13 Apr 2015 16:00pm
WINDHOEK, 13 APR (NAMPA) - Despite the expiry of power supply agreements with Eskom and Aggreko, Namibia does not foresee an imminent threat to its power supply security, at least not before August 2016.
The country imports about 60 per cent of its energy from neighbouring countries.
The first agreement, which expired late last year, was with the Zimbabwe Electricity Supply Authority (ZESA), followed by NamPower's supplementary Eskom agreement, which expires in April 2015.
Other agreements nearing their expiry date are with the world's largest temporary power generation company, Mozambique's Aggreko, which lapses in August 2015, and an off-peak agreement with South Africas Eskom that expires in April 2016.
NamPower Managing Director, Paulinus Shilamba, on Monday during a media conference in Windhoek gave his assurance that despite these challenges, the country does not foresee an imminent threat to power supply security.
This, he explained, is mainly attributable to the re-commissioning of the Van Eck power station from the middle of this year; the rolling out of the Demand Site Management (DSM) programme, including the free distribution of one million energy-efficient light bulbs; and the commencement with effect from 01 April 2015 of the 80 megawatt (MW) Power Purchase Agreement between NamPower and the Zimbabwe Power Company (ZPC), which was signed late last year.
However, Shilamba cautioned customers to use electricity wisely and to strive towards saving at least 10 per cent of their electricity usage.
He stated that the most critical period will be after August 2016, when enormous strain will be placed on the system and when an additional generation capacity of at least 250MW will be needed to ensure security of supply for the country.
Amongst the challenges during that period will be the expiry of the bilateral agreement with Eskom in 2016, lower output from Ruacana power station due to lower water levels, additional loads including Skorpion Zinc Mine when their contract with Eskom expires in 2017, and general higher economic growth.
Shilamba noted that with the delay in commissioning some of the power generation projects coupled with the ongoing power supply challenges in the region, affordable firm imports are no longer available to Namibia.
It is therefore important that we change our strategy of heavy reliance on imports to that of building our own power stations in the country to become the main source of supply, and use imports to fill gaps only, he said.
He indicated that this new power supply strategy will also enable NamPower to retain part of the N.dollars 10 billion spending on imports over the next three years for the creation of assets in the country, thus stimulating socio-economic development through investments and job creation.
This is why the procurement of the 250MW gas-to-power project in the Erongo Region, which is being carried out through a transparent bidding process, is so critical and beneficial to the national economy, Shilamba added.
The commissioning of this plant will give us the breathing space and confidence to overcome the challenges and difficulties prior to the commissioning of the Kudu Gas-to-Power station in 2018, he stated.
The Erongo plant will operate in the minimum level of demand before Kudu and in mid-merit mode post-Kudu.
Currently, Namibia does not have a proper peaking plant in its power supply mix, apart from the small 22,5MW Anixas power station at the coast, which has become inadequate, Shilamba explained.
The 250MW plant will therefore also run as a proper peaking plant when required and be readily available when the Kudu, Van Eck or Ruacana power stations are out of service for maintenance, planned or forced outages in the future, he said.