International rating agencies and investors place a premium on power generation as a major factor contributing to industrial activity and economic growth. This was evident this week when Moody’s downgraded South Africa’s economic growth for 2020 from 1.5% down to 0.7% and to 0.9% for 2021.
Moody’s, the only major agency to still have South Africa at investment grade, said the country’s economy was “stuck in low gear’’ mainly due to the detrimental impact of widespread power outages on manufacturing and mining activity.
In this vein, Namibia’s national power utility, NamPower, which has an outstanding record of zero load shedding, has acknowledged the responsibility of being a catalyst in the development of a vibrant economy, an empowered society and a protected environment as driven by Vision 2030, the Fifth National Development Plan (NDP5) and the Harambee Prosperity Plan (HPP).
In NamPower’s latest annual report (2019), managing director Kahenge Simson Haulofu noted: “As a result of the significant changes in the electricity supply industry, it can never be business as usual for NamPower. There are challenging times lying ahead of us and the utility needs to adapt to the changing environment in order to remain relevant. In our quest to create and build the NamPower of the future, we, nonetheless, regard the changing environment as an exciting opportunity for the company”.
Haulofu added NamPower is an essential part of the energy value chain, energising and enhancing the value of the national grid that it manages and provides electricity to all sectors of the Namibian economy and its people.
To date, NamPower owns and operates three power stations in Namibia with the combined installed capacity of 459.50 MW. These power stations are the main sources of local power generation capacity in the country and include the Ruacana hydro-electric power station in the Kunene region (347 MW), the Van Eck coal-fired power station outside of Windhoek (90MW) and the Anixas diesel-powered power station at Walvis Bay (22.5 MW).
Meanwhile, as Namibia has shifted towards a Modified Single-Buyer Market Model, an increased number of independent power producers, which will significantly increase market complexity, is envisaged.
“NamPower has ensured that its new strategic plan is responsive to the imminent transition in the energy sector and will ensure the utility remains relevant. The strategic plan embraces partnerships, innovation and market responsiveness, thus unlocking the value of electricity sector collaboration.
We are, indeed, committed towards driving customer-centricity and operational excellence to make NamPower the electricity service company of choice. With this new strategy, NamPower will oversee the development of generation projects of 220 MW with the emphasis of the generation mix being least costly. Independent Power Producers will develop 70 MW of the 220 MW, while 150 MW will be on NamPower’s balance sheet,” explained NamPower chairperson, Kaunapaua Ndilula. In her chairperson’s section of the annual report, she noted this generation mix is in accordance with the National Integrated Resource Plan (NIRP), which is the Government’s 20-year development plan for Namibia’s Electricity Supply Industry, spanning the 2016 – 2035 period.
As part of the corporate strategy and business plan, and in line with the National Integrated Resource Plan (NIRP), the minister of mines and energy approved the development of 220 MW of generation capacity, of which 150 MW has been allocated to NamPower. It is NamPower’s intent to fund the projects from its balance sheet and will include energy from wind power, Solar PV, and from encroacher bush biomass.
To make up the full allocation of 220MWs, the minister of mines and energy further approved the procurement of generation capacities from Independent Power Producers (IPPs) through Power Purchase Agreements (PPAs) in the form of 50MW wind power and 20MW Solar PV.
It is expected that the IPPs will be responsible for the full development, construction, maintenance and operation of the plants for the duration of the PPAs. In addition to the generation projects, NamPower approved the development of key transmission projects in line with its transmission master plan.
-ebrandt@nepc.com.na