The government is considering a long-term plan to transform its state-owned power utility, NamPower, into an electricity distribution company, while Independent Power Producers (IPPs) take over the generation of electricity, Mines and Energy Minister Tom Alweendo has revealed.
The move aims to reduce the country’s over-reliance on NamPower and electricity imports, Alweendo said.
Namibia’s total electricity demand is currently estimated at 600MW per annum, while generation capacity stands at approximately 486.5MW. The need for more power is projected to grow at a yearly rate of 5%.
“We have embraced IPPs with production of 15%, while 85% is produced by NamPower. Thus we need to continue having more IPPs coming on board, so that going forward NamPower can focus on distribution and not so much on production, a space that can be taken by the private sector,” Alweendo explained.
“We continue to make sure we do have electricity meeting demand whether import or produce, our mandate is to make sure we close that gap of importing more, by embracing IPPs and reducing over-reliance on NamPower,” he added.
The Minister acknowledged the need for investments to accommodate the additional energy being added to the grid.
“We are however aware that, with this additional energy being added to the grid, it will become unsustainable without investments. In the same vein, I need to applaud NamPower for its efforts through their investment programme, so that we can absorb more,” Alweendo noted.
NamPower is currently undertaking various electricity generating projects estimated to produce 150MW from renewable energy, while a further 70MW will be sourced from IPPs.
According to Alweendo, Namibia will only be able to meet its energy demand and allow for IPP exports through such investments.
Earlier this year, the Electricity Control Board (ECB) issued a 1.2GW licence for the exportation of electricity by IPPs to the Southern African Power Pool (SAPP), which faces power deficits.
“This is an opportunity that we see as the country aspires to be a net exporter of electricity and leverages from the high demand of power in SAPP. So if IPPs can produce more than enough and its proven to be viable, it will create a platform for them to establish an Independent Transmission Interconnected Line which can be utilised for the evacuation of the excess electricity that can’t be channeled through NamPower,” ECB Chief Executive Officer Robert Kahimise said earlier this year.
“We have opened the door for Namibia to play its role as a net exporter of electricity and IPPs are free to explore. However, there will be no public funds to be used to expand the current existing infrastructure, any additions to meet the high demand will be borne by the concerned IPPs,” Kahimise added.
Namibia introduced the Modified Single Buyer Market Model in 2019, allowing contestable customers and licensed eligible sellers to transact with each other directly for the supply of electricity of up to 30% of the customer’s energy requirement.
