Namibia Power Corporation’s (NamPower) 40 megawatts (MW) biomass power station aims to yield around N$21 billion in microeconomic and macroeconomic benefits, The Brief has established.
The project entails the development of a 40MW biomass power station utilising Namibian encroacher bush as the fuel source.
The proposed power station will be developed as an Engineering Procurement and Construction (EPC) project and will be owned and operated by NamPower where the majority of the costs for the project will be leveraged from the power utility’s balance sheet.
This comes as NamPower has put out a bid for the EPC closing in November.
Bush encroachment in Namibia affects 26 million hectares of potential agricultural land for livestock and food production.
“The power station is set to assist NamPower to strengthen its domestic local generation mix and further stabilise the national power grid with a fully dispatchable energy source which could provide baseload energy,” the project overview report noted.
The report notes that the project also brings a number of macro and microeconomic benefits which include improved livestock carrying capacities through increased rangelands and agricultural productivity.
Furthermore, “increased groundwater within the harvested areas, displaced carbon dioxide emissions to the benefit of the region, contribution to the Gross Domestic Product (GDP) of Namibia and direct and indirect job creation throughout the fuel supply chain and the operation of the power station”.
NamPower, the Ministry of Environment, Forestry and Tourism and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH-Bush Control and Biomass Utilisation (BCBU) Project, with the support of Namibia Biomass Industry Group (NBiG), commissioned a macroeconomic study in 2018 to quantify and assess the microeconomic and macroeconomic impact of a 20MWe (nett) Otjikoto Bush Biomass Project.
The study was recently updated for the 40MWe (nett) capacity in 2021 with the assistance of NBiG.
NamPower says although there are assumed biomass-based power generation costs associated with operating and maintaining a biomass power station, there are significant economic benefits.
“The net present value (NPV) of the microeconomic benefits totals N$4.965 billion (discounted at 5.5% p.a.), or NAD0.81/kWh. The net present value of macroeconomic benefits (discounted at 5.5% p.a.) totals N$16.1 billion, or NAD2.67/kWh.”
NamPower notes that these figures might vary slightly, depending on the type of harvesting arrangement – whether a combination of fully mechanised, semi- mechanised and manual labour.
The larger scale of this 40MWe power plant vis-à-vis the 2018 study on a 20MWe power station results in a significantly larger macroeconomic benefit.
“Otjikoto Biomass Power Station… Without taking the requirements for operating the 40MWe power station into account, it was determined that a total of 39.2 million tonnes of biomass wood chips can be conservatively extracted from a 100km radius from the Project site,” states the overview.
This implies that the 40MWe Otjikoto Biomass Project can be sustained well after its planned lifetime considering the existing resource volumes.
