Expiry Of Zesa Contract A Concern For Namibia: Ecn

23 May 2013 10:05

WINDHOEK, 23 MAY (NAMPA) - Namibia will be left with a capacity shortage of 150 Megawatts of electricity after the current Zimbabwean Electricity Supply Authority (Zesa) contract expires in 2014.
This was announced by the Electricity Control Board (ECB)?s Chief Executive Officer Siseho Simasiku here on Thursday, saying that if no alternative supplier is found in the short run, Namibia will have to buy this energy on the emergency market from the region at emergency tariffs, which are very high.
NamPower and Zesa have a deal, in which the Namibian power utility made available US$40 million (approximately N.dollars 352 million) towards the refurbishment of the Hwange station.
In return, Zesa was supposed to deliver 150MW of power daily to NamPower for five years. The five-year contract ends in 2014.
?This will create price shocks for the Namibian consumer and economy, if not mitigated,? Simasiku said, adding that an alternative supplier needs to be found to close the gap.
The country is currently a net importer - importing between 50 and 70 per cent of its energy requirements from the region - while also depending on the availability of water at the Ruacana Hydro Power station, which increased its capacity with an additional unit of 85MW to a total installed capacity of 334 MW.
The country imports energy from Eskom in South Africa, Electricidade de Mozambique (EDM), Zesa, Zambia Electricity Supply Corporation Limited (Zesco) and the Societe nationale d? electricite (SNEL) of the Democratic Republic of Congo.
Simasiku said there is a substantial shortage of energy in the southern African region, and the situation will prevail over the next several years until enough new generation capacity has been built, thus putting pressure on energy tariffs not only in Namibia, but in all countries in the region.
Although several generation plants are planned, most of these plants are to start generating only after 2017 due to construction lead times.
Namibia has decided to go ahead with the execution of power-generation projects such as the Baynes Hydro Power and the Kudu Gas-to-Power project, which are only expected to generate power after 2017.
The Baynes Hydro Power station is set to cost at least N.dollars 13 billion, while the Kudu Gas project is estimated to cost at least N.dollars 13,8 billion.