing Namibians for higher prices expected to emanate from new power plants such as the Kudu gas power project that is expected to go online by the first quarter of 2018.
Simasiku said current bulk electricity prices of just over one Namibia dollar per unit could increase to reach levels of between N$1.50 and N$1.70 per unit by the time Kudu’s combined cycle gas turbine power station is completed in about four years’ time. According to the outgoing CEO, the higher tariffs will result from higher prices of new infrastructure and new technology necessary to exploit the Kudu gas field and other new electricity generation options.
The ECB is a statutory regulatory authority established in 2000 under the Electricity Act 2 of 2000, which was subsequently repealed by the Electricity Act, 4 of 2007, the latter Act having expanded the ECB mandate and core responsibilities. The core mandate of the ECB is to exercise control over the electricity supply industry with the main responsibility of regulating electricity generation, transmission, distribution, supply, import and export in Namibia through setting tariffs and issuance of licenses.
NE: What have been the major achievements of the ECB since its inception?
SS: “The ECB has been very successful in creating a conducive environment in which to operate. I would say that some of the major achievements of the ECB since its establishment include the formation of a Regional Electricity Regulators Association (RERA) for southern Africa. The ECB was also instrumental in establishing a regulatory body for the rest of Africa.”
NE: How would you describe the ECB as an organization?
SS: “The ECB is a mature organization and is on par with any electricity regulator in the region and on the continent.”
NE: In your opinion what are some of the major challenges in securing new power supply projects in Namibia?
SS: “There are three main challenges in securing new electricity supply projects. The first is the fact that electricity demand in Namibia is exceeding supply. Development in neighbouring South Africa, where we used to receive the majority of our electricity, has gradually eroded the surplus power generated by Eskom. Secondly, despite numerous warnings about the lack of electricity generation, new capacity generation projects have not been forthcoming in the industry. And thirdly, financing for new electricity projects have become difficult to secure. Bankable projects have become very difficult as in most cases financing institutions require government to support or guarantee financial resources.”
NE: Would you say there is enough private sector participation in the electricity supply industry?
SS: “Private sector participation is severely lacking in the electricity supply industry. The thing is that historically power utilities have operated as monopolies and have not always encouraged private sector participation. I think for this reason restructuring of the electricity supply market is receiving much attention from various stakeholders across the board.”
NE: What progress has been made in the transformation of the ECB into an energy regulator and not just an electricity regulator?
SS: “Government has given the go-ahead in principle for the transformation. However, we need laws to govern the entire energy sector, which is comprised of many sub-sectors. Only once the new Electricity Bill and the Energy and Gas Bill are approved can the new regulatory body be implemented.”
NE: Has the establishment of Regional Electricity Distributors (REDs) served their purpose?
SS: “I think overall the REDs have done a good job. There are those REDs that have experienced problems but I think that the areas that do not have REDs have more problems than the areas that have REDs. Where there are REDs, tariffs have gone up to the same extent as in those areas where there are no REDs. I definitely believe there is a need for REDs or some similar institutions.
“Ever since the establishment of the REDs I am not aware of any areas within their jurisdiction that have been disconnected.”
NE: Now that you have left the ECB what will you be doing with your time?
SS: “Well, I will remain in the electricity supply industry to a certain extent and will also be involved in the mining industry. I am part of a team that has established a consulting firm to cater for requests in both the energy and mining sectors.
“Even though I still have about a yeat left on my 5-year contract, the board and I came to an amicable understanding on a shorter term in office. During my time at the ECB, I focussed 100 percent on developing the energy sector in this country.”