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Reduced electricity consumption a concern for ECB

2023-05-02  Maihapa Ndjavera

Reduced electricity consumption a concern for ECB

The Electricity Control Board’s (ECB) financial position remains sound, but the reduced electricity consumption levels over the past five years are not expected to recover instantly, given the prevailing economic downturn, which remains a concern for the ECB’s future revenue projections. 

During 2022, ECB income amounted to N$88 million. This represents an increase of 1.8% from the N$86.4 million recorded in the previous financial year.

The figures were contained in the company’s 2022 annual report, tabled last week in the National Assembly. 

“The impact of own generation/rooftop solar PV installations, which are not subject to the ECB levy, continues to cause a reduction in levy income. The ECB continues to implement prudent financial measures to ensure financial sustainability in the short, medium and long term,” reads the report.

Levy income is the ECB’s primary source of income. The levies collected are based on the volume of electricity supplied by licensed embedded and isolated generators, as well as the Namibia Power Corporation (NamPower). 

Compared to the prior financial period, the report stated that actual units of electricity supplied increased by 1.2%. The increase in electricity units sold emanated from the recovery in economic activities. 

ECB levy per kilowatt hour (kWh) remained constant for the two years since the 2019/2020 financial year. 

According to the report, other income for the period under review was derived mainly from interest received, licence fees and rentals earned on the former ECB office building.

The impact of Covid-19 on economic activities, it said, significantly affected the ECB levy income, recording a notable decrease in levy income of 9% between the 2020 and 2021 financial years. 

However, the economic activities noted a slight recovery, resulting in an increase of 1.2% in levy income for the current financial year.


Tariffs hike

Namibians will soon find out if their already-drained pockets will be drained further to keep their lights on for the 2023/24 year. This is after NamPower requested a 16.87% increase in electricity tariffs for the 2023/24 year. 

If approved, an increase in electricity prices could drain pockets – and according to a local stock brokerage, push up already-high inflation. 

ECB endeavours to announce their approved tariffs before end of June 2023, and the new bulk tariffs will take effect from 1 July 2023.

A report on inflation for March 2023 by local stock brokerage Simonis Storm (SS) stated that it is notable that local demand for electricity is increasing, with a seasonal effect in winter and spring. This is when the 2023 demand for electricity increased notably due to the recovery of business and mining activity.

“Depending on what the ECB approves, we do see higher electricity tariffs, which would be effective July 2023 as a risk to inflation. This is due to the fact that the housing and utilities category has the largest weight in the consumer price basket (28.36%),” the SS report added.

The ECB last year announced an increase in bulk electricity tariffs of 7.30% from N$1.6982 to N$1.8222 per kilowatt hour (kWh) for the 2022/23 period. 

These increases mean regional electricity distributors (REDs), local authorities and large power users, like mines, which buy electricity directly from NamPower, pay more for electricity, which indirectly affects local consumers. 

The approved increase last year followed a tariff decrease in 2019/20. No tariff increases were effected for 2020/21, with an increase of 2.29% in 2021/22.

ECB, in its report, explained that tariff reviews are conducted as per the prevailing government policies, which state that tariffs should be cost-reflective, reflect the long-run marginal cost (LRMC) of supply and should be based on sound economic principles.

“The ECB further assesses the likely impacts of tariffs on the end-consumers and the Namibian economy at large. As part of the tariff review process, the ECB consults and considers the expectations of key stakeholders, including the government, private sector, licensees and consumers,” explains the report.


2023-05-02  Maihapa Ndjavera

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