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IPPs to invest N$1.6 billion into electricity sector

2019-03-07  Edgar Brandt

IPPs to invest N$1.6 billion into electricity sector

WINDHOEK – It is estimated that 14 Independent Power Producers (IPPs) will in total invest approximately N$1.6 billion local and foreign direct investment into the electricity sector and ultimately into the Namibian economy. This is according to the Chairman of the Electricity Control Board (ECB), Gottlieb Hinda, who in the electricity regulator’s latest annual report noted that the 14 IPPs are expected to add 70MW to the national electricity grid.  

In the Board Chairman’s section of the annual report, Hinda noted that during the 2017/2018 financial year, the national power utility NamPower, concluded 18 Power Purchase Agreements (PPAs) with an expected installed capacity of 171MW, which includes the 70MW to be produced by IPPs. In addition, Regional Electricity Distributors (REDs) also concluded two PPAs, which are already operational, with a combined capacity of 8MW. 

“The ECB also believes that a sustainable national electricity infrastructure should be able to allow the market to respond adequately to challenges of security of supply and investment in infrastructure. This is inextricably linked to the implementation of the National Integrated Resources Plan (NIRP), review of the current Single Buyer Market Model, finalisation of the Electricity Distribution Industry (EDI) Reform as well as access to and affordability of electricity,” reads the chairman’s report. Hinda added that notable progress has been made on the NIRP through a steering committee established by the Ministry of Mines and Energy. 

In his report, Hinda also expressed excitement about the ECB’s transformation to the Namibia Energy Regulator Authority, saying the ECB looks forward to the promulgation of both the Electricity Bill and the Namibia Energy Regulatory Authority (NERA) Bill. 

“Although this has not happened yet, it is highly anticipated and could be finalised during the next working period. The new entity will certainly aim to build on the string foundation laid by its predecessor and work tirelessly towards an impactful and meaningful regulation with the support of the entire value chain in the Namibian energy industry,” said Hinda. 

Meanwhile, in the Chief Executive Officer’s Report, Foibe Namene cautioned that the challenges of the new energy future are real and new trends are set to disturb the status quo of a traditional utility model and characteristics of the grid. Namene said the most notable trends include more cost-effective technologies, new players in the market and new policies that support non-utility generators. 

“This new reality demands a new way of thinking and how best to respond to deliver a future grid that is simultaneously flexible, reliable, sustainable and affordable. As experts have cautioned, the rise of renewable energy sources, increased grid complexity, changing consumer demands and volatile fossil fuel costs all create new concerns over electricity prices,” reads Namene’s report. 

She added that at policy level, the ECB has made substantial progress in revising the Electricity Act and drafting the NERA Bill, which will transform the ECB from an electricity regulator into an energy regulator. Namene pointed out that the Minister of Mines and Energy has approved the draft Bill which will be followed by submission to Cabinet for the promulgation process. 

2019-03-07  Edgar Brandt

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